Paramount Group, Inc. - FORM 8-K - EX-99.2

Paramount Group, Inc. - FORM 8-K - EX-99.2 - May 4, 2017

Attached files

Attached files

Paramount Group, Inc. Reports

file	filename
EX-99.1 - EX-99.1 - Paramount Group, Inc.	d392251dex991.htm
8-K - 8-K - Paramount Group, Inc.	d392251d8k.htm

Exhibit 99.2

LOGO

SUPPLEMENTAL OPERATING AND FINANCIAL DATA

FOR THE QUARTER ENDED MARCH 31, 2017


		FORWARD-LOOKING STATEMENTS

This supplemental information contains forward-looking statements within the meaning of the Federal securities laws. You can identify these statements by our use of the words “assumes,” “believes,” “estimates,” “expects,” “guidance,” “intends,” “plans,” “projects” and similar expressions that do not relate to historical matters. You should exercise caution in interpreting and relying on forward-looking statements because they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and could materially affect actual results, performance or achievements. These factors include, without limitation, the ability to enter into new leases or renew leases on favorable terms, dependence on tenants’ financial condition, the uncertainties of real estate development, acquisition and disposition activity, the ability to effectively integrate acquisitions, the costs and availability of financing, the ability of our joint venture partners to satisfy their obligations, the effects of local, national and international economic and market conditions, the effects of acquisitions, dispositions and possible impairment charges on our operating results, regulatory changes, including changes to tax laws and regulations, and other risks and uncertainties detailed from time to time in our filings with the Securities and Exchange Commission. We do not undertake a duty to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

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		TABLE OF CONTENTS


		Page
Company Profile		4

Research Coverage		5

Selected Financial Information
Financial Highlights		6
Consolidated Balance Sheets		7
Consolidated Statements of Income		8
Select Income Statement Data		9
Funds From Operations (“FFO”)		10
Funds Available for Distribution (“FAD”)		11
Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”)		12
Net Operating Income (“NOI”)		13
NOI - By Segment		14
Same Store Results - By Segment		15-16
Consolidated Joint Ventures and Funds		17-18
Unconsolidated Joint Ventures		19-20
Unconsolidated Funds Summary		21
Capital Structure		22
Debt Analysis		23
Debt Maturities		24

Selected Property Data
Portfolio Summary		25
Top Tenants and Industry Diversification		26
Leasing Activity		27
Lease Expirations		28-31
Cash Basis Capital Expenditures		32

Definitions		33-34

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		COMPANY PROFILE

Paramount Group, Inc. (“Paramount”) is a fully-integrated real estate investment trust that owns, operates, manages, acquires and redevelops high-quality, Class A office properties located in select central business district submarkets of New York, Washington, D.C. and San Francisco. Paramount is focused on maximizing the value of its portfolio by leveraging the sought-after locations of its assets and its proven property management capabilities to attract and retain high-quality tenants.


EXECUTIVE MANAGEMENT
Albert Behler		Chairman, Chief Executive Officer and President
Wilbur Paes		Executive Vice President, Chief Financial Officer and Treasurer
Jolanta Bott		Executive Vice President, Operations and Human Resources
Theodore Koltis		Executive Vice President, Leasing
Daniel Lauer		Executive Vice President, Chief Investment Officer

BOARD OF DIRECTORS
Albert Behler		Director, Chairman of the Board
Thomas Armbrust		Director
Martin Bussmann		Director
Dan Emmett		Director, Chair of Audit Committee
Lizanne Galbreath		Director, Chair of Compensation Committee
Karin Klein		Director
Peter Linneman		Director, Chair of Nominating and Corporate Governance Committee; Lead Independent Director
David O’Connor		Director
Katharina Otto-Bernstein		Director

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		RESEARCH COVERAGE ⁽¹⁾


James Feldman	Thomas Catherwood	Thomas Lesnick	Vin Chao
Bank of America Merrill Lynch	BTIG	Capital One Securities, Inc.	Deutsche Bank
(646) 855-5808	(212) 738-6140	(571) 633-8191	(212) 250-6799

Steve Sakwa	Jed Reagan	Richard Anderson	Vikram Malhotra
Evercore ISI	Green Street Advisors	Mizuho Securities USA Inc.	Morgan Stanley
(212) 446-9462	(949) 640-8780	(212) 205-8445	(212) 761-7064

Nick Yulico	Blaine Heck
UBS	Wells Fargo
(212) 713-3402	(443) 263-6529

⁽¹⁾

With the exception of Green Street Advisors, an independent research firm, the equity analysts listed above are those analysts that, according to First Call Corporation, have published research material on the Company and are listed as covering the Company. Please note that any opinions, estimates or forecasts regarding the Company’s performance made by such analysts do not represent the opinions, estimates or forecasts of the Company or its management. The Company does not by its reference above, imply its endorsement of or concurrence with any information, conclusions or recommendations made by any such analysts.

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		FINANCIAL HIGHLIGHTS

(unaudited and in thousands, except square feet and per share amounts)


	Three Months Ended
SELECTED FINANCIAL DATA	March 31, 2017		March 31, 2016			December 31, 2016
Total revenues	$	181,236	$	172,918		$	166,802
Net income (loss) attributable to common stockholders	$	372	$	(6,494	)	$	(6,489	)
Per share—basic and diluted	$	0.00	$	(0.03	)	$	(0.03	)
PGRE’s share of Cash NOI ⁽¹⁾	$	79,117	$	87,239		$	77,224
PGRE’s share of NOI ⁽¹⁾	$	98,362	$	100,165		$	90,763
FFO attributable to common stockholders ⁽¹⁾	$	51,589	$	49,248		$	41,034
Per share—diluted	$	0.22	$	0.23		$	0.18
Core FFO attributable to common stockholders ⁽¹⁾	$	51,710	$	48,992		$	40,643
Per share—diluted	$	0.22	$	0.23		$	0.18
FAD attributable to common stockholders ⁽¹⁾	$	30,438	$	27,091		$	17,822


COMMON SHARE DATA

	Three Months Ended
Share Price:	March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016
High	$	17.58		$	16.74		$	18.28		$	17.40		$	17.97
Low	$	15.87		$	14.58		$	15.36		$	15.26		$	14.23
Closing (end of period)	$	16.21		$	15.99		$	16.39		$	15.94		$	15.95
Dividends per common share	$	0.095		$	0.095		$	0.095		$	0.095		$	0.095
Annualized dividends per common share	$	0.380		$	0.380		$	0.380		$	0.380		$	0.380
Dividend yield (on closing share price)		2.3	%		2.4	%		2.3	%		2.4	%		2.4	%


PORTFOLIO STATISTICS
			Total as of March 31, 2017								PGRE’s Share as of March 31, 2017
Region:	Number of Properties		Square Feet		% Leased ⁽¹⁾			% Occupied ⁽¹⁾			Square Feet		% Leased ⁽¹⁾			% Occupied ⁽¹⁾
New York		7		8,638,634		90.8	%		88.4	%		6,826,297		88.5	%		85.5	%
Washington, D.C.		5		1,585,516		95.8	%		94.9	%		1,585,516		95.8	%		94.9	%
San Francisco		2		2,227,602		96.5	%		96.1	%		1,419,835		95.9	%		95.6	%

		14		12,451,752		92.5	%		90.6	%		9,831,648		90.8	%		88.4	%

⁽¹⁾	See page 33 for our definition of this measure.

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		CONSOLIDATED BALANCE SHEETS

(unaudited and in thousands)


	March 31, 2017			December 31, 2016
ASSETS:
Rental property, at cost
Land	$	2,091,535		$	2,091,535
Buildings and improvements		5,765,748			5,757,558

		7,857,283			7,849,093
Accumulated depreciation and amortization		(359,583	)		(318,161	)

Rental property, net		7,497,700			7,530,932
Cash and cash equivalents		125,734			162,965
Restricted cash		75,198			29,374
Investments in unconsolidated joint ventures		35,959			6,411
Investments in unconsolidated real estate funds		23,913			28,173
Preferred equity investments		55,294			55,051
Marketable securities		25,617			22,393
Accounts and other receivables, net		12,564			15,251
Deferred rent receivable		184,571			163,695
Deferred charges, net		72,796			71,184
Intangible assets, net		389,588			412,225
Assets held for sale		346,685			346,685
Other assets		39,895			22,829

Total Assets	$	8,885,514		$	8,867,168


LIABILITIES:
Notes and mortgages payable, net	$	3,477,798		$	3,364,898
Revolving credit facility		200,000			230,000
Due to affiliates ⁽¹⁾		27,299			27,299
Accounts payable and accrued expenses		88,250			103,896
Dividends and distributions payable		25,207			25,151
Deferred income taxes		1,276			1,467
Interest rate swap liabilities		—			22,446
Intangible liabilities, net		145,138			153,018
Other liabilities		75,188			53,046

Total Liabilities		4,040,156			3,981,221

EQUITY:
Paramount Group, Inc. equity		3,994,015			3,990,005
Noncontrolling interests in:
Consolidated real estate fund		67,205			64,793
Consolidated joint ventures		228,039			253,788
Operating Partnership		556,099			577,361

Total Equity		4,845,358			4,885,947

Total Liabilities and Equity	$	8,885,514		$	8,867,168

⁽¹⁾	Represents notes payable to affiliates, which are due in October 2017 and bear interest at a fixed rate of 0.50%.

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		CONSOLIDATED STATEMENTS OF INCOME

(unaudited and in thousands, except shares and per share amounts)


	Three Months Ended
	March 31, 2017			March 31, 2016			December 31, 2016
REVENUES:
Property rentals	$	132,235		$	125,002		$	127,041
Straight-line rent adjustments		20,147			19,869			14,725
Amortization of above and below-market leases, net		3,008			(3,619	)		2,943

Rental income		155,390			141,252			144,709
Tenant reimbursement income		12,852			10,789			11,842
Fee income (see details on page 9)		9,556			3,417			5,363
Other income (see details on page 9)		3,438			17,460			4,888

Total revenues		181,236			172,918			166,802
EXPENSES:
Operating		65,971			62,945			63,076
Depreciation and amortization		62,992			74,812			60,975
General and administrative (see details on page 9)		13,581			13,961			14,175
Transaction related costs		275			935			679

Total expenses		142,819			152,653			138,905
Operating income		38,417			20,265			27,897
Income from unconsolidated joint ventures		1,937			1,496			2,122
Income (loss) from unconsolidated real estate funds		288			(326	)		2,042
Interest and other income, net (see details on page 9)		3,200			1,700			1,905
Interest and debt expense (see details on page 9)		(39,733	)		(37,119	)		(44,340	)
Unrealized gain on interest rate swaps		1,802			6,860			10,153

Net income (loss) before income taxes		5,911			(7,124	)		(221	)
Income tax expense		(4,282	)		(363	)		(2,602	)

Net income (loss)		1,629			(7,487	)		(2,823	)
Less net (income) loss attributable to noncontrolling interests in:
Consolidated real estate fund		88			674			497
Consolidated joint ventures		(1,291	)		(1,252	)		(5,361	)
Operating Partnership		(54	)		1,571			1,198

Net income (loss) attributable to common stockholders	$	372		$	(6,494	)	$	(6,489	)


Weighted average common shares outstanding:
Basic		230,924,271			212,403,593			223,221,284

Diluted		230,958,441			212,403,593			223,221,284

Income (loss) per common share:
Basic	$	0.00		$	(0.03	)	$	(0.03	)

Diluted	$	0.00		$	(0.03	)	$	(0.03	)

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		SELECT INCOME STATEMENT DATA

(unaudited and in thousands)


	Three Months Ended
Fee Income:	March 31, 2017		March 31, 2016		December 31, 2016
Property management	$	1,610	$	1,521	$	1,484
Asset management		2,266		1,714		2,254
Acquisition, disposition and leasing		5,320		—		1,353
Other		360		182		272

Total fee income	$	9,556	$	3,417	$	5,363


	Three Months Ended
Other Income:	March 31, 2017		March 31, 2016		December 31, 2016
Lease termination income	$	66	$	10,955	$	2,502
Other (primarily tenant requested services, including overtime heating and cooling)		3,372		6,505		2,386

Total other income	$	3,438	$	17,460	$	4,888


	Three Months Ended
General and Administrative:	March 31, 2017		March 31, 2016		December 31, 2016
Non-cash general and administrative - stock based compensation expense	$	3,429	$	1,772	$	2,512
All other general and administrative		8,450		9,111		11,416
Mark-to-market of deferred compensation plan liabilities (offset by an increase in the mark-to-market of plan assets, which is included in “interest and other income”)		1,702		204		247
Severance costs		—		2,874		—

Total general and administrative	$	13,581	$	13,961	$	14,175


	Three Months Ended
Interest and Other Income:	March 31, 2017		March 31, 2016		December 31, 2016
Preferred equity investment income ⁽¹⁾	$	1,413	$	1,416	$	1,417
Interest income		85		80		241
Mark-to-market of deferred compensation plan assets (offset by an increase in the mark-to-market of plan liabilities, which is included in“general and administrative” expenses)		1,702		204		247

Total interest and other income	$	3,200	$	1,700	$	1,905

⁽¹⁾	Represents 100% of the investment income from PGRESS Equity Holdings, L.P., of which our 24.4% share is $344, $345 and $346 for the three months ended March 31, 2017 and 2016, and December 31, 2016, respectively.



	Three Months Ended
Interest and Debt Expense:	March 31, 2017		March 31, 2016		December 31, 2016
Interest expense	$	34,288	$	35,861	$	37,049
Debt breakage and defeasance costs		2,715		—		4,608
Amortization of deferred financing costs		2,730		1,258		2,683

Total interest and debt expense	$	39,733	$	37,119	$	44,340

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		FUNDS FROM OPERATIONS (“FFO”)

(unaudited and in thousands, except share and per share amounts)


	Three Months Ended
	March 31, 2017			March 31, 2016			December 31, 2016
Reconciliation of net income (loss) to FFO and Core FFO:
Net income (loss)	$	1,629		$	(7,487	)	$	(2,823	)
Real estate depreciation and amortization (including our share of unconsolidated joint ventures)		64,840			76,351			62,451

FFO ⁽¹⁾		66,469			68,864			59,628
Less FFO attributable to noncontrolling interests in:
Consolidated real estate fund		(140	)		448			272
Consolidated joint ventures		(7,195	)		(8,147	)		(11,294	)

FFO attributable to Paramount Group Operating Partnership		59,134			61,165			48,606
Less FFO attributable to noncontrolling interests in Operating Partnership		(7,545	)		(11,917	)		(7,572	)

FFO attributable to common stockholders ⁽¹⁾	$	51,589		$	49,248		$	41,034

Per diluted share	$	0.22		$	0.23		$	0.18


FFO	$	66,469		$	68,864		$	59,628
Non-core items:
Debt breakage and defeasance costs		2,715			—			4,608
Unrealized gain on interest rate swaps (including our share of unconsolidated joint ventures)		(2,386	)		(6,860	)		(10,930	)
Transaction related costs		275			935			679
Severance costs		—			2,874			—

Core FFO ⁽¹⁾		67,073			65,813			53,985
Less Core FFO attributable to noncontrolling interests in:
Consolidated real estate fund		(140	)		448			272
Consolidated joint ventures		(7,661	)		(5,414	)		(6,114	)

Core FFO attributable to Paramount Group Operating Partnership		59,272			60,847			48,143
Less Core FFO attributable to noncontrolling interests in Operating Partnership		(7,562	)		(11,855	)		(7,500	)

Core FFO attributable to common stockholders ⁽¹⁾	$	51,710		$	48,992		$	40,643

Per diluted share	$	0.22		$	0.23		$	0.18

Reconciliation of weighted average shares outstanding:
Weighted average shares outstanding		230,924,271			212,403,593			223,221,284
Effect of dilutive securities		34,170			4,366			23,141

Denominator for FFO and Core FFO per diluted share		230,958,441			212,407,959			223,244,425

⁽¹⁾	See page 33 for our definition of this measure.

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		FUNDS AVAILABLE FOR DISTRIBUTION (“FAD”)

(unaudited and in thousands)


	Three Months Ended
	March 31, 2017			March 31, 2016			December 31, 2016
Reconciliation of Core FFO to FAD:
Core FFO	$	67,073		$	65,813		$	53,985
Add (subtract) adjustments to arrive at FAD:
Amortization of stock-based compensation expense		3,429			1,772			2,512
Amortization of deferred financing costs (including our share of unconsolidated joint ventures)		2,798			1,309			2,734
Amortization of above and below-market leases, net (including our share of unconsolidated joint ventures)		(2,881	)		3,619			(2,943	)
Expenditures to maintain assets		(5,555	)		(4,172	)		(7,600	)
Second generation tenant improvements and leasing commissions		(7,408	)		(14,902	)		(11,704	)
Straight-line rent adjustments (including our share of unconsolidated joint ventures)		(20,511	)		(19,970	)		(14,756	)
Unrealized (gain) loss from unconsolidated real estate funds		(56	)		247			(1,911	)

FAD ⁽¹⁾		36,889			33,716			20,317
Less FAD attributable to noncontrolling interests in:
Consolidated real estate fund		(140	)		448			272
Consolidated joint ventures		(1,860	)		(517	)		522

FAD attributable to Paramount Group Operating Partnership		34,889			33,647			21,111
Less FAD attributable to noncontrolling interests in Operating Partnership		(4,451	)		(6,556	)		(3,289	)

FAD attributable to common stockholders ⁽¹⁾ ⁽²⁾	$	30,438		$	27,091		$	17,822

⁽¹⁾	See page 33 for our definition of this measure.

⁽²⁾	FAD attributable to common stockholders on a quarterly basis is not necessarily indicative of future amounts due to fluctuations in the timing of payments for tenant improvements and leasing commissions versus rents received from leases for which such costs are incurred.

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		EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (“EBITDA”)

(unaudited and in thousands)


	Three Months Ended
	March 31, 2017			March 31, 2016			December 31, 2016
Reconciliation of net income (loss) to EBITDA and Adjusted EBITDA:
Net income (loss)	$	1,629		$	(7,487	)	$	(2,823	)
Add (subtract) adjustments to arrive at EBITDA:
Depreciation and amortization (including our share of unconsolidated joint ventures)		64,840			76,351			62,451
Interest and debt expense (including our share of unconsolidated joint ventures)		41,368			38,519			45,785
Income tax expense (including our share of unconsolidated joint ventures)		4,282			363			2,602

EBITDA ⁽¹⁾		112,119			107,746			108,015
Less EBITDA attributable to noncontrolling interests in:
Consolidated real estate fund		(141	)		450			268
Consolidated joint ventures		(14,030	)		(15,077	)		(18,379	)

PGRE’s share of EBITDA ⁽¹⁾	$	97,948		$	93,119		$	89,904


EBITDA	$	112,119		$	107,746		$	108,015
Add (subtract) adjustments to arrive at adjusted EBITDA:
Unrealized gain on interest rate swaps (including our share of unconsolidated joint ventures)		(2,386	)		(6,860	)		(10,930	)
EBITDA from real estate funds		(450	)		844			(1,732	)
Transaction related costs		275			935			679
Severance costs		—			2,874			—

Adjusted EBITDA ⁽¹⁾		109,558			105,539			96,032
Less Adjusted EBITDA attributable to noncontrolling interests in consolidated joint ventures		(13,111	)		(12,344	)		(13,199	)

PGRE’s share of Adjusted EBITDA ⁽¹⁾	$	96,447		$	93,195		$	82,833

⁽¹⁾	See page 33 for our definition of this measure.

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		NET OPERATING INCOME (“NOI”)
(unaudited and in thousands)


	Three Months Ended
	March 31, 2017			March 31, 2016			December 31, 2016
Reconciliation of net income (loss) to NOI and Cash NOI:
Net income (loss)	$	1,629		$	(7,487	)	$	(2,823	)
Add (subtract) adjustments to arrive at NOI and Cash NOI:
Depreciation and amortization		62,992			74,812			60,975
General and administrative		13,581			13,961			14,175
Interest and debt expense		39,733			37,119			44,340
Transaction related costs		275			935			679
Income tax expense		4,282			363			2,602
NOI from unconsolidated joint ventures		4,823			4,428			4,257
Income from unconsolidated joint ventures		(1,937	)		(1,496	)		(2,122	)
(Income) loss from unconsolidated real estate funds		(288	)		326			(2,042	)
Fee income		(9,556	)		(3,417	)		(5,363	)
Interest and other income, net		(3,200	)		(1,700	)		(1,905	)
Unrealized gain on interest rate swaps		(1,802	)		(6,860	)		(10,153	)

NOI ⁽¹⁾		110,532			110,984			102,620
Less NOI attributable to noncontrolling interests in:
Consolidated real estate fund		(141	)		450			268
Consolidated joint ventures		(12,029	)		(11,269	)		(12,125	)

PGRE’s share of NOI ⁽¹⁾	$	98,362		$	100,165		$	90,763


NOI	$	110,532		$	110,984		$	102,620
Less:
Straight-line rent adjustments (including our share of unconsolidated joint ventures)		(20,511	)		(19,970	)		(14,756	)
Amortization of above and below-market leases, net (including our share of unconsolidated joint ventures)		(2,881	)		3,619			(2,943	)

Cash NOI ⁽¹⁾		87,140			94,633			84,921
Less Cash NOI attributable to noncontrolling interests in:
Consolidated real estate fund		(141	)		450			268
Consolidated joint ventures		(7,882	)		(7,844	)		(7,965	)

PGRE’s share of Cash NOI ⁽¹⁾	$	79,117		$	87,239		$	77,224

⁽¹⁾	See page 33 for our definition of this measure.

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		NOI - BY SEGMENT

(unaudited and in thousands)


	Three Months Ended March 31, 2017
	Total			New York			Washington, D.C.			San Francisco			Other
Reconciliation of net income (loss) to NOI and Cash NOI:
Net income (loss)	$	1,629		$	1,490		$	7,580		$	1,631		$	(9,072	)
Add (subtract) adjustments to arrive at NOI:
Depreciation and amortization		62,992			39,031			5,281			18,049			631
General and administrative		13,581			—			—			—			13,581
Interest and debt expense		39,733			22,001			2,011			13,478			2,243
Transaction related costs		275			—			—			—			275
Income tax expense		4,282			—			—			5			4,277
NOI from unconsolidated joint ventures		4,823			4,753			—			—			70
Income from unconsolidated joint ventures		(1,937	)		(1,925	)		—			—			(12	)
Income from unconsolidated real estate funds		(288	)		—			—			—			(288	)
Fee income		(9,556	)		—			—			—			(9,556	)
Interest and other income, net		(3,200	)		(32	)		(9	)		(27	)		(3,132	)
Unrealized gain on interest rate swaps		(1,802	)		—			—			(1,802	)		—

NOI ⁽¹⁾		110,532			65,318			14,863			31,334			(983	)
Less NOI attributable to noncontrolling interests in:
Consolidated real estate fund		(141	)		—			—			—			(141	)
Consolidated joint ventures		(12,029	)		—			—			(12,029	)		—

PGRE’s share of NOI for the three months ended March 31, 2017	$	98,362		$	65,318		$	14,863		$	19,305		$	(1,124	)

PGRE’s share of NOI for the three months ended March 31, 2016	$	100,165		$	79,513		$	11,707		$	11,177		$	(2,232	)


NOI⁽¹⁾	$	110,532		$	65,318		$	14,863		$	31,334		$	(983	)
Add (subtract) adjustments to arrive at Cash NOI:
Straight-line rent adjustments (including our share of unconsolidated joint ventures)		(20,511	)		(13,968	)		(1,063	)		(5,541	)		61
Amortization of above and below-market leases, net (including our share of unconsolidated joint ventures)		(2,881	)		2,140			(547	)		(4,474	)		—

Cash NOI ⁽¹⁾		87,140			53,490			13,253			21,319			(922	)
Less Cash NOI attributable to noncontrolling interests in:
Consolidated real estate fund		(141	)		—			—			—			(141	)
Consolidated joint ventures		(7,882	)		—			—			(7,882	)		—

PGRE’s share of Cash NOI for the three months ended March 31, 2017	$	79,117		$	53,490		$	13,253		$	13,437		$	(1,063	)

PGRE’s share of Cash NOI for the three months ended March 31, 2016	$	87,239		$	70,994		$	10,532		$	7,886		$	(2,173	)

⁽¹⁾	See page 33 for our definition of this measure.

- 14 -


		SAME STORE RESULTS - BY SEGMENT

(unaudited and in thousands)


	Three Months Ended March 31, 2017
SAME STORE CASH NOI⁽¹⁾	Total			New York			Washington, D.C.			San Francisco			Other

PGRE’s share of Cash NOI for the three months ended March 31, 2017	$	79,117		$	53,490		$	13,253		$	13,437		$	(1,063	)
Acquisitions ⁽²⁾		(6,224	)		(614	)		—			(5,610	)		—
Lease termination income (including our share of unconsolidated joint ventures)		(66	)		(66	)		—			—			—
Other, net		—			—			—			—			—

PGRE’s share of Same Store Cash NOI⁽¹⁾ for the three months ended March 31, 2017	$	72,827		$	52,810		$	13,253		$	7,827		$	(1,063	)


	Three Months Ended March 31, 2016
	Total			New York			Washington, D.C.			San Francisco			Other

PGRE’s share of Cash NOI for the three months ended March 31, 2016	$	87,239		$	70,994		$	10,532		$	7,886		$	(2,173	)
Acquisitions		—			—			—			—			—
Lease termination income (including our share of unconsolidated joint ventures)		(11,000	)		(10,968	)⁽³⁾		—			(32	)		—
Other, net		473			473			—			—			—

PGRE’s share of Same Store Cash NOI⁽¹⁾ for the three months ended March 31, 2016	$	76,712		$	60,499		$	10,532		$	7,854		$	(2,173	)


(Decrease) increase in PGRE’s share of Same Store Cash NOI	$	(3,885	)	$	(7,689	)	$	2,721		$	(27	)	$	1,110

% (Decrease) increase		(5.1	%)		(12.7	%)		25.8	%		(0.3	%)

⁽¹⁾	See page 33 for our definition of this measure.

⁽²⁾	Represents our share of Cash NOI attributable to (i) 60 Wall Street in New York, which was acquired in January 2017 and (ii) One Front Street in San Francisco, which was acquired in December 2016.

⁽³⁾	Includes $10,861 from the termination of a tenant’s lease at 1633 Broadway.

- 15 -


		SAME STORE RESULTS - BY SEGMENT

(unaudited and in thousands)


	Three Months Ended March 31, 2017
SAME STORE NOI⁽¹⁾	Total			New York			Washington, D.C.			San Francisco			Other

PGRE’s share of NOI for the three months ended March 31, 2017	$	98,362		$	65,318		$	14,863		$	19,305		$	(1,124	)
Acquisitions⁽²⁾		(8,039	)		(546	)		—			(7,493	)		—
Lease termination income (including our share of unconsolidated joint ventures)		(66	)		(66	)		—			—			—
Other, net		—			—			—			—			—

PGRE’s share of Same Store NOI⁽¹⁾ for the three months ended March 31, 2017	$	90,257		$	64,706		$	14,863		$	11,812		$	(1,124	)


	Three Months Ended March 31, 2016
	Total			New York			Washington, D.C.			San Francisco			Other

PGRE’s share of NOI for the three months ended March 31, 2016	$	100,165		$	79,513		$	11,707		$	11,177		$	(2,232	)
Acquisitions		—			—			—			—			—
Lease termination income (including our share of unconsolidated joint ventures)		(11,000	)		(10,968	) ⁽³⁾		—			(32	)		—
Other, net		6,785			6,785	⁽⁴⁾		—			—			—

PGRE’s share of Same Store NOI⁽¹⁾ for the three months ended March 31, 2016	$	95,950		$	75,330		$	11,707		$	11,145		$	(2,232	)


(Decrease) increase in PGRE’s share of Same Store NOI	$	(5,693	)	$	(10,624	)	$	3,156		$	667		$	1,108

% (Decrease) increase		(5.9	%)		(14.1	%)		27.0	%		6.0	%

⁽¹⁾	See page 33 for our definition of this measure.

⁽²⁾	Represents our share of NOI attributable to (i) 60 Wall Street in New York, which was acquired in January 2017 and (ii) One Front Street in San Francisco, which was acquired in December 2016.

⁽³⁾	Includes $10,861 from the termination of a tenant’s lease at 1633 Broadway.

⁽⁴⁾	Primarily represents the non-cash write-off related to an above-market lease asset from the termination of a tenant’s lease at 1633 Broadway.

- 16 -


		CONSOLIDATED JOINT VENTURES AND FUND - BALANCE SHEETS

(unaudited and in thousands)


	As of March 31, 2017								As of December 31, 2016
	Consolidated Joint Ventures						Consolidated Fund		Consolidated Joint Ventures						Consolidated Fund
	Total Consolidated Joint Ventures		One Market Plaza		PGRESS Equity Holdings L.P.		Residential Development Fund		Total Consolidated Joint Ventures		One Market Plaza		PGRESS Equity Holdings L.P.		Residential Development Fund
PGRE Ownership				49.0%		24.4%		12.5%				49.0%		24.4%		12.9%
ASSETS:
Rental property, net	$	1,258,518	$	1,258,518	$	—	$	73,296	$	1,264,387	$	1,264,387	$	—	$	72,423
Cash and cash equivalents		21,538		21,122		416		3,881		9,661		9,236		425		2,525
Restricted cash		24,628		24,628		—		11,000		1,868		1,868		—		3,000
Preferred equity investments		55,294		—		55,294		—		55,051		—		55,051		—
Accounts and other receivables, net		416		416		—		168		548		548		—		147
Deferred rent receivable		37,339		37,339		—		—		32,103		32,103		—		—
Deferred charges, net		6,044		6,044		—		—		5,966		5,966		—		—
Intangible assets, net		48,922		48,922		—		—		52,139		52,139		—		—
Other assets		213		211		2		206		14,048		14,046		2		426

Total Assets	$	1,452,912	$	1,397,200	$	55,712	$	88,551	$	1,435,771	$	1,380,293	$	55,478	$	78,521


LIABILITIES:
Notes and mortgages payable, net	$	967,833	$	967,833	$	—	$	—	$	872,960	$	872,960	$	—	$	—
Accounts payable and accrued expenses		18,538		18,520		18		754		19,952		19,934		18		1,125
Interest rate swap liabilities		—		—		—		—		21,227		21,227		—		—
Intangible liabilities, net		45,650		45,650		—		—		48,654		48,654		—		—
Other liabilities		127		127		—		11,000		3,555		3,555		—		3,000

Total Liabilities		1,032,148		1,032,130		18		11,754		966,348		966,330		18		4,125

EQUITY:
Paramount Group, Inc. equity		192,725		178,909		13,816		9,592		215,635		201,928		13,707		9,603
Noncontrolling interests		228,039		186,161		41,878		67,205		253,788		212,035		41,753		64,793

Total Equity		420,764		365,070		55,694		76,797		469,423		413,963		55,460		74,396

Total Liabilities and Equity	$	1,452,912	$	1,397,200	$	55,712	$	88,551	$	1,435,771	$	1,380,293	$	55,478	$	78,521

- 17 -


		CONSOLIDATED JOINT VENTURES AND FUND - OPERATING RESULTS

(unaudited and in thousands)


	Three Months Ended March 31, 2017											Three Months Ended March 31, 2016
	Consolidated Joint Ventures								Consolidated Fund			Consolidated Joint Ventures								Consolidated Fund
	Total Consolidated Joint Ventures			One Market Plaza			PGRESS Equity Holdings L.P.		Residential Development Fund			Total Consolidated Joint Ventures			One Market Plaza			PGRESS Equity Holdings L.P.		Residential Development Fund
Total revenues	$	31,119		$	31,119		$	—	$	868		$	29,619		$	29,619		$	—	$	833
Total operating expenses		7,278			7,278			—		414			7,173			7,173			—		1,352

Net operating income		23,841			23,841			—		454			22,446			22,446			—		(519	)
Depreciation and amortization		(11,573	)		(11,573	)		—		(259	)		(13,520	)		(13,520	)		—		(259	)
Interest and other income, net		1,438			25			1,413		—			1,422			6			1,416		1
Interest and debt expense		(13,478	)		(13,478	)		—		—			(13,793	)		(13,793	)		—		—
Unrealized gain on interest rate swaps		1,802			1,802			—		—			5,359			5,359			—		—

Net income (loss) before income taxes		2,030			617			1,413		195			1,914			498			1,416		(777)
Income tax expense		(2	)		(2	)		—		(2	)		(28	)		(28	)		—		1

Net income (loss)	$	2,028		$	615		$	1,413	$	193		$	1,886		$	470		$	1,416	$	(776	)



PGRE’s share Ownership	Total			49.0%			24.4%		12.5%			Total			49.0%			24.4%		13.4%
Net income (loss)	$	605		$	261		$	344	$	24		$	456		$	111		$	345	$	(344	)
Add: Management fee income		132			132			—		257			178			178			—		242

PGRE’s share of net income (loss)		737			393			344		281			634			289			345		(102	)
Add: Real estate depreciation and amortization		5,669			5,669			—		31			6,625			6,625			—		33

FFO ⁽¹⁾		6,406			6,062			344		312			7,259			6,914			345		(69	)
Add: Debt breakage costs		1,330			1,330			—		—			—			—			—		—
Less: Unrealized gain on interest rate swaps		(883	)		(883	)		—		—			(2,626	)		(2,626	)		—		—

Core FFO ⁽¹⁾	$	6,853		$	6,509		$	344	$	312		$	4,633		$	4,288		$	345	$	(69	)



Noncontrolling Interests’ share Ownership	Total			51.0%			75.6%		87.5%			Total			51.0%			75.6%		86.6%
Net income (loss)	$	1,423		$	354		$	1,069	$	169		$	1,430		$	359		$	1,071	$	(432	)
Less: Management fee expense		(132	)		(132	)		—		(257	)		(178	)		(178	)		—		(242	)

Net income (loss) attributable to noncontrolling interests		1,291			222			1,069		(88	)		1,252			181			1,071		(674	)
Add: Real estate depreciation and amortization		5,904			5,904			—		228			6,895			6,895			—		226

FFO ⁽¹⁾		7,195			6,126			1,069		140			8,147			7,076			1,071		(448)
Add: Debt breakage costs		1,385			1,385			—		—			—			—			—		—
Less: Unrealized gain on interest rate swaps		(919	)		(919	)		—		—			(2,733	)		(2,733	)		—		—

Core FFO ⁽¹⁾	$	7,661		$	6,592		$	1,069	$	140		$	5,414		$	4,343		$	1,071	$	(448	)

⁽¹⁾	See page 33 for our definition of this measure.

- 18 -


		UNCONSOLIDATED JOINT VENTURES - BALANCE SHEETS

(unaudited and in thousands)


	As of March 31, 2017										As of December 31, 2016
	Total		712 Fifth Avenue			60 Wall Street ⁽¹⁾		Oder-Center, Germany ⁽²⁾			Total			712 Fifth Avenue			Oder-Center, Germany ⁽²⁾
PGRE Ownership			50.0%			5.2%		9.5%						50.0%			9.5%
ASSETS:
Rental property, net	$	1,100,904	$	206,700		$	888,420	$	5,784		$	213,903		$	207,632		$	6,271
Cash and cash equivalents		36,849		20,305			16,204		340			19,089			18,430			659
Restricted cash		75		75			—		—			75			75			—
Accounts and other receivables, net		219		219			—		—			300			300			—
Deferred rent receivable		14,538		13,399			1,139		—			12,790			12,790			—
Deferred charges, net		8,478		8,478			—		—			8,907			8,907			—
Intangible assets, net		147,995		—			147,995		—
Other assets		9,339		3,697			5,179		463			690			199			491

Total Assets	$	1,318,397	$	252,873		$	1,058,937	$	6,587		$	255,754		$	248,333		$	7,421

LIABILITIES:
Notes and mortgages payable, net	$	833,917	$	246,092		$	566,496	$	21,329		$	269,063		$	245,990		$	23,073
Accounts payable and accrued expenses		16,884		5,259			11,620		5			3,633			3,460			173
Interest rate swap liabilities		3,869		3,869			—		—			5,036			5,036			—
Other liabilities		982		233			641		108			437			287			150

Total Liabilities		855,652		255,453			578,757		21,442			278,169			254,773			23,396

EQUITY:
Total Equity		462,745		(2,580	)		480,180		(14,855	)		(22,415	)		(6,440	)		(15,975	)

Total Liabilities and Equity	$	1,318,397	$	252,873		$	1,058,937	$	6,587		$	255,754		$	248,333		$	7,421

⁽¹⁾Acquired on January 24, 2017.

⁽²⁾We account for our interest in Oder-Center, Germany on a one-quarter lag basis.

- 19 -


		UNCONSOLIDATED JOINT VENTURES - OPERATING RESULTS

(unaudited and in thousands)


	Three Months Ended March 31, 2017												Three Months Ended March 31, 2016
	Total			712 Fifth Avenue			60 Wall Street ⁽¹⁾			Oder-Center, Germany ⁽²⁾			Total			712 Fifth Avenue			Oder-Center, Germany ⁽²⁾
Total revenues	$	30,615		$	14,379		$	15,224		$	1,012		$	15,366		$	14,312		$	1,054
Total operating expenses		10,962			5,966			4,725			271			5,818			5,617			201

Net operating income		19,653			8,413			10,499			741			9,548			8,695			853
Depreciation and amortization expense		(9,811	)		(2,920	)		(6,799	)		(92	)		(3,103	)		(3,008	)		(95	)
Interest and other income, net		30			24			6			—			14			14			—
Interest and debt expense		(6,893	)		(2,825	)		(3,815	)		(253	)		(3,022	)		(2,748	)		(274	)
Unrealized gain on interest rate swaps		1,168			1,168			—			—			—			—			—

Net income (loss) before income taxes		4,147			3,860			(109	)		396			3,437			2,953			484
Income tax expense		(2	)		—			—			(2	)		(2	)		—			(2	)

Net income (loss)	$	4,145		$	3,860		$	(109	)	$	394		$	3,435		$	2,953		$	482



PGRE’s share Ownership	Total			50.0%			5.2%			9.5%			Total			50.0%			9.5%
Net income (loss)	$	1,962		$	1,930		$	(5	)	$	37		$	1,522		$	1,476		$	46
Less: Step-up basis adjustment		(25	)		—			—			(25	)		(26	)		—			(26	)

PGRE’s share of net income (loss)		1,937			1,930			(5	)		12			1,496			1,476			20
Add: Real estate depreciation and amortization		1,848			1,460			354			34			1,539			1,504			35

FFO ⁽³⁾		3,785			3,390			349			46			3,035			2,980			55
Less: Unrealized gain on interest rate swaps		(584	)		(584	)		—			—			—			—			—

Core FFO ⁽³⁾	$	3,201		$	2,806		$	349		$	46		$	3,035		$	2,980		$	55



Joint Venture Partners’ share Ownership	Total			50.0%			94.8%			90.5%			Total			50.0%			90.5%
Net income (loss)	$	2,183		$	1,930		$	(104	)	$	357		$	1,913		$	1,477		$	436
Add: Real estate depreciation and amortization		7,988			1,460			6,445			83			1,590			1,504			86

FFO ⁽³⁾		10,171			3,390			6,341			440			3,503			2,981			522
Less: Unrealized gain on interest rate swaps		(584	)		(584	)		—			—			—			—			—

Core FFO ⁽³⁾	$	9,587		$	2,806		$	6,341		$	440		$	3,503		$	2,981		$	522

⁽¹⁾	Acquired on January 24, 2017.

⁽²⁾	We account for our interest in Oder-Center, Germany on a one-quarter lag basis.

⁽³⁾	See page 33 for our definition of this measure.

- 20 -


		UNCONSOLIDATED FUNDS SUMMARY
(unaudited and in thousands, except square feet and per square foot amounts)

Property Funds:

The following is a summary of the Property Funds, our ownership interests in these funds and the funds’ ownership interest in the underlying investments, as of March 31, 2017.


Fund	PGRE Ownership			One Market Plaza			50 Beale Street			0 Bond Street
Fund III		3.1	%		2.0	%		—			—
Fund VII/VII-H		7.2	%		—			42.8	%		100.0	%

Total Property Funds					2.0	%		42.8	%		100.0	%
Other Investors					98.0	%⁽¹⁾		57.2	%		—

Total					100.0	%		100.0	%		100.0	%

The following is a summary of the Property Funds’ investments and our ownership interests in the underlying investments, as of March 31, 2017.


		PGRE			Square		%			%			Annualized Rent ⁽²⁾
Investments	Submarket	Ownership			Feet		Leased			Occupied			Amount		Per Square Foot ⁽³⁾
50 Beale Street	South Financial District		3.1	%		663,633		82.0	%		82.0	%		29,928		55.26
0 Bond Street	NoHo		7.2	%		64,390		45.1	%		45.1	%		4,122		134.70

⁽¹⁾	Includes a 49.0% direct ownership interest held by us.

⁽²⁾	See page 33 for our definition of this measure.

⁽³⁾	Represents office and retail space only.

Debt Fund:

The following is a summary of our Debt Fund and our ownership interests in the underlying investments, as of March 31, 2017.


		PGRE			Fixed /						Face Amount				Fair Value
Investments	Investment Type	Ownership			Variable rate	Interest Rate			Maturity		Total		Our Share		Total		Our Share
26 Broadway	Mezzanine Loan		1.3	%	Fixed		8.25	%		Jan-2022	$	50,000	$	645	$	50,364	$	650
1440 Broadway	Mezzanine Loan		1.3	%	Variable (LIBOR plus 600 bps)		6.83	%		Oct-2019		40,000		516		40,492		522
700 Eighth Avenue	Mortgage/Mezzanine Loans		1.3	%	Variable (LIBOR plus 600 bps)		6.83	%		Jan-2019		74,000		955		74,184		957
1285 Avenue of the Americas	Mezzanine Loan		1.3	%	Fixed		6.75	%		Jun-2023		55,000		710		55,486		716
Other	Mezzanine Loan/Preferred Equity		1.3	%	Various		7.00% - 9.61	%		Oct-2018 to Nov-2026		134,895		1,740		136,422		1,760

											$	353,895	$	4,566	$	356,948	$	4,605

- 21 -


		CAPITAL STRUCTURE
(unaudited and in thousands, except share, unit and per share amounts)


					As of March 31, 2017
Debt:
Consolidated debt:
Notes and mortgages payable ⁽¹⁾					$	3,526,279
Revolving credit facility						200,000

						3,726,279
Less:
Noncontrolling interest’s share of consolidated debt (One Market Plaza)						(497,250	)
Add:
PGRE’s share of unconsolidated joint venture debt (712 Fifth Avenue, 60 Wall Street and Oder-Center, Germany)						155,176

PGRE’s share of total debt ⁽²⁾						3,384,205


	Shares / Units Outstanding		Share Price as of March 31, 2017
Equity:
Common stock		231,379,820	$	16.21		3,750,667
Operating Partnership units		33,631,382		16.21		545,165

Total equity		265,011,202		16.21		4,295,832

Total Market Capitalization					$	7,680,037

⁽¹⁾	Represents contractual amount due pursuant to the respective debt agreements.

⁽²⁾	See page 33 for our definition of this measure.

- 22 -


		DEBT ANALYSIS
(unaudited and in thousands)


	Total Debt						Fixed Rate Debt						Variable Rate Debt
Consolidated Debt:	Amount			Rate			Amount			Rate			Amount			Rate
1633 Broadway	$	1,030,100			3.52	%	$	1,000,000			3.54	%	$	30,100			2.73	%
One Market Plaza ⁽¹⁾		975,000			4.03	%		975,000			4.03	%		—			—
1301 Avenue of the Americas		850,000			2.87	%		500,000			3.05	%		350,000			2.61	%
31 West 52nd Street		500,000			3.80	%		500,000			3.80	%		—			—
1899 Pennsylvania Avenue ⁽²⁾		87,179			4.88	%		87,179			4.88	%		—			—
Liberty Place ⁽²⁾		84,000			4.50	%		84,000			4.50	%		—			—
Revolving Credit Facility ⁽²⁾		200,000			2.23	%		—			—			200,000			2.23	%

		3,726,279			3.53	%		3,146,179			3.72	%		580,100			2.49	%
Noncontrolling interest’s share ⁽³⁾		(497,250	)		4.03	%		(497,250	)		4.03	%		—			—

PGRE’s share of consolidated debt	$	3,229,029			3.45	%	$	2,648,929			3.66	%	$	580,100			2.49	%

Unconsolidated Joint Venture Debt:
712 Fifth Avenue	$	246,500			4.41	%	$	135,000			5.78	%	$	111,500			2.75	%
60 Wall Street		575,000			3.36	%		—			—			575,000			3.36	%
Oder-Center, Germany		21,329			4.62	%		21,329			4.62	%		—			—

Total unconsolidated debt		842,829			3.70	%		156,329			5.62	%		686,500			3.26	%
Joint venture partners’ share		(687,653	)		3.59	%		(86,803	)		5.52	%		(600,850	)		3.31	%

PGRE’s share of unconsolidated debt	$	155,176			4.21	%	$	69,526			5.74	%	$	85,650			2.96	%

PGRE’s Share of Total Debt ⁽³⁾	$	3,384,205			3.48	%	$	2,718,455			3.71	%	$	665,750			2.55	%


Revolving Credit Facility Covenants: ⁽⁴⁾	Required	Actual
Total Debt / Total Assets	Less than 60%		42.9	%
Secured Debt / Total Assets	Less than 50%		40.1	%
Fixed Charge Coverage	Greater than 1.5x		3.1x
Unsecured Debt / Unencumbered Assets	Less than 60%		11.2	%
Unencumbered Interest Coverage	Greater than 1.75x		11.3x


Debt Composition:	Amount		%
Fixed rate debt:
PGRE’s consolidated fixed rate debt	$	2,648,929
PGRE’s unconsolidated fixed rate debt		69,526

Total fixed rate debt		2,718,455		80.3	%

Variable rate debt:
PGRE’s consolidated variable rate debt		580,100
PGRE’s unconsolidated variable rate debt		85,650

Total variable rate debt		665,750		19.7	%

PGRE’s Share of Total Debt ⁽³⁾	$	3,384,205		100.0	%

⁽¹⁾	On January 19, 2017, we completed a $975,000 refinancing of One Market Plaza. The new seven-year interest-only loan matures in February 2024.

⁽²⁾	Repaid on May 4, 2017.

⁽³⁾	See page 33 for our definition of this measure.

⁽⁴⁾

This section presents ratios as of March 31, 2017 in accordance with the terms of the Company’s revolving credit facility, which has been filed with the SEC. Management is not presenting these ratios and the related calculations for any other purpose or for any other period, and is not intending for these measures to otherwise provide information to investors about the Company’s financial condition or results of operations. Investors should not rely on these measures other than for purposes of testing our compliance with the revolving credit facility.

- 23 -


		DEBT MATURITIES
(unaudited and in thousands)


Consolidated Debt:	2017		2018			2019		2020			2021			Thereafter			Total
Liberty Place	$	—	$	84,000	⁽¹⁾	$	—	$	—		$	—		$	—		$	84,000
1899 Pennsylvania Avenue		—		—			—		87,179	⁽¹⁾		—			—			87,179
1301 Avenue of the Americas		—		—			—		—			850,000			—			850,000
1633 Broadway		—		—			—		—			—			1,030,100			1,030,100
One Market Plaza		—		—			—		—			—			975,000			975,000
31 West 52nd Street		—		—			—		—			—			500,000			500,000
Revolving Credit Facility		—		200,000	⁽¹⁾		—		—			—			—			200,000

Total consolidated debt		—		284,000			—		87,179			850,000			2,505,100			3,726,279
Noncontrolling interest’s share ⁽²⁾		—		—			—		—			—			(497,250	)		(497,250	)

PGRE’s share of consolidated debt	$	—	$	284,000		$	—	$	87,179		$	850,000		$	2,007,850		$	3,229,029


Unconsolidated Joint Venture Debt:
712 Fifth Avenue	$	—	$	246,500		$	—	$	—		$	—		$	—		$	246,500
60 Wall Street		—		—			—		—			—			575,000			575,000
Oder-Center, Germany		—		—			—		—			—			21,329			21,329

Total unconsolidated debt		—		246,500			—		—			—			596,329			842,829
Joint venture partners’ share		—		(123,250	)		—		—			—			(564,403	)		(687,653	)

PGRE’s share of unconsolidated debt	$	—	$	123,250		$	—	$	—		$	—		$	31,926		$	155,176

PGRE’s share of total debt ⁽²⁾	$	—	$	407,250		$	—	$	87,179		$	850,000		$	2,039,776		$	3,384,205


Weighted average rate		—		3.36	%		—		4.88	%		2.87	%		3.71	%		3.48	%

% of debt maturing		—		12.0	%		—		2.6	%		25.1	%		60.3	%		100.0	%

⁽¹⁾	Repaid on May 4, 2017.

⁽²⁾	See page 33 for our definition of this measure.

- 24 -


		PORTFOLIO SUMMARY
(unaudited and in thousands, except square feet and per square foot amounts)


		Paramount			Square		%			%			Annualized Rent ⁽¹⁾
Property	Submarket	Ownership			Feet		Leased ⁽¹⁾			Occupied ⁽¹⁾			Amount		Per Square Foot ⁽²⁾
As of March 31, 2017
New York:
1633 Broadway	West Side		100.0	%		2,523,429		86.2	%		84.2	%	$	146,571	$	71.64
1301 Avenue of the Americas	Sixth Avenue / Rock Center		100.0	%		1,780,472		91.4	%		84.2	%		111,520		75.20
1325 Avenue of the Americas	Sixth Avenue / Rock Center		100.0	%		806,534		82.6	%		79.5	%		41,519		65.33
31 West 52nd Street	Sixth Avenue / Rock Center		100.0	%		761,787		84.5	%		84.5	%		54,864		82.44
900 Third Avenue	East Side		100.0	%		597,543		97.4	%		96.8	%		41,909		73.09
712 Fifth Avenue	Madison / Fifth Ave		50.0	%		543,386		96.9	%		96.3	%		57,750		110.95
60 Wall Street ⁽³⁾	Downtown		5.2	%		1,625,483		100.0	%		100.0	%		67,000		41.22

Subtotal / Weighted Average						8,638,634		90.8	%		88.4	%		521,133		68.94

PGRE’s Share						6,826,297		88.5	%		85.5	%		428,755		74.63

Washington, D.C.:
Waterview ⁽⁴⁾	Rosslyn, VA		100.0	%		636,768		98.7	%		98.7	%		35,244		53.33
425 Eye Street	East End		100.0	%		372,552		98.5	%		98.5	%		16,583		45.45
2099 Pennsylvania Avenue	CBD		100.0	%		210,792		82.3	%		76.2	%		12,117		75.82
1899 Pennsylvania Avenue	CBD		100.0	%		190,955		100.0	%		100.0	%		14,999		78.63
Liberty Place	East End		100.0	%		174,449		91.1	%		89.9	%		12,263		77.44

Subtotal / Weighted Average						1,585,516		95.8	%		94.9	%		91,206		59.45

PGRE’s Share						1,585,516		95.8	%		94.9	%		91,206		59.45

San Francisco:
One Market Plaza	South Financial District		49.0	%		1,583,857		97.5	%		97.0	%		108,851		70.00
One Front Street	North Financial District		100.0	%		643,745		93.9	%		93.9	%		35,355		58.12

Subtotal / Weighted Average						2,227,602		96.5	%		96.1	%		144,206		66.67

PGRE’s Share						1,419,835		95.9	%		95.6	%		88,692		64.74

Total / Weighted Average						12,451,752		92.5	%		90.6	%	$	756,545	$	67.22

PGRE’s Share						9,831,648		90.8	%		88.4	%	$	608,653	$	70.37

⁽¹⁾	See page 33 for our definition of this measure.

⁽²⁾	Represents office and retail space only.

⁽³⁾	Acquired on January 24, 2017.

⁽⁴⁾	Sold on May 3, 2017.

- 25 -


		TOP TENANTS AND INDUSTRY DIVERSIFICATION
(unaudited and in thousands, except square feet and per square foot amounts)


							PGRE’s Share of
	Lease Expiration			Total Square Feet Occupied			Total Square Feet Occupied			% of Total Square Feet			Annualized Rent ⁽¹⁾				% of Annualized Rent
Top 10 Tenants:	Lease Expiration			Total Square Feet Occupied			Total Square Feet Occupied			% of Total Square Feet			Amount		Per Square Foot		% of Annualized Rent
As of March 31, 2017
The Corporate Executive Board Company ⁽²⁾		Jan-2028			625,062			625,062			6.4	%	$	33,308	$	53.29		5.5	%
Barclays Capital, Inc.		Dec-2020			497,418			497,418			5.1	%		32,238		64.81		5.3	%
Allianz Global Investors, LP		Jan-2031			320,911			320,911			3.3	%		27,952		87.10		4.6	%
Clifford Chance LLP		Jun-2024			328,992			328,992			3.3	%		25,977		78.96		4.3	%
Credit Agricole Corporate & Investment Bank		Feb-2023			311,291			311,291			3.2	%		24,868		79.89		4.1	%
Morgan Stanley & Company		Mar-2032	⁽³⁾		312,885	⁽³⁾		312,885	⁽³⁾		3.2	%		22,209		70.98		3.6	%
WMG Acquisition Corp. (Warner Music Group)		Jul-2029			293,487			293,487			3.0	%		16,722		56.98		2.7	%
Chadbourne & Parke, LLP		Sep-2024			203,863			203,863			2.1	%		16,102		78.98		2.6	%
U.S. General Services Administration		Jun-2021			310,450			310,450			3.2	%		14,204		45.75		2.3	%
Showtime Networks, Inc.		Jan-2026			238,880			238,880			2.4	%		14,170		59.32		2.3	%


	PGRE’s Share of
	Square Feet		% of Occupied			Annualized		% of Annualized
Industry Diversification:	Occupied		Square Feet			Rent		Rent
As of March 31, 2017
Legal Services		1,819,198		21.1	%	$	136,875		22.5	%
Financial Services - Commercial and Investment Banking		1,733,796		20.1	%		120,752		19.8	%
Technology and Media		1,380,723		16.0	%		89,527		14.7	%
Financial Services, all others		967,011		11.2	%		80,919		13.3	%
Insurance		389,789		4.5	%		31,851		5.2	%
Retail		266,363		3.1	%		22,139		3.6	%
Government		345,278		4.0	%		16,648		2.7	%
Consumer Products		174,082		2.0	%		12,963		2.1	%
Real Estate		186,543		2.2	%		12,172		2.0	%
Other		1,361,219		15.8	%		84,807		14.1	%

⁽¹⁾	See page 33 for our definition of this measure.

⁽²⁾	No longer our tenant effective May 3, 2017 pursuant to the sale of Waterview.

⁽³⁾	52,056 of the square feet leased expires on June 30, 2017.

- 26 -


		LEASING ACTIVITY

(unaudited)


	Total			New York			Washington, D.C.			San Francisco
Three Months Ended March 31, 2017:
Total square feet leased		285,506			93,304			4,996			187,206
PGRE’s share of total square feet leased:		279,746			91,728			4,996			183,022
Initial rent ⁽¹⁾	$	70.42		$	68.61		$	59.87		$	71.74
Weighted average lease term (in years)		8.9			10.2			8.9			8.1
Tenant improvements and leasing commissions:
Per square foot	$	67.27		$	90.06		$	46.12		$	55.38
Per square foot per annum	$	7.58		$	8.81		$	5.19		$	6.80
Percentage of initial rent		10.8	%		12.8	%		8.7	%		9.5	%
Rent concessions:
Average free rent period (in months)		3.8			6.4			4.7			2.3
Average free rent period per annum (in months)		0.4			0.6			0.5			0.3
Second generation space: ⁽¹⁾
Square feet		219,247			39,982			—			179,265
GAAP basis:
Straight-line rent	$	66.19		$	61.76		$	—		$	67.25
Prior straight-line rent	$	55.97		$	55.04		$	—		$	56.20
Percentage increase		18.3	%		12.2	%		—			19.7	%
Cash basis
Initial rent ⁽¹⁾	$	70.28		$	64.22		$	—		$	71.74
Prior escalated rent	$	59.32		$	60.48		$	—		$	59.04
Percentage increase		18.5	%		6.2	%		—			21.5	%

⁽¹⁾	See page 33 for our definition of this measure.

- 27 -


		LEASE EXPIRATIONS - TOTAL PORTFOLIO

(unaudited and in thousands, except square feet and per square foot amounts)


	Total		PGRE’s Share of
Year of	Square Feet		Square Feet		Annualized Rent ⁽¹⁾				% of
Lease Expiration ⁽²⁾	of Expiring Leases		of Expiring Leases		Amount		Per Square Foot ⁽³⁾		Annualized Rent
Month to Month		7,337		5,562	$	300	$	—		0.0	%

2Q 2017		54,061		44,575		2,560		57.12		0.4	%
3Q 2017		113,659		111,875		8,083		72.24		1.2	%
4Q 2017		91,480		82,505		5,606		69.05		0.8	%

Total 2017		259,200		238,955		16,249		68.32		2.4	%
1Q 2018		154,448		125,288		7,345		84.54		1.1	%
Remaining 2018		197,500		161,039		13,323		82.69		2.0	%

Total 2018		351,948		286,327		20,668		83.33		3.1	%

2019		698,891		574,942		41,605		71.37		6.1	%
2020		482,000		393,290		30,299		77.08		4.4	%
2021		1,592,055		1,370,238		85,700		63.39		12.6	%
2022		2,194,698		508,284		33,418		71.12		4.9	%
2023		688,016		639,364		48,972		77.10		7.2	%
2024		680,160		655,487		50,349		77.01		7.4	%
2025		687,496		489,850		35,090		71.69		5.1	%
2026		730,413		652,769		47,533		69.71		7.0	%
Thereafter		3,874,024		3,805,647		271,848		74.73		39.8	%

⁽¹⁾	See page 33 for our definition of this measure.

⁽²⁾	Leases that expire on the last day of the quarter are treated as occupied and are reflected as expiring space in the following quarter.

⁽³⁾	Represents office and retail space only.

- 28 -


		LEASE EXPIRATIONS - NEW YORK

(unaudited and in thousands, except square feet and per square foot amounts)


	Total		PGRE’s Share of
Year of	Square Feet		Square Feet		Annualized Rent ⁽¹⁾				% of
Lease Expiration ⁽²⁾	of Expiring Leases		of Expiring Leases		Amount		Per Square Foot ⁽³⁾		Annualized Rent
Month to Month		575		575	$	113	$	—		0.0	%

2Q 2017		54,061		44,575		2,560		57.12		0.5	%
3Q 2017		105,815		105,815		7,728		73.03		1.6	%
4Q 2017		31,360		31,360		2,891		96.43		0.6	%

Total 2017		191,236		181,750		13,179		72.98		2.7	%
1Q 2018		100,056		81,985		5,129		111.87		1.0	%
Remaining 2018		148,991		132,586		11,534		86.95		2.3	%

Total 2018		249,047		214,571		16,663		93.35		3.3	%

2019		267,926		252,324		20,828		83.98		4.2	%
2020		338,070		295,913		23,494		79.45		4.8	%
2021		924,020		876,294		59,791		70.50		12.1	%
2022		1,786,888		235,340		12,891		62.14		2.6	%
2023		515,080		482,891		36,727		76.60		7.4	%
2024		573,139		552,063		42,444		77.10		8.6	%
2025		113,903		90,508		7,360		81.32		1.5	%
2026		575,377		560,231		41,240		69.98		8.3	%
Thereafter		2,981,535		2,933,215		219,621		73.70		44.5	%

⁽¹⁾	See page 33 for our definition of this measure.

⁽²⁾	Leases that expire on the last day of the quarter are treated as occupied and are reflected as expiring space in the following quarter.

⁽³⁾	Represents office and retail space only.

- 29 -


		LEASE EXPIRATIONS - WASHINGTON, D.C.

(unaudited and in thousands, except square feet and per square foot amounts)


	Total		PGRE’s Share of
Year of	Square Feet		Square Feet		Annualized Rent ⁽¹⁾				% of
Lease Expiration ⁽²⁾	of Expiring Leases		of Expiring Leases		Amount		Per Square Foot ⁽³⁾		Annualized Rent
Month to Month		—		—	$	—	$	—		—

2Q 2017		—		—		—		—		—
3Q 2017		—		—		—		—		—
4Q 2017		—		—		—		—		—

Total 2017		—		—		—		—		—
1Q 2018		—		—		—		—		—
Remaining 2018		—		—		—		—		—

Total 2018		—		—		—		—		—

2019		42,081		42,081		3,415		75.94		3.5	%
2020		32,959		32,959		2,477		75.14		2.5	%
2021		316,703		316,703		15,535		47.31		15.8	%
2022		36,733		36,733		2,080		56.63		2.1	%
2023		140,657		140,657		11,286		80.87		11.5	%
2024		78,811		78,811		6,042		76.80		6.1	%
2025		56,565		56,565		4,438		78.45		4.5	%
2026		32,011		32,011		2,205		68.88		2.2	%
Thereafter		853,162		853,162		51,077		57.86		51.8	%

⁽¹⁾	See page 33 for our definition of this measure.

⁽²⁾	Leases that expire on the last day of the quarter are treated as occupied and are reflected as expiring space in the following quarter.

⁽³⁾	Represents office and retail space only.

- 30 -


		LEASE EXPIRATIONS - SAN FRANCISCO

(unaudited and in thousands, except square feet and per square foot amounts)


	Total		PGRE’s Share of
Year of	Square Feet		Square Feet		Annualized Rent ⁽¹⁾				% of
Lease Expiration ⁽²⁾	of Expiring Leases		of Expiring Leases		Amount		Per Square Foot ⁽³⁾		Annualized Rent
Month to Month		6,762		4,987	$	187	$	—		0.2	%

2Q 2017		—		—		—		—		—
3Q 2017		7,844		6,060		355		58.55		0.4	%
4Q 2017		60,120		51,145		2,715		53.09		3.0	%

Total 2017		67,964		57,205		3,070		53.66		3.4	%
1Q 2018		54,392		43,303		2,216		53.54		2.5	%
Remaining 2018		48,509		28,454		1,789		62.86		2.0	%

Total 2018		102,901		71,757		4,005		57.40		4.5	%

2019		388,884		280,537		17,362		59.69		19.5	%
2020		110,971		64,418		4,328		67.18		4.9	%
2021		351,332		177,241		10,374		58.61		11.6	%
2022		371,077		236,211		18,447		78.10		20.7	%
2023		32,279		15,817		959		59.07		1.1	%
2024		28,210		24,613		1,863		75.68		2.1	%
2025		517,028		342,777		23,292		68.01		26.1	%
2026		123,025		60,528		4,088		67.64		4.6	%
Thereafter		39,327		19,270		1,150		61.38		1.3	%

⁽¹⁾	See page 33 for our definition of this measure.

⁽²⁾	Leases that expire on the last day of the quarter are treated as occupied and are reflected as expiring space in the following quarter.

⁽³⁾	Represents office and retail space only.

- 31 -


		CASH BASIS CAPITAL EXPENDITURES - TOTAL PORTFOLIO

(unaudited and in thousands)


	For the Three Months Ended March 31, 2017
	Total Portfolio		New York		Washington, D.C		San Francisco		Other
Capital expenditures: ⁽¹⁾
Expenditures to maintain assets	$	5,555	$	3,297	$	466	$	1,705	$	87
Second generation tenant improvements		3,957		2,487		—		1,470		—
Second generation leasing commissions		3,451		3,213		—		238		—
First generation leasing costs and other capital expenditures		5,566		2,816		1,226		1,524		—

Total Capital Expenditures		18,529		11,813		1,692		4,937		87

Development Expenditures ⁽¹⁾
Residential Development Fund	$	1,437	$	—	$	—	$	—	$	1,437
Other		452		375		—		77		—

Total Development Expenditures		1,889		375		—		77		1,437


	For the Three Months Ended March 31, 2016
	Total Portfolio		New York		Washington, D.C		San Francisco		Other
Capital expenditures: ⁽¹⁾
Expenditures to maintain assets	$	4,172	$	2,529	$	800	$	750	$	93
Second generation tenant improvements		13,576		11,689		391		1,496		—
Second generation leasing commissions		1,326		687		—		639		—
First generation leasing costs and other capital expenditures		6,946		4,570		2,376		—		—

Total Capital Expenditures		26,020		19,475		3,567		2,885		93

Development Expenditures ⁽¹⁾
Residential Development Fund	$	1,152	$	—	$	—	$	—	$	1,152
1633 - Plaza and Retail development		3,043		3,043		—		—		—
One Market Plaza - Lobby and Retail repositioning		4,460		—		—		4,460		—
Other		391		391		—		—		—

Total Development Expenditures		9,046		3,434		—		4,460		1,152

⁽¹⁾	See page 33 for our definition of this measure.

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		DEFINITIONS

Funds from Operations (“FFO”) is a supplemental measure of our performance. FFO is presented in accordance with the definition adopted by the National Association of Real Estate Investment Trusts (“NAREIT”). NAREIT defines FFO as GAAP net income or loss adjusted to exclude net gains from sales of depreciated real estate assets, impairment losses on depreciable real estate and depreciation and amortization expense from real estate assets, including our share of such adjustments of unconsolidated joint ventures. FFO is commonly used in the real estate industry to assist investors and analysts in comparing results of real estate companies because it excludes the effect of real estate depreciation and amortization and net gain on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions. FFO attributable to common stockholders represents the Company’s share of FFO that is attributable to common stockholders and is calculated by reducing from FFO, the noncontrolling interests’ share of FFO in consolidated joint ventures, real estate funds and Operating Partnership.

Core Funds from Operations (“Core FFO”) is an alternative measure of our operating performance, which adjusts FFO for certain other items that we believe enhance the comparability of our FFO across periods. Core FFO, when applicable, excludes the impact of transaction related costs, unrealized gains or losses on interest rate swaps, severance costs and defeasance and debt breakage costs, in order to reflect the Core FFO of our real estate portfolio and operations. In future periods, we may also exclude other items from Core FFO that we believe may help investors compare our results. Core FFO attributable to common stockholders represents the Company’s share of Core FFO that is attributable to common stockholders and is calculated by reducing from Core FFO, the noncontrolling interests’ share of Core FFO in consolidated joint ventures, real estate funds and Operating Partnership.

Funds Available for Distribution (“FAD”) is a supplemental measure of our operating performance and is calculated as Core FFO adjusted for (i) capital expenditures to maintain assets, (ii) tenant improvements and leasing commissions incurred for second generation leases, (iii) straight-line rent adjustments, (iv) unrealized gain (loss) on real estate fund investments, (v) amortization of above and below-market leases, net, (vi) amortization of stock-based compensation expense and (vii) amortization of deferred financing costs. FAD is commonly used in the real estate industry along with cash flow from operating activities as a measure of the ability to generate cash from operations and the ability to fund cash needs and make distributions to our stockholders. FAD provides supplemental information regarding our operating performance that would not otherwise be available and is useful to investors and analysts in assessing our operating performance. Additionally, although FAD is not intended to be a liquidity measure, as it does not make adjustments for the changes in working capital, we believe that FAD may provide investors and analysts with useful supplemental information regarding our ability to generate cash from operations and our ability to make distributions to our stockholders. Furthermore, we believe that FAD is frequently used by investors and analysts in evaluating our performance as a REIT. FAD attributable to common stockholders represents the Company’s share of FAD that is attributable to common stockholders and is calculated by reducing from FAD, the noncontrolling interests’ share of FAD in consolidated joint ventures, real estate funds and Operating Partnership.

Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) is calculated as net income (loss) plus interest expense, income taxes, depreciation and amortization expenses including our share of such adjustments of unconsolidated joint ventures. EBITDA provides supplemental information regarding our operating performance that would not otherwise be available and may be useful to an investor in assessing our ability to incur and service debt. EBITDA should not be considered as (i) a substitute for net income (loss) determined in accordance with GAAP, (ii) a substitute for net cash flows from operating activities determined in accordance with GAAP, (iii) an indication of our financial performance or (iv) a measure of our liquidity. We also present PGRE’s share of EBITDA which represents our share of EBITDA generated by our consolidated and unconsolidated joint ventures, based on our percentage ownership in the underlying assets.

Adjusted EBITDA is calculated by adjusting EBITDA to eliminate the impact of the performance of our real estate funds, gains and losses on interest rate swaps, transaction related costs and certain other items that may vary from period to period. We also present our PGRE’s share of Adjusted EBITDA, which represents our share of the Adjusted EBITDA generated by our consolidated and unconsolidated joint ventures based on our percentage ownership in the underlying assets. Adjusted EBITDA helps compare our operating performance from period to period by removing from our operating results the impact of our capital structure (primarily interest charges from our consolidated outstanding debt and the impact of our interest rate swaps), certain non-cash expenses (primarily depreciation and amortization on our assets), the formation and performance of our real estate funds and transaction related costs that may vary from period to period. In future periods, we may also exclude other items from Adjusted EBITDA that we believe may help investors compare our results. Adjusted EBITDA should not be considered as a substitute for net income (loss) determined in accordance with GAAP. Other real estate companies may use different methodologies for calculating Adjusted EBITDA or similar metrics, and accordingly, our presentation of Adjusted EBITDA may not be comparable to other real estate companies.

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		DEFINITIONS - CONTINUED

Net Operating Income (“NOI”) is a metric we use to measure the operating performance of our properties. NOI consists of property-related revenue (which includes rental income, tenant reimbursement income and certain other income) less operating expenses (which includes building expenses such as cleaning, security, repairs and maintenance, utilities, property administration and real estate taxes). We also present Cash NOI which deducts from NOI, straight-line rent adjustments and the amortization of above and below-market leases, net, including our share of such adjustments of unconsolidated joint ventures. In addition, we present PGRE’s share of NOI and Cash NOI which represents our share of NOI and Cash NOI of consolidated and unconsolidated joint ventures, based on our percentage ownership in the underlying assets. We used NOI and Cash NOI as metrics to measure the operating performance of our properties. We use these metrics internally as performance measures and believe they provide useful information to investors regarding our financial condition and results of operations because they reflect only those income and expense items that are incurred at property level. Other real estate companies may use different methodologies for calculating NOI and Cash NOI, and accordingly, our presentation of NOI and Cash NOI may not be comparable to other real estate companies.

Same Store NOI is used to measure the operating performance of our properties that were owned by us in a similar manner during both the current period and prior reporting periods, and represents Same Store NOI from consolidated and unconsolidated joint ventures based on our percentage ownership in the underlying assets. Same Store NOI also excludes lease termination income, bad debt expense and certain other items that may vary from period to period. We also present Same Store Cash NOI, which excludes the effect of non-cash items such as the straight-lining of rental revenue and the amortization of above and below-market leases.

PGRE’s Share of Total Debt represents our share of debt of consolidated and unconsolidated joint ventures, based on our percentage ownership in the underlying assets. We believe that PGRE’s share of total debt provides useful information to investors regarding our financial condition because it includes our share of debt from unconsolidated joint ventures and excludes the noncontrolling interests share of debt from consolidated joint ventures that is attributable to our partners. PGRE’s share of total debt should not be considered as a substitute for total debt determined in accordance with GAAP and should only be considered together with and as a supplement to the total debt determined in accordance with GAAP.

Annualized Rent represents the end of period monthly base rent plus escalations in accordance with the lease terms, multiplied by 12.

Leased % represents percentage of square feet that is leased, including signed leases not yet commenced.

Occupied % represents the percentage of space for which we have commenced rental revenue in accordance with GAAP.

Initial Rent represents the weighted average cash basis starting rent per square foot and does not include free rent or periodic step-ups in rent.

Prior Escalated Rent represents the weighted average cash basis rent (including reimbursements) per square foot at expiration.

Second Generation Space represents space leased that has been vacant for less than twelve months.

Capital Expenditures consist of expenditures to maintain assets, tenant improvement allowances and leasing commissions. Expenditures to Maintain Assets include capital expenditures to maintain current revenues. Second Generation Tenant Improvements and Leasing Commissions represent tenant improvements and leasing commissions incurred in leasing second generation space. First Generation Leasing Costs and Other Capital Expenditures include capital expenditures completed in the year of acquisition and the following two years that were planned at the time of acquisition, as well as tenant improvements and leasing commissions on space leased that has been vacant for more than twelve months. Development Expenditures consist of hard and soft costs related to the development of a property in getting it ready for its intended use.

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COMPANY INFORMATION

Corporate Headquarters

Investor Relations

Stock Exchange Listing

Trading Symbol

1633 Broadway, Suite 1801

IR@paramount-group.com

New York Stock Exchange

New York, NY 10019

(212) 492-2298

(212) 237-3100