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

Paramount Group, Inc. - FORM 8-K - EX-99.2 - August 1, 2018

Attached files

Attached files

Paramount Group, Inc. Reports

file	filename
EX-99.1 - EX-99.1 - Paramount Group, Inc.	d543963dex991.htm
8-K - FORM 8-K - Paramount Group, Inc.	d543963d8k.htm

Exhibit 99.2

LOGO

SUPPLEMENTAL OPERATING AND FINANCIAL DATA

FOR THE QUARTER ENDED JUNE 30, 2018


		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
Guidance		6
Financial Highlights		7
Consolidated Balance Sheets		8
Consolidated Statements of Income		9
Select Income Statement Data		10
Funds From Operations (“FFO”)		11
Funds Available for Distribution (“FAD”)		12
Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (“EBITDAre”)		13
Net Operating Income (“NOI”)		14 - 16
Same Store Results		17 - 20
Consolidated Joint Ventures and Fund		21 - 23
Unconsolidated Joint Ventures		24 - 26
Unconsolidated Funds Summary		27
Capital Structure		28
Debt Analysis		29
Debt Maturities		30

Selected Property Data
Portfolio Summary		31
Same Store Leased Occupancy		32 - 33
Top Tenants and Industry Diversification		34
Leasing Activity		35 - 36
Lease Expirations		37 - 40
Cash Basis Capital Expenditures		41 - 42

Definitions		43 - 44

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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
Peter Brindley		Executive Vice President, Leasing
David Zobel		Executive Vice President, Head of Acquisitions

BOARD OF DIRECTORS


Albert Behler		Director, Chairman of the Board
Thomas Armbrust		Director
Martin Bussmann		Director
Dan Emmett		Director, Chair of Nominating and Corporate Governance Committee; Lead Independent Director
Lizanne Galbreath		Director, Chair of Compensation Committee
Karin Klein		Director
Peter Linneman		Director, Chair of Audit Committee
Katharina Otto-Bernstein		Director
Mark Patterson		Director

COMPANY INFORMATION


Corporate Headquarters	Investor Relations	Stock Exchange Listing	Trading Symbol
1633 Broadway, Suite 1801	IR@paramount-group.com	New York Stock Exchange	PGRE
New York, NY 10019	(212) 492-2298
(212) 237-3100

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		RESEARCH COVERAGE⁽¹⁾


James Feldman	Thomas Catherwood	Derek Johnston / Mike Husseini	Steve Sakwa
Bank of America Merrill Lynch	BTIG	Deutsche Bank	Evercore ISI
(646) 855-5808	(212) 738-6140	(904) 520-4973 / (212) 250-7703	(212) 446-9462
james.feldman@baml.com	tcatherwood@btig.com	derek.johnston@db.com /	steve.sakwa@evercoreisi.com
		mike.husseini@db.com

Andrew Rosivach	Daniel Ismail	Richard Anderson	Vikram Malhotra
Goldman Sachs	Green Street Advisors	Mizuho Securities USA Inc.	Morgan Stanley
(212) 902-2796	(949) 640-8780	(212) 205-8445	(212) 761-7064
andrew.rosivach@gs.com	dismail@greenst.com	richard.anderson@us.mizuho-sc.com	vikram.malhotra@morganstanley.com

Frank Lee	Blaine Heck
UBS	Wells Fargo
(415) 352-5679	(443) 263-6529
frank-a.lee@ubs.com	blaine.heck@wellsfargo.com

⁽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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		GUIDANCE

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


	Full Year 2018						Compared to Prior Guidance
	Low			High			Compared to Prior Guidance
Estimated net loss attributable to common stockholders	$	(0.14	)	$	(0.10	)
Real estate impairment loss		0.17			0.17
Our share of depreciation and amortization		0.90			0.90

Estimated Core FFO ⁽¹⁾	$	0.93		$	0.97		Increased

Assumptions
Leasing Activity (square feet)		700,000			900,000		Increased
PGRE’s share of Same Store Leased % ⁽²⁾ at year end		96.0	%		97.5	%	Increased
Increase in PGRE’s share of Same Store Cash NOI ⁽²⁾		7.0	%		10.0	%	Unchanged
Increase in PGRE’s share of Same Store NOI ⁽²⁾		7.0	%		10.0	%	Increased
PGRE’s share of Cash NOI ⁽²⁾		351,000			355,000		Increased
PGRE’s share of NOI ⁽²⁾		415,000			421,000		Increased
PGRE’s share of straight-line rent and above and below-market lease revenue, net		64,000			66,000		Increased
Fee income, net of income taxes		17,000			18,000		Unchanged
PGRE’s share of interest and debt expense, including amortization of deferred financing costs		(130,000	)		(128,000	)	Unchanged
General and administrative expenses		(58,000	)		(56,000	)	Unchanged

⁽¹⁾

We are increasing our Estimated Core FFO Guidance for the full year of 2018, which is reconciled above to estimated net loss attributable to common stockholders per diluted share in accordance with GAAP. The estimated net loss attributable to common stockholders per diluted share is not a projection and is being provided solely to satisfy the disclosure requirements of the U.S. Securities and Exchange Commission. Except as described above, these estimates reflect management’s view of current and future market conditions, including assumptions with respect to rental rates, occupancy levels and the earnings impact of the events referenced in our earnings release issued on August 1, 2018 and otherwise referenced during our conference call scheduled for August 2, 2018. These estimates do not include the impact on operating results from possible future property acquisitions or dispositions, capital markets activity or unrealized gains or losses on real estate fund investments. The estimates set forth above may be subject to fluctuations as a result of several factors, including the straight-lining of rental income and the amortization of above and below-market leases. There can be no assurance that our actual results will not differ materially from the estimates set forth above.

⁽²⁾	See page 43 for our definition of this measure.

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		FINANCIAL HIGHLIGHTS

(unaudited and in thousands, except per share amounts)


	Three Months Ended							Six Months Ended
SELECTED FINANCIAL DATA	June 30, 2018			June 30, 2017		March 31, 2018		June 30, 2018			June 30, 2017
Net (loss) income attributable to common stockholders	$	(34,816	)	$	103,016	$	1,114	$	(33,702	)	$	103,388
Per share - basic and diluted	$	(0.14	)	$	0.44	$	0.00	$	(0.14	)	$	0.44

Core FFO attributable to common stockholders⁽¹⁾	$	57,899		$	54,565	$	54,963	$	112,862		$	106,070
Per share - diluted	$	0.24		$	0.23	$	0.23	$	0.47		$	0.45
PGRE’s share of Cash NOI ⁽¹⁾	$	88,488		$	85,436	$	85,947	$	174,435		$	164,553
PGRE’s share of NOI ⁽¹⁾	$	106,246		$	102,208	$	100,580	$	206,826		$	200,570


Same Store NOI	% Change
Three Months Ended June 30, 2018 vs. June 30, 2017		6.1	%
Six Months Ended June 30, 2018 vs. June 30, 2017		6.3	%

PORTFOLIO STATISTICS


	As of
	June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017
Leased % ⁽¹⁾		96.4	%		94.0	%		93.5	%		92.3	%		90.9	%


Same Store Leased %	% Change
June 30, 2018 vs. March 31, 2018		2.4	%
June 30, 2018 vs. December 31, 2017		2.9	%

COMMON SHARE DATA


	Three Months Ended
	June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017
Share Price:
High	$	15.63		$	15.89		$	16.61		$	16.79		$	17.25
Low	$	13.85		$	13.70		$	15.49		$	15.14		$	15.32
Closing (end of period)	$	15.40		$	14.24		$	15.85		$	16.00		$	16.00

Dividends per common share	$	0.100		$	0.100		$	0.095		$	0.095		$	0.095
Annualized dividends per common share	$	0.400		$	0.400		$	0.380		$	0.380		$	0.380
Dividend yield (on closing share price)		2.6	%		2.8	%		2.4	%		2.4	%		2.4	%

⁽¹⁾	See page 43 for our definition of this measure.

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		CONSOLIDATED BALANCE SHEETS

(unaudited and in thousands)


	June 30, 2018			December 31, 2017
ASSETS:
Real estate, at cost
Land	$	2,186,006		$	2,209,506
Buildings and improvements		6,132,725			6,119,969

		8,318,731			8,329,475
Accumulated depreciation and amortization		(566,164	)		(487,945	)

Real estate, net		7,752,567			7,841,530
Cash and cash equivalents		233,530			219,381
Restricted cash		32,755			31,044
Investments in unconsolidated joint ventures		67,823			44,762
Investments in unconsolidated real estate funds		9,292			7,253
Preferred equity investments, net		35,925			35,817
Marketable securities		25,913			29,039
Accounts and other receivables, net		15,549			17,082
Deferred rent receivable		252,140			220,826
Deferred charges, net		116,147			98,645
Intangible assets, net		316,451			352,206
Other assets		57,821			20,076

Total Assets	$	8,915,913		$	8,917,661

LIABILITIES:
Notes and mortgages payable, net	$	3,562,459		$	3,541,300
Revolving credit facility		—			—
Due to affiliates		27,299			27,299
Accounts payable and accrued expenses		123,720			117,630
Dividends and distributions payable		26,621			25,211
Intangible liabilities, net		115,559			130,028
Other liabilities		54,507			54,109

Total Liabilities		3,910,165			3,895,577

EQUITY:
Paramount Group, Inc. equity		4,113,520			4,176,741
Noncontrolling interests in:
Consolidated joint ventures		403,686			404,997
Consolidated real estate fund		57,816			14,549
Operating Partnership		430,726			425,797

Total Equity		5,005,748			5,022,084

Total Liabilities and Equity	$	8,915,913		$	8,917,661

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		CONSOLIDATED STATEMENTS OF INCOME

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


	Three Months Ended									Six Months Ended
	June 30, 2018			June 30, 2017			March 31, 2018			June 30, 2018			June 30, 2017
REVENUES:
Property rentals	$	148,486		$	138,232		$	145,741		$	294,227		$	270,467
Straight-line rent adjustments		16,739			11,974			13,244			29,983			32,121
Amortization of above and below-market leases, net		4,304			7,981			4,420			8,724			10,989

Rental income		169,529			158,187			163,405			332,934			313,577
Tenant reimbursement income		13,164			11,856			14,246			27,410			24,708
Fee income (see details on page 10)		5,409			4,448			3,465			8,874			14,004
Other income (see details on page 10)		3,317			3,213			3,155			6,472			6,651

Total revenues		191,419			177,704			184,271			375,690			358,940

EXPENSES:
Operating		67,646			63,461			68,978			136,624			129,432
Depreciation and amortization		64,775			68,636			65,156			129,931			131,628
General and administrative (see details on page 10)		17,195			16,573			12,631			29,826			30,154
Transaction related costs		293			502			120			413			777
Real estate impairment loss		46,000			—			—			46,000			—

Total expenses		195,909			149,172			146,885			342,794			291,991

Operating (loss) income		(4,490	)		28,532			37,386			32,896			66,949

Income (loss) from unconsolidated joint ventures		2,521			16,535			(62	)		2,459			18,472
Loss from unconsolidated real estate funds		(14	)		(2,411	)		(66	)		(80	)		(2,123	)
Interest and other income, net (see details on page 10)		2,094			2,486			2,016			4,110			5,686
Interest and debt expense (see details on page 10)		(36,809	)		(34,817	)		(36,082	)		(72,891	)		(71,835	)
Loss on early extinguishment of debt		—			(5,162	)		—			—			(7,877	)
Gain on sale of real estate		—			133,989			—			—			133,989
Unrealized gain on interest rate swaps		—			—			—			—			1,802

Net (loss) income before income taxes		(36,698	)		139,152			3,192			(33,506	)		145,063
Income tax benefit (expense)		120			(970	)		(477	)		(357	)		(5,252	)

Net (loss) income		(36,578	)		138,182			2,715			(33,863	)		139,811
Less net (income) loss attributable to noncontrolling interests in:
Consolidated joint ventures		(1,752	)		(1,897	)		(1,055	)		(2,807	)		(3,188	)
Consolidated real estate fund		(152	)		(20,169	)		(430	)		(582	)		(20,081	)
Operating Partnership		3,666			(13,100	)		(116	)		3,550			(13,154	)

Net (loss) income attributable to common stockholders	$	(34,816	)	$	103,016		$	1,114		$	(33,702	)	$	103,388

Weighted average common shares outstanding:
Basic		240,336,485			234,990,468			240,311,744			240,324,183			232,968,602

Diluted		240,336,485			235,010,830			240,338,698			240,324,183			232,995,822

(Loss) income per common share:
Basic	$	(0.14	)	$	0.44		$	0.00		$	(0.14	)	$	0.44

Diluted	$	(0.14	)	$	0.44		$	0.00		$	(0.14	)	$	0.44

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		SELECT INCOME STATEMENT DATA

(unaudited and in thousands)


	Three Months Ended						Six Months Ended
	June 30, 2018		June 30, 2017		March 31, 2018		June 30, 2018		June 30, 2017
Fee Income:
Property management	$	1,490	$	1,532	$	1,502	$	2,992	$	3,142
Asset management		1,823		2,359		1,610		3,433		4,625
Acquisition and disposition		1,750		250		—		1,750		5,570
Other		346		307		353		699		667

Total fee income	$	5,409	$	4,448	$	3,465	$	8,874	$	14,004


	Three Months Ended						Six Months Ended
	June 30, 2018		June 30, 2017		March 31, 2018		June 30, 2018		June 30, 2017
Other Income:
Lease termination income	$	29	$	895	$	28	$	57	$	961
Other (primarily parking income and tenant requested services, including overtime heating and cooling)		3,288		2,318		3,127		6,415		5,690

Total other income	$	3,317	$	3,213	$	3,155	$	6,472	$	6,651


	Three Months Ended						Six Months Ended
	June 30, 2018		June 30, 2017		March 31, 2018		June 30, 2018		June 30, 2017
General and Administrative:
Cash general and administrative	$	12,346	$	11,113	$	6,275	$	18,621	$	19,563
Non-cash general and administrative - stock based compensation expense		4,650		4,438		6,265		10,915		7,867
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”)		199		1,022		91		290		2,724

Total general and administrative	$	17,195	$	16,573	$	12,631	$	29,826	$	30,154


	Three Months Ended						Six Months Ended
	June 30, 2018		June 30, 2017		March 31, 2018		June 30, 2018		June 30, 2017
Interest and Other Income:
Preferred equity investment income ⁽¹⁾	$	917	$	953	$	899		1,816		2,366
Interest income		978		511		1,026		2,004		596
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)		199		1,022		91		290		2,724

Total interest and other income, net	$	2,094	$	2,486	$	2,016	$	4,110	$	5,686

⁽¹⁾	Represents 100% of the investment income from PGRESS Equity Holdings, L.P., of which our 24.4% share is $223, $232 and $219 for the three months ended June 30, 2018 and 2017, and March 31, 2018, respectively and $442 and $576 for the six months ended June 30, 2018 and 2017, respectively.


	Three Months Ended						Six Months Ended
	June 30, 2018		June 30, 2017		March 31, 2018		June 30, 2018		June 30, 2017
Interest and Debt Expense:
Interest expense	$	34,055	$	31,999	$	33,321	$	67,376	$	66,287
Amortization of deferred financing costs		2,754		2,818		2,761		5,515		5,548

Total interest and debt expense	$	36,809	$	34,817	$	36,082	$	72,891	$	71,835

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		FFO

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


	Three Months Ended									Six Months Ended
	June 30, 2018			June 30, 2017			March 31, 2018			June 30, 2018			June 30, 2017
Reconciliation of net (loss) income to FFO and Core FFO:
Net (loss) income	$	(36,578	)	$	138,182		$	2,715		$	(33,863	)	$	139,811
Real estate depreciation and amortization (including our share of unconsolidated joint ventures)		66,711			70,660			67,160			133,871			135,500
Real estate impairment loss		46,000			—			—			46,000			—
Gain on sale of depreciable real estate		—			(110,583	)		—			—			(110,583	)

FFO ⁽¹⁾		76,133			98,259			69,875			146,008			164,728
Less FFO attributable to noncontrolling interests in:
Consolidated joint ventures		(10,840	)		(7,740	)		(10,207	)		(21,047	)		(14,935	)
Consolidated real estate fund		(152	)		(20,276	)		(430	)		(582	)		(20,416	)

FFO attributable to Paramount Group Operating Partnership		65,141			70,243			59,238			124,379			129,377
Less FFO attributable to noncontrolling interests in Operating Partnership		(6,206	)		(7,925	)		(5,585	)		(11,791	)		(15,470	)

FFO attributable to common stockholders⁽¹⁾	$	58,935		$	62,318		$	53,653		$	112,588		$	113,907

Per diluted share	$	0.25		$	0.27		$	0.22		$	0.47		$	0.49


FFO	$	76,133		$	98,259		$	69,875		$	146,008		$	164,728
Non-core items:
Our share of (distributions from 712 Fifth Avenue in excess of earnings) and earnings in excess of distributions		(1,512	)		(15,072	)		1,195			(317	)		(15,072	)
Transaction related costs		293			502			120			413			777
Realized and unrealized loss from unconsolidated real estate funds		74			2,482			131			205			2,247
After-tax net gain on sale of residential condominium land parcel		—			(21,568	)		—			—			(21,568	)
Loss on early extinguishment of debt		—			5,162			—			—			7,877
Unrealized gain on interest rate swaps (including our share of unconsolidated joint ventures)		—			(364	)		—			—			(2,750	)

Core FFO ⁽¹⁾		74,988			69,401			71,321			146,309			136,239
Less Core FFO attributable to noncontrolling interests in:
Consolidated joint ventures		(10,840	)		(7,740	)		(10,207	)		(21,047	)		(15,401	)
Consolidated real estate fund		(152	)		12			(430	)		(582	)		(128	)

Core FFO attributable to Paramount Group Operating Partnership		63,996			61,673			60,684			124,680			120,710
Less Core FFO attributable to noncontrolling interests in Operating Partnership		(6,097	)		(7,108	)		(5,721	)		(11,818	)		(14,640	)

Core FFO attributable to common stockholders ⁽¹⁾	$	57,899		$	54,565		$	54,963		$	112,862		$	106,070

Per diluted share	$	0.24		$	0.23		$	0.23		$	0.47		$	0.45


Reconciliation of weighted average shares outstanding:
Weighted average shares outstanding		240,336,485			234,990,468			240,311,744			240,324,183			232,968,602
Effect of dilutive securities		17,229			20,362			26,954			20,525			27,220

Denominator for FFO and Core FFO per diluted share		240,353,714			235,010,830			240,338,698			240,344,708			232,995,822

⁽¹⁾	See page 43 for our definition of this measure.

- 11 -


		FAD

(unaudited and in thousands)


	Three Months Ended									Six Months Ended
	June 30, 2018			June 30, 2017			March 31, 2018			June 30, 2018			June 30, 2017
Reconciliation of Core FFO to FAD:
Core FFO	$	74,988		$	69,401		$	71,321		$	146,309		$	136,239
Add (subtract) adjustments to arrive at FAD:
Amortization of stock-based compensation expense		4,650			4,438			6,265			10,915			7,867
Amortization of deferred financing costs (including our share of unconsolidated joint ventures)		2,827			3,061			2,835			5,662			5,859
Amortization of above and below-market leases, net (including our share of unconsolidated joint ventures)		(4,141	)		(7,818	)		(4,257	)		(8,398	)		(10,699	)
Expenditures to maintain assets		(2,496	)		(1,999	)		(3,702	)		(6,198	)		(7,554	)
Second generation tenant improvements and leasing commissions		(20,392	)		(9,867	)		(14,983	)		(35,375	)		(17,275	)
Straight-line rent adjustments (including our share of unconsolidated joint ventures)		(16,853	)		(12,208	)		(13,197	)		(30,050	)		(32,719	)

FAD ⁽¹⁾		38,583			45,008			44,282			82,865			81,718

Less FAD attributable to noncontrolling interests in:
Consolidated joint ventures		(6,277	)		(3,123	)		(6,850	)		(13,127	)		(4,983	)
Consolidated real estate fund		(152	)		12			(430	)		(582	)		(128	)

FAD attributable to Paramount Group Operating Partnership		32,154			41,897			37,002			69,156			76,607
Less FAD attributable to noncontrolling interests in Operating Partnership		(3,063	)		(4,727	)		(3,488	)		(6,551	)		(9,156	)

FAD attributable to common stockholders ^(1) (2)	$	29,091		$	37,170		$	33,514		$	62,605		$	67,451

Dividends declared on common stock	$	24,053		$	22,637		$	24,051		$	48,104		$	44,618

⁽¹⁾	See page 43 for our definition of this measure.

⁽²⁾	FAD attributable to common stockholders is not necessarily indicative of future FAD 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.

- 12 -


		EBITDAre

(unaudited and in thousands)


	Three Months Ended									Six Months Ended
	June 30, 2018			June 30, 2017			March 31, 2018			June 30, 2018			June 30, 2017
Reconciliation of net (loss) income to EBITDAre and Adjusted EBITDAre:
Net (loss) income	$	(36,578	)	$	138,182		$	2,715		$	(33,863	)	$	139,811
Add (subtract) adjustments to arrive at EBITDAre and Adjusted EBITDAre:
Depreciation and amortization (including our share of unconsolidated joint ventures)		66,711			70,660			67,160			133,871			135,500
Interest and debt expense (including our share of unconsolidated joint ventures)		38,513			36,679			37,744			76,257			75,332
Income tax (benefit) expense (including our share of unconsolidated joint ventures)		(120	)		970			478			358			5,252
Real estate impairment loss		46,000			—			—			46,000			—
Gain on sale of depreciable real estate		—			(110,583	)		—			—			(110,583	)

EBITDAre⁽¹⁾		114,526			135,908			108,097			222,623			245,312
Less EBITDAre attributable to noncontrolling interests in:
Consolidated joint ventures		(17,469	)		(12,941	)		(16,786	)		(34,255	)		(25,586	)
Consolidated real estate fund		(122	)		(20,276	)		(432	)		(554	)		(20,417	)

PGRE’s share of EBITDAre ⁽¹⁾	$	96,935		$	102,691		$	90,879		$	187,814		$	199,309


EBITDAre	$	114,526		$	135,908		$	108,097		$	222,623		$	245,312
Add (subtract) adjustments to arrive at Adjusted EBITDAre:
Our share of (distributions from 712 Fifth Avenue in excess of earnings) and earnings in excess of distributions		(1,512	)		(15,072	)		1,195			(317	)		(15,072	)
Transaction related costs		293			502			120			413			777
EBITDAre from real estate funds		(122	)		2,021			(414	)		(536	)		1,571
Pre-tax net gain on sale of residential condominium land parcel		—			(23,406	)		—			—			(23,406	)
Loss on early extinguishment of debt		—			5,162			—			—			7,877
Unrealized gain on interest rate swaps (including our share of unconsolidated joint ventures)		—			(364	)		—			—			(2,750	)

Adjusted EBITDAre ⁽¹⁾		113,185			104,751			108,998			222,183			214,309
Less Adjusted EBITDAre attributable to noncontrolling interests in:
Consolidated joint ventures		(17,469	)		(12,941	)		(16,786	)		(34,255	)		(26,052	)
Consolidated real estate fund		—			381			—			—			381

PGRE’s share of Adjusted EBITDAre ⁽¹⁾	$	95,716		$	92,191		$	92,212		$	187,928		$	188,638

⁽¹⁾	See page 43 for our definition of this measure.

- 13 -


		NOI

(unaudited and in thousands)


	Three Months Ended									Six Months Ended
	June 30, 2018			June 30, 2017			March 31, 2018			June 30, 2018			June 30, 2017
Reconciliation of net (loss) income to NOI and Cash NOI:
Net (loss) income	$	(36,578	)	$	138,182		$	2,715		$	(33,863	)	$	139,811
Add (subtract) adjustments to arrive at NOI and Cash NOI:
Depreciation and amortization		64,775			68,636			65,156			129,931			131,628
General and administrative		17,195			16,573			12,631			29,826			30,154
Interest and debt expense		36,809			34,817			36,082			72,891			71,835
Loss on early extinguishment of debt		—			5,162			—			—			7,877
Transaction related costs		293			502			120			413			777
Income tax (benefit) expense		(120	)		970			477			357			5,252
NOI from unconsolidated joint ventures		4,569			4,958			4,740			9,309			9,781
(Income) loss from unconsolidated joint ventures		(2,521	)		(16,535	)		62			(2,459	)		(18,472	)
Loss from unconsolidated real estate funds		14			2,411			66			80			2,123
Fee income		(5,409	)		(4,448	)		(3,465	)		(8,874	)		(14,004	)
Interest and other income, net		(2,094	)		(2,486	)		(2,016	)		(4,110	)		(5,686	)
Real estate impairment loss		46,000			—			—			46,000			—
Gain on sale of real estate		—			(133,989	)		—			—			(133,989	)
Unrealized gain on interest rate swaps		—			—			—			—			(1,802	)

NOI ⁽¹⁾		122,933			114,753			116,568			239,501			225,285
Less NOI attributable to noncontrolling interests in:
Consolidated joint ventures		(16,674	)		(12,200	)		(16,014	)		(32,688	)		(24,229	)
Consolidated real estate fund		(13	)		(345	)		26			13			(486	)

PGRE’s share of NOI⁽¹⁾	$	106,246		$	102,208		$	100,580		$	206,826		$	200,570


NOI ⁽¹⁾	$	122,933		$	114,753		$	116,568		$	239,501		$	225,285
Less:
Straight-line rent adjustments (including our share of unconsolidated joint ventures)		(16,853	)		(12,208	)		(13,197	)		(30,050	)		(32,719	)
Amortization of above and below-market leases, net (including our share of unconsolidated joint ventures)		(4,141	)		(7,818	)		(4,257	)		(8,398	)		(10,699	)

Cash NOI⁽¹⁾		101,939			94,727			99,114			201,053			181,867
Less Cash NOI attributable to noncontrolling interests in:
Consolidated joint ventures		(13,438	)		(8,946	)		(13,193	)		(26,631	)		(16,828	)
Consolidated real estate fund		(13	)		(345	)		26			13			(486	)

PGRE’s share of Cash NOI ⁽¹⁾	$	88,488		$	85,436		$	85,947		$	174,435		$	164,553

⁽¹⁾	See page 43 for our definition of this measure.

- 14 -


		NOI

(unaudited and in thousands)


	Three Months Ended June 30, 2018
	Total			New York			Washington, D.C.			San Francisco			Other
Reconciliation of net (loss) income to NOI and Cash NOI:
Net (loss) income	$	(36,578	)	$	11,115		$	(41,841	)	$	7,998		$	(13,850	)
Add (subtract) adjustments to arrive at NOI and Cash NOI:
Depreciation and amortization		64,775			38,369			5,540			20,206			660
General and administrative		17,195			—			—			—			17,195
Interest and debt expense		36,809			23,266			—			12,273			1,270
Transaction related costs		293			—			—			—			293
Income tax (benefit) expense		(120	)		—			—			5			(125	)
NOI from unconsolidated joint ventures		4,569			4,493			—			—			76
Income from unconsolidated joint ventures		(2,521	)		(2,506	)		—			—			(15	)
Loss from unconsolidated real estate funds		14			—			—			—			14
Fee income		(5,409	)		—			—			—			(5,409	)
Interest and other income, net		(2,094	)		—			—			(186	)		(1,908	)
Real estate impairment loss		46,000			—			46,000			—			—

NOI ⁽¹⁾		122,933			74,737			9,699			40,296			(1,799	)
Less NOI attributable to noncontrolling interests in:
Consolidated joint ventures		(16,674	)		—			—			(16,674	)		—
Consolidated real estate fund		(13	)		—			—			—			(13	)

PGRE’s share of NOIfor the three months ended June 30, 2018	$	106,246		$	74,737		$	9,699		$	23,622		$	(1,812	)

PGRE’s share of NOI for the three months ended June 30, 2017	$	102,208		$	68,151		$	11,573		$	24,881		$	(2,397	)


NOI ⁽¹⁾	$	122,933		$	74,737		$	9,699		$	40,296		$	(1,799	)
Add (subtract) adjustments to arrive at Cash NOI:
Straight-line rent adjustments (including our share of unconsolidated joint ventures)		(16,853	)		(11,497	)		204			(5,536	)		(24	)
Amortization of above and below-market leases, net (including our share of unconsolidated joint ventures)		(4,141	)		533			(550	)		(4,124	)		—

Cash NOI⁽¹⁾		101,939			63,773			9,353			30,636			(1,823	)
Less Cash NOI attributable to noncontrolling interests in:
Consolidated joint ventures		(13,438	)		—			—			(13,438	)		—
Consolidated real estate fund		(13	)		—			—			—			(13	)

PGRE’s share of Cash NOI for the three months ended June 30, 2018	$	88,488		$	63,773		$	9,353		$	17,198		$	(1,836	)

PGRE’s share of Cash NOI for the three months ended June 30, 2017	$	85,436		$	61,423		$	10,690		$	15,748		$	(2,425	)

⁽¹⁾	See page 43 for our definition of this measure.

- 15 -


		NOI

(unaudited and in thousands)


	Six Months Ended June 30, 2018
	Total			New York			Washington, D.C.			San Francisco			Other
Reconciliation of net (loss) income to NOI and Cash NOI:
Net (loss) income	$	(33,863	)	$	16,594		$	(37,749	)	$	12,907		$	(25,615	)
Add (subtract) adjustments to arrive at NOI and Cash NOI:
Depreciation and amortization		129,931			76,555			11,052			41,069			1,255
General and administrative		29,826			—			—			—			29,826
Interest and debt expense		72,891			46,012			—			24,440			2,439
Transaction related costs		413			—			—			—			413
Income tax expense		357			—			—			8			349
NOI from unconsolidated joint ventures		9,309			9,158			—			—			151
Income from unconsolidated joint ventures		(2,459	)		(2,433	)		—			—			(26	)
Loss from unconsolidated real estate funds		80			—			—			—			80
Fee income		(8,874	)		—			—			—			(8,874	)
Interest and other income, net		(4,110	)		—			—			(345	)		(3,765	)
Real estate impairment loss		46,000			—			46,000			—			—

NOI ⁽¹⁾		239,501			145,886			19,303			78,079			(3,767	)
Less NOI attributable to noncontrolling interests in:
Consolidated joint ventures		(32,688	)		—			—			(32,688	)		—
Consolidated real estate funds		13			—			—			—			13

PGRE’s share of NOI for the six months ended June 30, 2018	$	206,826		$	145,886		$	19,303		$	45,391		$	(3,754	)

PGRE’s share of NOI for the six months ended June 30, 2017	$	200,570		$	133,469		$	26,436		$	44,186		$	(3,521	)


NOI ⁽¹⁾	$	239,501		$	145,886		$	19,303		$	78,079		$	(3,767	)
Add (subtract) adjustments to arrive at Cash NOI:
Straight-line rent adjustments (including our share of unconsolidated joint ventures)		(30,050	)		(21,005	)		362			(9,444	)		37
Amortization of above and below-market leases, net		(8,398	)		1,090			(1,097	)		(8,391	)		—

Cash NOI⁽¹⁾		201,053			125,971			18,568			60,244			(3,730	)
Less Cash NOI attributable to noncontrolling interests in:
Consolidated joint ventures		(26,631	)		—			—			(26,631	)		—
Consolidated real estate funds		13			—			—			—			13

PGRE’s share of Cash NOI for the six months ended June 30, 2018	$	174,435		$	125,971		$	18,568		$	33,613		$	(3,717	)

PGRE’s share of Cash NOI for the six months ended June 30, 2017	$	164,553		$	114,913		$	23,943		$	29,185		$	(3,488	)

⁽¹⁾	See page 43 for our definition of this measure.

- 16 -


		SAME STORE RESULTS

(unaudited and in thousands)


	Three Months Ended June 30, 2018
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 June 30, 2018	$	88,488		$	63,773		$	9,353		$	17,198		$	(1,836	)
Acquisitions ⁽²⁾		(1,766	)		—			—			(1,766	)		—
Dispositions		—			—			—			—			—
Lease termination income (including our share of unconsolidated joint ventures)		(54	)		(54	)		—			—			—
Other, net		174			174			—			—			—

PGRE’s share of Same Store Cash NOI ⁽¹⁾ for the three months ended June 30, 2018	$	86,842		$	63,893		$	9,353		$	15,432		$	(1,836	)


	Three Months Ended June 30, 2017
	Total			New York			Washington, D.C.			San Francisco			Other
PGRE’s share of Cash NOI for the three months ended June 30, 2017	$	85,436		$	61,423		$	10,690		$	15,748		$	(2,425	)
Acquisitions		—			—			—			—			—
Dispositions ⁽³⁾		(2,332	)		—			(2,332	)		—			—
Lease termination income (including our share of unconsolidated joint ventures)		(1,041	)		(175	)		—			(866	)		—
Other, net		(87	)		30			—			—			(117	)

PGRE’s share of Same Store Cash NOI ⁽¹⁾ for the three months ended June 30, 2017	$	81,976		$	61,278		$	8,358		$	14,882		$	(2,542	)


Increase in PGRE’s share of Same Store Cash NOI	$	4,866		$	2,615		$	995		$	550		$	706
% Increase		5.9	%		4.3	%		11.9	%		3.7	%

⁽¹⁾	See page 43 for our definition of this measure.

⁽²⁾	Represents our share of Cash NOI attributable to acquired properties (50 Beale Street in San Francisco) for the months in which they were not owned by us in both reporting periods.

⁽³⁾	Represents our share of Cash NOI attributable to sold properties (Waterview in Washington, D.C.) for the months in which they were not owned by us in both reporting periods.

- 17 -


		SAME STORE RESULTS

(unaudited and in thousands)


	Three Months Ended June 30, 2018
SAME STORE NOI ⁽¹⁾	Total			New York			Washington, D.C.			San Francisco			Other
PGRE’s share of NOI for the three months ended June 30, 2018	$	106,246		$	74,737		$	9,699		$	23,622		$	(1,812	)
Acquisitions ⁽²⁾		(2,361	)		—			—			(2,361	)		—
Dispositions		—			—			—			—			—
Lease termination income (including our share of unconsolidated joint ventures)		(54	)		(54	)		—			—			—
Other, net		174			174			—			—			—

PGRE’s share of Same Store NOI ⁽¹⁾ for the three months ended June 30, 2018	$	104,005		$	74,857		$	9,699		$	21,261		$	(1,812	)


	Three Months Ended June 30, 2017
	Total			New York			Washington, D.C.			San Francisco			Other
PGRE’s share of NOI for the three months ended June 30, 2017	$	102,208		$	68,151		$	11,573		$	24,881		$	(2,397	)
Acquisitions		—			—			—			—			—
Dispositions ⁽³⁾		(2,332	)		—			(2,332	)		—			—
Lease termination income (including our share of unconsolidated joint ventures)		(1,041	)		(175	)		—			(866	)		—
Other, net		(785	)		30			—			(698	)		(117	)

PGRE’s share of Same Store NOI ⁽¹⁾ for the three months ended June 30, 2017	$	98,050		$	68,006		$	9,241		$	23,317		$	(2,514	)


Increase (decrease) in PGRE’s share of Same Store NOI	$	5,955	⁽⁴⁾	$	6,851		$	458		$	(2,056	)⁽⁴⁾	$	702
% Increase (decrease)		6.1	%⁽⁴⁾		10.1	%		5.0	%		(8.8	%)⁽⁴⁾

⁽¹⁾	See page 43 for our definition of this measure.

⁽²⁾	Represents our share of NOI attributable to acquired properties (50 Beale Street in San Francisco) for the months in which they were not owned by us in both reporting periods.

⁽³⁾	Represents our share of NOI attributable to sold properties (Waterview in Washington, D.C.) for the months in which they were not owned by us in both reporting periods.

⁽⁴⁾

This decrease resulted from income of $3,028 in the prior year from the accelerated amortization of certain below-market lease liabilities in connection with such tenants’ lease modifications. Excluding this income, Same Store NOI increased by 9.5% for the total portfolio and 4.8% for our San Francisco portfolio.

- 18 -


		SAME STORE RESULTS - BY SEGMENT

(unaudited and in thousands)


	Six Months Ended June 30, 2018
SAME STORE CASH NOI ⁽¹⁾	Total			New York			Washington, D.C.			San Francisco			Other
PGRE’s share of Cash NOI for the six months ended June 30, 2018	$	174,435		$	125,971		$	18,568		$	33,613		$	(3,717	)
Acquisitions ⁽²⁾		(3,730	)		(215	)		—			(3,515	)		—
Dispositions		—			—			—			—			—
Lease termination income (including our share of unconsolidated joint ventures)		(244	)		(244	)		—			—			—
Other, net		174			174			—			—			—

PGRE’s share of Same Store Cash NOI ⁽¹⁾ for the six months ended June 30, 2018	$	170,635		$	125,686		$	18,568		$	30,098		$	(3,717	)


	Six Months Ended June 30, 2017
	Total			New York			Washington, D.C.			San Francisco			Other
PGRE’s share of Cash NOI for the six months ended June 30, 2017	$	164,553		$	114,913		$	23,943		$	29,185		$	(3,488	)
Acquisitions		—			—			—			—			—
Dispositions ⁽³⁾		(8,632	)		—			(8,632	)		—			—
Lease termination income (including our share of unconsolidated joint ventures)		(1,107	)		(241	)		—			(866	)		—
Other, net		(87	)		30			—			—			(117	)

PGRE’s share of Same Store Cash NOI ⁽¹⁾ for the six months ended June 30, 2017	$	154,727		$	114,702		$	15,311		$	28,319		$	(3,605	)


Increase (decrease) in PGRE’s share of Same Store Cash NOI	$	15,908		$	10,984		$	3,257		$	1,779		$	(112	)
% Increase		10.3	%		9.6	%		21.3	%		6.3	%

⁽¹⁾	See page 43 for our definition of this measure.

⁽²⁾	Represents our share of Cash NOI attributable to acquired properties (60 Wall Street in New York and 50 Beale Street in San Francisco) for the months in which they were not owned by us in both reporting periods.

⁽³⁾	Represents our share of Cash NOI attributable to sold properties (Waterview in Washington, D.C.) for the months in which they were not owned by us in both reporting periods.

- 19 -


		SAME STORE RESULTS - BY SEGMENT

(unaudited and in thousands)


	Six Months Ended June 30, 2018
SAME STORE NOI ⁽¹⁾	Total			New York			Washington, D.C.			San Francisco			Other
PGRE’s share of NOI for the six months ended June 30, 2018	$	206,826		$	145,886		$	19,303		$	45,391		$	(3,754	)
Acquisitions ⁽²⁾		(4,667	)		(173	)		—			(4,494	)		—
Dispositions		—			—			—			—			—
Lease termination income (including our share of unconsolidated joint ventures)		(244	)		(244	)		—			—			—
Other, net		174			174			—			—			—

PGRE’s share of Same Store NOI ⁽¹⁾ for the six months ended June 30, 2018	$	202,089		$	145,643		$	19,303		$	40,897		$	(3,754	)


	Six Months Ended June 30, 2017
	Total			New York			Washington, D.C.			San Francisco			Other
PGRE’s share of NOI for the six months ended June 30, 2017	$	200,570		$	133,469		$	26,436		$	44,186		$	(3,521	)
Acquisitions		—			—			—			—			—
Dispositions ⁽³⁾		(8,632	)		—			(8,632	)		—			—
Lease termination income (including our share of unconsolidated joint ventures)		(1,107	)		(241	)		—			(866	)		—
Other, net		(785	)		30			—			(698	)		(117	)

PGRE’s share of Same Store NOI ⁽¹⁾ for the six months ended June 30, 2017	$	190,046		$	133,258		$	17,804		$	42,622		$	(3,638	)


Increase (decrease) in PGRE’s share of Same Store NOI	$	12,043	⁽⁴⁾	$	12,385		$	1,499		$	(1,725	)⁽⁴⁾	$	(116	)

% Increase (decrease)		6.3	%⁽⁴⁾		9.3	%		8.4	%		(4.0	%)⁽⁴⁾

⁽¹⁾	See page 43 for our definition of this measure.

⁽²⁾	Represents our share of NOI attributable to acquired properties (60 Wall Street in New York and 50 Beale Street in San Francisco) for the months in which they were not owned by us in both reporting periods.

⁽³⁾	Represents our share of NOI attributable to sold properties (Waterview in Washington, D.C.) for the months in which they were not owned by us in both reporting periods.

⁽⁴⁾

This decrease resulted from income of $3,028 in the prior year from the accelerated amortization of certain below-market lease liabilities in connection with such tenants’ lease modifications. Excluding this income, Same Store NOI increased by 8.1% for the total portfolio and 3.3% for our San Francisco portfolio.

- 20 -


		CONSOLIDATED JOINT VENTURES AND FUND - BALANCE SHEETS

(unaudited and in thousands)


	As of June 30, 2018										As of December 31, 2017
									Consolidated										Consolidated
	Consolidated Joint Ventures								Fund		Consolidated Joint Ventures								Fund
	Total		One		50		PGRESS		Residential		Total		One		50		PGRESS		Residential
	Consolidated		Market		Beale		Equity		Development		Consolidated		Market		Beale		Equity		Development
	Joint Ventures		Plaza		Street		Holdings L.P.		Fund		Joint Ventures		Plaza		Street		Holdings L.P.		Fund
PGRE Ownership			49.0%		31.1%		24.4%		7.4%				49.0%		31.1%		24.4%		7.4%
ASSETS:
Real estate, net	$	1,711,766	$	1,233,804	$	477,962	$	—	$	—	$	1,726,800	$	1,246,427	$	480,373	$	—	$	—
Cash and cash equivalents		67,211		42,248		24,586		377		6,873		46,839		24,658		21,792		389		656
Restricted cash		5,538		5,538		—		—		—		8,163		8,163		—		—		—
Preferred equity investments, net		35,925		—		—		35,925		—		35,817		—		—		35,817		—
Investments in unconsolidated joint ventures		—		—		—		—		40,236		—		—		—		—		16,031
Accounts and other receivables, net		1,559		671		888		—		67		2,548		1,423		1,125		—		2
Deferred rent receivable		47,663		45,621		2,042		—		—		44,000		43,332		668		—		—
Deferred charges, net		10,777		7,649		3,128		—		—		8,123		7,508		615		—		—
Intangible assets, net		56,230		34,146		22,084		—		—		66,112		39,421		26,691		—		—
Other assets		2,300		1,794		506		—		15,735		908		747		161		—		10

Total Assets	$	1,938,969	$	1,371,471	$	531,196	$	36,302	$	62,911	$	1,939,310	$	1,371,679	$	531,425	$	36,206	$	16,699

LIABILITIES:
Notes and mortgages payable, net	$	1,197,126	$	969,126	$	228,000	$	—	$	—	$	1,196,607	$	968,607	$	228,000	$	—	$	—
Accounts payable and accrued expenses		29,317		18,181		11,073		63		75		21,134		14,876		6,205		53		62
Intangible liabilities, net		38,754		31,255		7,499		—		—		46,365		36,793		9,572		—		—
Other liabilities		151		148		3		—		—		156		149		7		—		—

Total Liabilities		1,265,348		1,018,710		246,575		63		75		1,264,262		1,020,425		243,784		53		62

EQUITY:
Paramount Group, Inc. equity		269,935		172,918		87,746		9,271		5,020		270,051		172,182		88,695		9,174		2,088
Noncontrolling interests		403,686		179,843		196,875		26,968		57,816		404,997		179,072		198,946		26,979		14,549

Total Equity		673,621		352,761		284,621		36,239		62,836		675,048		351,254		287,641		36,153		16,637

Total Liabilities and Equity	$	1,938,969	$	1,371,471	$	531,196	$	36,302	$	62,911	$	1,939,310	$	1,371,679	$	531,425	$	36,206	$	16,699

- 21 -


		CONSOLIDATED JOINT VENTURES AND FUND - OPERATING RESULTS

(unaudited and in thousands)


	Three Months Ended June 30, 2018														Three Months Ended June 30, 2017
												Consolidated											Consolidated
	Consolidated Joint Ventures											Fund			Consolidated Joint Ventures								Fund
	Total			One								Residential			Total			One					Residential
	Consolidated			Market			50 Beale			PGRESS Equity		Development			Consolidated			Market			PGRESS Equity		Development
	Joint Ventures			Plaza			Street ⁽¹⁾			Holdings L.P.		Fund			Joint Ventures			Plaza			Holdings L.P.		Fund
Total revenues	$	42,611		$	32,790		$	9,821		$	—	$	7		$	31,893		$	31,893		$	—	$	552
Total operating expenses		11,325			8,097			3,228			—		—			7,708			7,708			—		101

Net operating income		31,286			24,693			6,593			—		7			24,185			24,185			—		451
Depreciation and amortization		(16,058	)		(11,037	)		(5,021	)		—		—			(11,467	)		(11,467	)		—		(100	)
Interest and other income, net		1,103			124			62			917		121			990			37			953		25
Interest and debt expense		(12,273	)		(10,193	)		(2,080	)		—		—			(10,194	)		(10,194	)		—		—
Gain on sale of real estate		—			—			—			—		—			—			—			—		23,406	⁽²⁾
Income from unconsolidated joint ventures		—			—			—			—		(16	)		—			—			—		33

Net income (loss) before income taxes		4,058			3,587			(446	)		917		112			3,514			2,561			953		23,815
Income tax (expense) benefit		(5	)		1			(6	)		—		3			(3	)		(3	)		—		—

Net income (loss)	$	4,053		$	3,588		$	(452	)	$	917	$	115		$	3,511		$	2,558		$	953	$	23,815


PGRE’s share Ownership	Total			49.0%			31.1%			24.4%		7.4%			Total			49.0%			24.4%		7.4%
Net income (loss)	$	1,816		$	1,752		$	(159	)	$	223	$	(15	)	$	1,479		$	1,247		$	232	$	3,544
Add: Management fee income		485			157			328			—		(22	)		135			135			—		86

PGRE’s share of net income (loss)		2,301			1,909			169			223		(37	)		1,614			1,382			232		3,630
Add: Real estate depreciation and amortization		6,970			5,408			1,562			—		—			5,624			5,624			—		9

FFO ⁽³⁾		9,271			7,317			1,731			223		(37	)		7,238			7,006			232		3,639
Less: Gain on sale of land parcel		—			—			—			—		—			—			—			—		(3,118	)

Core FFO ⁽³⁾	$	9,271		$	7,317		$	1,731		$	223	$	(37	)	$	7,238		$	7,006		$	232	$	521


Noncontrolling interests’ share Ownership	Total			51.0%			68.9%			75.6%		92.6%			Total			51.0%			75.6%		92.6%
Net income (loss)	$	2,237		$	1,836		$	(293	)	$	694	$	130		$	2,032		$	1,311		$	721	$	20,271
Less: Management fee expense		(485	)		(157	)		(328	)		—		22			(135	)		(135	)		—		(86	)

Net income (loss) attributable to noncontrolling interests		1,752			1,679			(621	)		694		152			1,897			1,176			721		20,185
Add: Real estate depreciation and amortization		9,088			5,629			3,459			—		—			5,843			5,843			—		91

FFO ⁽³⁾		10,840			7,308			2,838			694		152			7,740			7,019			721		20,276
Less: Gain on sale of real estate		—			—			—			—		—			—			—			—		(20,288	)

Core FFO ⁽³⁾	$	10,840		$	7,308		$	2,838		$	694	$	152		$	7,740		$	7,019		$	721	$	(12	)

⁽¹⁾	Acquired on July 17, 2017.

⁽²⁾	Represents the gain on sale of One Steuart Lane (formerly 75 Howard), of which our share, net of income taxes, was $1,661.

⁽³⁾	See page 43 for our definition of this measure.

- 22 -


		CONSOLIDATED JOINT VENTURES AND FUND - OPERATING RESULTS

(unaudited and in thousands)


	Six Months Ended June 30, 2018														Six Months Ended June 30, 2017
												Consolidated											Consolidated
	Consolidated Joint Ventures											Fund			Consolidated Joint Ventures								Fund
	Total			One								Residential			Total			One					Residential
	Consolidated			Market			50 Beale			PGRESS Equity		Development			Consolidated			Market			PGRESS Equity		Development
	Joint Ventures			Plaza			Street ⁽¹⁾			Holdings L.P.		Fund			Joint Ventures			Plaza			Holdings L.P.		Fund
Total revenues	$	83,456		$	64,720		$	18,736		$	—	$	9		$	63,012		$	63,012		$	—	$	1,420
Total operating expenses		21,897			15,619			6,278			—		1			14,986			14,986			—		515

Net operating income		61,559			49,101			12,458			—		8			48,026			48,026			—		905
Depreciation and amortization		(32,264	)		(22,286	)		(9,978	)		—		—			(23,040	)		(23,040	)		—		(359	)
Interest and other income, net		2,161			216			129			1,816		630			2,428			62			2,366		25
Interest and debt expense		(24,440	)		(20,279	)		(4,161	)		—		—			(23,672	)		(23,672	)		—		—
Gain on sale of land parcel		—			—			—			—		—			—			—			—		23,406	⁽²⁾
Income from unconsolidated joint venture		—			—			—			—		(18	)		—			—			—		33
Unrealized gain on interest rate swaps		—			—			—			—		—			1,802			1,802			—		—

Net income (loss) before income taxes		7,016			6,752			(1,552	)		1,816		620			5,544			3,178			2,366		24,010
Income tax (expense) benefit		(8	)		(2	)		(6	)		—		1			(5	)		(5	)		—		(2	)

Net income (loss)	$	7,008		$	6,750		$	(1,558	)	$	1,816	$	621		$	5,539		$	3,173		$	2,366	$	24,008


PGRE’s share Ownership	Total			49.0%			31.1%			24.4%		7.4%			Total			49.0%			24.4%		7.4%
Net income (loss)	$	3,224		$	3,301		$	(519	)	$	442	$	35		$	2,084		$	1,508		$	576	$	3,568
Add: Management fee income		977			324			653			—		4			267			267			—		343

PGRE’s share of net income		4,201			3,625			134			442		39			2,351			1,775			576		3,911
Add: Real estate depreciation and amortization		14,024			10,920			3,104			—		—			11,293			11,293			—		40

FFO ⁽³⁾		18,225			14,545			3,238			442		39			13,644			13,068			576		3,951
Add: Loss on early extinguishment of debt		—			—			—			—		—			1,330			1,330			—		—
Less: Gain on sale of land parcel		—			—			—			—		—			—			—			—		(3,118	)
Less: Unrealized gain on interest rate swaps		—			—			—			—		—			(883	)		(883	)		—		—

Core FFO ⁽³⁾	$	18,225		$	14,545		$	3,238		$	442	$	39		$	14,091		$	13,515		$	576	$	833


Noncontrolling Interests’ share Ownership	Total			51.0%			68.9%			75.6%		92.6%			Total			51.0%			75.6%		92.6%
Net income (loss)	$	3,784		$	3,449		$	(1,039	)	$	1,374	$	586		$	3,455		$	1,665		$	1,790	$	20,440
Less: Management fee expense		(977	)		(324	)		(653	)		—		(4	)		(267	)		(267	)		—		(343	)

Net income (loss) attributable to noncontrolling interests		2,807			3,125			(1,692	)		1,374		582			3,188			1,398			1,790		20,097
Add: Real estate depreciation and amortization		18,240			11,366			6,874			—		—			11,747			11,747			—		319

FFO ⁽³⁾		21,047			14,491			5,182			1,374		582			14,935			13,145			1,790		20,416
Add: Loss on early extinguishment of debt		—			—			—			—		—			1,385			1,385			—		—
Less: Gain on sale of land parcel		—			—			—			—		—			—			—			—		(20,288	)
Less: Unrealized gain on interest rate swaps		—			—			—			—		—			(919	)		(919	)		—		—

Core FFO ⁽³⁾	$	21,047		$	14,491		$	5,182		$	1,374	$	582		$	15,401		$	13,611		$	1,790	$	128

⁽¹⁾	Acquired on July 17, 2017.

⁽²⁾	Represents the gain on sale of One Steuart Lane, of which our share, net of income taxes, was $1,661.

⁽³⁾	See page 43 for our definition of this measure.

- 23 -


		UNCONSOLIDATED JOINT VENTURES - BALANCE SHEETS

(unaudited and in thousands)


	As of June 30, 2018									As of December 31, 2017
			712			60 Wall						712			60 Wall
	Total		Fifth Avenue			Street		Other ⁽¹⁾		Total		Fifth Avenue			Street		Other ⁽¹⁾
PGRE Ownership			50.0%			5.0%		Various				50.0%			5.0%		Various
ASSETS:
Real estate, net	$	1,217,130	$	199,731		$	863,018	$	154,381	$	1,196,116	$	202,040		$	873,142	$	120,934
Cash and cash equivalents		54,182		35,736			17,503		943		52,132		31,511			18,642		1,979
Restricted cash		3,181		2,949			—		232		4,726		4,726			—		—
Accounts and other receivables, net		684		189			495		—		296		296			—		—
Deferred rent receivable		15,427		13,608			1,819		—		15,446		13,456			1,990		—
Deferred charges, net		7,087		7,087			—		—		7,848		7,848			—		—
Intangible assets, net		112,040		—			112,040		—		126,422		—			126,422		—
Other assets		6,366		310			51		6,005		1,148		197			105		846

Total Assets	$	1,416,097	$	259,610		$	994,926	$	161,561	$	1,404,134	$	260,074		$	1,020,301	$	123,759

LIABILITIES:
Notes and mortgages payable, net	$	888,255	$	296,337		$	568,668	$	23,250	$	886,902	$	296,132		$	567,799	$	22,971
Accounts payable and accrued expenses		34,120		4,378			7,569		22,173		12,560		4,435			7,382		743
Other liabilities		1,662		204			850		608		1,636		180			850		606

Total Liabilities		924,037		300,919			577,087		46,031		901,098		300,747			576,031		24,320

EQUITY:
Total Equity		492,060		(41,309	)		417,839		115,530		503,036		(40,673	)		444,270		99,439

Total Liabilities and Equity	$	1,416,097	$	259,610		$	994,926	$	161,561	$	1,404,134	$	260,074		$	1,020,301	$	123,759

⁽¹⁾	Represents Oder-Center, Germany and One Steuart Lane.

- 24 -


		UNCONSOLIDATED JOINT VENTURES - OPERATING RESULTS

(unaudited and in thousands)


	Three Months Ended June 30, 2018												Three Months Ended June 30, 2017
				712			60 Wall									712			60 Wall
	Total			Fifth Avenue			Street			Other ⁽¹⁾			Total			Fifth Avenue			Street			Other ⁽¹⁾
Total revenues	$	35,373		$	13,733		$	20,516		$	1,124		$	36,314		$	14,390		$	20,235		$	1,689
Total operating expenses		13,078			6,126			6,733			219			13,093			6,102			6,376			615

Net operating income		22,295			7,607			13,783			905			23,221			8,288			13,859			1,074
Depreciation and amortization expense		(12,032	)		(2,898	)		(9,033	)		(101	)		(12,201	)		(3,075	)		(9,033	)		(93	)
Interest and other income, net		198			157			41			—			75			48			26			1
Interest and debt expense		(9,733	)		(2,674	)		(6,800	)		(259	)		(8,860	)		(3,126	)		(5,481	)		(253	)
Unrealized gain on interest rate swaps		—			—			—			—			728			728			—			—

Net income (loss) before income taxes		728			2,192			(2,009	)		545			2,963			2,863			(629	)		729
Income tax expense		—			—			—			—			—			—			—			—

Net income (loss)	$	728		$	2,192		$	(2,009	)	$	545		$	2,963		$	2,863		$	(629	)	$	729


PGRE’s share
Ownership	Total			50.0%			5.0%			Various			Total			50.0%			5.0%			Various
Net income (loss)	$	1,036		$	1,096		$	(102	)	$	42		$	1,488		$	1,432		$	(31	)	$	87
Less: Step-up basis adjustment		(27	)		—			—			(27	)		(25	)		—			—			(25	)
Add: Distributions in excess of earnings		1,512			1,512			—			—			15,072			15,072			—			—

PGRE’s share of net income (loss)		2,521			2,608			(102	)		15			16,535			16,504			(31	)		62
Less: Noncontrolling interests		—			—			—			—			(31	)		—			—			(31	)
Add: Real estate depreciation and amortization		1,936			1,449			452			35			2,024			1,538			452			34

FFO ⁽²⁾		4,457			4,057			350			50			18,528			18,042			421			65
Less: Distributions in excess of earnings		(1,512	)		(1,512	)		—			—			(15,072	)		(15,072	)		—			—
Less: Unrealized gain on interest rate swaps		—			—			—			—			(364	)		(364	)		—			—

Core FFO⁽²⁾	$	2,945		$	2,545		$	350		$	50		$	3,092		$	2,606		$	421		$	65


Joint Venture Partners’ share
Ownership	Total			50.0%			95.0%			Various			Total			50.0%			95.0%			Various
Net (loss) income	$	(308	)	$	1,096		$	(1,907	)	$	503		$	1,475		$	1,431		$	(598	)	$	642
Add: Real estate depreciation and amortization		10,123			1,449			8,581			93			10,202			1,537			8,581			84

FFO ⁽²⁾		9,815			2,545			6,674			596			11,677			2,968			7,983			726
Less: Unrealized gain on interest rate swaps		—			—			—			—			(364	)		(364	)		—			—

Core FFO⁽²⁾	$	9,815		$	2,545		$	6,674		$	596		$	11,313		$	2,604		$	7,983		$	726

⁽¹⁾	Represents Oder-Center, Germany and One Steuart Lane.

⁽²⁾	See page 43 for our definition of this measure.

- 25 -


		UNCONSOLIDATED JOINT VENTURES - OPERATING RESULTS

(unaudited and in thousands)


	Six Months Ended June 30, 2018												Six Months Ended June 30, 2017
				712			60 Wall									712			60 Wall
	Total			Fifth Avenue			Street ⁽¹⁾			Other ⁽²⁾			Total			Fifth Avenue			Street ⁽¹⁾			Other ⁽²⁾
Total revenues	$	71,344		$	27,865		$	40,959		$	2,520		$	66,929		$	28,769		$	35,459		$	2,701
Total operating expenses		26,605			12,310			13,473			822			24,055			12,068			11,101			886

Net operating income		44,739			15,555			27,486			1,698			42,874			16,701			24,358			1,815
Depreciation and amortization expense		(24,193	)		(5,924	)		(18,066	)		(203	)		(22,012	)		(5,995	)		(15,832	)		(185	)
Interest and other income, net		368			270			97			1			105			72			32			1
Interest and debt expense		(18,912	)		(5,319	)		(13,070	)		(523	)		(15,753	)		(5,951	)		(9,296	)		(506	)
Unrealized gain on interest rate swaps		—			—			—			—			1,896			1,896			—			—

Net income (loss) before income taxes		2,002			4,582			(3,553	)		973			7,110			6,723			(738	)		1,125
Income tax expense		(10	)		—			—			(10	)		(2	)		—			—			(2	)

Net income (loss)	$	1,992		$	4,582		$	(3,553	)	$	963		$	7,108		$	6,723		$	(738	)	$	1,123


PGRE’s share Ownership	Total			50.0%			5.0%			Various			Total			50.0%			5.0%			Various
Net income (loss)	$	2,197		$	2,291		$	(175	)	$	81		$	3,450		$	3,362		$	(36	)	$	124
Less: Step-up basis adjustment		(55	)		—			—			(55	)		(50	)		—			—			(50	)
Add: Distributions in excess of earnings		317			317			—			—			15,072			15,072			—			—

PGRE’s share of net income (loss)		2,459			2,608			(175	)		26			18,472			18,434			(36	)		74
Less: Noncontrolling interests		—			—			—			—			(31	)		—			—			(31	)
Add: Real estate depreciation and amortization		3,940			2,962			905			73			3,872			2,998			806			68

FFO ⁽³⁾		6,399			5,570			730			99			22,313			21,432			770			111
Less: Distributions in excess of earnings		(317	)		(317	)		—			—			(15,072	)		(15,072	)		—			—
Less: Unrealized gain on interest rate swaps		—			—			—			—			(948	)		(948	)		—			—

Core FFO⁽³⁾	$	6,082		$	5,253		$	730		$	99		$	6,293		$	5,412		$	770		$	111


Joint Venture Partners’ share Ownership	Total			50.0%			95.0%			Various			Total			50.0%			95.0%			Various
Net (loss) income	$	(205	)	$	2,291		$	(3,378	)	$	882		$	3,658		$	3,361		$	(702	)	$	999
Add: Real estate depreciation and amortization		20,308			2,962			17,161			185			18,190			2,997			15,026			167

FFO ⁽³⁾		20,103			5,253			13,783			1,067			21,848			6,358			14,324			1,166
Less: Unrealized gain on interest rate swaps		—			—			—			—			(948	)		(948	)		—			—

Core FFO⁽³⁾	$	20,103		$	5,253		$	13,783		$	1,067		$	20,900		$	5,410		$	14,324		$	1,166

⁽¹⁾	Acquired on January 24, 2017.

⁽²⁾	Represents Oder-Center, Germany and One Steuart Lane.

⁽³⁾	See page 43 for our definition of this measure.

- 26 -


		UNCONSOLIDATED FUNDS SUMMARY

(unaudited and in thousands)

Debt Fund:

The following is a summary of our Debt Fund and our ownership interests in the underlying investments, as of June 30, 2018.


		PGRE Ownership			Fixed / Variable rate		Interest Rate		Maturity		Face Amount				Fair Value
Investments	Investment Type	PGRE Ownership			Fixed / 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	$	50,282	$	649
700 Eighth Avenue	Mortgage and Mezzanine Loans		1.3	%		Variable (LIBOR plus 600 bps)		8.01%		Jan-2019		74,000		955		74,436		960
1285 Avenue of the Americas	Mezzanine Loan		1.3	%		Fixed		6.75%		Jun-2023		55,000		710		55,412		715
Other	Mortgage and Mezzanine Loans/Preferred Equity		1.3	%		Various		5.50% - 9.61%		Oct-2018 to Dec-2027		352,733		4,553		352,311		4,545

											$	531,733	$	6,863	$	532,441	$	6,869


	Total			Our Share
Committed capital	$	775,200		$	10,000
Called and/or invested		(532,450	)		(6,869	)

Available to be invested	$	242,750		$	3,131

- 27 -


		CAPITAL STRUCTURE

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


	As of June 30, 2018
Debt:
Consolidated debt:
Notes and mortgages payable ⁽¹⁾	$	3,599,800
$1.0 billion Revolving Credit Facility ⁽²⁾		—

		3,599,800
Less:
Noncontrolling interest’s share of consolidated debt (One Market Plaza and 50 Beale Street)		(654,342	)
Add:
PGRE’s share of unconsolidated joint venture debt (712 Fifth Avenue, 60 Wall Street, and Oder-Center, Germany)		181,017

PGRE’s share of total debt ⁽³⁾		3,126,475


	Shares / Units		Share Price as of
	Outstanding		June 30, 2018
Equity:
Common stock		240,529,397	$	15.40		3,704,153
Operating Partnership units		25,300,324		15.40		389,625

Total equity		265,829,721		15.40		4,093,778

Total Market Capitalization					$	7,220,253

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

⁽²⁾	On January 10, 2018, we amended and extended our revolving credit facility. The maturity date of our revolving credit facility was extended from November 2018 to January 2022, with two six-month extension options, and the capacity was increased to $1.0 billion from $800 million.

⁽³⁾	See page 43 for our definition of this measure.

- 28 -


		DEBT ANALYSIS

(unaudited and in thousands)


	Total Debt						Fixed Rate Debt						Variable Rate Debt
	Amount			Rate			Amount			Rate			Amount			Rate
Consolidated Debt:
1633 Broadway	$	1,046,800			3.55	%	$	1,000,000			3.54	%	$	46,800			3.73	%
1301 Avenue of the Americas		850,000			3.36	%		500,000			3.05	%		350,000			3.80	%
31 West 52nd Street		500,000			3.80	%		500,000			3.80	%		—			—
One Market Plaza		975,000			4.03	%		975,000			4.03	%		—			—
50 Beale Street		228,000			3.65	%		228,000			3.65	%		—			—
Revolving Credit Facility ⁽¹⁾		—			—			—			—			—			—

Total consolidated debt		3,599,800			3.68	%		3,203,000			3.66	%		396,800			3.79	%

Noncontrolling interest’s share		(654,342	)		3.94	%		(654,342	)		3.94	%		—			—

PGRE’s share of consolidated debt ⁽²⁾	$	2,945,458			3.62	%	$	2,548,658			3.59	%	$	396,800			3.79	%

Unconsolidated Joint Venture Debt:
712 Fifth Avenue	$	300,000			3.39	%	$	300,000			3.39	%	$	—			—
60 Wall Street		575,000			4.52	%		—			—			575,000			4.52	%
Oder-Center, Germany		23,250			4.62	%		23,250			4.62	%		—			—

Total unconsolidated debt		898,250			4.15	%		323,250			3.48	%		575,000			4.52	%

Joint venture partners’ share		(717,233	)		4.29	%		(171,041	)		3.54	%		(546,192	)		4.52	%

PGRE’s share of unconsolidated debt ⁽²⁾	$	181,017			3.59	%	$	152,209			3.41	%	$	28,808			4.52	%

PGRE’s share of Total Debt ⁽²⁾	$	3,126,475			3.62	%	$	2,700,867			3.58	%	$	425,608			3.84	%


	Required		Actual
Revolving Credit Facility Covenants: ⁽³⁾
Total Debt / Total Assets		Less than 60%		39.2	%
Secured Debt / Total Assets		Less than 50%		39.1	%
Fixed Charge Coverage		Greater than 1.5x		3.9	x
Unsecured Debt / Unencumbered Assets		Less than 60%		0.0	%
Unencumbered Interest Coverage		Greater than 1.75x		38.7	x


	Amount		%
Debt Composition:
Fixed rate debt:
PGRE’s consolidated fixed rate debt	$	2,548,658
PGRE’s unconsolidated fixed rate debt		152,209

Total fixed rate debt		2,700,867		86.4	%

Variable rate debt:
PGRE’s consolidated variable rate debt		396,800
PGRE’s unconsolidated variable rate debt		28,808

Total variable rate debt		425,608		13.6	%

PGRE’s share of Total Debt ⁽²⁾	$	3,126,475		100.0	%

⁽¹⁾	On January 10, 2018, we amended and extended our revolving credit facility.

⁽²⁾	See page 43 for our definition of this measure.

⁽³⁾

This section presents ratios as of June 30, 2018 in accordance with the terms of our revolving credit facility, which has been filed with the SEC. We are not presenting these ratios and the related calculations for any other purpose or for any other period, and are not intending for these measures to otherwise provide information to investors about our 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.

- 29 -


		DEBT MATURITIES

(unaudited and in thousands)


	2018		2019		2020		2021			2022			Thereafter			Total
Consolidated Debt:
1301 Avenue of the Americas	$	—	$	—	$	—	$	850,000		$	—		$	—		$	850,000
50 Beale Street		—		—		—		228,000			—			—			228,000
1633 Broadway		—		—		—		—			1,046,800						1,046,800
One Market Plaza		—		—		—		—			—			975,000			975,000
31 West 52nd Street		—		—		—		—			—			500,000			500,000
Revolving Credit Facility		—		—		—		—			—			—			—

Total consolidated debt		—		—		—		1,078,000			1,046,800			1,475,000			3,599,800
Noncontrolling interest’s share		—		—		—		(157,092	)		—			(497,250	)		(654,342	)

PGRE’s share of consolidated debt ⁽¹⁾	$	—	$	—	$	—	$	920,908		$	1,046,800		$	977,750		$	2,945,458

Unconsolidated Joint Venture Debt:
712 Fifth Avenue	$	—	$	—	$	—	$	—		$	—		$	300,000		$	300,000
60 Wall Street		—		—		—		—			575,000			—			575,000
Oder-Center, Germany		—		—		—		—			23,250			—			23,250

Total unconsolidated debt		—		—		—		—			598,250			300,000			898,250
Joint venture partners’ share		—		—		—		—			(567,233	)		(150,000	)		(717,233	)

PGRE’s share of unconsolidated debt ⁽¹⁾	$	—	$	—	$	—	$	—		$	31,017		$	150,000		$	181,017

PGRE’s share of total debt ⁽¹⁾	$	—	$	—	$	—	$	920,908		$	1,077,817		$	1,127,750		$	3,126,475

Weighted average rate		—		—		—		3.38	%		3.58	%		3.84	%		3.62	%

% of debt maturing		—		—		—		29.5	%		34.4	%		36.1	%		100.0	%

⁽¹⁾	See page 43 for our definition of this measure.

- 30 -


		PORTFOLIO SUMMARY

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


													Annualized Rent ⁽¹⁾
Property	Submarket	Paramount Ownership			Square Feet		% Leased ⁽¹⁾			% Occupied ⁽¹⁾			Amount		Per Square Foot ⁽²⁾
As of June 30, 2018
New York:
1633 Broadway	West Side		100.0	%		2,518,597		95.4	%		95.4	%	$	171,234	$	73.75
1301 Avenue of the Americas	Sixth Avenue / Rock Center		100.0	%		1,781,571		97.9	%		97.0	%		132,682		77.53
1325 Avenue of the Americas	Sixth Avenue / Rock Center		100.0	%		811,767		95.9	%		80.6	%		43,317		66.78
31 West 52nd Street	Sixth Avenue / Rock Center		100.0	%		763,140		95.8	%		81.5	%		54,796		85.57
900 Third Avenue	East Side		100.0	%		599,043		94.2	%		94.2	%		38,707		68.79
712 Fifth Avenue	Madison / Fifth Avenue		50.0	%		543,386		89.7	%		89.7	%		50,888		104.87
60 Wall Street	Downtown		5.0	%		1,625,483		100.0	%		100.0	%		73,600		45.28

Subtotal / Weighted average						8,642,987		96.4	%		93.5	%		565,224		70.60

PGRE’s share						6,827,248		95.9	%		92.2	%		469,867		75.69

Washington, D.C.:
425 Eye Street	East End		100.0	%		372,552		98.7	%		98.7	%		16,901		46.16
2099 Pennsylvania Avenue	CBD		100.0	%		208,776		91.6	%		91.6	%		15,181		80.40
1899 Pennsylvania Avenue	CBD		100.0	%		190,955		100.0	%		100.0	%		15,651		82.08
Liberty Place	East End		100.0	%		174,090		94.9	%		94.9	%		14,262		86.14

Subtotal / Weighted average						946,373		96.7	%		96.7	%		61,995		67.94

PGRE’s share						946,373		96.7	%		96.7	%		61,995		67.94

San Francisco:
One Market Plaza	South Financial District		49.0	%		1,583,136		97.9	%		97.9	%		118,857		75.91
One Front Street	North Financial District		100.0	%		646,759		99.5	%		99.5	%		44,091		68.30
50 Beale Street	South Financial District		31.1	%		664,308		95.8	%		86.5	%		34,112		59.78

Subtotal / Weighted average						2,894,203		97.7	%		95.6	%		197,060		70.83

PGRE’s share						1,629,095		98.2	%		97.1	%		112,940		71.02

Total / Weighted average						12,483,563		96.8	%		94.3	%	$	824,279	$	70.45

PGRE’s share						9,402,716		96.4	%		93.5	%	$	644,802	$	74.01

⁽¹⁾	See page 43 for our definition of this measure.

⁽²⁾	Represents office and retail space only.

- 31 -


		SAME STORE LEASED OCCUPANCY

(unaudited)


				As of June 30, 2018						As of March 31, 2018						Change in Same Store Leased %
Property	Paramount Ownership			Leased % ⁽¹⁾			Same Store Leased % ⁽¹⁾			Leased % ⁽¹⁾			Same Store Leased % ⁽¹⁾			Change in Same Store Leased %
New York:
1633 Broadway		100.0	%		95.4	%		95.4	%		95.4	%		95.4	%		—	%
1301 Avenue of the Americas		100.0	%		97.9	%		97.9	%		97.9	%		97.9	%		—	%
1325 Avenue of the Americas		100.0	%		95.9	%		95.9	%		80.9	%		80.9	%		15.0	%
31 West 52nd Street		100.0	%		95.8	%		95.8	%		81.5	%		81.5	%		14.3	%
900 Third Avenue		100.0	%		94.2	%		94.2	%		94.7	%		94.7	%		(0.5	%)
712 Fifth Avenue		50.0	%		89.7	%		89.7	%		93.9	%		93.9	%		(4.2	%)
60 Wall Street		5.0	%		100.0	%		100.0	%		100.0	%		100.0	%		—	%

Weighted average					96.4	%		96.4	%		94.1	%		94.1	%		2.3	%

PGRE’s share					95.9	%		95.9	%		92.7	%		92.7	%		3.2	%

Washington, D.C.:
425 Eye Street		100.0	%		98.7	%		98.7	%		98.7	%		98.7	%		—	%
2099 Pennsylvania Avenue		100.0	%		91.6	%		91.6	%		90.6	%		90.6	%		1.0	%
1899 Pennsylvania Avenue		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		—	%
Liberty Place		100.0	%		94.9	%		94.9	%		94.9	%		94.9	%		—	%

Weighted average					96.7	%		96.7	%		96.5	%		96.5	%		0.2	%

PGRE’s share					96.7	%		96.7	%		96.5	%		96.5	%		0.2	%

San Francisco:
One Market Plaza		49.0	%		97.9	%		97.9	%		97.9	%		97.9	%		—	%
One Front Street		100.0	%		99.5	%		99.5	%		99.5	%		99.5	%		—	%
50 Beale Street		31.1	%		95.8	%		95.8	%		91.4	%		91.4	%		4.4	%

Weighted average					97.7	%		97.7	%		96.7	%		96.7	%		1.0	%

PGRE’s share					98.2	%		98.2	%		97.7	%		97.7	%		0.5	%

Weighted average					96.8	%		96.8	%		94.9	%		94.9	%		1.9	%

PGRE’s share					96.4	%		96.4	%		94.0	%		94.0	%		2.4	%

⁽¹⁾	See page 43 for our definition of this measure.

- 32 -


		SAME STORE LEASED OCCUPANCY

(unaudited)


				As of June 30, 2018						As of December 31, 2017						Change in Same Store Leased %
Property	Paramount Ownership			Leased % ⁽¹⁾			Same Store Leased % ⁽¹⁾			Leased % ⁽¹⁾			Same Store Leased % ⁽¹⁾			Change in Same Store Leased %
New York:
1633 Broadway		100.0	%		95.4	%		95.4	%		95.4	%		95.4	%		-	%
1301 Avenue of the Americas		100.0	%		97.9	%		97.9	%		97.9	%		97.9	%		-	%
1325 Avenue of the Americas		100.0	%		95.9	%		95.9	%		80.9	%		80.9	%		15.0	%
31 West 52nd Street		100.0	%		95.8	%		95.8	%		78.0	%		78.0	%		17.8	%
900 Third Avenue		100.0	%		94.2	%		94.2	%		94.7	%		94.7	%		(0.5	%)
712 Fifth Avenue		50.0	%		89.7	%		89.7	%		95.1	%		95.1	%		(5.4	%)
60 Wall Street		5.0	%		100.0	%		100.0	%		100.0	%		100.0	%		-	%

Weighted average					96.4	%		96.4	%		93.8	%		93.8	%		2.6	%

PGRE’s share					95.9	%		95.9	%		92.4	%		92.4	%		3.5	%

Washington, D.C.:
425 Eye Street		100.0	%		98.7	%		98.7	%		98.7	%		98.7	%		-	%
2099 Pennsylvania Avenue		100.0	%		91.6	%		91.6	%		88.9	%		88.9	%		2.7	%
1899 Pennsylvania Avenue		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		-	%
Liberty Place		100.0	%		94.9	%		94.9	%		94.9	%		94.9	%		-	%

Weighted average					96.7	%		96.7	%		96.1	%		96.1	%		0.6	%

PGRE’s share					96.7	%		96.7	%		96.1	%		96.1	%		0.6	%

San Francisco:
One Market Plaza		49.0	%		97.9	%		97.9	%		97.7	%		97.7	%		0.2	%
One Front Street		100.0	%		99.5	%		99.5	%		99.3	%		99.3	%		0.2	%
50 Beale Street		31.1	%		95.8	%		95.8	%		82.6	%		82.6	%		13.2	%

Weighted average					97.7	%		97.7	%		94.6	%		94.6	%		3.1	%

PGRE’s share					98.2	%		98.2	%		96.4	%		96.4	%		1.8	%

Weighted average					96.8	%		96.8	%		94.2	%		94.2	%		2.6	%

PGRE’s share					96.4	%		96.4	%		93.5	%		93.5	%		2.9	%

⁽¹⁾	See page 43 for our definition of this measure.

- 33 -


		TOP TENANTS AND INDUSTRY DIVERSIFICATION

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


								PGRE’s Share of
	Property	Lease Expiration			Total Square Feet Occupied			Total Square Feet Occupied			% of Total Square Feet			Annualized Rent ⁽¹⁾				% of Annualized Rent
	Property	Lease Expiration			Total Square Feet Occupied			Total Square Feet Occupied			% of Total Square Feet			Amount		Per Square Foot		% of Annualized Rent
Top 10 Tenants:
As of June 30, 2018
Barclays Capital, Inc.	1301 Avenue of the Americas & 2099 Pennsylvania Avenue		Dec-2020	⁽²⁾		500,790	⁽²⁾		500,790	⁽²⁾		5.3	%	$	32,713	$	65.32		5.1	%
Allianz Global Investors, LP	1633 Broadway		Jan-2031			320,911			320,911			3.4	%		28,329		88.28		4.4	%
Credit Agricole Corporate & Investment Bank	1301 Avenue of the Americas		Feb-2023			312,679			312,679			3.3	%		26,766		85.60		4.2	%
Clifford Chance LLP	31 West 52nd Street		Jun-2024			328,992			328,992			3.5	%		26,248		79.78		4.1	%
Norton Rose Fulbright	1301 Avenue of the Americas		Sep-2034	⁽³⁾		320,325	⁽³⁾		320,325	⁽³⁾		3.4	%		25,518		79.66		4.0	%
Morgan Stanley & Company	1633 Broadway		Mar-2032			260,829			260,829			2.8	%		19,235		73.75		3.0	%
WMG Acquisition Corp. (Warner Music Group)	1633 Broadway		Jul-2029			293,888			293,888			3.1	%		17,058		58.04		2.6	%
First Republic Bank	One Front Street		Jun-2025			231,443			231,443			2.5	%		15,441		66.72		2.4	%
Showtime Networks, Inc.	1633 Broadway		Jan-2026			238,880			238,880			2.5	%		14,437		60.44		2.2	%
Kasowitz Benson Torres & Friedman, LLP	1633 Broadway		Mar-2037			203,394			203,394			2.2	%		14,437		70.98		2.2	%


	PGRE’s Share of
	Square Feet Occupied		% of Occupied Square Feet			Annualized Rent ⁽¹⁾		% of Annualized Rent
Industry Diversification:
As of June 30, 2018
Legal Services		1,895,725		21.7	%	$	145,274		22.5	%
Financial Services - Commercial and Investment Banking		1,860,173		21.3	%		135,733		21.1	%
Technology and Media		1,607,650		18.4	%		109,226		16.9	%
Financial Services, all others		958,739		11.0	%		82,833		12.8	%
Insurance		554,680		6.4	%		44,160		6.8	%
Retail		276,511		3.2	%		21,499		3.3	%
Government		345,278		4.0	%		16,959		2.6	%
Consumer Products		192,620		2.2	%		14,743		2.3	%
Real Estate		191,640		2.2	%		14,081		2.2	%
Other		835,668		9.6	%		60,294		9.5	%

⁽¹⁾	See page 43 for our definition of this measure.

⁽²⁾	3,372 square feet leased at 2099 Pennsylvania Avenue expires on June 30, 2023.

⁽³⁾	116,462 of the square feet leased expires on March 31, 2032.

- 34 -


		LEASING ACTIVITY ⁽¹⁾

(unaudited)


	Total			New York			Washington, D.C.		San Francisco
Three Months Ended June 30, 2018

Total square feet leased		312,522			259,855			1,667		51,000

PGRE’s share of total square feet leased:		278,845			254,988			1,667		22,190
Initial rent ⁽²⁾	$	76.78		$	76.95		$	—	$	72.00
Weighted average lease term (in years)		13.7			14.0			—		5.0
Tenant improvements and leasing commissions:
Per square foot	$	141.92		$	145.53		$	—	$	45.00
Per square foot per annum	$	10.37		$	10.39		$	—	$	9.00
Percentage of initial rent		13.5	%		13.5	%		—		12.5	%
Rent concessions:
Average free rent period (in months)		13.2			13.6			—		3.0
Average free rent period per annum (in months)		1.0			1.0			—		0.6

Second generation space: ⁽²⁾
Square feet		87,646			73,887			1,667		12,092
GAAP basis:
Straight-line rent	$	73.68		$	74.20		$	—	$	69.95
Prior straight-line rent	$	67.81		$	68.42		$	—	$	63.43
Percentage increase		8.7	%		8.4	%		—		10.3	%
Cash basis
Initial rent ⁽²⁾	$	74.78		$	75.17		$	—	$	72.00
Prior escalated rent	$	62.40		$	64.66		$	—	$	46.27
Percentage increase		19.8	%		16.2	%		—		55.6	%

⁽¹⁾	The leasing statistics, except for square feet leased, represent office space only.

⁽²⁾	See page 43 for our definition of this measure.

- 35 -


		LEASING ACTIVITY ⁽¹⁾

(unaudited)


	Total			New York			Washington, D.C.			San Francisco
Six Months Ended June 30, 2018

Total square feet leased		597,689			405,195			4,929			187,565

PGRE’s share of total square feet leased:		495,693			397,065			4,929			93,699
Initial rent ⁽¹⁾	$	80.74		$	81.14		$	58.50		$	79.88
Weighted average lease term (in years)		11.4			12.7			3.4			6.0
Tenant improvements and leasing commissions:
Per square foot	$	110.06		$	122.09		$	11.07		$	61.02
Per square foot per annum	$	9.62		$	9.58		$	3.24		$	10.15
Percentage of initial rent		11.9	%		11.8	%		5.5	%		12.7	%
Rent concessions:
Average free rent period (in months)		9.8			11.6			1.0			2.0
Average free rent period per annum (in months)		0.9			0.9			0.3			0.3

Second generation space: ⁽²⁾
Square feet		248,861			181,685			1,667			65,509
GAAP basis:
Straight-line rent	$	81.92		$	81.81		$	—		$	82.24
Prior straight-line rent	$	73.36		$	76.39		$	—		$	64.96
Percentage increase		11.7	%		7.1	%		—			26.6	%
Cash basis:
Initial rent ⁽²⁾	$	84.05		$	84.85		$	—		$	81.85
Prior escalated rent	$	71.01		$	75.44		$	—		$	58.73
Percentage increase		18.4	%		12.5	%		—			39.4	%

⁽¹⁾	The leasing statistics, except for square feet leased, represent office space only.

⁽²⁾	See page 43 for our definition of this measure.

- 36 -


		LEASE EXPIRATIONS - TOTAL PORTFOLIO

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


	Total Square Feet of Expiring Leases		PGRE’s Share of
Year of Lease Expiration ⁽²⁾			Square Feet of Expiring Leases		Annualized Rent ⁽¹⁾				% of Annualized Rent
Year of Lease Expiration ⁽²⁾			Square Feet of Expiring Leases		Amount		Per Square Foot ⁽³⁾		% of Annualized Rent
Month to Month		9,662		6,581	$	481	$	64.07		0.1	%

3Q 2018		28,259		25,082		1,906		82.21		0.3	%
4Q 2018		48,886		39,037		2,616		67.02		0.4	%

Total 2018		77,145		64,119		4,522		72.50		0.7	%
1Q 2019		210,061		176,149		13,731		77.80		2.1	%
2Q 2019		66,205		60,907		3,641		60.48		0.5	%
Remaining 2019		342,543		272,615		22,424		82.07		3.4	%

Total 2019		618,809		509,671		39,796		78.06		6.0	%
2020		749,880		469,415		33,770		70.97		5.1	%
2021		1,629,138		1,411,830		90,267		64.66		13.5	%
2022		2,364,590		562,199		39,066		77.26		5.9	%
2023		770,507		706,873		55,693		81.79		8.4	%
2024		752,907		695,892		53,983		77.79		8.1	%
2025		1,089,801		772,073		56,224		72.87		8.4	%
2026		753,857		667,240		49,304		70.79		7.4	%
2027		125,471		117,455		9,613		81.88		1.4	%
Thereafter		3,088,716		3,038,954		233,763		76.68		35.0	%

⁽¹⁾	See page 43 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.

- 37 -


		LEASE EXPIRATIONS - NEW YORK

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


	Total Square Feet of Expiring Leases		PGRE’s Share of
			Square Feet of Expiring Leases		Annualized Rent ⁽¹⁾
Year of Lease Expiration ⁽²⁾			Square Feet of Expiring Leases		Amount		Per Square Foot ⁽³⁾		% of Annualized Rent
Month to Month		1,322		1,322	$	254	$	—		0.1	%

3Q 2018		2,680		1,340		164		102.08		0.0	%
4Q 2018		48,886		39,037		2,616		67.02		0.5	%

Total 2018		51,566		40,377		2,780		68.18		0.5	%
1Q 2019		103,179		95,005		8,432		88.48		1.7	%
2Q 2019		13,826		11,213		674		64.42		0.1	%
Remaining 2019		204,719		198,330		16,808		85.99		3.4	%

Total 2019		321,724		304,548		25,914		86.08		5.2	%
2020		293,633		249,607		19,024		76.12		3.9	%
2021		958,624		910,899		63,094		71.26		12.8	%
2022		1,786,888		231,932		12,291		66.75		2.5	%
2023		544,143		515,190		39,668		80.91		8.1	%
2024		573,139		552,063		42,877		77.89		8.7	%
2025		251,833		219,031		15,971		72.92		3.3	%
2026		581,223		566,078		42,052		70.64		8.6	%
2027		85,378		85,378		7,114		83.32		1.4	%
Thereafter		2,868,601		2,855,229		220,316		76.89		44.9	%

⁽¹⁾	See page 43 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.

- 38 -


		LEASE EXPIRATIONS - WASHINGTON, D.C.

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


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

3Q 2018		—		—		—		—		—
4Q 2018		—		—		—		—		—

Total 2018		—		—		—		—		—
1Q 2019		34,475		34,475		2,679		77.71		4.3	%
2Q 2019		—		—		—		—		—
Remaining 2019		5,939		5,939		788		85.22		1.3	%

Total 2019		40,414		40,414		3,467		78.81		5.6	%
2020		33,136		33,136		2,642		79.73		4.3	%
2021		317,416		317,416		15,731		47.91		25.5	%
2022		38,919		38,919		2,541		65.29		4.1	%
2023		149,178		149,178		12,461		84.16		20.2	%
2024		80,478		80,478		6,544		81.56		10.6	%
2025		56,565		56,565		4,689		82.89		7.6	%
2026		32,011		32,011		2,261		70.63		3.7	%
2027		24,373		24,373		1,982		81.32		3.2	%
Thereafter		123,873		123,873		9,298		75.06		15.2	%

⁽¹⁾	See page 43 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.

- 39 -


		LEASE EXPIRATIONS - SAN FRANCISCO

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


	Total		PGRE’s Share of
Year of Lease Expiration ⁽²⁾	Square Feet		Square Feet		Annualized Rent ⁽¹⁾				% of
Year of Lease Expiration ⁽²⁾	of Expiring Leases		of Expiring Leases		Amount		Per Square Foot ⁽³⁾		Annualized Rent
Month to Month		8,340		5,259	$	227	$	64.07		0.2	%

3Q 2018		25,579		23,742		1,738		80.93		1.5	%
4Q 2018		—		—		—		—		—

Total 2018		25,579		23,742		1,738		80.93		1.5	%
1Q 2019		72,407		46,669		2,620		56.14		2.3	%
2Q 2019		52,379		49,694		2,967		59.70		2.6	%
Remaining 2019		131,885		68,346		4,828		70.64		4.3	%

Total 2019		256,671		164,709		10,415		63.24		9.2	%
2020		423,111		186,672		12,104		62.44		10.7	%
2021		353,098		183,515		11,442		62.35		10.1	%
2022		538,783		291,348		24,234		83.26		21.4	%
2023		77,186		42,505		3,564		83.29		3.1	%
2024		99,290		63,351		4,562		72.15		4.0	%
2025		781,403		496,477		35,564		71.71		31.3	%
2026		140,623		69,151		4,991		72.10		4.4	%
2027		15,720		7,704		517		67.49		0.5	%
Thereafter		96,242		59,852		4,149		69.89		3.6	%

⁽¹⁾	See page 43 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.

- 40 -


		CASH BASIS CAPITAL EXPENDITURES

(unaudited and in thousands)


	Three Months Ended June 30, 2018
	Total		New York		Washington, D.C		San Francisco		Other
Capital expenditures: ⁽¹⁾
Expenditures to maintain assets	$	2,496	$	1,738	$	379	$	171	$	208
Second generation tenant improvements		12,343		10,828		89		1,426		—
Second generation leasing commissions		8,049		6,837		—		1,212		—
First generation leasing costs and other capital expenditures		716		—		—		716		—

Total Capital Expenditures	$	23,604	$	19,403	$	468	$	3,525	$	208

Redevelopment Expenditures ⁽¹⁾
31 West 52nd Street (Lobby Renovation)	$	9,216	$	9,216	$	—	$	—	$	—
One Market Plaza		1,258		—		—		1,258		—
Other		33		33		—		—		—

Total Redevelopment Expenditures	$	10,507	$	9,249	$	—	$	1,258	$	—


	Three Months Ended June 30, 2017
	Total		New York		Washington, D.C		San Francisco		Other
Capital expenditures: ⁽¹⁾
Expenditures to maintain assets	$	1,999	$	1,739	$	123	$	—	$	137
Second generation tenant improvements		4,151		2,454		2		1,695		—
Second generation leasing commissions		5,716		574		—		5,142		—
First generation leasing costs and other capital expenditures		6,166		2,643		1,473		2,050		—

Total Capital Expenditures	$	18,032	$	7,410	$	1,598	$	8,887	$	137

Redevelopment Expenditures ⁽¹⁾
One Market Plaza	$	3,129	$	—	$	—	$	3,129	$	—
Residential Development Fund		1,459		—		—		—		1,459
Other		1,276		1,246		—		30		—

Total Redevelopment Expenditures	$	5,864	$	1,246	$	—	$	3,159	$	1,459

⁽¹⁾	See page 43 for our definition of this measure.

- 41 -


		CASH BASIS CAPITAL EXPENDITURES

(unaudited and in thousands)


	Six Months Ended June 30, 2018
	Total		New York		Washington, D.C		San Francisco		Other
Capital expenditures: ⁽¹⁾
Expenditures to maintain assets	$	6,198	$	4,641	$	614	$	634	$	309
Second generation tenant improvements		25,842		23,438		123		2,281		—
Second generation leasing commissions		9,533		7,420		142		1,971		—
First generation leasing costs and other capital expenditures		5,370		111		2,059		3,200		—

Total Capital Expenditures	$	46,943	$	35,610	$	2,938	$	8,086	$	309

Redevelopment Expenditures ⁽¹⁾
31 West 52nd Street (Lobby Renovation)	$	12,180	$	12,180	$	—	$	—	$	—
One Market Plaza		2,012		—		—		2,012		—
Other		620		620		—		—		—

Total Redevelopment Expenditures	$	14,812	$	12,800	$	—	$	2,012	$	—


	Six Months Ended June 30, 2017
	Total		New York		Washington, D.C		San Francisco		Other
Capital expenditures: ⁽¹⁾
Expenditures to maintain assets	$	7,554	$	5,036	$	589	$	1,705	$	224
Second generation tenant improvements		8,108		4,941		2		3,165		—
Second generation leasing commissions		9,167		3,787		—		5,380		—
First generation leasing costs and other capital expenditures		11,732		5,459		2,699		3,574		—

Total Capital Expenditures	$	36,561	$	19,223	$	3,290	$	13,824	$	224

Redevelopment Expenditures ⁽¹⁾
One Market Plaza	$	3,206	$	—	$	—	$	3,206	$	—
Residential Development Fund		2,896		—		—		—		2,896
Other		1,651		1,621		—		30		—

Total Redevelopment Expenditures	$	7,753	$	1,621	$	—	$	3,236	$	2,896

⁽¹⁾	See page 43 for our definition of this measure.

- 42 -


		DEFINITIONS

We use and present various non-GAAP measures in this Supplemental Operating and Financial Data report. The following section contains definitions of these measures, describes our use of them and provides information regarding why we believe they are meaningful. Other real estate companies may use different methodologies for calculating these measures, and accordingly, our presentation of these measures may not be comparable to other real estate companies. These non-GAAP measures should not be considered a substitute for, and should only be considered together with and as a supplement to, financial information presented in accordance with GAAP.

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 is not intended to be a measure of cash flow or liquidity. 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 certain items, including, transaction related costs, realized and unrealized gains or losses on real estate fund investments, unrealized gains or losses on interest rate swaps, severance costs and gains or losses on early extinguishment of debt, 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 is not intended to be a measure of cash flow or liquidity. 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) amortization of above and below-market leases, net, (v) amortization of stock-based compensation expense and (vi) 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 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 for Real Estate (“EBITDAre”) is a supplemental measure of our operating performance. EBITDAre is presented in accordance with the definition adopted by Nareit. Nareit defines EBITDAre as GAAP net income (loss) adjusted to exclude interest expense, income taxes, depreciation and amortization expenses, net gains from sales of depreciated real estate assets and impairment losses on depreciable real estate, including our share of such adjustments of unconsolidated joint ventures. EBITDAre provides 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. EBITDAre should not be considered as an indication of our financial performance or a measure of our cash flow or liquidity. We also present PGRE’s share of EBITDAre which represents our share of EBITDAre generated by our consolidated and unconsolidated joint ventures, based on our percentage ownership in the underlying assets.

- 43 -


		DEFINITIONS - CONTINUED

Adjusted EBITDAre is a supplemental measure that is calculated by adjusting EBITDAre to eliminate the impact of the performance of our real estate funds, unrealized gains or losses on interest rate swaps, transaction related costs, gains or losses on early extinguishment of debt and certain other items that may vary from period to period. Adjusted EBITDAre enhances the comparability of EBITDAre across periods. In future periods, we may also exclude other items from Adjusted EBITDAre that we believe may help investors compare our results. We also present PGRE’s share of Adjusted EBITDAre, which represents our share of Adjusted EBITDAre generated by our consolidated and unconsolidated joint ventures based on our percentage ownership in the underlying assets.

Net Operating Income (“NOI”) is used 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 use NOI and Cash NOI 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.

Same Store NOI is used to measure the operating performance of 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.

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.

Same Store Leased % represents percentage of square feet that is leased, including signed leases not yet commenced, for properties that were owned by us in a similar manner during both the current period and prior reporting periods.

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.

- 44 -

Same Store Cash NOI

% Change

Three Months Ended June 30, 2018 vs. June 30, 2017

Six Months Ended June 30, 2018 vs. June 30, 2017