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

Paramount Group, Inc. - FORM 8-K - EX-99.2 - November 6, 2017

Attached files

Attached files

Paramount Group, Inc. Reports

file	filename
8-K - 8-K - Paramount Group, Inc.	d471809d8k.htm
EX-99.1 - EX-99.1 - Paramount Group, Inc.	d471809dex991.htm

Exhibit 99.2

LOGO

SUPPLEMENTAL OPERATING AND FINANCIAL DATA

FOR THE QUARTER ENDED SEPTEMBER 30, 2017


		FORWARD-LOOKING STATEMENTS

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

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		TABLE OF CONTENTS


	Page
Company Profile		4

Research Coverage		5

Selected Financial Information
Financial Highlights		6
Consolidated Balance Sheets		7
Consolidated Statements of Income		8
Select Income Statement Data		9
Funds From Operations (“FFO”)		10
Funds Available for Distribution (“FAD”)		11
Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”)		12
Net Operating Income (“NOI”)		13
NOI - By Segment		14-15
Same Store Results - By Segment		16-19
Consolidated Joint Ventures and Funds		20-22
Unconsolidated Joint Ventures		23-25
Unconsolidated Funds Summary		26
Capital Structure		27
Debt Analysis		28
Debt Maturities		29

Selected Property Data
Portfolio Summary		30
Same Store Leased Occupancy		31-32
Top Tenants and Industry Diversification		33
Leasing Activity		34-35
Lease Expirations		36-39
Cash Basis Capital Expenditures		40-41

Definitions		42-43

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		COMPANY PROFILE

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


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

BOARD OF DIRECTORS
Albert Behler		Director, Chairman of the Board
Thomas Armbrust		Director
Martin Bussmann		Director
Dan Emmett		Director, Chair of 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
David O’Connor		Director
Katharina Otto-Bernstein		Director

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		RESEARCH COVERAGE⁽¹⁾


James Feldman	Thomas Catherwood	Chris Lucas	Vin Chao
Bank of America Merrill Lynch	BTIG	Capital One	Deutsche Bank
(646) 855-5808	(212) 738-6140	(571) 633-8151	(212) 250-6799

Steve Sakwa	Andrew Rosivach	Jed Reagan	Richard Anderson
Evercore ISI	Goldman Sachs	Green Street Advisors	Mizuho Securities USA Inc.
(212) 446-9462	(212) 902-2796	(949) 640-8780	(212) 205-8445

Vikram Malhotra	Nick Yulico	Blaine Heck
Morgan Stanley	UBS	Wells Fargo
(212) 761-7064	(212) 713-3402	(443) 263-6529

⁽¹⁾

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

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		FINANCIAL HIGHLIGHTS

(unaudited and in thousands, except per share amounts)


	Three Months Ended									Nine Months Ended
SELECTED FINANCIAL DATA	September 30, 2017			September 30, 2016			June 30, 2017			September 30, 2017			September 30, 2016
Net (loss) income attributable to common stockholders	$	(10,214	)	$	(139	)	$	103,016		$	93,174		$	(3,445	)
Per share—basic and diluted	$	(0.04	)	$	(0.00	)	$	0.44		$	0.40		$	(0.02	)
PGRE’s share of Cash NOI ⁽¹⁾	$	83,813		$	72,432		$	85,436		$	248,366		$	231,924
PGRE’s share of NOI ⁽¹⁾	$	95,337		$	95,315		$	102,208		$	295,907		$	295,655

Same Store Results:

Same Store Cash NOI				% Change			Same Store NOI									% Change
Three Months Ended September 30, 2017 vs. September 30, 2016					21.3	%		Three Months Ended September 30, 2017 vs. September 30, 2016									0.2	%
Nine Months Ended September 30, 2017 vs. September 30, 2016					9.2	%		Nine Months Ended September 30, 2017 vs. September 30, 2016									(3.3	%)
Core FFO attributable to common stockholders ⁽¹⁾	$	52,369		$	45,236		$	54,565		$	158,439		$	144,549
Per share—diluted	$	0.22		$	0.21		$	0.23		$	0.67		$	0.67
FAD attributable to common stockholders ⁽¹⁾	$	25,197		$	18,684		$	37,170		$	92,648		$	59,438
Dividends paid to common stockholders	$	22,807		$	20,863		$	22,637		$	67,425		$	61,953

COMMON SHARE DATA

	Three Months Ended
Share Price:	September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016
High	$	16.79		$	17.25		$	17.58		$	16.74		$	18.28
Low	$	15.14		$	15.32		$	15.87		$	14.58		$	15.36
Closing (end of period)	$	16.00		$	16.00		$	16.21		$	15.99		$	16.39
Dividends per common share	$	0.095		$	0.095		$	0.095		$	0.095		$	0.095
Annualized dividends per common share	$	0.380		$	0.380		$	0.380		$	0.380		$	0.380
Dividend yield (on closing share price)		2.4	%		2.4	%		2.3	%		2.4	%		2.3	%

PORTFOLIO STATISTICS

	Three Months Ended
	September 30, 2017			June 30, 2017			December 31, 2016
Leased % ⁽¹⁾		92.3	%		90.9	%		92.7	%

Same Store Leased %				% Change
September 30, 2017 vs. June 30, 2017					1.7	%
September 30, 2017 vs. December 31, 2016					0.2	%

⁽¹⁾	See page 42 for our definition of this measure.

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		CONSOLIDATED BALANCE SHEETS
(unaudited and in thousands)


	September 30, 2017			December 31, 2016
ASSETS:
Real estate, at cost
Land	$	2,209,506		$	2,091,535
Buildings and improvements		6,097,220			5,757,558

		8,306,726			7,849,093
Accumulated depreciation and amortization		(443,555	)		(318,161	)

Real estate, net		7,863,171			7,530,932
Cash and cash equivalents		185,028			162,965
Restricted cash		32,320			29,374
Investments in unconsolidated joint ventures		46,014			6,411
Investments in unconsolidated real estate funds		8,146			28,173
Preferred equity investments, net		35,763			55,051
Marketable securities		27,867			22,393
Accounts and other receivables, net		13,822			15,251
Deferred rent receivable		209,226			163,695
Deferred charges, net		88,846			71,184
Intangible assets, net		373,053			412,225
Assets held for sale		—			346,685
Other assets		40,752			22,829

Total Assets	$	8,924,008		$	8,867,168


LIABILITIES:
Notes and mortgages payable, net	$	3,539,071		$	3,364,898
Revolving credit facility		—			230,000
Due to affiliates		27,299			27,299
Accounts payable and accrued expenses		97,679			103,896
Dividends and distributions payable		25,211			25,151
Intangible liabilities, net		138,563			153,018
Other liabilities		54,029			76,959

Total Liabilities		3,881,852			3,981,221

EQUITY:
Paramount Group, Inc. equity		4,185,620			3,990,005
Noncontrolling interests in:
Consolidated joint ventures		408,035			253,788
Consolidated real estate fund		14,947			64,793
Operating Partnership		433,554			577,361

Total Equity		5,042,156			4,885,947

Total Liabilities and Equity	$	8,924,008		$	8,867,168

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		CONSOLIDATED STATEMENTS OF INCOME
(unaudited and in thousands, except share and per share amounts)


	Three Months Ended									Nine Months Ended
	September 30, 2017			September 30, 2016			June 30, 2017			September 30, 2017			September 30, 2016
REVENUES:
Property rentals	$	141,801		$	122,606		$	138,232		$	412,268		$	371,016
Straight-line rent adjustments		11,408			23,301			11,974			43,529			67,843
Amortization of above and below-market leases, net		3,175			3,112			7,981			14,164			6,593

Rental income		156,384			149,019			158,187			469,961			445,452
Tenant reimbursement income		14,053			11,978			11,856			38,761			33,101
Fee income (see details on page 9)		5,834			3,976			4,448			19,838			11,568
Other income (see details on page 9)		3,499			6,345			3,213			10,150			26,418

Total revenues		179,770			171,318			177,704			538,710			516,539
EXPENSES:
Operating		68,264			64,025			63,461			197,696			186,964
Depreciation and amortization		66,515			66,376			68,636			198,143			208,475
General and administrative (see details on page 9)		14,470			13,235			16,573			44,624			39,335
Transaction related costs		274			282			502			1,051			1,725

Total expenses		149,523			143,918			149,172			441,514			436,499
Operating income		30,247			27,400			28,532			97,196			80,040
Income from unconsolidated joint ventures		671			1,792			16,535			19,143			5,291
Loss from unconsolidated real estate funds		(3,930	)		(1,254	)		(2,411	)		(6,053	)		(2,540	)
Interest and other (loss) income, net (see details on page 9)		(17,668	)		2,299			2,486			(11,982	)		5,029
Interest and debt expense (see details on page 9)		(35,733	)		(38,278	)		(34,817	)		(107,568	)		(113,406	)
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		—			12,728			—			1,802			29,661

Net (loss) income before income taxes		(26,413	)		4,687			139,152			118,650			4,075
Income tax benefit (expense)		1,010			(218	)		(970	)		(4,242	)		817

Net (loss) income		(25,403	)		4,469			138,182			114,408			4,892
Less net (income) loss attributable to noncontrolling interests in:
Consolidated joint ventures		14,217			(4,703	)		(1,897	)		11,029			(10,062	)
Consolidated real estate fund		(114	)		67			(20,169	)		(20,195	)		819
Operating Partnership		1,086			28			(13,100	)		(12,068	)		906

Net (loss) income attributable to common stockholders	$	(10,214	)	$	(139	)	$	103,016		$	93,174		$	(3,445	)


Weighted average common shares outstanding:
Basic		239,445,810			219,394,245			234,990,468			235,151,398			216,317,746

Diluted		239,445,810			219,394,245			235,010,830			235,177,683			216,317,746

(Loss) income per common share:
Basic	$	(0.04	)	$	(0.00	)	$	0.44		$	0.40		$	(0.02	)

Diluted	$	(0.04	)	$	(0.00	)	$	0.44		$	0.40		$	(0.02	)

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		SELECT INCOME STATEMENT DATA
(unaudited and in thousands)


	Three Months Ended							Nine Months Ended
Fee Income:	September 30, 2017			September 30, 2016		June 30, 2017		September 30, 2017			September 30, 2016
Property management	$	1,673		$	1,404	$	1,532	$	4,815		$	4,464
Asset management		1,997			2,003		2,359		6,622			5,500
Acquisition and disposition		1,475			187		250		7,045			777
Other		689			382		307		1,356			827

Total fee income	$	5,834		$	3,976	$	4,448	$	19,838		$	11,568


	Three Months Ended							Nine Months Ended
Other Income:	September 30, 2017			September 30, 2016		June 30, 2017		September 30, 2017			September 30, 2016
Lease termination income	$	954		$	3,460	$	895	$	1,915		$	14,508
Other (primarily tenant requested services, including overtime heating and cooling)		2,545			2,885		2,318		8,235			11,910

Total other income	$	3,499		$	6,345	$	3,213	$	10,150		$	26,418


	Three Months Ended							Nine Months Ended
General and Administrative:	September 30, 2017			September 30, 2016		June 30, 2017		September 30, 2017			September 30, 2016
Non-cash general and administrative - stock based compensation expense	$	3,825		$	2,583	$	4,438	$	11,692		$	6,911
All other general and administrative		9,833			9,916		11,113		29,396			29,353
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”)		812			736		1,022		3,536			197
Severance costs		—			—		—		—			2,874

Total general and administrative	$	14,470		$	13,235	$	16,573	$	44,624		$	39,335


	Three Months Ended							Nine Months Ended
Interest and Other (Loss) Income:	September 30, 2017			September 30, 2016		June 30, 2017		September 30, 2017			September 30, 2016
Valuation allowance on preferred equity investment ⁽¹⁾	$	(19,588	)	$	—	$	—	$	(19,588	)	$	—
Preferred equity investment income ⁽²⁾		961			1,460		953		3,327			4,299
Interest income		147			103		511		743			533
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)		812			736		1,022		3,536			197

Total interest and other (loss) income, net	$	(17,668	)	$	2,299	$	2,486	$	(11,982	)	$	5,029

⁽¹⁾	Represents the valuation allowance on 2 Herald Square, our preferred equity investment in PGRESS Equity Holdings L.P., of which our 24.4% share is $4,780 and $14,808 was attributable to noncontrolling interests.

⁽²⁾

Represents 100% of the investment income from PGRESS Equity Holdings, L.P., of which our 24.4% share is $243, $355 and $232 for the three months ended September 30, 2017 and 2016, and June 30, 2017, respectively and $819 and $1,047 for the nine months ended September 30, 2017 and 2016, respectively.



	Three Months Ended						Nine Months Ended
Interest and Debt Expense:	September 30, 2017		September 30, 2016		June 30, 2017		September 30, 2017		September 30, 2016
Interest expense	$	32,914	$	36,820	$	31,999	$	99,201	$	109,285
Amortization of deferred financing costs		2,819		1,458		2,818		8,367		4,121

Total interest and debt expense	$	35,733	$	38,278	$	34,817	$	107,568	$	113,406

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		FUNDS FROM OPERATIONS (“FFO”)
(unaudited and in thousands, except share and per share amounts)


	Three Months Ended									Nine Months Ended
	September 30, 2017			September 30, 2016			June 30, 2017			September 30, 2017			September 30, 2016
Reconciliation of net (loss) income to FFO and Core FFO:
Net (loss) income	$	(25,403	)	$	4,469		$	138,182		$	114,408		$	4,892
Real estate depreciation and amortization (including our share of unconsolidated joint ventures)		68,523			68,008			70,660			204,023			213,202
Gain on sale of Waterview		—			—			(110,583	)		(110,583	)		—

FFO ⁽¹⁾		43,120			72,477			98,259			207,848			218,094
Less FFO attributable to noncontrolling interests in:
Consolidated joint ventures		5,152			(11,319	)		(7,740	)		(9,783	)		(30,026	)
Consolidated real estate fund		(114	)		(157	)		(20,276	)		(20,530	)		147

FFO attributable to Paramount Group Operating Partnership		48,158			61,001			70,243			177,535			188,215
Less FFO attributable to noncontrolling interests in Operating Partnership		(4,628	)		(10,386	)		(7,925	)		(20,098	)		(34,109	)

FFO attributable to common stockholders⁽¹⁾	$	43,530		$	50,615		$	62,318		$	157,437		$	154,106

Per diluted share	$	0.18		$	0.23		$	0.27		$	0.67		$	0.71


FFO	$	43,120		$	72,477		$	98,259		$	207,848		$	218,094
Non-core items:
Valuation allowance on preferred equity investment		19,588			—			—			19,588			—
Realized and unrealized loss from unconsolidated real estate funds		4,034			1,379			2,482			6,281			2,518
Our share of earnings from 712 Fifth Avenue in excess of distributions received and (distributions in excess of basis)		691			—			(15,072	)		(14,381	)		—
Transaction related costs		274			282			502			1,051			1,725
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)		—			(13,589	)		(364	)		(2,750	)		(30,939	)
Severance costs		—			—			—			—			2,874

Core FFO ⁽¹⁾		67,707			60,549			69,401			203,946			194,272
Less Core FFO attributable to noncontrolling interests in:
Consolidated joint ventures		(9,656	)		(5,874	)		(7,740	)		(25,057	)		(17,776	)
Consolidated real estate fund		(114	)		(157	)		12			(242	)		147

Core FFO attributable to Paramount Group Operating Partnership		57,937			54,518			61,673			178,647			176,643
Less Core FFO attributable to noncontrolling interests in Operating Partnership		(5,568	)		(9,282	)		(7,108	)		(20,208	)		(32,094	)

Core FFO attributable to common stockholders ⁽¹⁾	$	52,369		$	45,236		$	54,565		$	158,439		$	144,549

Per diluted share	$	0.22		$	0.21		$	0.23		$	0.67		$	0.67

Reconciliation of weighted average shares outstanding:
Weighted average shares outstanding		239,445,810			219,394,245			234,990,468			235,151,398			216,317,746
Effect of dilutive securities		24,653			24,385			20,362			26,285			—

Denominator for FFO and Core FFO per diluted share		239,470,463			219,418,630			235,010,830			235,177,683			216,317,746

⁽¹⁾	See page 42 for our definition of this measure.

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		FUNDS AVAILABLE FOR DISTRIBUTION (“FAD”)
(unaudited and in thousands)


	Three Months Ended									Nine Months Ended
	September 30, 2017			September 30, 2016			June 30, 2017			September 30, 2017			September 30, 2016
Reconciliation of Core FFO to FAD:
Core FFO	$	67,707		$	60,549		$	69,401		$	203,946		$	194,272
Add (subtract) adjustments to arrive at FAD:
Amortization of stock-based compensation expense		3,825			2,583			4,438			11,692			6,911
Amortization of deferred financing costs (including our share of unconsolidated joint ventures)		2,891			1,509			3,061			8,750			4,274
Amortization of above and below-market leases, net (including our share of unconsolidated joint ventures)		(3,017	)		(3,112	)		(7,818	)		(13,716	)		(6,593	)
Expenditures to maintain assets		(2,861	)		(6,502	)		(1,999	)		(10,415	)		(12,916	)
Second generation tenant improvements and leasing commissions		(22,698	)		(9,344	)		(9,867	)		(39,973	)		(46,747	)
Straight-line rent adjustments (including our share of unconsolidated joint ventures)		(11,402	)		(23,234	)		(12,208	)		(44,121	)		(67,968	)

FAD ⁽¹⁾		34,445			22,449			45,008			116,163			71,233
Less FAD attributable to noncontrolling interests in:
Consolidated joint ventures		(6,454	)		226			(3,123	)		(11,437	)		1,421
Consolidated real estate fund		(115	)		(157	)		12			(243	)		147

FAD attributable to Paramount Group Operating Partnership		27,876			22,518			41,897			104,483			72,801
Less FAD attributable to noncontrolling interests in Operating Partnership		(2,679	)		(3,834	)		(4,727	)		(11,835	)		(13,363	)

FAD attributable to common stockholders ^(1) (2)	$	25,197		$	18,684		$	37,170		$	92,648		$	59,438

⁽¹⁾	See page 42 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.

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

(unaudited and in thousands)


	Three Months Ended									Nine Months Ended
	September 30, 2017			September 30, 2016			June 30, 2017			September 30, 2017			September 30, 2016
Reconciliation of net (loss) income to EBITDA and Adjusted EBITDA:
Net (loss) income	$	(25,403	)	$	4,469		$	138,182		$	114,408		$	4,892
Add (subtract) adjustments to arrive at EBITDA and Adjusted EBITDA:
Depreciation and amortization (including our share of unconsolidated joint ventures)		68,523			68,008			70,660			204,023			213,202
Interest and debt expense (including our share of unconsolidated joint ventures)		37,392			39,697			36,679			112,724			117,628
Income tax (benefit) expense (including our share of unconsolidated joint ventures)		(1,010	)		219			970			4,242			(816	)

EBITDA⁽¹⁾		79,502			112,393			246,491			435,397			334,906
Less EBITDA attributable to noncontrolling interests in:
Consolidated joint ventures		(1,294	)		(18,373	)		(12,941	)		(26,880	)		(50,949	)
Consolidated real estate fund		(111	)		(156	)		(20,276	)		(20,528	)		146

PGRE’s share of EBITDA ⁽¹⁾	$	78,097		$	93,864		$	213,274		$	387,989		$	284,103


EBITDA	$	79,502		$	112,393		$	246,491		$	435,397		$	334,906
Add (subtract) adjustments to arrive at Adjusted EBITDA:
Valuation allowance on preferred equity investment		19,588			—			—			19,588			—
EBITDA from real estate funds		3,801			1,073			2,021			5,372			2,708
Our share of earnings from 712 Fifth Avenue in excess of distributions received and (distributions in excess of basis)		691			—			(15,072	)		(14,381	)		—
Transaction related costs		274			282			502			1,051			1,725
Gain on sale of Waterview		—			—			(110,583	)		(110,583	)		—
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)		—			(13,589	)		(364	)		(2,750	)		(30,939	)
Severance costs		—			—			—			—			2,874

Adjusted EBITDA ⁽¹⁾		103,856			100,159			104,751			318,165			311,274
Less Adjusted EBITDA attributable to noncontrolling interests in:
Consolidated joint ventures		(16,101	)		(12,927	)		(12,941	)		(42,153	)		(38,698	)
Consolidated real estate fund		3			—			381			384			—

PGRE’s share of Adjusted EBITDA ⁽¹⁾	$	87,758		$	87,232		$	92,191		$	276,396		$	272,576

⁽¹⁾	See page 42 for our definition of this measure.

- 12 -


		NET OPERATING INCOME (“NOI”)

(unaudited and in thousands)


	Three Months Ended									Nine Months Ended
	September 30, 2017			September 30, 2016			June 30, 2017			September 30, 2017			September 30, 2016
Reconciliation of net (loss) income to NOI and Cash NOI:
Net (loss) income	$	(25,403	)	$	4,469		$	138,182		$	114,408		$	4,892
Add (subtract) adjustments to arrive at NOI and Cash NOI:
Depreciation and amortization		66,515			66,376			68,636			198,143			208,475
General and administrative		14,470			13,235			16,573			44,624			39,335
Interest and debt expense		35,733			38,278			34,817			107,568			113,406
Loss on early extinguishment of debt		—			—			5,162			7,877			—
Transaction related costs		274			282			502			1,051			1,725
Income tax (benefit) expense		(1,010	)		218			970			4,242			(817	)
NOI from unconsolidated joint ventures		4,993			3,974			4,958			14,774			12,938
Income from unconsolidated joint ventures		(671	)		(1,792	)		(16,535	)		(19,143	)		(5,291	)
Loss from unconsolidated real estate funds		3,930			1,254			2,411			6,053			2,540
Fee income		(5,834	)		(3,976	)		(4,448	)		(19,838	)		(11,568	)
Interest and other loss (income), net		17,668			(2,299	)		(2,486	)		11,982			(5,029	)
Gain on sale of real estate		—			—			(133,989	)		(133,989	)		—
Unrealized gain on interest rate swaps		—			(12,728	)		—			(1,802	)		(29,661	)

NOI ⁽¹⁾		110,665			107,291			114,753			335,950			330,945
Less NOI attributable to noncontrolling interests in:
Consolidated joint ventures		(15,307	)		(11,819	)		(12,200	)		(39,536	)		(35,436	)
Consolidated real estate fund		(21	)		(157	)		(345	)		(507	)		146

PGRE’s share of NOI⁽¹⁾	$	95,337		$	95,315		$	102,208		$	295,907		$	295,655


NOI	$	110,665		$	107,291		$	114,753		$	335,950		$	330,945
Less:
Straight-line rent adjustments (including our share of unconsolidated joint ventures)		(11,402	)		(23,234	)		(12,208	)		(44,121	)		(67,968	)
Amortization of above and below-market leases, net (including our share of unconsolidated joint ventures)		(3,017	)		(3,112	)		(7,818	)		(13,716	)		(6,593	)

Cash NOI⁽¹⁾		96,246			80,945			94,727			278,113			256,384
Less Cash NOI attributable to noncontrolling interests in:
Consolidated joint ventures		(12,412	)		(8,356	)		(8,946	)		(29,240	)		(24,606	)
Consolidated real estate fund		(21	)		(157	)		(345	)		(507	)		146

PGRE’s share of Cash NOI ⁽¹⁾	$	83,813		$	72,432		$	85,436		$	248,366		$	231,924

⁽¹⁾	See page 42 for our definition of this measure.

- 13 -


		NOI - BY SEGMENT

(unaudited and in thousands)


	Three Months Ended September 30, 2017
	Total			New York			Washington, D.C.			San Francisco			Other
Reconciliation of net (loss) income to NOI and Cash NOI:
Net (loss) income	$	(25,403	)	$	2,870		$	3,698		$	1,114		$	(33,085	)
Add (subtract) adjustments to arrive at NOI and Cash NOI:
Depreciation and amortization		66,515			38,040			5,417			22,586			472
General and administrative		14,470			—			—			—			14,470
Interest and debt expense		35,733			22,562			—			12,026			1,145
Transaction related costs		274			—			—			—			274
Income tax (benefit )expense		(1,010	)		—			—			1			(1,011	)
NOI from unconsolidated joint ventures		4,993			4,815			—			—			178
Income from unconsolidated joint ventures		(671	)		(551	)		—			—			(120	)
Loss from unconsolidated real estate funds		3,930			—			—			—			3,930
Fee income		(5,834	)		—			—			—			(5,834	)
Interest and other loss (income), net		17,668			(37	)		(16	)		(133	)		17,854

NOI ⁽¹⁾		110,665			67,699			9,099			35,594			(1,727	)
Less NOI attributable to noncontrolling interests in:
Consolidated joint ventures		(15,307	)		—			—			(15,307	)		—
Consolidated real estate fund		(21	)		—			—			—			(21	)

PGRE’s share of NOI for the three months ended September 30, 2017	$	95,337		$	67,699		$	9,099		$	20,287		$	(1,748	)

PGRE’s share of NOI for the three months ended September 30, 2016	$	95,315		$	71,174		$	13,907		$	11,628		$	(1,394	)


NOI⁽¹⁾	$	110,665		$	67,699		$	9,099		$	35,594		$	(1,727	)
Add (subtract) adjustments to arrive at Cash NOI:
Straight-line rent adjustments (including our share of unconsolidated joint ventures)		(11,402	)		(8,455	)		106			(3,025	)		(28	)
Amortization of above and below-market leases, net (including our share of unconsolidated joint ventures)		(3,017	)		1,060			(547	)		(3,530	)		—

Cash NOI⁽¹⁾		96,246			60,304			8,658			29,039			(1,755	)
Less Cash NOI attributable to noncontrolling interests in:
Consolidated joint ventures		(12,412	)		—			—			(12,412	)		—
Consolidated real estate fund		(21	)		—			—			—			(21	)

PGRE’s share of Cash NOI for the three months ended September 30, 2017	$	83,813		$	60,304		$	8,658		$	16,627		$	(1,776	)

PGRE’s share of Cash NOI for the three months ended September 30, 2016	$	72,432		$	53,621		$	11,933		$	8,300		$	(1,422	)

⁽¹⁾	See page 42 for our definition of this measure.

- 14 -


		NOI - BY SEGMENT

(unaudited and in thousands)


	Nine Months Ended September 30, 2017
	Total			New York			Washington, D.C.			San Francisco			Other
Reconciliation of net income (loss) to NOI and Cash NOI:
Net income (loss)	$	114,408		$	23,921		$	122,237		$	4,942		$	(36,692	)
Add (subtract) adjustments to arrive at NOI and Cash NOI:
Depreciation and amortization		198,143			115,134			16,031			65,364			1,614
General and administrative		44,624			—			—			—			44,624
Interest and debt expense		107,568			66,754			2,724			32,983			5,107
Loss on early extinguishment of debt		7,877			—			5,162			2,715			—
Transaction related costs		1,051			—			—			—			1,051
Income tax expense		4,242			—			—			9			4,233
NOI from unconsolidated joint ventures		14,774			14,406			—			—			368
Income from unconsolidated joint ventures		(19,143	)		(18,949	)		—			—			(194	)
Loss from unconsolidated real estate funds		6,053			—			—			—			6,053
Fee income		(19,838	)		—			—			—			(19,838	)
Interest and other loss (income), net		11,982			(98	)		(36	)		(202	)		12,318
Gain on sale of real estate		(133,989	)		—			(110,583	)		—			(23,406	)
Unrealized gain on interest rate swaps		(1,802	)		—			—			(1,802	)		—

NOI ⁽¹⁾		335,950			201,168			35,535			104,009			(4,762	)
Less NOI attributable to noncontrolling interests in:
Consolidated joint ventures		(39,536	)		—			—			(39,536	)		—
Consolidated real estate funds		(507	)		—			—			—			(507	)

PGRE’s share of NOI for the nine months ended September 30, 2017	$	295,907		$	201,168		$	35,535		$	64,473		$	(5,269	)

PGRE’s share of NOI for the nine months ended September 30, 2016	$	295,655		$	226,951		$	38,998		$	34,900		$	(5,194	)


NOI⁽¹⁾	$	335,950		$	201,168		$	35,535		$	104,009		$	(4,762	)
Add (subtract) adjustments to arrive at Cash NOI:
Straight-line rent adjustments (including our share of unconsolidated joint ventures)		(44,121	)		(29,968	)		(1,290	)		(12,868	)		5
Amortization of above and below-market leases, net		(13,716	)		4,017			(1,644	)		(16,089	)		—

Cash NOI⁽¹⁾		278,113			175,217			32,601			75,052			(4,757	)
Less Cash NOI attributable to noncontrolling interests in:
Consolidated joint ventures		(29,240	)		—			—			(29,240	)		—
Consolidated real estate funds		(507	)		—			—			—			(507	)

PGRE’s share of Cash NOI for the nine months ended September 30, 2017	$	248,366		$	175,217		$	32,601		$	45,812		$	(5,264	)

PGRE’s share of Cash NOI for the nine months ended September 30, 2016	$	231,924		$	179,117		$	33,504		$	24,494		$	(5,191	)

⁽¹⁾	See page 42 for our definition of this measure.

- 15 -


		SAME STORE RESULTS - BY SEGMENT

(unaudited and in thousands)


	Three Months Ended September 30, 2017
SAME STORE CASH NOI ⁽¹⁾	Total			New York			Washington, D.C.			San Francisco			Other

PGRE’s share of Cash NOI for the three months ended September 30, 2017	$	83,813		$	60,304		$	8,658		$	16,627		$	(1,776	)
Acquisitions ⁽²⁾		(7,510	)		(842	)		—			(6,668	)		—
Dispositions		—			—			—			—			—
Lease termination income (including our share of unconsolidated joint ventures)		(886	)		(665	)		—			(221	)		—
Other, net		32			14			—			24			(6	)

PGRE’s share of Same Store Cash NOI⁽¹⁾ for the three months ended September 30, 2017	$	75,449		$	58,811		$	8,658		$	9,762		$	(1,782	)


	Three Months Ended September 30, 2016
	Total			New York			Washington, D.C.			San Francisco			Other

PGRE’s share of Cash NOI for the three months ended September 30, 2016	$	72,432		$	53,621		$	11,933		$	8,300		$	(1,422	)
Acquisitions		—			—			—			—			—
Dispositions ⁽³⁾		(6,327	)		—			(6,327	)		—			—
Lease termination income (including our share of unconsolidated joint ventures)		(3,433	)		(3,348	)		—			(85	)		—
Other, net		(465	)		(162	)		4			—			(307	)

PGRE’s share of Same Store Cash NOI⁽¹⁾ for the three months ended September 30, 2016	$	62,207		$	50,111		$	5,610		$	8,215		$	(1,729	)



Increase (decrease) in PGRE’s share of Same Store Cash NOI	$	13,242		$	8,700		$	3,048		$	1,547		$	(53	)

% Increase		21.3	%		17.4	%		54.3	%		18.8	%

⁽¹⁾	See page 42 for our definition of this measure.

⁽²⁾	Represents our share of Cash NOI for the three months ended September 30, 2017 attributable to (i) 60 Wall Street in New York, which was acquired in January 2017 and (ii) One Front Street and 50 Beale Street in San Francisco, which were acquired in December 2016 and July 2017, respectively.

⁽³⁾	Represents our share of Cash NOI for the three months ended September 30, 2016 attributable to Waterview, which was sold in May 2017.

- 16 -


		SAME STORE RESULTS - BY SEGMENT

(unaudited and in thousands)


	Three Months Ended September 30, 2017
SAME STORE NOI ⁽¹⁾	Total			New York			Washington, D.C.			San Francisco			Other

PGRE’s share of NOI for the three months ended September 30, 2017	$	95,337		$	67,699		$	9,099		$	20,287		$	(1,748	)
Acquisitions ⁽²⁾		(8,916	)		(678	)		—			(8,238	)		—
Dispositions		—			—			—			—			—
Lease termination income (including our share of unconsolidated joint ventures)		(886	)		(665	)		—			(221	)		—
Other, net		241			208			—			39			(6	)

PGRE’s share of Same Store NOI⁽¹⁾ for the three months ended September 30, 2017	$	85,776		$	66,564		$	9,099		$	11,867		$	(1,754	)


	Three Months Ended September 30, 2016
	Total			New York			Washington, D.C.			San Francisco			Other

PGRE’s share of NOI for the three months ended September 30, 2016	$	95,315		$	71,174		$	13,907		$	11,628		$	(1,394	)
Acquisitions		—			—			—			—			—
Dispositions ⁽³⁾		(6,277	)		—			(6,277	)		—			—
Lease termination income (including our share of unconsolidated joint ventures)		(3,433	)		(3,348	)		—			(85	)		—
Other, net		(18	)		207			4			78			(307	)

PGRE’s share of Same Store NOI⁽¹⁾ for the three months ended September 30, 2016	$	85,587		$	68,033		$	7,634		$	11,621		$	(1,701	)



Increase (decrease) in PGRE’s share of Same Store NOI	$	189		$	(1,469	)	$	1,465		$	246		$	(53	)

% Increase (decrease)		0.2	%		(2.2	%)		19.2	%		2.1	%

⁽¹⁾	See page 42 for our definition of this measure.

⁽²⁾	Represents our share of NOI for the three months ended September 30, 2017 attributable to (i) 60 Wall Street in New York, which was acquired in January 2017 and (ii) One Front Street and 50 Beale Street in San Francisco, which were acquired in December 2016 and July 2017, respectively.

⁽³⁾	Represents our share of NOI for the three months ended September 30, 2016 attributable to Waterview, which was sold in May 2017.

- 17 -


		SAME STORE RESULTS - BY SEGMENT

(unaudited and in thousands)


	Nine Months Ended September 30, 2017
SAME STORE CASH NOI ⁽¹⁾	Total			New York			Washington, D.C.			San Francisco			Other

PGRE’s share of Cash NOI for the nine months ended September 30, 2017	$	248,366		$	175,217		$	32,601		$	45,812		$	(5,264	)
Acquisitions ⁽²⁾		(20,561	)		(2,260	)		—			(18,301	)		—
Dispositions		—			—			—			—			—
Lease termination income (including our share of unconsolidated joint ventures)		(1,993	)		(906	)		—			(1,087	)		—
Other, net		(55	)		44			—			24			(123	)

PGRE’s share of Same Store Cash NOI⁽¹⁾ for the nine months ended September 30, 2017	$	225,757		$	172,095		$	32,601		$	26,448		$	(5,387	)


	Nine Months Ended September 30, 2016
	Total			New York			Washington, D.C.			San Francisco			Other

PGRE’s share of Cash NOI for the nine months ended September 30, 2016	$	231,924		$	179,117		$	33,504		$	24,494		$	(5,191	)
Acquisitions		—			—			—			—			—
Dispositions ⁽³⁾		(10,408	)		—			(10,408	)		—			—
Lease termination income (including our share of unconsolidated joint ventures)		(14,571	)		(14,422	)⁽⁴⁾		—			(149	)		—
Other, net		(293	)		311			4			—			(608	)

PGRE’s share of Same Store Cash NOI⁽¹⁾ for the nine months ended September 30, 2016	$	206,652		$	165,006		$	23,100		$	24,345		$	(5,799	)



Increase in PGRE’s share of Same Store Cash NOI	$	19,105		$	7,089		$	9,501		$	2,103		$	412

% Increase		9.2	%		4.3	%		41.1	%		8.6	%

⁽¹⁾	See page 42 for our definition of this measure.

⁽²⁾	Represents our share of Cash NOI for the nine months ended September 30, 2017 attributable to (i) 60 Wall Street in New York, which was acquired in January 2017 and (ii) One Front Street and 50 Beale Street in San Francisco, which were acquired in December 2016 and July 2017, respectively.

⁽³⁾	Represents our share of Cash NOI attributable to Waterview, which was sold in May 2017.

⁽⁴⁾	Includes $10,861 from the termination of a tenant’s lease at 1633 Broadway.

- 18 -


		SAME STORE RESULTS - BY SEGMENT

(unaudited and in thousands)


	Nine Months Ended September 30, 2017
SAME STORE NOI ⁽¹⁾	Total			New York			Washington, D.C.			San Francisco			Other

PGRE’s share of NOI for the nine months ended September 30, 2017	$	295,907		$	201,168		$	35,535		$	64,473		$	(5,269	)
Acquisitions ⁽²⁾		(28,981	)		(1,918	)		—			(27,063	)		—
Dispositions		—			—			—			—			—
Lease termination income (including our share of unconsolidated joint ventures)		(1,993	)		(906	)		—			(1,087	)		—
Other, net		(544	)		238			—			(659	)		(123	)

PGRE’s share of Same Store NOI ⁽¹⁾ for the nine months ended September 30, 2017	$	264,389		$	198,582		$	35,535		$	35,664		$	(5,392	)


	Nine Months Ended September 30, 2016
	Total			New York			Washington, D.C.			San Francisco			Other

PGRE’s share of NOI for the nine months ended September 30, 2016	$	295,655		$	226,951		$	38,998		$	34,900		$	(5,194	)
Acquisitions		—			—			—			—			—
Dispositions ⁽³⁾		(10,328	)		—			(10,328	)		—			—
Lease termination income (including our share of unconsolidated joint ventures)		(14,571	)		(14,422	)⁽⁴⁾		—			(149	)		—
Other, net		2,721			3,247	⁽⁵⁾		4			78			(608	)

PGRE’s share of Same Store NOI ⁽¹⁾ for the nine months ended September 30, 2016	$	273,477		$	215,776		$	28,674		$	34,829		$	(5,802	)



(Decrease) increase in PGRE’s share of Same Store NOI	$	(9,088	)	$	(17,194	)	$	6,861		$	835		$	410

% (Decrease) increase		(3.3	%)		(8.0	%)		23.9	%		2.4	%

⁽¹⁾	See page 42 for our definition of this measure.

⁽²⁾	Represents our share of NOI for the nine months ended September 30, 2017 attributable to (i) 60 Wall Street in New York, which was acquired in January 2017 and (ii) One Front Street and 50 Beale Street in San Francisco, which were acquired in December 2016 and July 2017, respectively.

⁽³⁾	Represents our share of NOI attributable to Waterview, which was sold in May 2017.

⁽⁴⁾	Includes $10,861 from the termination of a tenant’s lease at 1633 Broadway.

⁽⁵⁾

Includes an aggregate of $11,800 of non-cash write-offs primarily related to above-market lease asset from the termination of a tenant’s lease at 1633 Broadway, partially offset by $10,315 of income from the accelerated amortization of a below-market lease liability in connection with a tenant’s lease modification.

- 19 -


		CONSOLIDATED JOINT VENTURES AND FUND - BALANCE SHEETS

(unaudited and in thousands)


	As of September 30, 2017										As of December 31, 2016
	Consolidated Joint Ventures								Consolidated Fund		Consolidated Joint Ventures						Consolidated Fund
	Total Consolidated Joint Ventures		One Market Plaza		50 Beale Street ⁽¹⁾		PGRESS Equity Holdings L.P.		Residential Development Fund⁽²⁾		Total Consolidated Joint Ventures		One Market Plaza		PGRESS Equity Holdings L.P.		Residential Development Fund⁽²⁾
PGRE Ownership				49.0%		31.1%		24.4%		7.4%				49.0%		24.4%		12.9%
ASSETS:
Real estate, net	$	1,733,361	$	1,250,604	$	482,757	$	—	$	—	$	1,264,387	$	1,264,387	$	—	$	72,423
Cash and cash equivalents		49,836		26,005		23,448		383		1,041		9,661		9,236		425		2,525
Restricted cash		9,848		9,848		—		—		—		1,868		1,868		—		3,000
Preferred equity investments, net		35,763		—		—		35,763		—		55,051		—		55,051		—
Investments in unconsolidated joint ventures		—		—		—		—		16,077		—		—		—		—
Accounts and other receivables, net		2,204		955		1,228		21		4		548		548		—		147
Deferred rent receivable		42,533		42,226		307		—		—		32,103		32,103		—		—
Deferred charges, net		7,569		7,569		—		—		—		5,966		5,966		—		—
Intangible assets, net		71,316		42,308		29,008		—		—		52,139		52,139		—		—
Other assets		578		293		285		—		19		14,048		14,046		2		426

Total Assets	$	1,953,008	$	1,379,808	$	537,033	$	36,167	$	17,141	$	1,435,771	$	1,380,293	$	55,478	$	78,521


LIABILITIES:
Notes and mortgages payable, net	$	1,196,348	$	968,348	$	228,000	$	—	$	—	$	872,960	$	872,960	$	—	$	—
Accounts payable and accrued expenses		26,055		17,596		8,455		4		40		19,952		19,934		18		1,125
Intangible liabilities, net		50,289		39,681		10,608		—		—		48,654		48,654		—		—
Other liabilities		175		168		7		—		—		24,782		24,782		—		3,000

Total Liabilities		1,272,867		1,025,793		247,070		4		40		966,348		966,330		18		4,125

EQUITY:
Paramount Group, Inc. equity		272,106		173,531		89,436		9,139		2,154		215,635		201,928		13,707		9,603
Noncontrolling interests		408,035		180,484		200,527		27,024		14,947		253,788		212,035		41,753		64,793

Total Equity		680,141		354,015		289,963		36,163		17,101		469,423		413,963		55,460		74,396

Total Liabilities and Equity	$	1,953,008	$	1,379,808	$	537,033	$	36,167	$	17,141	$	1,435,771	$	1,380,293	$	55,478	$	78,521

⁽¹⁾	Acquired on July 17, 2017.

⁽²⁾

On May 5, 2017, Residential Development Fund (“RDF”) sold 80.0% of the equity interests in 75 Howard Street, a fully-entitled residential condominium land parcel (“75 Howard”) in San Francisco, California. Subsequent to the sale, RDF deconsolidated its investment in 75 Howard and began accounting for the remaining 20.0% under the equity method of accounting, however, we continue to consolidate our interest in RDF. We now have a 7.4% ownership interest in RDF; accordingly, our economic interest in 75 Howard is 1.5%.

- 20 -


		CONSOLIDATED JOINT VENTURES AND FUND - OPERATING RESULTS

(unaudited and in thousands)


	Three Months Ended September 30, 2017															Three Months Ended September 30, 2016
	Consolidated Joint Ventures												Consolidated Fund			Consolidated Joint Ventures								Consolidated Fund
	Total Consolidated Joint Ventures			One Market Plaza			50 Beale Street ⁽¹⁾			PGRESS Equity Holdings L.P.			Residential Development Fund			Total Consolidated Joint Ventures			One Market Plaza			PGRESS Equity Holdings L.P.		Residential Development Fund
Total revenues	$	39,506		$	32,174		$	7,332		$	—		$	(82	)	$	31,441		$	31,441		$	—	$	881
Total operating expenses		10,397			7,812			2,585			—			(14	)		7,994			7,994			—		417

Net operating income		29,109			24,362			4,747			—			(68	)		23,447			23,447			—		464
Depreciation and amortization		(16,324	)		(12,195	)		(4,129	)		—			—			(12,971	)		(12,971	)		—		(259	)
Interest and other (loss) income, net		(18,501	)		74			52			(18,627	)		104			1,465			5			1,460		—
Interest and debt expense		(12,026	)		(10,303	)		(1,723	)		—			—			(14,064	)		(14,064	)		—		—
Income from unconsolidated joint ventures		—			—			—			—			100			—			—			—		—
Unrealized gain on interest rate swaps		—			—			—			—			—			10,678			10,678			—		—

Net (loss) income before income taxes		(17,742	)		1,938			(1,053	)		(18,627	)		136			8,555			7,095			1,460		205
Income tax expense		(1	)		—			(1	)		—			—			(4	)		(4	)		—		—

Net (loss) income	$	(17,743	)	$	1,938		$	(1,054	)	$	(18,627	)	$	136		$	8,551		$	7,091		$	1,460	$	205



PGRE’s share Ownership	Total			49.0%			31.1%			24.4%			7.4%			Total			49.0%			24.4%		13.4%
Net (loss) income	$	(3,930	)	$	948		$	(341	)	$	(4,537	)	$	16		$	3,708		$	3,353		$	355	$	27
Add: Management fee income		404			137			267			—			7			140			140			—		245

PGRE’s share of net (loss) income		(3,526	)		1,085			(74	)		(4,537	)		23			3,848			3,493			355		272
Add: Real estate depreciation and amortization		7,259			5,976			1,283			—			—			6,355			6,355			—		35

FFO ⁽²⁾		3,733			7,061			1,209			(4,537	)		23			10,203			9,848			355		307
Add: Valuation allowance on preferred equity investment		4,780			—			—			4,780			—			—			—			—		—
Less: Unrealized gain on interest rate swaps		—			—			—			—			—			(5,233	)		(5,233	)		—		—

Core FFO ⁽²⁾	$	8,513		$	7,061		$	1,209		$	243		$	23		$	4,970		$	4,615		$	355	$	307



Noncontrolling interests’ share Ownership	Total			51.0%			68.9%			75.6%			92.6%			Total			51.0%			75.6%		86.6%
Net (loss) income	$	(13,813	)	$	990		$	(713	)	$	(14,090	)	$	120		$	4,843		$	3,738		$	1,105	$	178
Less: Management fee expense		(404	)		(137	)		(267	)		—			(7	)		(140	)		(140	)		—		(245	)

Net (loss) income attributable to noncontrolling interests		(14,217	)		853			(980	)		(14,090	)		113			4,703			3,598			1,105		(67	)
Add: Real estate depreciation and amortization		9,065			6,219			2,846			—			—			6,616			6,616			—		224

FFO ⁽²⁾		(5,152	)		7,072			1,866			(14,090	)		113			11,319			10,214			1,105		157
Add: Valuation allowance on preferred equity investment		14,808			—			—			14,808			—			—			—			—		—
Less: Unrealized gain on interest rate swaps		—			—			—			—			—			(5,445	)		(5,445	)		—		—

Core FFO ⁽²⁾	$	9,656		$	7,072		$	1,866		$	718		$	113		$	5,874		$	4,769		$	1,105	$	157

⁽¹⁾	Acquired on July 17, 2017.

⁽²⁾	See page 42 for our definition of this measure.

- 21 -


		CONSOLIDATED JOINT VENTURES AND FUND - OPERATING RESULTS
(unaudited and in thousands)


	Nine Months Ended September 30, 2017															Nine Months Ended September 30, 2016
	Consolidated Joint Ventures												Consolidated Fund			Consolidated Joint Ventures								Consolidated Fund
	Total Consolidated Joint Ventures			One Market Plaza			50 Beale Street ⁽¹⁾			PGRESS Equity Holdings L.P.			Residential Development Fund			Total Consolidated Joint Ventures			One Market Plaza			PGRESS Equity Holdings L.P.		Residential Development Fund
Total revenues	$	102,518		$	95,186		$	7,332		$	—		$	1,338		$	92,762		$	92,762		$	—	$	2,548
Total operating expenses		25,383			22,798			2,585			—			501			22,426			22,426			—		1,876

Net operating income		77,135			72,388			4,747			—			837			70,336			70,336			—		672
Depreciation and amortization		(39,364	)		(35,235	)		(4,129	)		—			(359	)		(39,139	)		(39,139	)		—		(776	)
Interest and other (loss) income, net		(16,073	)		136			52			(16,261	)		129			4,319			20			4,299		1
Interest and debt expense		(32,983	)		(31,260	)		(1,723	)		—			—			(41,693	)		(41,693	)		—		—
Loss on early extinguishment of debt		(2,715	)		(2,715	)		—			—			—			—			—			—		—
Gain on sale of land parcel		—			—			—			—			23,406			—			—			—		—
Income from unconsolidated joint venture		—			—			—			—			133			—			—			—		—
Unrealized gain on interest rate swaps		1,802			1,802			—			—			—			24,021			24,021			—		—

Net (loss) income before income taxes		(12,198	)		5,116			(1,053	)		(16,261	)		24,146			17,844			13,545			4,299		(103	)
Income tax expense		(6	)		(5	)		(1	)		—			(2	)		(37	)		(37	)		—		(2	)

Net (loss) income	$	(12,204	)	$	5,111		$	(1,054	)	$	(16,261	)	$	24,144		$	17,807		$	13,508		$	4,299	$	(105	)



PGRE’s share Ownership	Total			49.0%			31.1%			24.4%			7.4%			Total			49.0%			24.4%		13.4%
Net (loss) income	$	(1,846	)	$	2,456		$	(341	)	$	(3,961	)	$	3,584		$	7,309		$	6,262		$	1,047	$	(14	)
Add: Management fee income		671			404			267			—			350			436			436			—		728

PGRE’s share of net (loss) income		(1,175	)		2,860			(74	)		(3,961	)		3,934			7,745			6,698			1,047		714
Add: Real estate depreciation and amortization		18,552			17,269			1,283			—			40			19,175			19,175			—		104

FFO ⁽²⁾		17,377			20,129			1,209			(3,961	)		3,974			26,920			25,873			1,047		818
Add: Valuation allowance on preferred equity investment		4,780			—			—			4,780			—			—			—			—		—
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	)		—			—			—			(11,771	)		(11,771	)		—		—

Core FFO ⁽²⁾	$	22,604		$	20,576		$	1,209		$	819		$	856		$	15,149		$	14,102		$	1,047	$	818



Noncontrolling Interests’ share Ownership	Total			51.0%			68.9%			75.6%			92.6%			Total			51.0%			75.6%		86.6%
Net (loss) income	$	(10,358	)	$	2,655		$	(713	)	$	(12,300	)	$	20,560		$	10,498		$	7,246		$	3,252	$	(91	)
Less: Management fee expense		(671	)		(404	)		(267	)		—			(350	)		(436	)		(436	)		—		(728	)

Net (loss) income attributable to noncontrolling interests		(11,029	)		2,251			(980	)		(12,300	)		20,210			10,062			6,810			3,252		(819	)
Add: Real estate depreciation and amortization		20,812			17,966			2,846			—			319			19,964			19,964			—		672

FFO ⁽²⁾		9,783			20,217			1,866			(12,300	)		20,529			30,026			26,774			3,252		(147	)
Add: Valuation allowance on preferred equity investment		14,808			—			—			14,808			—			—			—			—		—
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	)		—			—			—			(12,250	)		(12,250	)		—		—

Core FFO ⁽²⁾	$	25,057		$	20,683		$	1,866		$	2,508		$	241		$	17,776		$	14,524		$	3,252	$	(147	)

⁽¹⁾	Acquired on July 17, 2017.

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

- 22 -


		UNCONSOLIDATED JOINT VENTURES - BALANCE SHEETS
(unaudited and in thousands)


	As of September 30, 2017									As of December 31, 2016
	Total		712 Fifth Avenue			60 Wall Street ⁽¹⁾		Other ⁽²⁾		Total			712 Fifth Avenue			Oder-Center, Germany
PGRE Ownership			50.0%			5.0%		Various					50.0%			9.5%
ASSETS:
Real estate, net	$	1,201,069	$	204,083		$	878,235	$	118,751	$	213,903		$	207,632		$	6,271
Cash and cash equivalents		58,871		22,807			32,114		3,950		19,089			18,430			659
Restricted cash		6,381		6,381			—		—		75			75			—
Accounts and other receivables, net		1,789		1,789			—		—		300			300			—
Deferred rent receivable		15,872		13,759			2,113		—		12,790			12,790			—
Deferred charges, net		8,060		8,060			—		—		8,907			8,907			—
Intangible assets, net		133,613		—			133,613		—		—			—			—
Other assets		9,956		3,914			5,382		660		690			199			491

Total Assets	$	1,435,611	$	260,793		$	1,051,457	$	123,361	$	255,754		$	248,333		$	7,421

LIABILITIES:
Notes and mortgages payable, net	$	885,951	$	296,051		$	567,365	$	22,535	$	269,063		$	245,990		$	23,073
Accounts payable and accrued expenses		19,003		5,416			12,484		1,103		3,633			3,460			173
Other liabilities		1,495		349			850		296		5,473			5,323			150

Total Liabilities		906,449		301,816			580,699		23,934		278,169			254,773			23,396

EQUITY:
Total Equity		529,162		(41,023	)		470,758		99,427		(22,415	)		(6,440	)		(15,975	)

Total Liabilities and Equity	$	1,435,611	$	260,793		$	1,051,457	$	123,361	$	255,754		$	248,333		$	7,421

⁽¹⁾	Acquired on January 24, 2017.

⁽²⁾	Represents Oder-Center, Germany and 75 Howard.

- 23 -


		UNCONSOLIDATED JOINT VENTURES - OPERATING RESULTS
(unaudited and in thousands)


	Three Months Ended September 30, 2017												Three Months Ended September 30, 2016
	Total			712 Fifth Avenue			60 Wall Street ⁽¹⁾			Other ⁽²⁾			Total			712 Fifth Avenue			Oder-Center, Germany
Total revenues	$	36,844		$	14,471		$	20,517		$	1,856		$	15,059		$	13,867		$	1,192
Total operating expenses		13,352			6,197			6,632			523			6,338			6,081			257

Net operating income		23,492			8,274			13,885			1,333			8,721			7,786			935
Depreciation and amortization expense		(12,196	)		(3,067	)		(9,034	)		(95	)		(3,299	)		(3,193	)		(106	)
Interest and other income, net		137			68			63			6			16			16			—
Interest and debt expense		(8,795	)		(2,700	)		(5,841	)		(254	)		(3,084	)		(2,787	)		(297	)
Unrealized gain on interest rate swaps		—			—			—			—			1,722			1,722			—

Net income (loss) before income taxes		2,638			2,575			(927	)		990			4,076			3,544			532
Income tax expense		—			—			—			—			(3	)		—			(3	)

Net income (loss)	$	2,638		$	2,575		$	(927	)	$	990		$	4,073		$	3,544		$	529



PGRE’s share Ownership	Total			50.0%			5.0%			Various			Total			50.0%			9.5%
Net income (loss)	$	1,388		$	1,287		$	(45	)	$	146		$	1,822		$	1,772		$	50
Less: Step-up basis adjustment		(26	)		—			—			(26	)		(30	)		—			(30	)
Less: Earnings in excess of distributions received		(691	)		(691	)		—			—			—			—			—

PGRE’s share of net income (loss)		671			596			(45	)		120			1,792			1,772			20
Less: Noncontrolling interests		(88	)		—			—			(88	)		—			—			—
Add: Real estate depreciation and amortization		2,008			1,533			440			35			1,632			1,597			35

FFO ⁽³⁾		2,591			2,129			395			67			3,424			3,369			55
Add: Earnings in excess of distributions received		691			691			—			—			—			—			—
Less: Unrealized gain on interest rate swaps		—			—			—			—			(861	)		(861	)		—

Core FFO⁽³⁾	$	3,282		$	2,820		$	395		$	67		$	2,563		$	2,508		$	55



Joint Venture Partners’ share Ownership	Total			50.0%			95.0%			Various			Total			50.0%			90.5%
Net income (loss)	$	1,250		$	1,288		$	(882	)	$	844		$	2,251		$	1,772		$	479
Add: Real estate depreciation and amortization		10,214			1,534			8,594			86			1,697			1,596			101

FFO ⁽³⁾		11,464			2,822			7,712			930			3,948			3,368			580
Less: Unrealized gain on interest rate swaps		—			—			—			—			(861	)		(861	)		—

Core FFO⁽³⁾	$	11,464		$	2,822		$	7,712		$	930		$	3,087		$	2,507		$	580

⁽¹⁾	Acquired on January 24, 2017.

⁽²⁾	Represents Oder-Center, Germany and 75 Howard.

⁽³⁾	See page 42 for our definition of this measure.

- 24 -


		UNCONSOLIDATED JOINT VENTURES - OPERATING RESULTS
(unaudited and in thousands)


	Nine Months Ended September 30, 2017												Nine Months Ended September 30, 2016
	Total			712 Fifth Avenue			60 Wall Street ⁽¹⁾			Other ⁽²⁾			Total			712 Fifth Avenue			Oder-Center, Germany
Total revenues	$	103,773		$	43,240		$	55,976		$	4,557		$	45,693		$	42,465		$	3,228
Total operating expenses		37,407			18,265			17,733			1,409			17,749			17,073			676

Net operating income		66,366			24,975			38,243			3,148			27,944			25,392			2,552
Depreciation and amortization expense		(34,208	)		(9,062	)		(24,866	)		(280	)		(9,533	)		(9,244	)		(289	)
Interest and other income, net		242			140			95			7			49			49			—
Interest and debt expense		(24,548	)		(8,651	)		(15,137	)		(760	)		(9,111	)		(8,287	)		(824	)
Unrealized gain on interest rate swaps		1,896			1,896			—			—			2,556			2,556			—

Net income (loss) before income taxes		9,748			9,298			(1,665	)		2,115			11,905			10,466			1,439
Income tax expense		(2	)		—			—			(2	)		(7	)		—			(7	)

Net income (loss)	$	9,746		$	9,298		$	(1,665	)	$	2,113		$	11,898		$	10,466		$	1,432


PGRE’s share Ownership	Total			50.0%			5.0%			Various			Total			50.0%			9.5%
Net income (loss)	$	4,838		$	4,649		$	(81	)	$	270		$	5,369		$	5,233		$	136
Less: Step-up basis adjustment		(76	)		—			—			(76	)		(78	)		—			(78	)
Add: Distributions in excess of basis		14,381			14,381			—			—			—			—			—

PGRE’s share of net income (loss)		19,143			19,030			(81	)		194			5,291			5,233			58
Less: Noncontrolling interests		(119	)		—			—			(119	)		—			—			—
Add: Real estate depreciation and amortization		5,880			4,531			1,246			103			4,727			4,622			105

FFO ⁽³⁾		24,904			23,561			1,165			178			10,018			9,855			163
Less: Distributions in excess of basis		(14,381	)		(14,381	)		—			—			—			—			—
Less: Unrealized gain on interest rate swaps		(948	)		(948	)		—			—			(1,278	)		(1,278	)		—

Core FFO⁽³⁾	$	9,575		$	8,232		$	1,165		$	178		$	8,740		$	8,577		$	163


Joint Venture Partners’ share Ownership	Total			50.0%			95.0%			Various			Total			50.0%			90.5%
Net income (loss)	$	4,908		$	4,649		$	(1,584	)	$	1,843		$	6,529		$	5,233		$	1,296
Add: Real estate depreciation and amortization		28,404			4,531			23,620			253			4,884			4,622			262

FFO ⁽³⁾		33,312			9,180			22,036			2,096			11,413			9,855			1,558
Less: Unrealized gain on interest rate swaps		(948	)		(948	)		—			—			(1,278	)		(1,278	)		—

Core FFO⁽³⁾	$	32,364		$	8,232		$	22,036		$	2,096		$	10,135		$	8,577		$	1,558

⁽¹⁾	Acquired on January 24, 2017.

⁽²⁾	Represents Oder-Center, Germany and 75 Howard.

⁽³⁾	See page 42 for our definition of this measure.

- 25 -


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

Property Funds:

The following is a summary of the Property Funds, our ownership interests in these funds and the funds’ ownership interest in the underlying investments, as of September 30, 2017.


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

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

Total					100.0	%		100.0	%

The following is a summary of the Property Funds’ investments and our ownership interests in the underlying investments, as of September 30, 2017.


		PGRE			Square		%			%			Annualized Rent ⁽²⁾
Investments	Submarket	Ownership			Feet		Leased			Occupied			Amount		Per Square Foot ⁽³⁾
0 Bond Street	NoHo		7.2	%		64,390		45.1	%		45.1	%	$	3,600	$	123.96

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

⁽²⁾	See page 42 for our definition of this measure.

⁽³⁾	Represents office and retail space only.

Debt Fund:

The following is a summary of our Debt Fund and our ownership interests in the underlying investments, as of September 30, 2017.


		PGRE			Fixed /	Interest					Face Amount				Fair Value
Investments	Investment Type	Ownership			Variable rate	Rate			Maturity		Total		Our Share		Total		Our Share
26 Broadway	Mezzanine Loan		1.3	%	Fixed		8.25	%		Jan-2022	$	50,000	$	645	$	50,332	$	649
1440 Broadway	Mezzanine Loan		1.3	%	Variable (LIBOR plus 600 bps)		7.23	%		Oct-2019		40,000		516		40,508		523
700 Eighth Avenue	Mortgage/Mezzanine Loans		1.3	%	Variable (LIBOR plus 600 bps)		7.23	%		Jan-2019		74,000		955		74,294		958
1285 Avenue of the Americas	Mezzanine Loan		1.3	%	Fixed		6.75	%		Jun-2023		55,000		710		55,463		715
Other	Mezzanine Loan/Preferred Equity		1.3	%	Various		6.75 9.61	% - %		Oct-2018 to Mar-2027		161,856		2,083		164,772		2,118

											$	380,856	$	4,909	$	385,369	$	4,963

- 26 -


		CAPITAL STRUCTURE

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


					As of September 30, 2017
Debt:
Consolidated debt:
Notes and mortgages payable ⁽¹⁾					$	3,583,100
Revolving Credit Facility						—

						3,583,100
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)						180,949

PGRE’s share of total debt ⁽²⁾						3,109,707


	Shares / Units Outstanding		Share Price as of September 30, 2017
Equity:
Common stock		240,073,742	$	16.00		3,841,180
Operating Partnership units		24,977,743		16.00		399,644

Total equity		265,051,485		16.00		4,240,824

Total Market Capitalization					$	7,350,531

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

⁽²⁾	See page 42 for our definition of this measure.

- 27 -


		DEBT ANALYSIS

(unaudited and in thousands)


	Total Debt						Fixed Rate Debt						Variable Rate Debt
Consolidated Debt:	Amount			Rate			Amount			Rate			Amount			Rate
1633 Broadway	$	1,030,100			3.52	%	$	1,000,000			3.54	%	$	30,100			2.99	%
1301 Avenue of the Americas		850,000			3.05	%		500,000			3.05	%		350,000			3.05	%
31 West 52nd Street		500,000			3.80	%		500,000			3.80	%		—			—
One Market Plaza ⁽¹⁾		975,000			4.03	%		975,000			4.03	%		—			—
50 Beale Street ⁽²⁾		228,000			3.65	%		228,000			3.65	%		—			—
Revolving Credit Facility		—			—			—			—			—			—

Total consolidated debt		3,583,100			3.60	%		3,203,000			3.66	%		380,100			3.05	%
Noncontrolling interest’s share ⁽³⁾		(654,342	)		3.94	%		(654,342	)		3.94	%		—			—

PGRE’s share of consolidated debt	$	2,928,758			3.52	%	$	2,548,658			3.59	%	$	380,100			3.05	%

Unconsolidated Joint Venture Debt:
712 Fifth Avenue ⁽⁴⁾	$	300,000			3.39	%	$	300,000			3.39	%	$	—			—
60 Wall Street		575,000			3.69	%		—			—			575,000			3.69	%
Oder-Center, Germany		22,535			4.62	%		22,535			4.62	%		—			—

Total unconsolidated debt		897,535			3.61	%		322,535			3.48	%		575,000			3.69	%
Joint venture partners’ share		(716,586	)		3.65	%		(170,394	)		3.54	%		(546,192	)		3.69	%

PGRE’s share of unconsolidated debt	$	180,949			3.45	%	$	152,141			3.41	%	$	28,808			3.69	%

PGRE’s share of Total Debt ⁽³⁾	$	3,109,707			3.52	%	$	2,700,799			3.58	%	$	408,908			3.09	%


Revolving Credit Facility Covenants: ⁽⁵⁾	Required	Actual
Total Debt / Total Assets	Less than 60%		41.2	%
Secured Debt / Total Assets	Less than 50%		40.9	%
Fixed Charge Coverage	Greater than 1.5x		3.0x
Unsecured Debt / Unencumbered Assets	Less than 60%		1.4	%
Unencumbered Interest Coverage	Greater than 1.75x		45.4x


Debt Composition:	Amount		%
Fixed rate debt:
PGRE’s consolidated fixed rate debt	$	2,548,658
PGRE’s unconsolidated fixed rate debt		152,141

Total fixed rate debt		2,700,799		86.9	%

Variable rate debt:
PGRE’s consolidated variable rate debt		380,100
PGRE’s unconsolidated variable rate debt		28,808

Total variable rate debt		408,908		13.1	%

PGRE’s share of Total Debt ⁽³⁾	$	3,109,707		100.0	%

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

⁽²⁾	On July 17, 2017, we assumed this loan in connection with the acquisition of 50 Beale Street.

⁽³⁾	See page 42 for our definition of this measure.

⁽⁴⁾	On June 13, 2017, we completed a $300,000 refinancing of 712 Fifth Avenue. The new ten-year interest-only loan matures in July 2027.

⁽⁵⁾

This section presents ratios as of September 30, 2017 in accordance with the terms of the Company’s revolving credit facility, which has been filed with the SEC. Management is not presenting these ratios and the related calculations for any other purpose or for any other period, and is not intending for these measures to otherwise provide information to investors about the Company’s financial condition or results of operations. Investors should not rely on these measures other than for purposes of testing our compliance with the revolving credit facility.

- 28 -


		DEBT MATURITIES

(unaudited and in thousands)


Consolidated Debt:	2017		2018		2019		2020		2021			Thereafter			Total
1301 Avenue of the Americas	$	—	$	—	$	—	$	—	$	850,000		$	—		$	850,000
50 Beale Street		—		—		—		—		228,000			—			228,000
1633 Broadway		—		—		—		—		—			1,030,100			1,030,100
One Market Plaza		—		—		—		—		—			975,000			975,000
31 West 52nd Street		—		—		—		—		—			500,000			500,000
Revolving Credit Facility		—		—		—		—		—			—			—

Total consolidated debt		—		—		—		—		1,078,000			2,505,100			3,583,100
Noncontrolling interest’s share ⁽¹⁾		—		—		—		—		(157,092	)		(497,250	)		(654,342	)

PGRE’s share of consolidated debt	$	—	$	—	$	—	$	—	$	920,908		$	2,007,850		$	2,928,758


Unconsolidated Joint Venture Debt:
712 Fifth Avenue	$	—	$	—	$	—	$	—	$	—		$	300,000		$	300,000
60 Wall Street		—		—		—		—		—			575,000			575,000
Oder-Center, Germany		—		—		—		—		—			22,535			22,535

Total unconsolidated debt		—		—		—		—		—			897,535			897,535
Joint venture partners’ share		—		—		—		—		—			(716,586	)		(716,586	)

PGRE’s share of unconsolidated debt	$	—	$	—	$	—	$	—	$	—		$	180,949		$	180,949

PGRE’s share of total debt ⁽¹⁾	$	—	$	—	$	—	$	—	$	920,908		$	2,188,799		$	3,109,707


Weighted average rate		—		—		—		—		3.10	%		3.69	%		3.52	%

% of debt maturing		—		—		—		—		29.6	%		70.4	%		100.0	%

⁽¹⁾	See page 42 for our definition of this measure.

- 29 -


		PORTFOLIO SUMMARY

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


		Paramount			Square		%			%			Annualized Rent ⁽¹⁾
Property	Submarket	Ownership			Feet		Leased ⁽¹⁾			Occupied ⁽¹⁾			Amount		Per Square Foot ⁽²⁾
As of September 30, 2017
New York:
1633 Broadway	West Side		100.0	%		2,517,844		90.8	%		86.4	%	$	151,683	$	72.65
1301 Avenue of the Americas	Sixth Avenue / Rock Center		100.0	%		1,781,571		97.9	%		90.5	%		120,953		75.87
1325 Avenue of the Americas	Sixth Avenue / Rock Center		100.0	%		808,999		80.7	%		77.6	%		41,226		66.31
31 West 52nd Street	Sixth Avenue / Rock Center		100.0	%		761,787		77.7	%		77.7	%		51,858		84.62
900 Third Avenue	East Side		100.0	%		598,903		97.8	%		96.6	%		42,426		73.97
712 Fifth Avenue	Madison / Fifth Avenue		50.0	%		543,386		95.1	%		94.6	%		57,299		112.10
60 Wall Street ⁽³⁾	Downtown		5.0	%		1,625,483		100.0	%		100.0	%		73,600		45.28

Subtotal / Weighted average						8,637,973		92.7	%		89.4	%		539,045		70.60

PGRE’s share						6,822,234		90.9	%		86.8	%		440,483		75.62

Washington, D.C.:
425 Eye Street	East End		100.0	%		372,552		98.5	%		98.5	%		16,789		45.65
2099 Pennsylvania Avenue	CBD		100.0	%		208,905		88.9	%		83.0	%		13,528		78.06
1899 Pennsylvania Avenue	CBD		100.0	%		190,955		100.0	%		100.0	%		15,198		79.68
Liberty Place	East End		100.0	%		174,626		92.4	%		92.4	%		13,441		83.05

Subtotal / Weighted average						947,038		95.5	%		94.2	%		58,956		65.93

PGRE’s share						947,038		95.5	%		94.2	%		58,956		65.93

San Francisco:
One Market Plaza	South Financial District		49.0	%		1,583,136		97.9	%		96.7	%		111,299		71.89
One Front Street	North Financial District		100.0	%		646,759		99.5	%		95.8	%		37,485		60.33
50 Beale Street ⁽⁴⁾	South Financial District		31.1	%		660,625		78.2	%		78.2	%		29,398		57.27

Subtotal / Weighted average						2,890,520		93.8	%		92.3	%		178,182		66.41

PGRE’s share						1,627,950		96.1	%		94.0	%		101,164		65.70

Total / Weighted average						12,475,531		93.1	%		90.5	%	$	776,183	$	69.23

PGRE’s share						9,397,222		92.3	%		88.8	%	$	600,603	$	72.71

⁽¹⁾	See page 42 for our definition of this measure.

⁽²⁾	Represents office and retail space only.

⁽³⁾	Acquired on January 24, 2017.

⁽⁴⁾	Acquired on July 17, 2017.

- 30 -


		SAME STORE LEASED OCCUPANCY

(unaudited)


				As of September 30, 2017						As of June 30, 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	%		90.8	%		90.8	%		86.4	%		86.4	%		4.4	%
1301 Avenue of the Americas		100.0	%		97.9	%		97.9	%		93.7	%		93.7	%		4.2	%
1325 Avenue of the Americas		100.0	%		80.7	%		80.7	%		81.3	%		81.3	%		(0.6	%)
31 West 52nd Street		100.0	%		77.7	%		77.7	%		84.5	%		84.5	%		(6.8	%)
900 Third Avenue		100.0	%		97.8	%		97.8	%		97.4	%		97.4	%		0.4	%
712 Fifth Avenue		50.0	%		95.1	%		95.1	%		94.6	%		94.6	%		0.5	%
60 Wall Street		5.0	%		100.0	%		100.0	%		100.0	%		100.0	%		—

Weighted average					92.7	%		92.7	%		91.1	%		91.1	%		1.6	%

PGRE’s share					90.9	%		90.9	%		88.9	%		88.9	%		2.0	%

Washington, D.C.:
425 Eye Street		100.0	%		98.5	%		98.5	%		98.5	%		98.5	%		—
2099 Pennsylvania Avenue		100.0	%		88.9	%		88.9	%		84.8	%		84.8	%		4.1	%
1899 Pennsylvania Avenue		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		—
Liberty Place		100.0	%		92.4	%		92.4	%		92.4	%		92.4	%		—

Weighted average					95.5	%		95.5	%		94.6	%		94.6	%		0.9	%

PGRE’s share					95.5	%		95.5	%		94.6	%		94.6	%		0.9	%

San Francisco:
One Market Plaza		49.0	%		97.9	%		97.9	%		97.8	%		97.8	%		0.1	%
One Front Street		100.0	%		99.5	%		99.5	%		98.5	%		98.5	%		1.0	%
50 Beale Street ⁽²⁾		31.1	%		78.2	%		—			—			—			—

Weighted average					93.8	%		98.4	%		98.0	%		98.0	%		0.4	%

PGRE’s share					96.1	%		98.6	%		98.2	%		98.2	%		0.4	%

Weighted average					93.1	%		94.0	%		92.7	%		92.7	%		1.3	%

PGRE’s share					92.3	%		92.6	%		90.9	%		90.9	%		1.7	%

⁽¹⁾	See page 42 for our definition of this measure.

⁽²⁾	Acquired on July 17, 2017.

- 31 -


		SAME STORE LEASED OCCUPANCY

(unaudited)


				As of September 30, 2017						As of December 31, 2016						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	%		90.8	%		90.8	%		86.3	%		86.3	%		4.5	%
1301 Avenue of the Americas		100.0	%		97.9	%		97.9	%		93.7	%		93.7	%		4.2	%
1325 Avenue of the Americas		100.0	%		80.7	%		80.7	%		96.5	%		96.5	%		(15.8	%)
31 West 52nd Street		100.0	%		77.7	%		77.7	%		84.5	%		84.5	%		(6.8	%)
900 Third Avenue		100.0	%		97.8	%		97.8	%		98.0	%		98.0	%		(0.2	%)
712 Fifth Avenue		50.0	%		95.1	%		95.1	%		97.1	%		97.1	%		(2.0	%)
60 Wall Street ⁽²⁾		5.0	%		100.0	%		—			—			—			—

Weighted average					92.7	%		91.0	%		91.0	%		91.0	%		—

PGRE’s share					90.9	%		90.8	%		90.7	%		90.7	%		0.1	%

Washington, D.C.:
Waterview⁽³⁾		100.0	%		—			—			98.7	%		—			—
425 Eye Street		100.0	%		98.5	%		98.5	%		97.7	%		97.7	%		0.8	%
2099 Pennsylvania Avenue		100.0	%		88.9	%		88.9	%		82.3	%		82.3	%		6.6	%
1899 Pennsylvania Avenue		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		—
Liberty Place		100.0	%		92.4	%		92.4	%		89.9	%		89.9	%		2.5	%

Weighted average					95.5	%		95.5	%		95.5	%		93.3	%		2.2	%

PGRE’s share					95.5	%		95.5	%		95.5	%		93.3	%		2.2	%

San Francisco:
One Market Plaza		49.0	%		97.9	%		97.9	%		98.7	%		98.7	%		(0.8	%)
One Front Street		100.0	%		99.5	%		99.5	%		99.4	%		99.4	%		0.1	%
50 Beale Street ⁽⁴⁾		31.1	%		78.2	%		—			—			—			—

Weighted average					93.8	%		98.4	%		98.9	%		98.9	%		(0.5	%)

PGRE’s share					96.1	%		98.6	%		99.0	%		99.0	%		(0.4	%)

Weighted average					93.1	%		93.0	%		93.3	%		92.9	%		0.1	%

PGRE’s share					92.3	%		92.5	%		92.7	%		92.3	%		0.2	%

⁽¹⁾	See page 42 for our definition of this measure.

⁽²⁾	Acquired on January 24, 2017.

⁽³⁾	Sold on May 3, 2017.

⁽⁴⁾	Acquired on July 17, 2017.

- 32 -


		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
Top 10 Tenants:	Property	Lease Expiration			Total Square Feet Occupied			Total Square Feet Occupied			% of Total Square Feet			Amount		Per Square Foot		% of Annualized Rent
As of September 30, 2017
Barclays Capital, Inc.	1301 Avenue of the Americas		Dec-2020			497,418			497,418			5.3	%	$	32,205	$	64.74		5.4	%
Allianz Global Investors, LP	1633 Broadway		Jan-2031			320,911			320,911			3.4	%		28,203		87.88		4.7	%
Clifford Chance LLP	31 West 52nd Street		Jun-2024			328,992			328,992			3.5	%		26,218		79.69		4.4	%
Norton Rose Fulbright	1301 Avenue of the Americas		Sep-2034	⁽²⁾		320,325	⁽²⁾		320,325	⁽²⁾		3.4	%		25,343		79.12		4.2	%
Credit Agricole Corporate & Investment Bank	1301 Avenue of the Americas		Feb-2023			312,679			312,679			3.3	%		24,913		79.68		4.1	%
Morgan Stanley & Company	1633 Broadway		Mar-2032			260,829			260,829			2.8	%		19,124		73.32		3.2	%
WMG Acquisition Corp. (Warner Music Group)	1633 Broadway		Jul-2029			293,487			293,487			3.1	%		16,947		57.74		2.8	%
Showtime Networks, Inc.	1633 Broadway		Jan-2026			238,880			238,880			2.5	%		14,416		60.35		2.4	%
Kasowitz Benson Torres & Friedman, LLP	1633 Broadway		Mar-2037			203,394			203,394			2.2	%		14,354		70.57		2.4	%
U.S. General Services Administration	425 Eye St		Jun-2021			310,450			310,450			3.3	%		14,250		45.90		2.4	%


	PGRE’s Share of
Industry Diversification:	Square Feet Occupied		% of Occupied Square Feet			Annualized Rent ⁽¹⁾		% of Annualized Rent
As of September 30, 2017
Legal Services		1,812,862		21.9	%	$	138,191		23.0	%
Financial Services - Commercial and Investment Banking		1,700,718		20.6	%		121,539		20.2	%
Technology and Media		1,446,303		17.5	%		95,281		15.9	%
Financial Services, all others		941,924		11.4	%		80,011		13.3	%
Insurance		560,635		6.8	%		43,749		7.3	%
Retail		267,814		3.2	%		21,939		3.7	%
Government		345,278		4.2	%		16,734		2.8	%
Real Estate		226,434		2.7	%		15,460		2.6	%
Consumer Products		193,807		2.3	%		14,837		2.5	%
Other		777,023		9.4	%		52,862		8.7	%

⁽¹⁾	See page 42 for our definition of this measure.

⁽²⁾	116,462 of the square feet leased expires on March 31, 2032.

- 33 -


		LEASING ACTIVITY

(unaudited)


	Total			New York			Washington, D.C.			San Francisco
Three Months Ended September 30, 2017:
Total square feet leased		369,136			305,351			7,070			56,715
PGRE’s share of total square feet leased:		356,413			294,377			7,070			54,966
Initial rent ⁽¹⁾	$	80.98		$	82.84		$	74.53		$	71.70
Weighted average lease term (in years)		10.8			11.7			5.5			7.1
Tenant improvements and leasing commissions:
Per square foot	$	105.94		$	109.68		$	26.26		$	96.02
Per square foot per annum	$	9.77		$	9.40		$	4.78		$	13.53
Percentage of initial rent		12.1	%		11.4	%		6.4	%		18.9	%
Rent concessions:
Average free rent period (in months)		9.4			10.6			6.0			3.0
Average free rent period per annum (in months)		0.9			0.9			1.1			0.4
Second generation space: ⁽¹⁾
Square feet		163,298			109,008			—			54,290
GAAP basis:
Straight-line rent	$	81.33		$	85.02		$	—		$	73.92
Prior straight-line rent	$	74.30		$	75.51		$	—		$	71.87
Percentage increase		9.5	%		12.6	%		—			2.8	%
Cash basis
Initial rent ⁽¹⁾	$	83.68		$	89.65		$	—		$	71.70
Prior escalated rent	$	76.25		$	88.53		$	—		$	51.59
Percentage increase		9.8	%		1.3	%		—			39.0	%

⁽¹⁾	See page 42 for our definition of this measure.

- 34 -


		LEASING ACTIVITY

(unaudited)


	Total			New York			Washington, D.C.			San Francisco
Nine Months Ended September 30, 2017:
Total square feet leased		946,880			524,378			19,602			402,900
PGRE’s share of total square feet leased:		859,432			498,610			19,602			341,220
Initial rent ⁽¹⁾	$	78.50		$	80.77		$	70.95		$	75.62
Weighted average lease term (in years)		9.4			10.5			8.3			7.9
Tenant improvements and leasing commissions:
Per square foot	$	86.74		$	100.27		$	65.22		$	68.17
Per square foot per annum	$	9.23		$	9.59		$	7.85		$	8.61
Percentage of initial rent		11.8	%		11.9	%		11.1	%		11.4	%
Rent concessions:
Average free rent period (in months)		6.9			9.4			8.8			3.1
Average free rent period per annum (in months)		0.7			0.9			1.1			0.4
Second generation space: ⁽¹⁾
Square feet		594,418			257,631			—			336,787
GAAP basis:
Straight-line rent	$	76.31		$	79.64		$	—		$	73.86
Prior straight-line rent	$	68.54		$	75.92		$	—		$	63.09
Percentage increase		11.3	%		4.9	%		—			17.1	%
Cash basis:
Initial rent ⁽¹⁾	$	79.24		$	84.16		$	—		$	75.62
Prior escalated rent	$	68.23		$	84.59		$	—		$	56.17
Percentage increase (decrease)		16.1	%		(0.5	%)		—			34.6	%

⁽¹⁾	See page 42 for our definition of this measure.

- 35 -


		LEASE EXPIRATIONS - TOTAL PORTFOLIO

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


	Total		PGRE’s Share of
Year of	Square Feet		Square Feet		Annualized Rent ⁽¹⁾				% of Annualized Rent
Lease Expiration ⁽²⁾	of Expiring Leases		of Expiring Leases		Amount		Per Square Foot ⁽³⁾		% of Annualized Rent
Month to Month		9,963		7,607	$	366	$	48.00		0.1	%

4Q 2017		34,259		33,526		2,423		75.25		0.4	%
1Q 2018		87,943		83,073		3,550		63.67		0.6	%
2Q 2018		61,701		41,816		3,834		92.54		0.6	%
3Q 2018		6,282		3,105		244		70.15		0.0	%
4Q 2018		46,554		29,742		3,455		116.15		0.6	%

Total 2018		202,480		157,736		11,083		86.57		1.8	%

2019		780,321		653,862		49,026		75.33		7.9	%
2020		746,421		473,760		34,609		77.47		5.6	%
2021		1,611,404		1,393,722		88,192		64.15		14.1	%
2022		2,392,602		570,920		38,144		74.67		6.1	%
2023		722,331		660,394		50,660		77.37		8.1	%
2024		680,160		655,487		50,985		77.99		8.2	%
2025		843,884		589,776		43,010		73.42		6.9	%
2026		748,433		661,815		47,487		68.52		7.6	%
Thereafter		2,802,470		2,772,298		207,571		81.13		33.2	%

⁽¹⁾	See page 42 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.

- 36 -


		LEASE EXPIRATIONS - NEW YORK

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


Year of Lease Expiration ⁽²⁾	Total Square Feet of Expiring Leases		PGRE’s Share of
			Square Feet of Expiring Leases		Annualized Rent ⁽¹⁾				% of Annualized Rent
			Square Feet of Expiring Leases		Amount		Per Square Foot ⁽³⁾		% of Annualized Rent
Month to Month		1,762		1,762	$	150	$	—		0.0	%

4Q 2017		32,822		32,822		2,364		75.07		0.5	%
1Q 2018		55,270		50,417		1,377		80.36		0.3	%
2Q 2018		58,777		40,811		3,755		92.56		0.8	%
3Q 2018		2,680		1,340		163		101.98		0.0	%
4Q 2018		37,368		20,556		3,044		148.08		0.7	%

Total 2018		154,095		113,124		8,339		104.47		1.8	%

2019		366,157		348,979		29,404		86.02		6.4	%
2020		328,524		290,929		23,180		79.68		5.0	%
2021		954,094		906,368		62,377		71.03		13.6	%
2022		1,786,888		231,938		12,534		66.65		2.7	%
2023		506,604		479,347		36,217		76.32		7.9	%
2024		573,139		552,063		42,846		77.83		9.3	%
2025		125,482		96,046		8,206		85.44		1.8	%
2026		575,799		560,653		40,258		67.99		8.8	%
Thereafter		2,580,485		2,570,707		193,204		74.67		42.2	%

⁽¹⁾	See page 42 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 - WASHINGTON, D.C.

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


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

4Q 2017		—		—		—		—		—
1Q 2018		—		—		—		—		—
2Q 2018		—		—		—		—		—
3Q 2018		—		—		—		—		—
4Q 2018		—		—		—		—		—

Total 2018		—		—		—		—		—

2019		42,081		42,081		3,513		76.79		5.9	%
2020		33,136		33,136		2,552		77.00		4.3	%
2021		314,154		314,154		15,335		47.17		25.7	%
2022		38,919		38,919		2,422		62.22		4.1	%
2023		147,727		147,727		12,151		82.87		20.4	%
2024		78,811		78,811		6,235		79.25		10.5	%
2025		56,565		56,565		4,585		81.06		7.7	%
2026		32,011		32,011		2,266		70.78		3.8	%
Thereafter		144,874		144,874		10,553		72.85		17.6	%

⁽¹⁾	See page 42 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 - SAN FRANCISCO

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


Year of Lease Expiration ⁽²⁾	Total Square Feet of Expiring Leases		PGRE’s Share of
			Square Feet of Expiring Leases		Annualized Rent ⁽¹⁾				% of Annualized Rent
			Square Feet of Expiring Leases		Amount		Per Square Foot ⁽³⁾		% of Annualized Rent
Month to Month		8,201		5,845	$	216	$	48.00		0.2	%

4Q 2017		1,437		704		59		85.35		0.1	%
1Q 2018		32,673		32,656		2,173		54.03		2.1	%
2Q 2018		2,924		1,005		79		90.00		0.1	%
3Q 2018		3,602		1,765		81		45.99		0.1	%
4Q 2018		9,186		9,186		411		44.70		0.4	%

Total 2018		48,385		44,612		2,744		51.81		2.7	%

2019		372,083		262,802		16,109		61.32		15.4	%
2020		384,761		149,695		8,877		67.77		8.5	%
2021		343,156		173,200		10,480		60.57		10.0	%
2022		566,795		300,063		23,188		80.62		22.1	%
2023		68,000		33,320		2,292		68.03		2.2	%
2024		28,210		24,613		1,904		77.37		1.8	%
2025		661,837		437,165		30,219		69.62		28.7	%
2026		140,623		69,151		4,963		71.70		4.7	%
Thereafter		77,111		56,717		3,814		67.88		3.6	%

⁽¹⁾	See page 42 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 -


		CASH BASIS CAPITAL EXPENDITURES

(unaudited and in thousands)


	Three Months Ended September 30, 2017
	Total		New York		Washington, D.C		San Francisco		Other
Capital expenditures: ⁽¹⁾
Expenditures to maintain assets	$	2,861	$	1,876	$	661	$	196	$	128
Second generation tenant improvements		18,763		15,818		2		2,943		—
Second generation leasing commissions		3,935		2,260		—		1,675		—
First generation leasing costs and other capital expenditures		7,760		6,573		1,166		21		—

Total Capital Expenditures	$	33,319	$	26,527	$	1,829	$	4,835	$	128

Development Expenditures ⁽¹⁾
31 West 52nd Street	$	951	$	951	$	—	$	—	$	—
One Market Plaza		899		—		—		899		—
900 Third Avenue		661		661		—		—		—
Other		202		49		—		153		—

Total Development Expenditures	$	2,713	$	1,661	$	—	$	1,052	$	—


	Three Months Ended September 30, 2016
	Total		New York		Washington, D.C		San Francisco		Other
Capital expenditures: ⁽¹⁾
Expenditures to maintain assets	$	6,502	$	4,556	$	588	$	1,353	$	5
Second generation tenant improvements		7,149		3,514		79		3,556		—
Second generation leasing commissions		2,195		1,880		56		259		—
First generation leasing costs and other capital expenditures		17,096		15,398		214		1,484		—

Total Capital Expenditures	$	32,942	$	25,348	$	937	$	6,652	$	5

Development Expenditures ⁽¹⁾
Residential Development Fund	$	1,748	$	—	$	—	$	—	$	1,748
1633—Plaza and Retail development		1,119		1,119		—		—		—
One Market Plaza—Lobby and Retail repositioning		—		—		—		—		—
Other		324		324		—		—		—

Total Development Expenditures	$	3,191	$	1,443	$	—	$	—	$	1,748

⁽¹⁾	See page 42 for our definition of this measure.

- 40 -


		CASH BASIS CAPITAL EXPENDITURES

(unaudited and in thousands)


	Nine Months Ended September 30, 2017
	Total		New York		Washington, D.C		San Francisco		Other
Capital expenditures: ⁽¹⁾
Expenditures to maintain assets	$	10,415	$	6,912	$	1,250	$	1,901	$	352
Second generation tenant improvements		26,871		20,759		4		6,108		—
Second generation leasing commissions		13,102		6,047		—		7,055		—
First generation leasing costs and other capital expenditures		19,492		12,032		3,865		3,595		—

Total Capital Expenditures	$	69,880	$	45,750	$	5,119	$	18,659	$	352

Development Expenditures ⁽¹⁾
One Market Plaza	$	4,105	$	—	$	—	$	4,105
Residential Development Fund		2,896		—		—		—		2,896
31 West 52nd Street		1,130		1,130		—		—		—
900 Third		1,129		1,129		—		—		—
1633 Broadway		785		785		—		—		—
Other		421		238		—		183		—

Total Development Expenditures	$	10,466	$	3,282	$	—	$	4,288	$	2,896


	Nine Months Ended September 30, 2016
	Total		New York		Washington, D.C		San Francisco		Other
Capital expenditures: ⁽¹⁾
Expenditures to maintain assets	$	12,916	$	7,750	$	1,665	$	3,244	$	257
Second generation tenant improvements		40,248		26,554		2,008		11,686		—
Second generation leasing commissions		6,499		4,396		629		1,474		—
First generation leasing costs and other capital expenditures		38,115		32,708		2,838		2,569		—

Total Capital Expenditures	$	97,778	$	71,408	$	7,140	$	18,973	$	257

Development Expenditures ⁽¹⁾
1633—Plaza and Retail development	$	6,945	$	6,945	$	—	$	—	$	—
One Market Plaza—Lobby and Retail repositioning		4,656		—		—		4,656		—
Residential Development Fund		3,976		—		—		—		3,976
Other		1,285		1,285		—		—		—

Total Development Expenditures	$	16,862	$	8,230	$	—	$	4,656	$	3,976

⁽¹⁾	See page 42 for our definition of this measure.

- 41 -


		DEFINITIONS

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

Core Funds from Operations (“Core FFO”) is an alternative measure of our operating performance, which adjusts FFO for certain other items that we believe enhance the comparability of our FFO across periods. Core FFO, when applicable, excludes the impact of 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 loss 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 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 supplemental information regarding our operating performance that would not otherwise be available and is useful to investors and analysts in assessing our operating performance. Additionally, although FAD is not intended to be a liquidity measure, as it does not make adjustments for the changes in working capital, we believe that FAD may provide investors and analysts with useful supplemental information regarding our ability to generate cash from operations and our ability to make distributions to our stockholders. Furthermore, we believe that FAD is frequently used by investors and analysts in evaluating our performance as a REIT. FAD attributable to common stockholders represents the Company’s share of FAD that is attributable to common stockholders and is calculated by reducing from FAD, the noncontrolling interests’ share of FAD in consolidated joint ventures, real estate funds and Operating Partnership.

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

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

- 42 -


		DEFINITIONS - CONTINUED

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

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

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

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

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

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.

- 43 -

COMPANY INFORMATION

Corporate Headquarters

Investor Relations

Stock Exchange Listing

Trading Symbol

1633 Broadway, Suite 1801

IR@paramount-group.com

New York Stock Exchange

New York, NY 10019

(212) 492-2298

(212) 237-3100