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

Paramount Group, Inc. - FORM 8-K - EX-99.2 - May 2, 2018

Attached files

Attached files

Paramount Group, Inc. Reports

file	filename
EX-99.1 - EX-99.1 - Paramount Group, Inc.	d577500dex991.htm
8-K - FORM 8-K - Paramount Group, Inc.	d577500d8k.htm

Exhibit 99.2

LOGO

SUPPLEMENTAL OPERATING AND FINANCIAL DATA

FOR THE QUARTER ENDED MARCH 31, 2018


		FORWARD-LOOKING STATEMENTS

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

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		TABLE OF CONTENTS


		Page
Company Profile		4

Research Coverage		5

Selected Financial Information
Guidance		6
Financial Highlights		7
Consolidated Balance Sheets		8
Consolidated Statements of Income		9
Select Income Statement Data		10
Funds From Operations (“FFO”)		11
Funds Available for Distribution (“FAD”)		12
Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (“EBITDAre”)		13
Net Operating Income (“NOI”)		14 - 15
Same Store Results		16 - 17
Consolidated Joint Ventures and Fund		18 - 19
Unconsolidated Joint Ventures		20 - 21
Unconsolidated Funds Summary		22
Capital Structure		23
Debt Analysis		24
Debt Maturities		25

Selected Property Data
Portfolio Summary		26
Same Store Leased Occupancy		27
Top Tenants and Industry Diversification		28
Leasing Activity		29
Lease Expirations		30 - 33
Cash Basis Capital Expenditures		34

Definitions		35 - 36

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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
Peter Brindley		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

- 4 -


		RESEARCH COVERAGE⁽¹⁾


James Feldman	Thomas Catherwood	Vin Chao	Steve Sakwa
Bank of America Merrill Lynch	BTIG	Deutsche Bank	Evercore ISI
(646) 855-5808	(212) 738-6140	(212) 250-6799	(212) 446-9462
james.feldman@baml.com	tcatherwood@btig.com	vincent.chao@db.com	steve.sakwa@evercoreisi.com

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

Nick Yulico	Blaine Heck
UBS	Wells Fargo
(212) 713-3402	(443) 263-6529
nick.yulico@ubs.com	blaine.heck@wellsfargo.com

⁽¹⁾

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

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


	Full Year 2018
	Low			High
Estimated net income attributable to common stockholders	$	0.02		$	0.06
Our share of depreciation and amortization		0.90			0.90

Estimated Core FFO ⁽¹⁾	$	0.92		$	0.96

Assumptions
Leasing Activity (square feet)		500,000			700,000
PGRE’s share of Same Store Leased % ⁽²⁾ at year end		94.0	%		96.0	%
Increase in PGRE’s share of Same Store Cash NOI ⁽²⁾		7.0	%		10.0	%
Increase in PGRE’s share of Same Store NOI ⁽²⁾		6.5	%		9.5	%
PGRE’s share of Cash NOI ⁽²⁾		349,000			354,000
PGRE’s share of NOI ⁽²⁾		412,000			419,000
PGRE’s share of straight-line rent and above and below-market lease revenue, net		63,000			65,000
Fee income, net of income taxes		17,000			18,000
PGRE’s share of interest and debt expense, including amortization of deferred financing costs		(130,000	)		(128,000	)
General and administrative expenses		(58,000	)		(56,000	)

⁽¹⁾

The Company is reaffirming its Estimated Core FFO Guidance for the full year of 2018, which is reconciled above to estimated net income attributable to common stockholders per diluted share in accordance with GAAP. The estimated net income attributable to common stockholders per diluted share is not a projection and is being provided solely to satisfy the disclosure requirements of the U.S. Securities and Exchange Commission. Except as described above, these estimates reflect management’s view of current and future market conditions, including assumptions with respect to rental rates, occupancy levels and the earnings impact of the events referenced in the Company’s earnings release issued on May 2, 2018 and otherwise referenced during the Company’s conference call scheduled for May 3, 2018. These estimates do not include the impact on operating results from possible future property acquisitions or dispositions, capital markets activity or unrealized gains or losses on real estate fund investments. The estimates set forth above may be subject to fluctuations as a result of several factors, including the straight-lining of rental income and the amortization of above and below-market leases. There can be no assurance that the Company’s actual results will not differ materially from the estimates set forth above.

⁽²⁾	See page 35 for our definition of this measure.

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


	Three Months Ended
SELECTED FINANCIAL DATA	March 31, 2018			March 31, 2017			December 31, 2017
Net income (loss) attributable to common stockholders	$	1,114		$	372		$	(6,793	)
Per share—basic and diluted	$	0.00		$	0.00		$	(0.03	)
PGRE’s share of Cash NOI ⁽¹⁾	$	85,947		$	79,117		$	83,619
PGRE’s share of NOI ⁽¹⁾	$	100,580		$	98,362		$	96,737

Same Store Cash NOI				% Change			Same Store NOI									% Change
Three Months Ended March 31, 2018 vs. March 31, 2017					15.2	%		Three Months Ended March 31, 2018 vs. March 31, 2017									6.6	%
Core FFO attributable to common stockholders⁽¹⁾	$	54,963		$	51,505		$	51,633
Per share—diluted	$	0.23		$	0.22		$	0.22
FAD attributable to common stockholders ⁽¹⁾	$	33,514		$	30,281		$	28,942
Dividends declared on common stock	$	24,051		$	21,981		$	22,841

COMMON SHARE DATA

	Three Months Ended
Share Price:	March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017
High	$	15.89		$	16.61		$	16.79		$	17.25		$	17.58
Low	$	13.70		$	15.49		$	15.14		$	15.32		$	15.87
Closing (end of period)	$	14.24		$	15.85		$	16.00		$	16.00		$	16.21
Dividends per common share	$	0.100		$	0.095		$	0.095		$	0.095		$	0.095
Annualized dividends per common share	$	0.400		$	0.380		$	0.380		$	0.380		$	0.380
Dividend yield (on closing share price)		2.8	%		2.4	%		2.4	%		2.4	%		2.3	%

PORTFOLIO STATISTICS

	As of
	March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017
Leased % ⁽¹⁾		94.0	%		93.5	%		92.3	%		90.9	%		90.8	%

Same Store Leased %				% Change
March 31, 2018 vs. December 31, 2017					0.5	%

⁽¹⁾	See page 35 for our definition of this measure.

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		CONSOLIDATED BALANCE SHEETS
(unaudited and in thousands)


	March 31, 2018			December 31, 2017
ASSETS:
Real estate, at cost
Land	$	2,209,506		$	2,209,506
Buildings and improvements		6,150,115			6,119,969

		8,359,621			8,329,475
Accumulated depreciation and amortization		(534,934	)		(487,945	)

Real estate, net		7,824,687			7,841,530
Cash and cash equivalents		212,547			219,381
Restricted cash		33,032			31,044
Investments in unconsolidated joint ventures		67,355			44,762
Investments in unconsolidated real estate funds		7,276			7,253
Preferred equity investments, net		35,870			35,817
Marketable securities		24,984			29,039
Accounts and other receivables, net		17,036			17,082
Deferred rent receivable		234,758			220,826
Deferred charges, net		106,415			98,645
Intangible assets, net		333,983			352,206
Other assets		75,925			20,076

Total Assets	$	8,973,868		$	8,917,661


LIABILITIES:
Notes and mortgages payable, net	$	3,560,230		$	3,541,300
Revolving credit facility		—			—
Due to affiliates		27,299			27,299
Accounts payable and accrued expenses		128,625			117,630
Dividends and distributions payable		26,627			25,211
Intangible liabilities, net		122,673			130,028
Other liabilities		54,344			54,109

Total Liabilities		3,919,798			3,895,577

EQUITY:
Paramount Group, Inc. equity		4,162,439			4,176,741
Noncontrolling interests in:
Consolidated joint ventures		404,137			404,997
Consolidated real estate fund		51,456			14,549
Operating Partnership		436,038			425,797

Total Equity		5,054,070			5,022,084

Total Liabilities and Equity	$	8,973,868		$	8,917,661

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


	Three Months Ended
	March 31, 2018			March 31, 2017			December 31, 2017
REVENUES:
Property rentals	$	145,741		$	132,235		$	142,639
Straight-line rent adjustments		13,244			20,147			10,924
Amortization of above and below-market leases, net		4,420			3,008			5,359

Rental income		163,405			155,390			158,922
Tenant reimbursement income		14,246			12,852			13,657
Fee income (see details on page 10)		3,465			9,556			4,374
Other income (see details on page 10)		3,155			3,438			3,304

Total revenues		184,271			181,236			180,257
EXPENSES:
Operating		68,978			65,971			68,440
Depreciation and amortization		65,156			62,992			67,894
General and administrative (see details on page 10)		12,631			13,581			16,953
Transaction related costs		120			275			976

Total expenses		146,885			142,819			154,263
Operating income		37,386			38,417			25,994
(Loss) income from unconsolidated joint ventures		(62	)		1,937			1,042
(Loss) income from unconsolidated real estate funds		(66	)		288			(90	)
Interest and other income, net (see details on page 10)		2,016			3,200			2,951
Interest and debt expense (see details on page 10)		(36,082	)		(37,018	)		(36,194	)
Loss on early extinguishment of debt		—			(2,715	)		—
Unrealized gain on interest rate swaps		—			1,802			—

Net income (loss) before income taxes		3,192			5,911			(6,297	)
Income tax expense		(477	)		(4,282	)		(935	)

Net income (loss)		2,715			1,629			(7,232	)
Less net (income) loss attributable to noncontrolling interests in:
Consolidated joint ventures		(1,055	)		(1,291	)		(664	)
Consolidated real estate fund		(430	)		88			398
Operating Partnership		(116	)		(54	)		705

Net income (loss) attributable to common stockholders	$	1,114		$	372		$	(6,793	)

Weighted average common shares outstanding:
Basic		240,311,744			230,924,271			239,997,181

Diluted		240,338,698			230,958,441			239,997,181

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

Diluted	$	0.00		$	0.00		$	(0.03	)

-9-


		SELECT INCOME STATEMENT DATA
(unaudited and in thousands)


	Three Months Ended
Fee Income:	March 31, 2018		March 31, 2017		December 31, 2017
Property management	$	1,502	$	1,610	$	1,521
Asset management		1,610		2,266		1,959
Acquisition and disposition		—		5,320		725
Other		353		360		169

Total fee income	$	3,465	$	9,556	$	4,374


	Three Months Ended
Other Income:	March 31, 2018		March 31, 2017		December 31, 2017
Lease termination income	$	28	$	66	$	274
Other (primarily parking income and tenant requested services, including overtime heating and cooling)		3,127		3,372		3,030

Total other income	$	3,155	$	3,438	$	3,304


	Three Months Ended
General and Administrative:	March 31, 2018		March 31, 2017		December 31, 2017
Cash general and administrative	$	6,275	$	8,450	$	9,649
Non-cash general and administrative - stock based compensation expense		6,265		3,429		3,100
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”)		91		1,702		1,578
Severance costs		—		—		2,626

Total general and administrative	$	12,631	$	13,581	$	16,953


	Three Months Ended
Interest and Other Income:	March 31, 2018		March 31, 2017		December 31, 2017
Preferred equity investment income ⁽¹⁾	$	899	$	1,413	$	860
Interest income		1,026		85		513
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)		91		1,702		1,578

Total interest and other income, net	$	2,016	$	3,200	$	2,951

⁽¹⁾	Represents 100% of the investment income from PGRESS Equity Holdings, L.P., of which our 24.4% share is $219, $344 and $210 for the three months ended March 31, 2018 and 2017, and December 31, 2017, respectively.


	Three Months Ended
Interest and Debt Expense:	March 31, 2018		March 31, 2017		December 31, 2017
Interest expense	$	33,321	$	34,288	$	33,373
Amortization of deferred financing costs		2,761		2,730		2,821

Total interest and debt expense	$	36,082	$	37,018	$	36,194

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


	Three Months Ended
	March 31, 2018			March 31, 2017			December 31, 2017
Reconciliation of net income (loss) to FFO and Core FFO:
Net income (loss)	$	2,715		$	1,629		$	(7,232	)
Real estate depreciation and amortization (including our share of unconsolidated joint ventures)		67,160			64,840			69,915

FFO ⁽¹⁾		69,875			66,469			62,683
Less FFO attributable to noncontrolling interests in:
Consolidated joint ventures		(10,207	)		(7,195	)		(9,965	)
Consolidated real estate fund		(430	)		(140	)		398

FFO attributable to Paramount Group Operating Partnership		59,238			59,134			53,116
Less FFO attributable to noncontrolling interests in Operating Partnership		(5,585	)		(7,545	)		(4,995	)

FFO attributable to common stockholders⁽¹⁾	$	53,653		$	51,589		$	48,121

Per diluted share	$	0.22		$	0.22		$	0.20

FFO	$	69,875		$	66,469		$	62,683
Non-core items:
Our share of earnings from 712 Fifth Avenue in excess of distributions received		1,195			—			176
Realized and unrealized loss (gain) from unconsolidated real estate funds		131			(235	)		99
Transaction related costs		120			275			976
Severance costs		—			—			2,626
Loss on early extinguishment of debt		—			2,715			—
Unrealized gain on interest rate swaps (including our share of unconsolidated joint ventures)		—			(2,386	)		—

Core FFO ⁽¹⁾		71,321			66,838			66,560
Less Core FFO attributable to noncontrolling interests in:
Consolidated joint ventures		(10,207	)		(7,661	)		(9,965	)
Consolidated real estate fund		(430	)		(140	)		398

Core FFO attributable to Paramount Group Operating Partnership		60,684			59,037			56,993
Less Core FFO attributable to noncontrolling interests in Operating Partnership		(5,721	)		(7,532	)		(5,360	)

Core FFO attributable to common stockholders ⁽¹⁾	$	54,963		$	51,505		$	51,633

Per diluted share	$	0.23		$	0.22		$	0.22

Reconciliation of weighted average shares outstanding:
Weighted average shares outstanding		240,311,744			230,924,271			239,997,181
Effect of dilutive securities		26,954			34,170			37,360

Denominator for FFO and Core FFO per diluted share		240,338,698			230,958,441			240,034,541

⁽¹⁾	See page 35 for our definition of this measure.

-11-


		FAD
(unaudited and in thousands)


	Three Months Ended
	March 31, 2018			March 31, 2017			December 31, 2017
Reconciliation of Core FFO to FAD:
Core FFO	$	71,321		$	66,838		$	66,560
Add (subtract) adjustments to arrive at FAD:
Amortization of stock-based compensation expense		6,265			3,429			3,100
Amortization of deferred financing costs (including our share of unconsolidated joint ventures)		2,835			2,798			2,895
Amortization of above and below-market leases, net (including our share of unconsolidated joint ventures)		(4,257	)		(2,881	)		(5,196	)
Expenditures to maintain assets		(3,702	)		(5,555	)		(8,623	)
Second generation tenant improvements and leasing commissions		(14,983	)		(7,408	)		(10,744	)
Straight-line rent adjustments (including our share of unconsolidated joint ventures)		(13,197	)		(20,511	)		(10,765	)

FAD ⁽¹⁾		44,282			36,710			37,227
Less FAD attributable to noncontrolling interests in:
Consolidated joint ventures		(6,850	)		(1,860	)		(5,687	)
Consolidated real estate fund		(430	)		(140	)		407

FAD attributable to Paramount Group Operating Partnership		37,002			34,710			31,947
Less FAD attributable to noncontrolling interests in Operating Partnership		(3,488	)		(4,429	)		(3,005	)

FAD attributable to common stockholders ^(1) (2)	$	33,514		$	30,281		$	28,942

⁽¹⁾	See page 35 for our definition of this measure.

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

-12-


		EBITDAre
(unaudited and in thousands)


	Three Months Ended
	March 31, 2018			March 31, 2017			December 31, 2017
Reconciliation of net income (loss) to EBITDAre and Adjusted EBITDAre:
Net income (loss)	$	2,715		$	1,629		$	(7,232	)
Add (subtract) adjustments to arrive at EBITDAre and Adjusted EBITDAre:
Depreciation and amortization (including our share of unconsolidated joint ventures)		67,160			64,840			69,915
Interest and debt expense (including our share of unconsolidated joint ventures)		37,744			38,653			37,869
Income tax expense (including our share of unconsolidated joint ventures)		478			4,282			935

EBITDAre⁽¹⁾		108,097			109,404			101,487
Less EBITDAre attributable to noncontrolling interests in:
Consolidated joint ventures		(16,786	)		(12,645	)		(16,684	)
Consolidated real estate fund		(432	)		(141	)		398

PGRE’s share of EBITDAre ⁽¹⁾	$	90,879		$	96,618		$	85,201


EBITDAre	$	108,097		$	109,404		$	101,487
Add (subtract) adjustments to arrive at Adjusted EBITDAre:
Our share of earnings from 712 Fifth Avenue in excess of distributions received		1,195			—			176
EBITDAre from real estate funds		(414	)		(450	)		554
Transaction related costs		120			275			976
Severance costs		—			—			2,626
Loss on early extinguishment of debt		—			2,715			—
Unrealized gain on interest rate swaps (including our share of unconsolidated joint ventures)		—			(2,386	)		—

Adjusted EBITDAre ⁽¹⁾		108,998			109,558			105,819
Less Adjusted EBITDAre attributable to noncontrolling interests in:
Consolidated joint ventures		(16,786	)		(13,111	)		(16,685	)

PGRE’s share of Adjusted EBITDAre ⁽¹⁾	$	92,212		$	96,447		$	89,134

⁽¹⁾	See page 35 for our definition of this measure.

-13-


		NOI
(unaudited and in thousands)


	Three Months Ended
	March 31, 2018			March 31, 2017			December 31, 2017
Reconciliation of net income (loss) to NOI and Cash NOI:
Net income (loss)	$	2,715		$	1,629		$	(7,232	)
Add (subtract) adjustments to arrive at NOI and Cash NOI:
Depreciation and amortization		65,156			62,992			67,894
General and administrative		12,631			13,581			16,953
Interest and debt expense		36,082			37,018			36,194
Loss on early extinguishment of debt		—			2,715			—
Transaction related costs		120			275			976
Income tax expense		477			4,282			935
NOI from unconsolidated joint ventures		4,740			4,823			4,869
Loss (income) from unconsolidated joint ventures		62			(1,937	)		(1,042	)
Loss (income) from unconsolidated real estate funds		66			(288	)		90
Fee income		(3,465	)		(9,556	)		(4,374	)
Interest and other income, net		(2,016	)		(3,200	)		(2,951	)
Unrealized gain on interest rate swaps		—			(1,802	)		—

NOI ⁽¹⁾		116,568			110,532			112,312
Less NOI attributable to noncontrolling interests in:
Consolidated joint ventures		(16,014	)		(12,029	)		(15,928	)
Consolidated real estate fund		26			(141	)		353

PGRE’s share of NOI⁽¹⁾	$	100,580		$	98,362		$	96,737


NOI ⁽¹⁾	$	116,568		$	110,532		$	112,312
Less:
Straight-line rent adjustments (including our share of unconsolidated joint ventures)		(13,197	)		(20,511	)		(10,765	)
Amortization of above and below-market leases, net (including our share of unconsolidated joint ventures)		(4,257	)		(2,881	)		(5,196	)

Cash NOI⁽¹⁾		99,114			87,140			96,351
Less Cash NOI attributable to noncontrolling interests in:
Consolidated joint ventures		(13,193	)		(7,882	)		(13,085	)
Consolidated real estate fund		26			(141	)		353

PGRE’s share of Cash NOI ⁽¹⁾	$	85,947		$	79,117		$	83,619

⁽¹⁾	See page 35 for our definition of this measure.

- 14 -


		NOI
(unaudited and in thousands)


	Three Months Ended March 31, 2018
	Total			New York			Washington, D.C.			San Francisco			Other
Reconciliation of net income (loss) to NOI and Cash NOI:
Net income (loss)	$	2,715		$	5,479		$	4,092		$	4,909		$	(11,765	)
Add (subtract) adjustments to arrive at NOI and Cash NOI:
Depreciation and amortization		65,156			38,186			5,512			20,863			595
General and administrative		12,631			—			—			—			12,631
Interest and debt expense		36,082			22,746			—			12,167			1,169
Transaction related costs		120			—			—			—			120
Income tax expense		477			—			—			3			474
NOI from unconsolidated joint ventures		4,740			4,665			—			—			75
Loss (income) from unconsolidated joint ventures		62			73			—			—			(11	)
Loss from unconsolidated real estate funds		66			—			—			—			66
Fee income		(3,465	)		—			—			—			(3,465	)
Interest and other income, net		(2,016	)		—			—			(159	)		(1,857	)

NOI ⁽¹⁾		116,568			71,149			9,604			37,783			(1,968	)
Less NOI attributable to noncontrolling interests in:
Consolidated joint ventures		(16,014	)		—			—			(16,014	)		—
Consolidated real estate fund		26			—			—			—			26

PGRE’s share of NOIfor the three months ended March 31, 2018	$	100,580		$	71,149		$	9,604		$	21,769		$	(1,942	)

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


NOI ⁽¹⁾	$	116,568		$	71,149		$	9,604		$	37,783		$	(1,968	)
Add (subtract) adjustments to arrive at Cash NOI:
Straight-line rent adjustments (including our share of unconsolidated joint ventures)		(13,197	)		(9,508	)		158			(3,908	)		61
Amortization of above and below-market leases, net (including our share of unconsolidated joint ventures)		(4,257	)		557			(547	)		(4,267	)		—

Cash NOI⁽¹⁾		99,114			62,198			9,215			29,608			(1,907	)
Less Cash NOI attributable to noncontrolling interests in:
Consolidated joint ventures		(13,193	)		—			—			(13,193	)		—
Consolidated real estate fund		26			—			—			—			26

PGRE’s share of Cash NOI for the three months ended March 31, 2018	$	85,947		$	62,198		$	9,215		$	16,415		$	(1,881	)

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

⁽¹⁾	See page 35 for our definition of this measure.

- 15 -


		SAME STORE RESULTS
(unaudited and in thousands)


SAME STORE CASH NOI ⁽¹⁾	Three Months Ended March 31, 2018
SAME STORE CASH NOI ⁽¹⁾	Total			New York			Washington, D.C.			San Francisco			Other

PGRE’s share of Cash NOI for the three months ended March 31, 2018	$	85,947		$	62,198		$	9,215		$	16,415		$	(1,881	)
Acquisitions ⁽²⁾		(1,964	)		(215	)		—			(1,749	)		—
Dispositions		—			—			—			—			—
Lease termination income (including our share of unconsolidated joint ventures)		(190	)		(190	)		—			—			—
Other, net		—			—			—			—			—

PGRE’s share of Same Store Cash NOI ⁽¹⁾ for the three months ended March 31, 2018	$	83,793		$	61,793		$	9,215		$	14,666		$	(1,881	)


	Three Months Ended March 31, 2017
	Total			New York			Washington, D.C.			San Francisco			Other

PGRE’s share of Cash NOI for the three months ended March 31, 2017	$	79,117		$	53,490		$	13,253		$	13,437		$	(1,063	)
Acquisitions		—			—			—			—			—
Dispositions ⁽³⁾		(6,300	)		—			(6,300	)		—			—
Lease termination income (including our share of unconsolidated joint ventures)		(66	)		(66	)		—			—			—
Other, net		—			—			—			—			—

PGRE’s share of Same Store Cash NOI ⁽¹⁾ for the three months ended March 31, 2017	$	72,751		$	53,424		$	6,953		$	13,437		$	(1,063	)



Increase (decrease) in PGRE’s share of Same Store Cash NOI	$	11,042		$	8,369		$	2,262		$	1,229		$	(818	)

% Increase		15.2	%		15.7	%		32.5	%		9.1	%

⁽¹⁾	See page 35 for our definition of this measure.

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

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

- 16 -


		SAME STORE RESULTS
(unaudited and in thousands)


SAME STORE NOI ⁽¹⁾	Three Months Ended March 31, 2018
	Total			New York			Washington, D.C.			San Francisco			Other

PGRE’s share of NOI for the three months ended March 31, 2018	$	100,580		$	71,149		$	9,604		$	21,769		$	(1,942	)
Acquisitions ⁽²⁾		(2,306	)		(173	)		—			(2,133	)		—
Dispositions		—			—			—			—			—
Lease termination income (including our share of unconsolidated joint ventures)		(190	)		(190	)		—			—			—
Other, net		—			—			—			—			—

PGRE’s share of Same Store NOI ⁽¹⁾ for the three months ended March 31, 2018	$	98,084		$	70,786		$	9,604		$	19,636		$	(1,942	)


	Three Months Ended March 31, 2017
	Total			New York			Washington, D.C.			San Francisco			Other

PGRE’s share of NOI for the three months ended March 31, 2017	$	98,362		$	65,318		$	14,863		$	19,305		$	(1,124	)
Acquisitions		—			—			—			—			—
Dispositions ⁽³⁾		(6,300	)		—			(6,300	)		—			—
Lease termination income (including our share of unconsolidated joint ventures)		(66	)		(66	)		—			—			—
Other, net		—			—			—			—			—

PGRE’s share of Same Store NOI ⁽¹⁾ for the three months ended March 31, 2017	$	91,996		$	65,252		$	8,563		$	19,305		$	(1,124	)



Increase (decrease) in PGRE’s share of Same Store NOI	$	6,088		$	5,534		$	1,041		$	331		$	(818	)

% Increase		6.6	%		8.5	%		12.2	%		1.7	%

⁽¹⁾	See page 35 for our definition of this measure.

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

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

- 17 -


		CONSOLIDATED JOINT VENTURES AND FUND - BALANCE SHEETS
(unaudited and in thousands)


	As of March 31, 2018										As of December 31, 2017
	Consolidated Joint Ventures								Consolidated Fund		Consolidated Joint Ventures								Consolidated Fund
	Total Consolidated Joint Ventures		One Market Plaza		50 Beale Street		PGRESS Equity Holdings L.P.		Residential Development Fund		Total Consolidated Joint Ventures		One Market Plaza		50 Beale Street		PGRESS Equity Holdings L.P.		Residential Development Fund
PGRE Ownership				49.0%		31.1%		24.4%		7.4%				49.0%		31.1%		24.4%		7.4%
ASSETS:
Real estate, net	$	1,718,880	$	1,240,009	$	478,871	$	—	$	—	$	1,726,800	$	1,246,427	$	480,373	$	—	$	—
Cash and cash equivalents		64,870		40,296		24,189		385		1,140		46,839		24,658		21,792		389		656
Restricted cash		5,541		5,541		—		—		—		8,163		8,163		—		—		—
Preferred equity investments, net		35,870		—		—		35,870		—		35,817		—		—		35,817		—
Investments in unconsolidated joint ventures		—		—		—		—		39,230		—		—		—		—		16,031
Accounts and other receivables, net		2,562		1,703		859		—		2		2,548		1,423		1,125		—		2
Deferred rent receivable		45,504		44,485		1,019		—		—		44,000		43,332		668		—		—
Deferred charges, net		9,192		7,956		1,236		—		—		8,123		7,508		615		—		—
Intangible assets, net		61,073		36,699		24,374		—		—		66,112		39,421		26,691		—		—
Other assets		378		340		38		—		15,686		908		747		161		—		10

Total Assets	$	1,943,870	$	1,377,029	$	530,586	$	36,255	$	56,058	$	1,939,310	$	1,371,679	$	531,425	$	36,206	$	16,699

LIABILITIES:
Notes and mortgages payable, net	$	1,196,867	$	968,867	$	228,000	$	—	$	—	$	1,196,607	$	968,607	$	228,000	$	—	$	—
Accounts payable and accrued expenses		30,364		22,241		8,071		52		57		21,134		14,876		6,205		53		62
Intangible liabilities, net		42,519		33,984		8,535		—		—		46,365		36,793		9,572		—		—
Other liabilities		155		148		7		—		—		156		149		7		—		—

Total Liabilities		1,269,905		1,025,240		244,613		52		57		1,264,262		1,020,425		243,784		53		62

EQUITY:
Paramount Group, Inc. equity		269,828		172,444		88,160		9,224		4,545		270,051		172,182		88,695		9,174		2,088
Noncontrolling interests		404,137		179,345		197,813		26,979		51,456		404,997		179,072		198,946		26,979		14,549

Total Equity		673,965		351,789		285,973		36,203		56,001		675,048		351,254		287,641		36,153		16,637

Total Liabilities and Equity	$	1,943,870	$	1,377,029	$	530,586	$	36,255	$	56,058	$	1,939,310	$	1,371,679	$	531,425	$	36,206	$	16,699

- 18 -


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


	Three Months Ended March 31, 2018														Three Months Ended March 31, 2017
	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	$	40,845		$	31,930		$	8,915		$	—	$	2		$	31,119		$	31,119		$	—	$	868
Total operating expenses		10,572			7,522			3,050			—		1			7,278			7,278			—		414

Net operating income		30,273			24,408			5,865			—		1			23,841			23,841			—		454
Depreciation and amortization		(16,206	)		(11,249	)		(4,957	)		—		—			(11,573	)		(11,573	)		—		(259	)
Interest and other income, net		1,058			92			67			899		509			1,438			25			1,413		—
Interest and debt expense		(12,167	)		(10,086	)		(2,081	)		—		—			(13,478	)		(13,478	)		—		—
Income from unconsolidated joint venture		—			—			—			—		(2	)		—			—			—		—
Unrealized gain on interest rate swaps		—			—			—			—		—			1,802			1,802			—		—

Net income (loss) before income taxes		2,958			3,165			(1,106	)		899		508			2,030			617			1,413		195
Income tax expense		(3	)		(3	)		—			—		(2	)		(2	)		(2	)		—		(2	)

Net income (loss)	$	2,955		$	3,162		$	(1,106	)	$	899	$	506		$	2,028		$	615		$	1,413	$	193



PGRE’s share Ownership	Total			49.0%			31.1%			24.4%		7.4%			Total			49.0%			24.4%		12.9%
Net income (loss)	$	1,408		$	1,549		$	(360	)	$	219	$	50		$	605		$	261		$	344	$	24
Add: Management fee income		492			167			325			—		26			132			132			—		257

PGRE’s share of net income (loss)		1,900			1,716			(35	)		219		76			737			393			344		281
Add: Real estate depreciation and amortization		7,054			5,512			1,542			—		—			5,669			5,669			—		31

FFO ⁽²⁾		8,954			7,228			1,507			219		76			6,406			6,062			344		312
Add: Loss on early extinguishment of debt		—			—			—			—		—			1,330			1,330			—		—
Less: Unrealized gain on interest rate swaps		—			—			—			—		—			(883	)		(883	)		—		—

Core FFO ⁽²⁾	$	8,954		$	7,228		$	1,507		$	219	$	76		$	6,853		$	6,509		$	344	$	312



Noncontrolling Interests’ share Ownership	Total			51.0%			68.9%			75.6%		92.6%			Total			51.0%			75.6%		87.1%
Net income (loss)	$	1,547		$	1,613		$	(746	)	$	680	$	456		$	1,423		$	354		$	1,069	$	169
Less: Management fee expense		(492	)		(167	)		(325	)		—		(26	)		(132	)		(132	)		—		(257	)

Net income (loss) attributable to noncontrolling interests		1,055			1,446			(1,071	)		680		430			1,291			222			1,069		(88	)
Add: Real estate depreciation and amortization		9,152			5,737			3,415			—		—			5,904			5,904			—		228

FFO ⁽²⁾		10,207			7,183			2,344			680		430			7,195			6,126			1,069		140
Add: Loss on early extinguishment of debt		—			—			—			—		—			1,385			1,385			—		—
Less: Unrealized gain on interest rate swaps		—			—			—			—		—			(919	)		(919	)		—		—

Core FFO ⁽²⁾	$	10,207		$	7,183		$	2,344		$	680	$	430		$	7,661		$	6,592		$	1,069	$	140

⁽¹⁾	Acquired on July 17, 2017.

⁽²⁾	See page 35 for our definition of this measure.

- 19 -


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


	As of March 31, 2018									As of December 31, 2017
	Total		712 Fifth Avenue			60 Wall Street		Other ⁽¹⁾		Total		712 Fifth Avenue			60 Wall Street		Other ⁽¹⁾
PGRE Ownership			50.0%			5.0%		Various				50.0%			5.0%		Various
ASSETS:
Real estate, net	$	1,189,801	$	199,948		$	868,050	$	121,803	$	1,196,116	$	202,040		$	873,142	$	120,934
Cash and cash equivalents		54,418		34,254			18,511		1,653		52,132		31,511			18,642		1,979
Restricted cash		4,007		3,805			—		202		4,726		4,726			—		—
Accounts and other receivables, net		303		280			—		23		296		296			—		—
Deferred rent receivable		15,246		13,375			1,871		—		15,446		13,456			1,990		—
Deferred charges, net		7,448		7,448			—		—		7,848		7,848			—		—
Intangible assets, net		119,231		—			119,231		—		126,422		—			126,422		—
Other assets		9,900		3,827			5,404		669		1,148		197			105		846

Total Assets	$	1,400,354	$	262,937		$	1,013,067	$	124,350	$	1,404,134	$	260,074		$	1,020,301	$	123,759

LIABILITIES:
Notes and mortgages payable, net	$	887,419	$	296,235		$	568,233	$	22,951	$	886,902	$	296,132		$	567,799	$	22,971
Accounts payable and accrued expenses		19,188		4,812			12,695		1,681		12,560		4,435			7,382		743
Other liabilities		1,380		174			836		370		1,636		180			850		606

Total Liabilities		907,987		301,221			581,764		25,002		901,098		300,747			576,031		24,320

EQUITY:
Total Equity		492,367		(38,284	)		431,303		99,348		503,036		(40,673	)		444,270		99,439

Total Liabilities and Equity	$	1,400,354	$	262,937		$	1,013,067	$	124,350	$	1,404,134	$	260,074		$	1,020,301	$	123,759

⁽¹⁾	Represents Oder-Center, Germany and 75 Howard.

- 20 -


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


	Three Months Ended March 31, 2018												Three Months Ended March 31, 2017
	Total			712 Fifth Avenue			60 Wall Street ⁽¹⁾			Other ⁽²⁾			Total			712 Fifth Avenue			60 Wall Street ⁽¹⁾			Oder-Center, Germany
Total revenues	$	35,971		$	14,132		$	20,443		$	1,396		$	30,615		$	14,379		$	15,224		$	1,012
Total operating expenses		13,527			6,184			6,740			603			10,962			5,966			4,725			271

Net operating income		22,444			7,948			13,703			793			19,653			8,413			10,499			741
Depreciation and amortization expense		(12,161	)		(3,026	)		(9,033	)		(102	)		(9,811	)		(2,920	)		(6,799	)		(92	)
Interest and other income, net		170			113			56			1			30			24			6			—
Interest and debt expense		(9,179	)		(2,645	)		(6,270	)		(264	)		(6,893	)		(2,825	)		(3,815	)		(253	)
Unrealized gain on interest rate swaps		—			—			—			—			1,168			1,168			—			—

Net income (loss) before income taxes		1,274			2,390			(1,544	)		428			4,147			3,860			(109	)		396
Income tax expense		(10	)		—			—			(10	)		(2	)		—			—			(2	)

Net income (loss)	$	1,264		$	2,390		$	(1,544	)	$	418		$	4,145		$	3,860		$	(109	)	$	394



PGRE’s share Ownership	Total			50.0%			5.0%			Various			Total			50.0%			5.0%			9.5%
Net income (loss)	$	1,161		$	1,195		$	(73	)	$	39		$	1,962		$	1,930		$	(5	)	$	37
Less: Step-up basis adjustment		(28	)		—			—			(28	)		(25	)		—			—			(25	)
Less: Earnings in excess of distributions		(1,195	)		(1,195	)		—			—			—			—			—			—

PGRE’s share of net (loss) income		(62	)		—			(73	)		11			1,937			1,930			(5	)		12
Less: Noncontrolling interests		—			—			—			—			—			—			—			—
Add: Real estate depreciation and amortization		2,004			1,513			453			38			1,848			1,460			354			34

FFO ⁽³⁾		1,942			1,513			380			49			3,785			3,390			349			46
Add: Earnings in excess of distributions		1,195			1,195			—			—			—			—			—			—
Less: Unrealized gain on interest rate swaps		—			—			—			—			(584	)		(584	)		—			—

Core FFO⁽³⁾	$	3,137		$	2,708		$	380		$	49		$	3,201		$	2,806		$	349		$	46



Joint Venture Partners’ share Ownership	Total			50.0%			95.0%			Various			Total			50.0%			95.0%			90.5%
Net income (loss)	$	103		$	1,195		$	(1,471	)	$	379		$	2,183		$	1,930		$	(104	)	$	357
Add: Real estate depreciation and amortization		10,185			1,513			8,580			92			7,988			1,460			6,445			83

FFO ⁽³⁾		10,288			2,708			7,109			471			10,171			3,390			6,341			440
Less: Unrealized gain on interest rate swaps		—			—			—			—			(584	)		(584	)		—			—

Core FFO⁽³⁾	$	10,288		$	2,708		$	7,109		$	471		$	9,587		$	2,806		$	6,341		$	440

⁽¹⁾	Acquired on January 24, 2017.

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

⁽³⁾	See page 35 for our definition of this measure.

- 21 -


		UNCONSOLIDATED FUNDS SUMMARY
(unaudited and in thousands)

Debt Fund:

The following is a summary of our Debt Fund and our ownership interests in the underlying investments, as of March 31, 2018.


		PGRE Ownership			Fixed / Variable rate	Interest Rate					Face Amount				Fair Value
Investments	Investment Type	PGRE Ownership			Fixed / Variable rate	Interest Rate			Maturity		Total		Our Share		Total		Our Share
26 Broadway	Mezzanine Loan		1.3	%	Fixed		8.25	%		Jan-2022	$	50,000	$	645	$	50,299	$	649
700 Eighth Avenue	Mortgage and Mezzanine Loans		1.3	%	Variable (LIBOR plus 600 bps)		7.69	%		Jan-2019		74,000		955		74,510		962
1285 Avenue of the Americas	Mezzanine Loan		1.3	%	Fixed		6.75	%		Jun-2023		55,000		710		55,429		715
Other	Mortgage and Mezzanine Loans/Preferred Equity		1.3	%	Various		5.50 9.61	% - %		Oct-2018 to Dec-2027		190,444		2,459		190,077		2,452

											$	369,444	$	4,769	$	370,315	$	4,778


	Total			Our Share
Committed capital	$	775,200		$	10,000
Called and/or invested		(369,950	)		(4,772	)

Available to be invested	$	405,250		$	5,228

- 22 -


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


					As of March 31, 2018
Debt:
Consolidated debt:
Notes and mortgages payable ⁽¹⁾					$	3,599,800
$1.0 billion Revolving Credit Facility ⁽²⁾						—

						3,599,800
Less:
Noncontrolling interest’s share of consolidated debt (One Market Plaza and 50 Beale Street)						(654,342	)
Add:
PGRE’s share of unconsolidated joint venture debt (712 Fifth Avenue, 60 Wall Street, and Oder-Center, Germany)						180,988

PGRE’s share of total debt ⁽³⁾						3,126,446


	Shares / Units Outstanding		Share Price as of March 31, 2018
Equity:
Common stock		240,505,886	$	14.24		3,424,804
Operating Partnership units		25,307,251		14.24		360,375

Total equity		265,813,137		14.24		3,785,179

Total Market Capitalization					$	6,911,625

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

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

⁽³⁾	See page 35 for our definition of this measure.

- 23 -


		DEBT ANALYSIS

(unaudited and in thousands)


	Total Debt						Fixed Rate Debt						Variable Rate Debt
Consolidated Debt:	Amount			Rate			Amount			Rate			Amount			Rate
1633 Broadway	$	1,046,800			3.53	%	$	1,000,000			3.54	%	$	46,800			3.42	%
1301 Avenue of the Americas		850,000			3.23	%		500,000			3.05	%		350,000			3.49	%
31 West 52nd Street		500,000			3.80	%		500,000			3.80	%		—			—
One Market Plaza		975,000			4.03	%		975,000			4.03	%		—			—
50 Beale Street		228,000			3.65	%		228,000			3.65	%		—			—
Revolving Credit Facility ⁽¹⁾		—			—			—			—			—			—

Total consolidated debt		3,599,800			3.64	%		3,203,000			3.66	%		396,800			3.48	%

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

PGRE’s share of consolidated debt ⁽²⁾	$	2,945,458			3.57	%	$	2,548,658			3.59	%	$	396,800			3.48	%

Unconsolidated Joint Venture Debt:
712 Fifth Avenue	$	300,000			3.39	%	$	300,000			3.39	%	$	—			—
60 Wall Street		575,000			4.23	%		—			—			575,000			4.23	%
Oder-Center, Germany		22,951			4.62	%		22,951			4.62	%		—			—

Total unconsolidated debt		897,951			3.96	%		322,951			3.48	%		575,000			4.23	%

Joint venture partners’ share		(716,963	)		4.06	%		(170,771	)		3.54	%		(546,192	)		4.23	%

PGRE’s share of unconsolidated debt ⁽²⁾	$	180,988			3.54	%	$	152,180			3.41	%	$	28,808			4.23	%

PGRE’s share of Total Debt ⁽²⁾	$	3,126,446			3.57	%	$	2,700,838			3.58	%	$	425,608			3.53	%


Revolving Credit Facility Covenants: ⁽³⁾	Required	Actual
Total Debt / Total Assets	Less than 60%		39.2	%
Secured Debt / Total Assets	Less than 50%		39.1	%
Fixed Charge Coverage	Greater than 1.5x		3.7x
Unsecured Debt / Unencumbered Assets	Less than 60%		0.0	%
Unencumbered Interest Coverage	Greater than 1.75x		43.4x


Debt Composition:	Amount		%
Fixed rate debt:
PGRE’s consolidated fixed rate debt	$	2,548,658
PGRE’s unconsolidated fixed rate debt		152,180

Total fixed rate debt		2,700,838		86.4	%

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

Total variable rate debt		425,608		13.6	%

PGRE’s share of Total Debt ⁽²⁾	$	3,126,446		100.0	%

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

⁽²⁾	See page 35 for our definition of this measure.

⁽³⁾

This section presents ratios as of March 31, 2018 in accordance with the terms of our revolving credit facility, which has been filed with the SEC. We are not presenting these ratios and the related calculations for any other purpose or for any other period, and are not intending for these measures to otherwise provide information to investors about our financial condition or results of operations. Investors should not rely on these measures other than for purposes of testing our compliance with the revolving credit facility.

- 24 -


		DEBT MATURITIES

(unaudited and in thousands)


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

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

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


Unconsolidated Joint Venture Debt:
712 Fifth Avenue	$	—	$	—	$	—	$	—		$	—		$	300,000		$	300,000
60 Wall Street		—		—		—		—			575,000			—			575,000
Oder-Center, Germany		—		—		—		—			22,951			—			22,951

Total unconsolidated debt		—		—		—		—			597,951			300,000			897,951
Joint venture partners’ share		—		—		—		—			(566,963	)		(150,000	)		(716,963	)

PGRE’s share of unconsolidated debt ⁽¹⁾	$	—	$	—	$	—	$	—		$	30,988		$	150,000		$	180,988


PGRE’s share of total debt ⁽¹⁾	$	—	$	—	$	—	$	920,908		$	1,077,788		$	1,127,750		$	3,126,446


Weighted average rate		—		—		—		3.26	%		3.55	%		3.84	%		3.57	%

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

⁽¹⁾	See page 35 for our definition of this measure.

- 25 -


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


		Paramount			Square		%			%			Annualized Rent ⁽¹⁾
Property	Submarket	Ownership			Feet		Leased ⁽¹⁾			Occupied ⁽¹⁾			Amount		Per Square Foot ⁽²⁾
As of March 31, 2018
New York:
1633 Broadway	West Side		100.0	%		2,518,597		95.4	%		91.2	%	$	163,677	$	73.00
1301 Avenue of the Americas	Sixth Avenue /Rock Center		100.0	%		1,781,571		97.9	%		97.0	%		131,862		77.05
1325 Avenue of the Americas	Sixth Avenue /Rock Center		100.0	%		808,998		80.9	%		80.9	%		43,394		66.87
31 West 52nd Street	Sixth Avenue /Rock Center		100.0	%		763,140		81.5	%		77.9	%		52,333		85.04
900 Third Avenue	East Side		100.0	%		598,903		94.7	%		94.7	%		41,241		73.20
712 Fifth Avenue	Madison /Fifth Avenue		50.0	%		543,386		93.9	%		92.1	%		53,296		107.00
60 Wall Street	Downtown		5.0	%		1,625,483		100.0	%		100.0	%		73,600		45.28

Subtotal / Weighted average						8,640,078		94.1	%		92.2	%		559,403		70.67

PGRE’s share						6,824,339		92.7	%		90.4	%		462,842		75.77

Washington, D.C.:
425 Eye Street	East End		100.0	%		372,552		98.7	%		98.7	%		16,846		46.01
2099 Pennsylvania Avenue	CBD		100.0	%		208,776		90.6	%		90.6	%		14,616		77.49
1899 Pennsylvania Avenue	CBD		100.0	%		190,955		100.0	%		100.0	%		15,676		82.22
Liberty Place	East End		100.0	%		174,090		94.9	%		93.5	%		13,984		85.90

Subtotal / Weighted average						946,373		96.5	%		96.2	%		61,122		67.21

PGRE’s share						946,373		96.5	%		96.2	%		61,122		67.21

San Francisco:
One Market Plaza	South Financial District		49.0	%		1,583,136		97.9	%		96.3	%		114,201		74.15
One Front Street	North Financial District		100.0	%		646,759		99.5	%		89.5	%		38,346		65.92
50 Beale Street	South Financial District		31.1	%		660,769		91.4	%		82.6	%		31,919		58.84

Subtotal / Weighted average						2,890,664		96.7	%		91.7	%		184,466		69.24

PGRE’s share						1,627,995		97.7	%		91.9	%		104,231		69.25

Total / Weighted average						12,477,115		94.9	%		92.4	%	$	804,991	$	70.06

PGRE’s share						9,398,707		94.0	%		91.3	%	$	628,195	$	73.69

⁽¹⁾	See page 35 for our definition of this measure.

⁽²⁾	Represents office and retail space only.

- 26 -


		SAME STORE LEASED OCCUPANCY
(unaudited)


				As of March 31, 2018						As of December 31, 2017						Change in Same Store Leased %
Property	Paramount Ownership			Leased % ⁽¹⁾			Same Store Leased % ⁽¹⁾			Leased % ⁽¹⁾			Same Store Leased % ⁽¹⁾			Change in Same Store Leased %
New York:
1633 Broadway		100.0	%		95.4	%		95.4	%		95.4	%		95.4	%		—	%
1301 Avenue of the Americas		100.0	%		97.9	%		97.9	%		97.9	%		97.9	%		—	%
1325 Avenue of the Americas		100.0	%		80.9	%		80.9	%		80.9	%		80.9	%		—	%
31 West 52nd Street		100.0	%		81.5	%		81.5	%		78.0	%		78.0	%		3.5	%
900 Third Avenue		100.0	%		94.7	%		94.7	%		94.7	%		94.7	%		—	%
712 Fifth Avenue		50.0	%		93.9	%		93.9	%		95.1	%		95.1	%		(1.2	%)
60 Wall Street		5.0	%		100.0	%		100.0	%		100.0	%		100.0	%		—	%

Weighted average					94.1	%		94.1	%		93.8	%		93.8	%		0.3	%

PGRE’s share					92.7	%		92.7	%		92.4	%		92.4	%		0.3	%

Washington, D.C.:
425 Eye Street		100.0	%		98.7	%		98.7	%		98.7	%		98.7	%		—	%
2099 Pennsylvania Avenue		100.0	%		90.6	%		90.6	%		88.9	%		88.9	%		1.7	%
1899 Pennsylvania Avenue		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		—	%
Liberty Place		100.0	%		94.9	%		94.9	%		94.9	%		94.9	%		—	%

Weighted average					96.5	%		96.5	%		96.1	%		96.1	%		0.4	%

PGRE’s share					96.5	%		96.5	%		96.1	%		96.1	%		0.4	%

San Francisco:
One Market Plaza		49.0	%		97.9	%		97.9	%		97.7	%		97.7	%		0.2	%
One Front Street		100.0	%		99.5	%		99.5	%		99.3	%		99.3	%		0.2	%
50 Beale Street		31.1	%		91.4	%		91.4	%		82.6	%		82.6	%		8.8	%

Weighted average					96.7	%		96.7	%		94.6	%		94.6	%		2.1	%

PGRE’s share					97.7	%		97.7	%		96.4	%		96.4	%		1.3	%

Weighted average					94.9	%		94.9	%		94.2	%		94.2	%		0.7	%

PGRE’s share					94.0	%		94.0	%		93.5	%		93.5	%		0.5	%

⁽¹⁾	See page 35 for our definition of this measure.

- 27 -


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


									PGRE’s Share of
Top 10 Tenants:	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 March 31, 2018
Barclays Capital, Inc.		1301 Avenue of the Americas & 2099 Pennsylvania Avenue		Dec-2020	⁽²⁾		500,790	⁽²⁾		500,790	⁽²⁾		5.3	%	$	32,407	$	64.71		5.2	%
Allianz Global Investors, LP		1633 Broadway		Jan-2031			320,911			320,911			3.4	%		28,177		87.80		4.5	%
Credit Agricole Corporate & Investment Bank		1301 Avenue of the Americas		Feb-2023			312,679			312,679			3.3	%		26,740		85.52		4.3	%
Clifford Chance LLP		31 West 52nd Street		Jun-2024			328,992			328,992			3.5	%		26,218		79.69		4.2	%
Norton Rose Fulbright		1301 Avenue of the Americas		Sep-2034	⁽³⁾		320,325	⁽³⁾		320,325	⁽³⁾		3.4	%		25,323		79.05		4.0	%
Morgan Stanley & Company		1633 Broadway		Mar-2032			260,829			260,829			2.8	%		19,108		73.26		3.0	%
WMG Acquisition Corp. (Warner Music Group)		1633 Broadway		Jul-2029			293,888			293,888			3.1	%		16,939		57.64		2.7	%
Showtime Networks, Inc.		1633 Broadway		Jan-2026			238,880			238,880			2.5	%		14,394		60.26		2.3	%
Kasowitz Benson Torres & Friedman, LLP		1633 Broadway		Mar-2037			203,394			203,394			2.2	%		14,338		70.49		2.3	%
U.S. General Services Administration		425 Eye Street		Jun-2021	⁽⁴⁾		310,450	⁽⁴⁾		310,450	⁽⁴⁾		3.3	%		14,332		46.17		2.3	%


	PGRE’s Share of
Industry Diversification:	Square Feet Occupied		% of Occupied Square Feet			Annualized Rent ⁽¹⁾		% of Annualized Rent
As of March 31, 2018
Legal Services		1,898,367		22.3	%	$	146,656		23.3	%
Financial Services - Commercial and Investment Banking		1,759,525		20.7	%		128,149		20.4	%
Technology and Media		1,484,239		17.4	%		98,810		15.7	%
Financial Services, all others		931,297		10.9	%		79,127		12.6	%
Insurance		554,680		6.5	%		44,049		7.0	%
Retail		276,511		3.3	%		22,060		3.5	%
Government		345,278		4.1	%		16,872		2.7	%
Real Estate		228,000		2.7	%		15,701		2.5	%
Consumer Products		192,620		2.3	%		14,795		2.4	%
Other		836,474		9.8	%		61,976		9.9	%

⁽¹⁾	See page 35 for our definition of this measure.

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

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

⁽⁴⁾	14,312 of the square feet leased expires on August 7, 2022.

- 28 -


		LEASING ACTIVITY
(unaudited)


	Total			New York			Washington, D.C.			San Francisco
Three Months Ended March 31, 2018
Total square feet leased		285,167			145,340			3,262			136,565
PGRE’s share of total square feet leased:		216,848			142,077			3,262			71,509
Initial rent ⁽¹⁾	$	86.32		$	89.68		$	58.50		$	80.90
Weighted average lease term (in years)		8.3			9.5			3.4			6.1
Tenant improvements and leasing commissions:
Per square foot	$	65.23		$	67.55		$	11.07		$	63.09
Per square foot per annum	$	7.88		$	7.14		$	3.24		$	10.28
Percentage of initial rent		9.1	%		8.0	%		5.5	%		12.7	%
Rent concessions:
Average free rent period (in months)		5.1			6.7			1.0			1.9
Average free rent period per annum (in months)		0.6			0.7			0.3			0.3
Second generation space: ⁽¹⁾
Square feet		161,215			107,798			—			53,417
GAAP basis:
Straight-line rent	$	85.76		$	86.45		$	—		$	84.36
Prior straight-line rent	$	75.93		$	81.24		$	—		$	65.22
Percentage increase		12.9	%		6.4	%		—			29.3	%
Cash basis
Initial rent ⁽¹⁾	$	88.36		$	90.75		$	—		$	83.55
Prior escalated rent	$	75.01		$	82.01		$	—		$	60.89
Percentage increase		17.8	%		10.7	%		—			37.2	%

⁽¹⁾	See page 35 for our definition of this measure.

- 29 -


		LEASE EXPIRATIONS - TOTAL PORTFOLIO

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


	Total		PGRE’s Share of
Year of	Square Feet		Square Feet		Annualized Rent ⁽¹⁾				% of
Lease Expiration ⁽²⁾	of Expiring Leases		of Expiring Leases		Amount		Per Square Foot ⁽³⁾		Annualized Rent
Month to Month		9,080		6,304	$	346	$	58.44		0.1	%

2Q 2018		38,244		20,058		1,847		102.45		0.3	%
3Q 2018		28,259		25,082		1,886		81.51		0.3	%
4Q 2018		58,072		48,223		4,670		96.84		0.7	%

Total 2018		124,575		93,363		8,403		94.08		1.3	%
1Q 2019		195,117		176,229		13,752		77.92		2.1	%
Remaining 2019		414,476		339,250		26,246		77.88		4.1	%

Total 2019		609,593		515,479		39,998		77.90		6.2	%

2020		701,796		427,569		30,566		70.48		4.7	%
2021		1,629,138		1,411,830		89,925		64.53		13.9	%
2022		2,392,602		570,911		41,312		76.16		6.4	%
2023		760,456		696,822		54,540		81.43		8.4	%
2024		751,240		694,225		53,638		77.46		8.3	%
2025		1,006,548		688,820		51,147		74.31		7.9	%
2026		753,857		667,240		49,178		70.61		7.6	%
2027		125,471		117,455		9,529		81.15		1.5	%
Thereafter		2,927,261		2,901,512		220,529		75.60		33.7	%

⁽¹⁾	See page 35 for our definition of this measure.

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

⁽³⁾	Represents office and retail space only.

- 30 -


		LEASE EXPIRATIONS - NEW YORK
(unaudited and in thousands, except square feet and per square foot amounts)


	Total Square Feet of Expiring Leases		PGRE’s Share of
Year of Lease Expiration ⁽²⁾			Square Feet of Expiring Leases		Annualized Rent ⁽¹⁾				% of
Year of Lease Expiration ⁽²⁾			Square Feet of Expiring Leases		Amount		Per Square Foot ⁽³⁾		Annualized Rent
Month to Month		1,322		1,322	$	140	$	—		0.0	%

2Q 2018		35,320		19,053		1,777		104.48		0.4	%
3Q 2018		2,680		1,340		163		101.82		0.0	%
4Q 2018		48,886		39,037		4,259		109.11		0.8	%

Total 2018		86,886		59,430		6,199		107.61		1.2	%
1Q 2019		110,040		101,866		8,914		87.30		1.9	%
Remaining 2019		222,606		213,604		17,608		84.69		3.7	%

Total 2019		332,646		315,470		26,522		85.56		5.6	%
2020		283,899		244,740		18,420		75.27		3.9	%
2021		958,624		910,899		62,732		71.00		13.2	%
2022		1,786,888		231,932		14,396		66.98		3.0	%
2023		543,278		514,325		39,503		80.92		8.3	%
2024		573,139		552,063		42,888		77.90		9.0	%
2025		132,220		99,418		8,633		86.83		1.8	%
2026		581,223		566,078		41,951		70.47		8.8	%
2027		85,378		85,378		7,079		82.91		1.5	%
Thereafter		2,741,997		2,728,625		208,392		75.92		43.7	%

⁽¹⁾	See page 35 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.

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		LEASE EXPIRATIONS - WASHINGTON, D.C.
(unaudited and in thousands, except square feet and per square foot amounts)


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

2Q 2018		—		—		—		—		—
3Q 2018		—		—		—		—		—
4Q 2018		—		—		—		—		—

Total 2018		—		—		—		—		—
1Q 2019		34,475		34,475		2,665		77.31		4.4	%
Remaining 2019		7,606		7,606		924		88.57		1.5	%

Total 2019		42,081		42,081		3,589		79.31		5.9	%
2020		33,136		33,136		2,634		79.49		4.3	%
2021		317,416		317,416		15,656		47.78		25.7	%
2022		38,919		38,919		2,531		65.03		4.2	%
2023		149,178		149,178		12,505		84.45		20.5	%
2024		78,811		78,811		6,287		79.91		10.3	%
2025		56,565		56,565		4,687		82.85		7.7	%
2026		32,011		32,011		2,261		70.65		3.7	%
2027		24,373		24,373		1,941		79.62		3.2	%
Thereafter		123,873		123,873		8,873		71.63		14.5	%

⁽¹⁾	See page 35 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.

-32-


		LEASE EXPIRATIONS - SAN FRANCISCO
(unaudited and in thousands, except square feet and per square foot amounts)


	Total Square Feet of Expiring Leases		PGRE’s Share of
Year of Lease Expiration ⁽²⁾			Square Feet of Expiring Leases		Annualized Rent ⁽¹⁾				% of Annualized Rent
Year of Lease Expiration ⁽²⁾			Square Feet of Expiring Leases		Amount		Per Square Foot ⁽³⁾		% of Annualized Rent
Month to Month		7,758		4,982	$	206	$	58.44		0.2	%

2Q 2018		2,924		1,005		70		69.65		0.1	%
3Q 2018		25,579		23,742		1,723		80.20		1.5	%
4Q 2018		9,186		9,186		411		44.70		0.4	%

Total 2018		37,689		33,933		2,204		69.31		2.0	%
1Q 2019		50,602		39,888		2,173		54.49		2.0	%
Remaining 2019		184,264		118,040		7,714		65.37		6.9	%

Total 2019		234,866		157,928		9,887		62.61		8.9	%
2020		384,761		149,693		9,512		60.53		8.5	%
2021		353,098		183,515		11,537		62.86		10.4	%
2022		566,795		300,060		24,385		81.34		21.9	%
2023		68,000		33,319		2,532		75.25		2.3	%
2024		99,290		63,351		4,463		70.58		4.0	%
2025		817,763		532,837		37,827		71.06		34.0	%
2026		140,623		69,151		4,966		71.75		4.5	%
2027		15,720		7,704		509		66.36		0.5	%
Thereafter		61,391		49,014		3,264		67.27		2.8	%

⁽¹⁾	See page 35 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.

-33-


		CASH BASIS CAPITAL EXPENDITURES
(unaudited and in thousands)


	Three Months Ended March 31, 2018
	Total		New York		Washington, D.C		San Francisco		Other
Capital expenditures: ⁽¹⁾
Expenditures to maintain assets	$	3,702	$	2,903	$	235	$	463	$	101
Second generation tenant improvements		13,499		12,610		34		855		—
Second generation leasing commissions		1,484		583		142		759		—
First generation leasing costs and other capital expenditures		4,654		111		2,059		2,484		—

Total Capital Expenditures	$	23,339	$	16,207	$	2,470	$	4,561	$	101

Redevelopment Expenditures ⁽¹⁾
31 West 52nd Street (Lobby Renovation)	$	2,964	$	2,964	$	—	$	—	$	—
One Market Plaza (Elevator Modernization)		754		—		—		754		—
Other		587		587		—		—		—

Total Redevelopment Expenditures	$	4,305	$	3,551	$	—	$	754	$	—


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

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

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

Total Redevelopment Expenditures	$	1,889	$	375	$	—	$	77	$	1,437

⁽¹⁾	See page 35 for our definition of this measure.

- 34 -


		DEFINITIONS

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

Funds from Operations (“FFO”) is a supplemental measure of our performance. FFO is presented in accordance with the definition adopted by the National Association of Real Estate Investment Trusts (“Nareit”). Nareit defines FFO as GAAP net income or loss adjusted to exclude net gains from sales of depreciated real estate assets, impairment losses on depreciable real estate and depreciation and amortization expense from real estate assets, including our share of such adjustments of unconsolidated joint ventures. FFO is commonly used in the real estate industry to assist investors and analysts in comparing results of real estate companies because it excludes the effect of real estate depreciation and amortization and net gain on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions. FFO is not intended to be a measure of cash flow or liquidity. FFO attributable to common stockholders represents the Company’s share of FFO that is attributable to common stockholders and is calculated by reducing from FFO, the noncontrolling interests’ share of FFO in consolidated joint ventures, real estate funds and Operating Partnership.

Core Funds from Operations (“Core FFO”) is an alternative measure of our operating performance, which adjusts FFO for certain other items that we believe enhance the comparability of our FFO across periods. Core FFO, when applicable, excludes the impact of certain items, including, transaction related costs, realized and unrealized gains or losses on real estate fund investments, unrealized gains or losses on interest rate swaps, severance costs and gains or losses on early extinguishment of debt, in order to reflect the Core FFO of our real estate portfolio and operations. In future periods, we may also exclude other items from Core FFO that we believe may help investors compare our results. Core FFO is not intended to be a measure of cash flow or liquidity. Core FFO attributable to common stockholders represents the Company’s share of Core FFO that is attributable to common stockholders and is calculated by reducing from Core FFO, the noncontrolling interests’ share of Core FFO in consolidated joint ventures, real estate funds and Operating Partnership.

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

Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (“EBITDAre”) is a supplemental measure of our operating performance. EBITDAre is presented in accordance with the definition adopted by Nareit. Nareit defines EBITDAre as GAAP net income (loss) adjusted to exclude interest expense, income taxes, depreciation and amortization expenses, net gains from sales of depreciated real estate assets and impairment losses on depreciable real estate, including our share of such adjustments of unconsolidated joint ventures. EBITDAre provides information regarding our operating performance that would not otherwise be available and may be useful to an investor in assessing our ability to incur and service debt. EBITDAre should not be considered as an indication of our financial performance or a measure of our cash flow or liquidity. We also present PGRE’s share of EBITDAre which represents our share of EBITDAre generated by our consolidated and unconsolidated joint ventures, based on our percentage ownership in the underlying assets.

- 35 -


		DEFINITIONS - CONTINUED

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

Net Operating Income (“NOI”) is used to measure the operating performance of our properties. NOI consists of property-related revenue (which includes rental income, tenant reimbursement income and certain other income) less operating expenses (which includes building expenses such as cleaning, security, repairs and maintenance, utilities, property administration and real estate taxes). We also present Cash NOI which deducts from NOI, straight-line rent adjustments and the amortization of above and below-market leases, net, including our share of such adjustments of unconsolidated joint ventures. In addition, we present PGRE’s share of NOI and Cash NOI which represents our share of NOI and Cash NOI of consolidated and unconsolidated joint ventures, based on our percentage ownership in the underlying assets. We use NOI and Cash NOI internally as performance measures and believe they provide useful information to investors regarding our financial condition and results of operations because they reflect only those income and expense items that are incurred at property level.

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

PGRE’s Share of Total Debt represents our share of debt of consolidated and unconsolidated joint ventures, based on our percentage ownership in the underlying assets. We believe that PGRE’s share of total debt provides useful information to investors regarding our financial condition because it includes our share of debt from unconsolidated joint ventures and excludes the noncontrolling interests’ share of debt from consolidated joint ventures that is attributable to our partners.

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

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

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

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

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

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

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

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

- 36 -

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