EX-99.2 3 pgre-ex992_7.htm EX-99.2 pgre-ex992_7.htm

 

 

Exhibit 99.2

 

 

 

 

 

 

SUPPLEMENTAL OPERATING AND FINANCIAL DATA

FOR THE QUARTER ENDED SEPTEMBER 30, 2020


 

 

 

 

 

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 negative impact of the coronavirus 2019 (COVID-19) global pandemic on the U.S., regional and global economies and our tenants' financial condition and results of operations, 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 U.S. 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.

 

 


- 2 -


 

 

 

 

 

 

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 for Real Estate ("EBITDAre")

12

 

 

Net Operating Income ("NOI")

13 - 15

 

 

Same Store Results

16 - 19

 

 

Consolidated Joint Ventures and Fund

20 - 25

 

 

Unconsolidated Joint Ventures

26 - 31

 

 

Capital Structure

32

 

 

Debt Analysis

33

 

 

Debt Maturities

34

 

 

 

 

 

Selected Property Data

 

 

 

Portfolio Summary

35

 

 

Same Store Leased Occupancy

 

 

 

36 - 37

 

 

Top Tenants and Industry Diversification

38

 

 

Leasing Activity

39 - 40

 

 

Lease Expirations

41 - 44

 

 

Cash Basis Capital Expenditures

45 - 46

 

 

 

 

 

 

 

 

 

 

 

 

Definitions

47 - 48

- 3 -


 

 

 

 

 

 

COMPANY PROFILE

 

Paramount Group, Inc. ("Paramount") or (the "Company") 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 and San Francisco. Paramount is focused on maximizing the value of its portfolio by leveraging the sought-after locations of its assets and its proven property management capabilities to attract and retain high-quality tenants.

 

EXECUTIVE MANAGEMENT

 

Albert Behler

 

Chairman, Chief Executive Officer and President

 

 

Wilbur Paes

 

Executive Vice President, Chief Financial Officer and Treasurer

 

 

Peter Brindley

 

Executive Vice President, Leasing

 

 

David Zobel

 

Executive Vice President, Head of Acquisitions

 

 

Gage Johnson

 

Senior Vice President, General Counsel and Secretary

 

 

BOARD OF DIRECTORS

 

Albert Behler

 

Director, Chairman of the Board

Thomas Armbrust

 

Director

Martin Bussmann

 

Director

Colin Dyer

 

Director

Karin Klein

 

Director, Chair of Compensation Committee

Peter Linneman

 

Director, Chair of Audit Committee

Katharina Otto-Bernstein

 

Director

Mark Patterson

 

Director, Lead Independent Director, Chair of Nominating and Corporate Governance Committee

Greg Wright

 

Director

COMPANY INFORMATION

 

Corporate Headquarters

Investor Relations

Stock Exchange Listing

Trading Symbol

1633 Broadway, Suite 1801

IR@paramount-group.com

New York Stock Exchange

PGRE

New York, NY 10019

(212) 492-2298

 

 

(212) 237-3100

 

 

 

- 4 -


 

 

 

 

 

 

RESEARCH COVERAGE (1)

 

 

James Feldman

Thomas Catherwood

Derek Johnston

Steve Sakwa

Bank of America Merrill Lynch

BTIG

Deutsche Bank

Evercore ISI

(646) 855-5808

(212) 738-6140

(904) 520-4973

(212) 446-9462

james.feldman@baml.com

tcatherwood@btig.com

derek.johnston@db.com

steve.sakwa@evercoreisi.com

 

 

 

 

Richard Skidmore

Daniel Ismail

Omotayo Okusanya

Vikram Malhotra

Goldman Sachs

Green Street Advisors

Mizuho Securities USA Inc.

Morgan Stanley

(801) 741-5459

(949) 640-8780

(646) 949-9672

(212) 761-7064

richard.skidmore@gs.com

dismail@greenst.com

omotayo.okusanya@mizuhogroup.com

vikram.malhotra@morganstanley.com

 

 

 

 

Blaine Heck

 

 

 

Wells Fargo

 

 

 

(443) 263-6529

 

 

 

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.

- 5 -


 

 

 

 

 

 

FINANCIAL HIGHLIGHTS

(unaudited and in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

 

 

SELECTED FINANCIAL DATA

September 30, 2020

 

 

September 30, 2019

 

 

June 30, 2020

 

 

September 30, 2020

 

 

September 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income attributable to common stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

$

(8,921

)

 

$

4,336

 

 

$

(8,234

)

 

$

(15,187

)

 

$

6,740

 

 

 

 

 

 

 

Discontinued operations

 

1,963

 

 

 

2,746

 

 

 

1,964

 

 

 

5,307

 

 

 

6,506

 

 

 

 

 

 

Net (loss) income attributable to common stockholders

$

(6,958

)

 

$

7,082

 

 

$

(6,270

)

 

$

(9,880

)

 

$

13,246

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income per share - basic and diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per share from continuing operations

$

(0.04

)

 

$

0.02

 

 

$

(0.04

)

 

$

(0.07

)

 

$

0.03

 

 

 

 

 

 

 

Per share from discontinued operations

 

0.01

 

 

 

0.01

 

 

 

0.01

 

 

 

0.03

 

 

 

0.03

 

 

 

 

 

 

Net (loss) income per share - basic and diluted

$

(0.03

)

 

$

0.03

 

 

$

(0.03

)

 

$

(0.04

)

 

$

0.06

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core FFO attributable to common stockholders (1)

$

49,560

 

 

$

58,540

 

 

$

50,118

 

 

$

161,187

 

 

$

168,892

 

 

 

 

 

 

 

Per share - diluted

$

0.22

 

 

$

0.25

 

 

$

0.23

 

 

$

0.72

 

 

$

0.72

 

 

`

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PGRE's share of Cash NOI (1)

$

92,160

 

 

$

93,551

 

 

$

89,216

 

 

$

279,905

 

 

$

278,432

 

 

 

 

 

 

PGRE's share of NOI (1)

$

94,621

 

 

$

105,718

 

 

$

98,823

 

 

$

304,001

 

 

$

313,799

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Same Store Cash NOI (1)

% Change

 

 

Same Store NOI (1)

% Change

 

 

   Three Months Ended September 30, 2020 vs. September 30, 2019

 

(1.8

%)

 

   Three Months Ended September 30, 2020 vs. September 30, 2019

 

1.1

%

 

   Nine Months Ended September 30, 2020 vs. September 30, 2019

 

(0.5

%)

 

   Nine Months Ended September 30, 2020 vs. September 30, 2019

 

1.1

%

 

PORTFOLIO STATISTICS (at PGRE Share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2020

 

 

June 30, 2020

 

 

March 31, 2020

 

 

December 31, 2019

 

 

September 30, 2019

 

 

 

 

 

 

Leased % (1)

 

95.5

%

 

 

95.6

%

 

 

95.9

%

 

 

95.9

%

 

 

96.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Same Store Leased % (1)

% Change

 

 

Same Store Leased % (1)

% Change

 

 

   September 30, 2020 vs. June 30, 2020

 

(0.1

%)

 

    September 30, 2020 vs. September 30, 2019

 

(0.8

%)

 

   September 30, 2020 vs. December 31, 2019

 

(0.3

%)

 

 

 

 

 

COMMON SHARE DATA

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

Share Price:

September 30, 2020

 

 

June 30, 2020

 

 

March 31, 2020

 

 

December 31, 2019

 

 

September 30, 2019

 

 

 

 

 

High

$

7.99

 

 

$

10.38

 

 

$

15.00

 

 

$

13.99

 

 

$

14.42

 

 

 

 

 

Low

$

6.69

 

 

$

6.95

 

 

$

6.42

 

 

$

12.65

 

 

$

12.77

 

 

 

 

 

Closing (end of period)

$

7.08

 

 

$

7.71

 

 

$

8.80

 

 

$

13.92

 

 

$

13.35

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends per common share

$

0.10

 

 

$

0.10

 

 

$

0.10

 

 

$

0.10

 

 

$

0.10

 

 

 

 

Annualized dividends per common share

$

0.40

 

 

$

0.40

 

 

$

0.40

 

 

$

0.40

 

 

$

0.40

 

 

 

 

Dividend yield (on closing share price)

 

5.6

%

 

 

5.2

%

 

 

4.5

%

 

 

2.9

%

 

 

3.0

%

 

 

 

(1)

See page 47 for our definition of this measure.

- 6 -


 

 

 

 

 

 

CONSOLIDATED BALANCE SHEETS

(unaudited and in thousands)

 

 

 

 

 

 

 

 

September 30, 2020

 

 

December 31, 2019

 

Assets:

 

 

 

 

 

 

 

 

Real estate, at cost:

 

 

 

 

 

 

 

 

 

Land

$

1,966,237

 

 

$

1,966,237

 

 

 

Buildings and improvements

 

5,969,297

 

 

 

5,923,648

 

 

 

 

 

 

 

 

 

 

7,935,534

 

 

 

7,889,885

 

 

 

Accumulated depreciation and amortization

 

(920,078

)

 

 

(790,216

)

 

Real estate, net

 

7,015,456

 

 

 

7,099,669

 

 

Cash and cash equivalents

 

515,942

 

 

 

306,215

 

 

Restricted cash

 

30,965

 

 

 

25,272

 

 

Investments in unconsolidated joint ventures

 

417,592

 

 

 

449,180

 

 

Investments in unconsolidated real estate funds

 

12,867

 

 

 

10,317

 

 

Accounts and other receivables

 

15,289

 

 

 

19,231

 

 

Due from affiliates

 

-

 

 

 

36,918

 

 

Deferred rent receivable

 

326,050

 

 

 

301,588

 

 

Deferred charges, net

 

120,211

 

 

 

126,367

 

 

Intangible assets, net

 

167,675

 

 

 

203,169

 

 

Assets related to discontinued operations

 

103,787

 

 

 

104,836

 

 

Other assets

 

80,660

 

 

 

51,373

 

Total assets

$

8,806,494

 

 

$

8,734,135

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

Notes and mortgages payable, net

$

3,798,944

 

 

$

3,783,851

 

 

Revolving credit facility

 

200,000

 

 

 

36,918

 

 

Accounts payable and accrued expenses

 

109,228

 

 

 

117,356

 

 

Dividends and distributions payable

 

24,173

 

 

 

25,255

 

 

Intangible liabilities, net

 

61,485

 

 

 

73,789

 

 

Other liabilities

 

59,531

 

 

 

66,004

 

Total liabilities

 

4,253,361

 

 

 

4,103,173

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

Paramount Group, Inc. equity

 

3,690,246

 

 

 

3,785,730

 

 

Noncontrolling interests in:

 

 

 

 

 

 

 

 

 

Consolidated joint ventures

 

436,576

 

 

 

360,778

 

 

 

Consolidated real estate fund

 

79,168

 

 

 

72,396

 

 

 

Operating Partnership

 

347,143

 

 

 

412,058

 

Total equity

 

4,553,133

 

 

 

4,630,962

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and equity

$

8,806,494

 

 

$

8,734,135

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

- 7 -


 

 

CONSOLIDATED STATEMENTS OF INCOME

(unaudited and in thousands, except per share amounts)

 

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

 

 

 

 

September 30, 2020

 

 

September 30, 2019

 

 

June 30, 2020

 

 

September 30, 2020

 

 

September 30, 2019

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental revenue (1)

$

165,420

 

 

$

181,115

 

 

$

163,989

 

 

$

504,834

 

 

$

530,500

 

 

Fee and other income (1)

 

11,355

 

 

 

10,138

 

 

 

7,129

 

 

 

27,045

 

 

 

26,485

 

Total revenues

 

176,775

 

 

 

191,253

 

 

 

171,118

 

 

 

531,879

 

 

 

556,985

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating

 

67,865

 

 

 

68,846

 

 

 

64,313

 

 

 

199,192

 

 

 

199,043

 

 

Depreciation and amortization

 

58,889

 

 

 

60,696

 

 

 

58,716

 

 

 

176,032

 

 

 

181,685

 

 

General and administrative (1)

 

16,805

 

 

 

16,319

 

 

 

17,901

 

 

 

46,955

 

 

 

51,457

 

 

Transaction related costs

 

81

 

 

 

786

 

 

 

258

 

 

 

542

 

 

 

1,704

 

Total expenses

 

143,640

 

 

 

146,647

 

 

 

141,188

 

 

 

422,721

 

 

 

433,889

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from unconsolidated joint ventures

 

(4,268

)

 

 

(1,332

)

 

 

(5,955

)

 

 

(14,444

)

 

 

(2,815

)

 

(Loss) income from unconsolidated real estate funds

 

(56

)

 

 

206

 

 

 

89

 

 

 

85

 

 

 

271

 

 

Interest and other income, net (1)

 

1,104

 

 

 

1,222

 

 

 

2,252

 

 

 

2,360

 

 

 

7,705

 

 

Interest and debt expense (1)

 

(35,792

)

 

 

(37,325

)

 

 

(36,009

)

 

 

(108,420

)

 

 

(111,462

)

(Loss) income from continuing operations, before income taxes

 

(5,877

)

 

 

7,377

 

 

 

(9,693

)

 

 

(11,261

)

 

 

16,795

 

 

Income tax (expense) benefit

 

(393

)

 

 

583

 

 

 

(138

)

 

 

(1,135

)

 

 

(823

)

(Loss) income from continuing operations, net

 

(6,270

)

 

 

7,960

 

 

 

(9,831

)

 

 

(12,396

)

 

 

15,972

 

Income from discontinued operations, net

 

2,147

 

 

 

3,040

 

 

 

2,147

 

 

 

5,815

 

 

 

7,202

 

Net (loss) income

 

(4,123

)

 

 

11,000

 

 

 

(7,684

)

 

 

(6,581

)

 

 

23,174

 

Less net (income) loss attributable to noncontrolling interests in:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated joint ventures

 

(3,566

)

 

 

(3,051

)

 

 

(405

)

 

 

(5,485

)

 

 

(8,253

)

 

Consolidated real estate fund

 

79

 

 

 

(109

)

 

 

1,235

 

 

 

1,291

 

 

 

(256

)

 

Operating Partnership

 

652

 

 

 

(758

)

 

 

584

 

 

 

895

 

 

 

(1,419

)

Net (loss) income attributable to common stockholders

$

(6,958

)

 

$

7,082

 

 

$

(6,270

)

 

$

(9,880

)

 

$

13,246

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income per diluted share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) income from continuing operations, net

$

(0.04

)

 

$

0.02

 

 

$

(0.04

)

 

$

(0.07

)

 

$

0.03

 

 

Income from discontinued operations, net

 

0.01

 

 

 

0.01

 

 

 

0.01

 

 

 

0.03

 

 

 

0.03

 

Net (loss) income per diluted share

$

(0.03

)

 

$

0.03

 

 

$

(0.03

)

 

$

(0.04

)

 

$

0.06

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

See page 9 for details.

- 8 -


 

 

 

 

 

 

SELECT INCOME STATEMENT DATA

(unaudited and in thousands)

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

Rental Revenue:

September 30, 2020

 

 

September 30, 2019

 

 

June 30, 2020

 

 

September 30, 2020

 

 

September 30, 2019

 

 

Property rentals

$

146,721

 

 

$

149,953

 

 

$

143,422

 

 

$

439,281

 

 

$

444,710

 

 

Tenant reimbursements

 

12,222

 

 

 

15,689

 

 

 

10,099

 

 

 

36,370

 

 

 

41,074

 

 

Straight-line rent adjustments

 

4,567

 

 

 

11,369

 

 

 

9,233

 

 

 

24,495

 

 

 

33,650

 

 

Amortization of above and below-market leases, net

 

1,910

 

 

 

2,571

 

 

 

1,235

 

 

 

4,688

 

 

 

8,614

 

 

Lease termination income

 

-

 

 

 

1,533

 

 

 

-

 

 

 

-

 

 

 

2,452

 

Total rental revenue

$

165,420

 

 

$

181,115

 

 

$

163,989

 

 

$

504,834

 

 

$

530,500

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

Fee and Other Income:

September 30, 2020

 

 

September 30, 2019

 

 

June 30, 2020

 

 

September 30, 2020

 

 

September 30, 2019

 

 

Property management

$

2,270

 

 

$

1,692

 

 

$

2,239

 

 

$

6,959

 

 

$

4,933

 

 

Asset management

 

3,636

 

 

 

2,665

 

 

 

3,571

 

 

 

10,728

 

 

 

7,273

 

 

Acquisition, disposition and leasing

 

2,586

 

 

 

2,104

 

 

 

-

 

 

 

2,586

 

 

 

3,435

 

 

Other

 

661

 

 

 

698

 

 

 

399

 

 

 

1,419

 

 

 

1,730

 

 

Total fee income

 

9,153

 

 

 

7,159

 

 

 

6,209

 

 

 

21,692

 

 

 

17,371

 

 

Other (primarily parking income and tenant requested services, including

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

overtime heating and cooling)

 

2,202

 

 

 

2,979

 

 

 

920

 

 

 

5,353

 

 

 

9,114

 

Total fee and other income

$

11,355

 

 

$

10,138

 

 

$

7,129