EX-99.2

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

EX-99.2 3 d264323dex992.htm EX-99.2 EX-99.2

Exhibit 99.2

LOGO

SUPPLEMENTAL OPERATING AND FINANCIAL DATA

FOR THE QUARTER ENDED DECEMBER 31, 2016


		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 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
Top Tenants and Industry Diversification		31
Leasing Activity		32-33
Lease Expirations		34-37
Cash Basis Capital Expenditures		38-42

Definitions		43-44

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		COMPANY PROFILE

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


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

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

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		RESEARCH COVERAGE⁽¹⁾


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

Steve Sakwa	Brad Burke	Jed Reagan	Richard Anderson
Evercore ISI	Goldman Sachs	Green Street Advisors	Mizuho Securities USA Inc.
(212) 446-9462	(917) 343-2082	(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 square feet and per share amounts)


	Three Months Ended									Year Ended
SELECTED FINANCIAL DATA	December 31, 2016			December 31, 2015			September 30, 2016			December 31, 2016			December 31, 2015
Total revenues	$	166,802		$	170,528		$	171,318		$	683,341		$	662,408
Net (loss) income attributable to common stockholders	$	(6,489	)	$	8,905		$	(139	)	$	(9,934	)	$	(4,419	)
Per share—basic and diluted	$	(0.03	)	$	0.04		$	(0.00	)	$	(0.05	)	$	(0.02	)
PGRE’s share of NOI ⁽¹⁾	$	90,763		$	96,812		$	95,315		$	386,418		$	368,661
PGRE’s share of Cash NOI ⁽¹⁾	$	77,224		$	75,320		$	72,432		$	309,148		$	308,341
FFO attributable to common stockholders ⁽¹⁾	$	41,034		$	61,559		$	50,615		$	195,140		$	209,349
Per share—diluted	$	0.18		$	0.29		$	0.23		$	0.89		$	0.99
Core FFO attributable to common stockholders⁽¹⁾	$	40,643		$	45,188		$	44,092		$	183,116		$	172,796
Per share—diluted	$	0.18		$	0.21		$	0.20		$	0.84		$	0.81
FAD attributable to common stockholders ⁽¹⁾	$	17,822		$	2,437		$	18,684		$	77,260		$	63,494

COMMON SHARE DATA

	Three Months Ended
Share Price:	December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016			December 31, 2015
High	$	16.74		$	18.28		$	17.40		$	17.97		$	18.56
Low	$	14.58		$	15.36		$	15.26		$	14.23		$	16.50
Closing (end of period)	$	15.99		$	16.39		$	15.94		$	15.95		$	18.10
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	%		2.3	%		2.4	%		2.4	%		2.1	%


PORTFOLIO STATISTICS
			Total as of December 31, 2016								PGRE’s Share as of December 31, 2016
	Number of		Square								Square
Region:	Properties		Feet		% Leased ⁽¹⁾			% Occupied ⁽¹⁾			Feet		% Leased ⁽¹⁾			% Occupied ⁽¹⁾
New York		6		7,011,734		91.0	%		88.6	%		6,740,041		90.7	%		88.4	%
Washington, D.C.		5		1,585,519		95.5	%		92.6	%		1,585,519		95.5	%		92.6	%
San Francisco		2		2,223,823		98.9	%		96.9	%		1,417,983		99.0	%		97.5	%

		13		10,821,076		93.3	%		90.9	%		9,743,543		92.7	%		90.4	%

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

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		CONSOLIDATED BALANCE SHEETS

(unaudited and in thousands)


	December 31, 2016			December 31, 2015
ASSETS:
Rental property, at cost
Land	$	2,091,535		$	2,042,071
Buildings and improvements		5,757,558			5,610,046

		7,849,093			7,652,117
Accumulated depreciation and amortization		(318,161	)		(243,089	)

Rental property, net		7,530,932			7,409,028
Cash and cash equivalents		162,965			143,884
Restricted cash		29,374			41,823
Real estate fund investments		—			416,438
Investments in unconsolidated real estate funds		28,173			—
Investments in unconsolidated joint ventures		6,411			7,102
Preferred equity investments		55,051			53,941
Marketable securities		22,393			21,521
Deferred rent receivable		163,695			77,792
Accounts and other receivables, net		15,251			10,844
Deferred charges, net		71,184			74,991
Intangible assets, net		412,225			511,207
Assets held for sale		346,685			—
Other assets		22,829			6,658

Total Assets	$	8,867,168		$	8,775,229


LIABILITIES:
Notes and mortgages payable, net	$	3,364,898		$	2,922,610
Revolving credit facility		230,000			20,000
Due to affiliates ⁽¹⁾		27,299			27,299
Loans payable to noncontrolling interests		—			45,662
Accounts payable and accrued expenses		103,896			102,730
Dividends and distributions payable		25,151			25,067
Deferred income taxes		1,467			2,533
Interest rate swap liabilities		22,446			93,936
Intangible liabilities, net		153,018			179,741
Other liabilities		53,046			45,101

Total Liabilities		3,981,221			3,464,679

EQUITY:
Paramount Group, Inc. equity		3,990,005			3,761,017
Noncontrolling interests in:
Consolidated real estate funds		64,793			414,637
Consolidated joint ventures		253,788			236,849
Operating Partnership		577,361			898,047

Total Equity		4,885,947			5,310,550

Total Liabilities and Equity	$	8,867,168		$	8,775,229

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

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		CONSOLIDATED STATEMENTS OF INCOME

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


	Three Months Ended									Year Ended
	December 31, 2016			December 31, 2015			September 30, 2016			December 31, 2016			December 31, 2015
REVENUES:
Property rentals	$	127,041		$	124,559		$	122,606		$	498,057		$	507,091
Straight-line rent adjustments		14,725			19,663			23,301			82,568			69,522
Amortization of above and below-market leases, net		2,943			6,678			3,112			9,536			9,917

Rental income		144,709			150,900			149,019			590,161			586,530
Tenant reimbursement income		11,842			10,929			11,978			44,943			50,885
Fee income (see details on page 9)		5,363			4,848			3,976			16,931			10,248
Other income (see details on page 9)		4,888			3,851			6,345			31,306			14,745

Total revenues		166,802			170,528			171,318			683,341			662,408
EXPENSES:
Operating		63,076			61,735			64,025			250,040			244,754
Depreciation and amortization		60,975			70,966			66,376			269,450			294,624
General and administrative (see details on page 9)		14,175			13,644			13,235			53,510			42,056
Transaction related costs		679			523			282			2,404			10,355

Total expenses		138,905			146,868			143,918			575,404			591,789
Operating income		27,897			23,660			27,400			107,937			70,619
Income from real estate fund investments		—			7,749			—			—			37,975
Income (loss) from unconsolidated real estate funds		2,042			—			(1,254	)		(498	)		—
Income from unconsolidated joint ventures		2,122			2,406			1,792			7,413			6,850
Interest and other income, net (see details on page 9)		1,905			1,268			2,299			6,934			871
Interest and debt expense (see details on page 9)		(44,340	)		(41,421	)		(38,278	)		(157,746	)		(168,366	)
Unrealized gain on interest rate swaps		10,153			26,263			12,728			39,814			75,760

Net (loss) income before income taxes		(221	)		19,925			4,687			3,854			23,709
Income tax (expense) benefit		(2,602	)		140			(218	)		(1,785	)		(2,566	)

Net (loss) income		(2,823	)		20,065			4,469			2,069			21,143
Less net (income) loss attributable to noncontrolling interests in:
Consolidated real estate funds		497			(4,496	)		67			1,316			(21,173	)
Consolidated joint ventures		(5,361	)		(4,495	)		(4,703	)		(15,423	)		(5,459	)
Operating Partnership		1,198			(2,169	)		28			2,104			1,070

Net (loss) income attributable to common stockholders	$	(6,489	)	$	8,905		$	(139	)	$	(9,934	)	$	(4,419	)


Weighted average common shares outstanding:
Basic		223,221,284			212,106,718			219,394,245			218,053,062			212,106,718

Diluted		223,221,284			212,111,790			219,394,245			218,053,062			212,106,718

(Loss) income per common share:
Basic	$	(0.03	)	$	0.04		$	(0.00	)	$	(0.05	)	$	(0.02	)

Diluted	$	(0.03	)	$	0.04		$	(0.00	)	$	(0.05	)	$	(0.02	)

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		SELECT INCOME STATEMENT DATA

(unaudited and in thousands)


	Three Months Ended						Year Ended
Fee Income:	December 31, 2016		December 31, 2015		September 30, 2016		December 31, 2016		December 31, 2015
Property management	$	1,484	$	1,489	$	1,404	$	5,948	$	5,763
Asset management ⁽¹⁾		2,254		—		2,003		7,754		—
Acquisition and leasing		1,353		3,247		244		2,226		3,916
Other		272		112		325		1,003		569

Total fee income	$	5,363	$	4,848	$	3,976	$	16,931	$	10,248

⁽¹⁾

As a result of deconsolidating our real estate funds that were accounted for at fair value on January 1, 2016, asset management fees are now included in fee income, as opposed to a reduction of income attributable to noncontrolling interests in the prior periods. (See pages 21 and 22 for asset management fees recognized in prior periods.)



	Three Months Ended						Year Ended
Other Income:	December 31, 2016		December 31, 2015		September 30, 2016		December 31, 2016		December 31, 2015
Lease termination income	$	2,502	$	183	$	3,460	$	17,010	$	871
Other (primarily tenant requested work)		2,386		3,668		2,885		14,296		13,874

Total other income	$	4,888	$	3,851	$	6,345	$	31,306	$	14,745


	Three Months Ended						Year Ended
General and Administrative:	December 31, 2016		December 31, 2015		September 30, 2016		December 31, 2016		December 31, 2015
Non-cash general and administrative - stock based compensation expense	$	2,512	$	1,297	$	2,583	$	9,423	$	5,139
All other general and administrative		11,416		11,305		9,916		40,769		33,405
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”)		247		1,042		736		444		197
Severance costs		—		—		—		2,874		3,315

Total general and administrative	$	14,175	$	13,644	$	13,235	$	53,510	$	42,056


	Three Months Ended						Year Ended
Interest and Other Income:	December 31, 2016		December 31, 2015		September 30, 2016		December 31, 2016		December 31, 2015
Preferred equity investment income ⁽¹⁾	$	1,417	$	—	$	1,460	$	5,716	$	—
Interest income		241		226		103		774		674
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)		247		1,042		736		444		197

Total interest and other income	$	1,905	$	1,268	$	2,299	$	6,934	$	871

⁽¹⁾	Represents 100% of the investment income from PGRESS Equity Holdings, L.P., which was acquired in December 2015, of which our share is $346 and $355 for the three months ended December 31, 2016 and September 30, 2016, respectively, and $1,393 for the year ended December 31, 2016.



	Three Months Ended						Year Ended
Interest and Debt Expense:	December 31, 2016		December 31, 2015		September 30, 2016		December 31, 2016		December 31, 2015
Interest expense ⁽¹⁾	$	41,657	$	40,610	$	36,820	$	150,942	$	165,801
Amortization of deferred financing costs		2,683		811		1,458		6,804		2,565

Total interest and debt expense	$	44,340	$	41,421	$	38,278	$	157,746	$	168,366

⁽¹⁾	Includes $4,608 of defeasance and debt breakage costs for the three months and year ended December 31, 2016, resulting from the repayment of debt.

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		FUNDS FROM OPERATIONS (“FFO”)

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


	Three Months Ended									Year Ended
	December 31, 2016			December 31, 2015			September 30, 2016			December 31, 2016			December 31, 2015
Reconciliation of net (loss) income to FFO and Core FFO:
Net (loss) income	$	(2,823	)	$	20,065		$	4,469		$	2,069		$	21,143
Real estate depreciation and amortization (including our share of unconsolidated joint ventures)		62,451			72,469			68,008			275,653			300,645

FFO ⁽¹⁾		59,628			92,534			72,477			277,722			321,788
Less FFO attributable to noncontrolling interests in:
Consolidated real estate funds		272			(4,726	)		(157	)		419			(22,096	)
Consolidated joint ventures		(11,294	)		(11,256	)		(11,319	)		(41,320	)		(39,383	)

FFO attributable to Paramount Group Operating Partnership		48,606			76,552			61,001			236,821			260,309
Less FFO attributable to noncontrolling interests in Operating Partnership		(7,572	)		(14,993	)		(10,386	)		(41,681	)		(50,960	)

FFO attributable to common stockholders⁽¹⁾	$	41,034		$	61,559		$	50,615		$	195,140		$	209,349

Per diluted share	$	0.18		$	0.29		$	0.23		$	0.89		$	0.99


FFO	$	59,628		$	92,534		$	72,477		$	277,722		$	321,788
Non-core items:
Unrealized gain on interest rate swaps (including our share of unconsolidated joint ventures)		(10,930	)		(27,328	)		(13,589	)		(41,869	)		(77,872	)
Defeasance and debt breakage costs		4,608			—			—			4,608			—
Transaction related costs		679			523			282			2,404			4,483
Severance costs		—			—			—			2,874			3,315
Transfer taxes due in connection with the sale of shares by a former joint venture partner		—			—			—			—			5,872
Predecessor income tax true-up		—			—			—			—			721

Core FFO ⁽¹⁾		53,985			65,729			59,170			245,739			258,307
Less Core FFO attributable to noncontrolling interests in:
Consolidated real estate funds		272			(4,726	)		(157	)		419			(22,096	)
Consolidated joint ventures		(6,114	)		(4,809	)		(5,874	)		(23,890	)		(21,355	)

Core FFO attributable to Paramount Group Operating Partnership		48,143			56,194			53,139			222,268			214,856
Less Core FFO attributable to noncontrolling interests in Operating Partnership		(7,500	)		(11,006	)		(9,047	)		(39,152	)		(42,060	)

Core FFO attributable to common stockholders ⁽¹⁾	$	40,643		$	45,188		$	44,092		$	183,116		$	172,796

Per diluted share	$	0.18		$	0.21		$	0.20		$	0.84		$	0.81

Reconciliation of weighted average shares outstanding:
Weighted average shares outstanding		223,221,284			212,106,718			219,394,245			218,053,062			212,106,718
Effect of dilutive securities		23,141			5,072			24,385			15,869			4,572

Denominator for FFO and Core FFO per diluted share		223,244,425			212,111,790			219,418,630			218,068,931			212,111,290

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

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		FUNDS AVAILABLE FOR DISTRIBUTION (“FAD”)

(unaudited and in thousands)


	Three Months Ended									Year Ended
	December 31, 2016			December 31, 2015			September 30, 2016			December 31, 2016			December 31, 2015
Reconciliation of Core FFO to FAD:
Core FFO	$	53,985		$	65,729		$	59,170		$	245,739		$	258,307
Add (subtract) adjustments to arrive at FAD:
Amortization of stock-based compensation expense		2,512			1,297			2,583			9,423			5,139
Amortization of deferred financing costs (including our share of unconsolidated joint ventures)		2,734			862			1,509			7,008			2,769
Amortization of above and below-market leases, net		(2,943	)		(6,678	)		(3,112	)		(9,536	)		(9,917	)
Recurring tenant improvements, leasing commissions and other capital expenditures		(19,304	)		(37,793	)		(15,846	)		(78,967	)		(84,937	)
Straight-line rent adjustments (including our share of unconsolidated joint ventures)		(14,756	)		(19,488	)		(23,234	)		(82,724	)		(69,112	)
Unrealized (gain) loss from unconsolidated real estate funds		(1,911	)		—			1,379			607			—
Unrealized gains on real estate fund investments		—			(4,435	)		—			—			(18,402	)

FAD ⁽¹⁾		20,317			(506	)		22,449			91,550			83,847
Less FAD attributable to noncontrolling interests in:
Consolidated real estate funds		272			(879	)		(157	)		419			(10,552	)
Consolidated joint ventures		522			4,416			226			1,943			5,721

FAD attributable to Paramount Group Operating Partnership		21,111			3,031			22,518			93,912			79,016
Less FAD attributable to noncontrolling interests in Operating Partnership		(3,289	)		(594	)		(3,834	)		(16,652	)		(15,522	)

FAD attributable to common stockholders ^(1) (2)	$	17,822		$	2,437		$	18,684		$	77,260		$	63,494

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

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

- 11 -


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

(unaudited and in thousands)


	Three Months Ended									Year Ended
	December 31, 2016			December 31, 2015			September 30, 2016			December 31, 2016			December 31, 2015
Reconciliation of net (loss) income to EBITDA and Adjusted EBITDA:
Net (loss) income	$	(2,823	)	$	20,065		$	4,469		$	2,069		$	21,143
Add (subtract) adjustments to arrive at EBITDA:
Depreciation and amortization (including our share of unconsolidated joint ventures)		62,451			72,469			68,008			275,653			300,645
Interest and debt expense (including our share of unconsolidated joint ventures)		45,785			42,798			39,697			163,413			174,193
Income tax expense (benefit) (including our share of unconsolidated joint ventures)		2,602			(140	)		219			1,786			2,568

EBITDA⁽¹⁾		108,015			135,192			112,393			442,921			498,549
Less EBITDA attributable to noncontrolling interests in:
Consolidated real estate funds		268			(5,567	)		(156	)		414			(25,565	)
Consolidated joint ventures		(18,379	)		(17,849	)		(18,373	)		(69,328	)		(72,710	)

PGRE’s share of EBITDA ⁽¹⁾	$	89,904		$	111,776		$	93,864		$	374,007		$	400,274


EBITDA	$	108,015		$	135,192		$	112,393		$	442,921		$	498,549
Add (subtract) adjustments to arrive at adjusted EBITDA:
Unrealized gain on interest rate swaps (including our share of unconsolidated joint ventures)		(10,930	)		(27,328	)		(13,589	)		(41,869	)		(77,872	)
EBITDA from real estate funds		(1,732	)		(6,114	)		1,073			976			(32,873	)
Transaction related costs		679			523			282			2,404			4,483
Severance costs		—			—			—			2,874			3,315
Transfer taxes due in connection with the sale of shares by a former joint venture partner		—			—			—			—			5,872

Adjusted EBITDA ⁽¹⁾		96,032			102,273			100,159			407,306			401,474
Less Adjusted EBITDA attributable to noncontrolling interests in consolidated joint ventures		(13,199	)		(11,401	)		(12,927	)		(51,897	)		(54,682	)

PGRE’s share of Adjusted EBITDA ⁽¹⁾	$	82,833		$	90,872		$	87,232		$	355,409		$	346,792

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

- 12 -


		NET OPERATING INCOME (“NOI”)

(unaudited and in thousands)


	Three Months Ended									Year Ended
	December 31, 2016			December 31, 2015			September 30, 2016			December 31, 2016			December 31, 2015
Reconciliation of net (loss) income to NOI and Cash NOI:
Net (loss) income	$	(2,823	)	$	20,065		$	4,469		$	2,069		$	21,143
Add (subtract) adjustments to arrive at NOI and Cash NOI:
Depreciation and amortization		60,975			70,966			66,376			269,450			294,624
General and administrative		14,175			13,644			13,235			53,510			42,056
Interest and debt expense		44,340			41,421			38,278			157,746			168,366
Transfer taxes due in connection with the sale of shares by a former joint venture partner		—			—			—			—			5,872
Transaction related costs		679			523			282			2,404			4,483
Income tax expense (benefit)		2,602			(140	)		218			1,785			2,566
NOI from unconsolidated joint ventures		4,257			4,218			3,974			17,195			16,580
Income from real estate fund investments		—			(7,749	)		—			—			(37,975	)
(Income) loss from unconsolidated real estate funds		(2,042	)		—			1,254			498			—
Income from unconsolidated joint ventures		(2,122	)		(2,406	)		(1,792	)		(7,413	)		(6,850	)
Fee income		(5,363	)		(4,848	)		(3,976	)		(16,931	)		(10,248	)
Interest and other income, net		(1,905	)		(1,268	)		(2,299	)		(6,934	)		(871	)
Unrealized gain on interest rate swaps		(10,153	)		(26,263	)		(12,728	)		(39,814	)		(75,760	)

NOI ⁽¹⁾		102,620			108,163			107,291			433,565			423,986
Less NOI attributable to noncontrolling interests in:
Consolidated real estate funds		268			47			(157	)		414			(668	)
Consolidated joint ventures		(12,125	)		(11,398	)		(11,819	)		(47,561	)		(54,657	)

PGRE’s share of NOI⁽¹⁾	$	90,763		$	96,812		$	95,315		$	386,418		$	368,661


NOI	$	102,620		$	108,163		$	107,291		$	433,565		$	423,986
Less:
Straight-line rent adjustments (including our share of unconsolidated joint ventures)		(14,756	)		(19,488	)		(23,234	)		(82,724	)		(69,112	)
Amortization of above and below-market leases, net		(2,943	)		(6,678	)		(3,112	)		(9,536	)		(9,917	)

Cash NOI⁽¹⁾		84,921			81,997			80,945			341,305			344,957
Less Cash NOI attributable to noncontrolling interests in:
Consolidated real estate funds		268			47			(157	)		414			(668	)
Consolidated joint ventures		(7,965	)		(6,724	)		(8,356	)		(32,571	)		(35,948	)

PGRE’s share of Cash NOI ⁽¹⁾	$	77,224		$	75,320		$	72,432		$	309,148		$	308,341

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

- 13 -


		NOI - BY SEGMENT

(unaudited and in thousands)


	Three Months Ended December 31, 2016
	Total			New York			Washington, D.C.			San Francisco			Other
Reconciliation of net (loss) income to NOI and Cash NOI:
Net (loss) income	$	(2,823	)	$	799		$	(2,335	)	$	8,659		$	(9,946	)
Add (subtract) adjustments to arrive at NOI:
Depreciation and amortization		60,975			38,887			7,532			13,970			586
General and administrative		14,175			—			—			—			14,175
Interest and debt expense		44,340			21,543			6,946			14,124			1,727
Transaction related costs		679			—			—			—			679
Income tax expense		2,602			—			2,537			—			65
NOI from unconsolidated joint ventures		4,257			4,178			—			—			79
Income from unconsolidated real estate funds		(2,042	)		—			—			—			(2,042	)
Income from unconsolidated joint ventures		(2,122	)		(2,102	)		—			—			(20	)
Fee income		(5,363	)		—			—			—			(5,363	)
Interest and other income, net		(1,905	)		(37	)		(10	)		(8	)		(1,850	)
Unrealized (gain) loss on interest rate swaps		(10,153	)		4			—			(10,157	)		—

NOI ⁽¹⁾		102,620			63,272			14,670			26,588			(1,910	)
Less NOI attributable to noncontrolling interests in:
Consolidated real estate funds		268			—			—			—			268
Consolidated joint ventures		(12,125	)		—			—			(12,125	)		—

PGRE’s share of NOIfor the three months ended December 31, 2016	$	90,763		$	63,272		$	14,670		$	14,463		$	(1,642	)

PGRE’s share of NOI for the three months ended December 31, 2015	$	96,812		$	74,689		$	12,532		$	11,038		$	(1,447	)


NOI⁽¹⁾	$	102,620		$	63,272		$	14,670		$	26,588		$	(1,910	)
Add (subtract) adjustments to arrive at Cash NOI:
Straight-line rent adjustments (including our share of unconsolidated joint ventures)		(14,756	)		(9,333	)		(933	)		(4,463	)		(27	)
Amortization of above and below-market leases, net		(2,943	)		2,032			(549	)		(4,426	)		—

Cash NOI⁽¹⁾		84,921			55,971			13,188			17,699			(1,937	)
Less Cash NOI attributable to noncontrolling interests in:
Consolidated real estate funds		268			—			—			—			268
Consolidated joint ventures		(7,965	)		—			—			(7,965	)		—

PGRE’s share of Cash NOI for the three months ended December 31, 2016	$	77,224		$	55,971		$	13,188		$	9,734		$	(1,669	)

PGRE’s share of Cash NOI for the three months ended December 31, 2015	$	75,320		$	59,894		$	10,352		$	6,547		$	(1,473	)

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

- 14 -


		NOI - BY SEGMENT

(unaudited and in thousands)


	Year Ended December 31, 2016
	Total			New York			Washington, D.C.			San Francisco			Other
Reconciliation of net income (loss) to NOI and Cash NOI:
Net income (loss)	$	2,069		$	29,478		$	247		$	22,167		$	(49,823	)
Add (subtract) adjustments to arrive at NOI:
Depreciation and amortization		269,450			183,316			31,068			53,109			1,957
General and administrative		53,510			—			—			—			53,510
Interest and debt expense		157,746			73,729			22,406			55,817			5,794
Transaction related costs		2,404			—			—			—			2,404
Income tax expense		1,785			—			—			37			1,748
NOI from unconsolidated joint ventures		17,195			16,874			—			—			321
Loss from unconsolidated real estate funds		498			—			—			—			498
Income from unconsolidated joint ventures		(7,413	)		(7,335	)		—			—			(78	)
Fee income		(16,931	)		—			—			—			(16,931	)
Interest and other income, net		(6,934	)		(203	)		(53	)		(28	)		(6,650	)
Unrealized gain on interest rate swaps		(39,814	)		(5,636	)		—			(34,178	)		—

NOI ⁽¹⁾		433,565			290,223			53,668			96,924			(7,250	)
Less NOI attributable to noncontrolling interests in:
Consolidated real estate funds		414			—			—			—			414
Consolidated joint ventures		(47,561	)		—			—			(47,561	)		—

PGRE’s share of NOIfor the year ended December 31, 2016	$	386,418		$	290,223		$	53,668		$	49,363		$	(6,836	)

PGRE’s share of NOI for the year ended December 31, 2015	$	368,661		$	283,203		$	49,884		$	42,114		$	(6,540	)


NOI⁽¹⁾	$	433,565		$	290,223		$	53,668		$	96,924		$	(7,250	)
Add (subtract) adjustments to arrive at Cash NOI:
Straight-line rent adjustments (including our share of unconsolidated joint ventures)		(82,724	)		(64,056	)		(4,772	)		(13,872	)		(24	)
Amortization of above and below-market leases, net		(9,536	)		8,921			(2,204	)		(16,253	)		—

Cash NOI⁽¹⁾		341,305			235,088			46,692			66,799			(7,274	)
Less Cash NOI attributable to noncontrolling interests in:
Consolidated real estate funds		414			—			—			—			414
Consolidated joint ventures		(32,571	)		—			—			(32,571	)		—

PGRE’s share of Cash NOI for the year ended December 31, 2016	$	309,148		$	235,088		$	46,692		$	34,228		$	(6,860	)

PGRE’s share of Cash NOI for the year ended December 31, 2015	$	308,341		$	247,319		$	41,618		$	25,975		$	(6,571	)

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

- 15 -


		SAME STORE RESULTS - BY SEGMENT

(unaudited and in thousands)


	Three Months Ended December 31, 2016
SAME STORE NOI⁽¹⁾	Total			New York			Washington, D.C.			San Francisco			Other

PGRE’s share of NOI for the three months ended December 31, 2016	$	90,763		$	63,272		$	14,670		$	14,463		$	(1,642	)
Acquisitions ⁽²⁾		(2,618	)		—			—			(2,618	)		—
Lease termination income (including our share of unconsolidated joint ventures)		(2,469	)		(2,437	)		—			(32	)		—
Other, net		853			1,126			22			(295	)		—

PGRE’s share of Same Store NOI⁽¹⁾ for the three months ended December 31, 2016	$	86,529		$	61,961		$	14,692		$	11,518		$	(1,642	)


	Three Months Ended December 31, 2015
	Total			New York			Washington, D.C.			San Francisco			Other
PGRE’s share of NOI for the three months ended December 31, 2015	$	96,812		$	74,689		$	12,532		$	11,038		$	(1,447	)
Acquisitions		—			—			—			—			—
Lease termination income (including our share of unconsolidated joint ventures)		(182	)		(106	)		—			(76	)		—
Other, net		(4,000	)		(3,745	)⁽³⁾		—			(255	)		—

PGRE’s share of Same Store NOI⁽¹⁾ for the three months ended December 31, 2015	$	92,630		$	70,838		$	12,532		$	10,707		$	(1,447	)


(Decrease) increase in PGRE’s share of Same Store NOI	$	(6,101	)	$	(8,877	)	$	2,160		$	811		$	(195	)

% (Decrease) increase		(6.6	%)		(12.5	%)		17.2	%		7.6	%

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

⁽²⁾	Represents NOI from the acquisition of One Front Street, which was acquired in December 2016.

⁽³⁾	Includes $3,915 of income from the accelerated amortization of a below-market lease liability in connection with a tenant’s lease modification.

- 16 -


		SAME STORE RESULTS - BY SEGMENT

(unaudited and in thousands)


	Three Months Ended December 31, 2016
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 December 31, 2016	$	77,224		$	55,971		$	13,188		$	9,734		$	(1,669	)
Acquisitions ⁽²⁾		(1,885	)		—			—			(1,885	)		—
Lease termination income (including our share of unconsolidated joint ventures)		(2,469	)		(2,437	)		—			(32	)		—
Other, net		—			—			—			—			—

PGRE’s share of Same Store Cash NOI⁽¹⁾ for the three months ended December 31, 2016	$	72,870		$	53,534		$	13,188		$	7,817		$	(1,669	)


	Three Months Ended December 31, 2015
	Total			New York			Washington, D.C.			San Francisco			Other

PGRE’s share of Cash NOI for the three months ended December 31, 2015	$	75,320		$	59,894		$	10,352		$	6,547		$	(1,473	)
Acquisitions		—			—			—			—			—
Lease termination income (including our share of unconsolidated joint ventures)		(182	)		(106	)		—			(76	)		—
Other, net		3			—			—			3			—

PGRE’s share of Same Store Cash NOI⁽¹⁾ for the three months ended December 31, 2015	$	75,141		$	59,788		$	10,352		$	6,474		$	(1,473	)


(Decrease) increase in PGRE’s share of Same Store Cash NOI	$	(2,271	)	$	(6,254	)	$	2,836		$	1,343		$	(196	)

% (Decrease) increase		(3.0	%)		(10.5	%)		27.4	%		20.7	%

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

⁽²⁾	Represents Cash NOI from the acquisition of One Front Street, which was acquired in December 2016.

- 17 -


		SAME STORE RESULTS - BY SEGMENT

(unaudited and in thousands)


	Year Ended December 31, 2016
SAME STORE NOI⁽¹⁾	Total			New York			Washington, D.C.			San Francisco			Other

PGRE’s share of NOI for the year ended December 31, 2016	$	386,418		$	290,223		$	53,668		$	49,363		$	(6,836	)
Acquisitions ⁽²⁾		(13,754	)		(11,136	)		—			(2,618	)		—
Lease termination income (including our share of unconsolidated joint ventures)		(17,040	)		(16,859	)⁽³⁾		—			(181	)		—
Other, net		4,182			4,373	⁽⁴⁾		26			(217	)		—

PGRE’s share of Same Store NOI⁽¹⁾ for the year ended December 31, 2016	$	359,806		$	266,601		$	53,694		$	46,347		$	(6,836	)


	Year Ended December 31, 2015
	Total			New York			Washington, D.C.			San Francisco			Other

PGRE’s share of NOI for the year ended December 31, 2015	$	368,661		$	283,203		$	49,884		$	42,114		$	(6,540	)
Acquisitions		—			—			—			—			—
Lease termination income (including our share of unconsolidated joint ventures)		(870	)		(569	)		—			(301	)		—
Other, net		(3,975	)		(3,775	)⁽⁵⁾		—			(200	)		—

PGRE’s share of Same Store NOI⁽¹⁾ for the year ended December 31, 2015	$	363,816		$	278,859		$	49,884		$	41,613		$	(6,540	)


(Decrease) increase in PGRE’s share of Same Store NOI	$	(4,010	)	$	(12,258	)	$	3,810		$	4,734		$	(296	)

% (Decrease) increase		(1.1	%)		(4.4	%)		7.6	%		11.4	%

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

⁽²⁾	Represents NOI from the acquisitions of the remaining 35.8% equity interest that we did not previously own in 31 West 52nd Street, which was acquired in October 2015 and One Front Street, which was acquired in December 2016.

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

⁽⁴⁾

Includes an aggregate of $12,406 of non-cash write-offs primarily related to an 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.

⁽⁵⁾	Includes $3,915 of income from the accelerated amortization of the aforementioned below-market lease liability in connection with a tenant’s lease modification.

- 18 -


		SAME STORE RESULTS - BY SEGMENT

(unaudited and in thousands)


	Year Ended December 31, 2016
SAME STORE CASH NOI⁽¹⁾	Total			New York			Washington, D.C.			San Francisco			Other

PGRE’s share of Cash NOI for the year ended December 31, 2016	$	309,148		$	235,088		$	46,692		$	34,228		$	(6,860	)
Acquisitions ⁽²⁾		(11,214	)		(9,329	)		—			(1,885	)		—
Lease termination income (including our share of unconsolidated joint ventures)		(17,040	)		(16,859	)⁽³⁾		—			(181	)		—
Other, net		315			311			4			—			—

PGRE’s share of Same Store Cash NOI⁽¹⁾ for the year ended December 31, 2016	$	281,209		$	209,211		$	46,696		$	32,162		$	(6,860	)


	Year Ended December 31, 2015
	Total			New York			Washington, D.C.			San Francisco			Other

PGRE’s share of Cash NOI for the year ended December 31, 2015	$	308,341		$	247,319		$	41,618		$	25,975		$	(6,571	)
Acquisitions		—			—			—			—			—
Lease termination income (including our share of unconsolidated joint ventures)		(870	)		(569	)		—			(301	)		—
Other, net		28			(30	)		—			58			—

PGRE’s share of Same Store Cash NOI⁽¹⁾ for the year ended December 31, 2015	$	307,499		$	246,720		$	41,618		$	25,732		$	(6,571	)


(Decrease) increase in PGRE’s share of Same Store Cash NOI	$	(26,290	)	$	(37,509	)	$	5,078		$	6,430		$	(289	)

% (Decrease) increase		(8.5	%)		(15.2	%)		12.2	%		25.0	%

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

⁽²⁾	Represents Cash NOI from the acquisitions of the remaining 35.8% equity interest that we did not previously own in 31 West 52nd Street, which was acquired in October 2015 and One Front Street, which was acquired in December 2016.

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

- 19 -


		CONSOLIDATED JOINT VENTURES AND FUNDS - BALANCE SHEETS

(unaudited and in thousands)


	As of December 31, 2016								As of December 31, 2015
	Consolidated Joint Ventures						Consolidated Fund		Consolidated Joint Ventures						Consolidated Funds
	Total Consolidated Joint Ventures		One Market Plaza		PGRESS Equity Holdings L.P.		Residential Development Fund ⁽¹⁾		Total Consolidated Joint Ventures		One Market Plaza		PGRESS Equity Holdings L.P.		Real Estate Funds ⁽¹⁾
PGRE Ownership				49.0%		24.4%		12.9%				49.0%		25.4%		Various
ASSETS:
Rental property, net	$	1,264,387	$	1,264,387	$	—	$	72,423	$	1,276,358	$	1,276,358	$	—	$	67,286
Cash and cash equivalents		9,661		9,236		425		2,525		7,115		6,539		576		14,495
Restricted cash		1,868		1,868		—		3,000		13,188		13,188		—		—
Real estate fund investments ⁽¹⁾		—		—		—		—		—		—		—		416,438
Preferred equity investments		55,051		—		55,051		—		53,941		—		53,941		—
Deferred rent receivable		32,103		32,103		—		—		18,386		18,386		—		—
Accounts and other receivables, net		548		548		—		147		327		327		—		287
Deferred charges, net		5,966		5,966		—		—		4,958		4,958		—		—
Intangible assets, net		52,139		52,139		—		—		71,305		71,305		—		—
Other assets		14,048		14,046		2		426		664		664		—		16

Total Assets	$	1,435,771	$	1,380,293	$	55,478	$	78,521	$	1,446,242	$	1,391,725	$	54,517	$	498,522


LIABILITIES:
Notes and mortgages payable, net	$	872,960	$	872,960	$	—	$	—	$	857,037	$	857,037	$	—	$	—
Loans payable to noncontrolling interests		—		—		—		—		—		—		—		45,662
Accounts payable and accrued expenses		19,952		19,934		18		1,125		28,548		28,548		—		936
Interest rate swap liabilities		21,227		21,227		—		—		55,404		55,404		—		—
Intangible liabilities, net		48,654		48,654		—		—		65,011		65,011		—		—
Other liabilities		3,555		3,555		—		3,000		2,888		2,659		229		184

Total Liabilities		966,348		966,330		18		4,125		1,008,888		1,008,659		229		46,782

EQUITY:
Paramount Group, Inc. equity		215,635		201,928		13,707		9,603		200,505		187,282		13,223		37,103
Noncontrolling interests		253,788		212,035		41,753		64,793		236,849		195,784		41,065		414,637

Total Equity		469,423		413,963		55,460		74,396		437,354		383,066		54,288		451,740

Total Liabilities and Equity	$	1,435,771	$	1,380,293	$	55,478	$	78,521	$	1,446,242	$	1,391,725	$	54,517	$	498,522

⁽¹⁾

On January 1, 2016, we adopted (“ASU 2015-02”) Amendments to the Consolidation Analysis to ASC Topic 810, Consolidation, using the modified retrospective method, which resulted in the deconsolidation of all of our real estate fund investments that were accounted for at fair value, except for the Residential Development Fund, which is accounted for at historical cost and will continue to be consolidated into our financial statements.

- 20 -


		CONSOLIDATED JOINT VENTURES AND FUNDS - OPERATING RESULTS

(unaudited and in thousands)


	Three Months Ended December 31, 2016											Three Months Ended December 31, 2015
	Consolidated Joint Ventures								Consolidated Fund			Consolidated Joint Ventures			Consolidated Funds
	Total Consolidated Joint Ventures			One Market Plaza			PGRESS Equity Holdings L.P.		Residential Development Fund ⁽¹⁾			One Market Plaza			Real Estate Funds ⁽¹⁾
Total revenues	$	31,307		$	31,307		$	—	$	815		$	30,652		$	814
Total operating expenses		7,337			7,337			—		840			8,216			559

Net operating income		23,970			23,970			—		(25	)		22,436			255
Depreciation and amortization		(11,639	)		(11,639	)		—		(259	)		(13,246	)		(259	)
Income from real estate fund investments ⁽¹⁾		—			—			—		—			—			7,749
Interest and other income, net		1,424			7			1,417		—			5			—
Interest and debt expense		(14,124	)		(14,124	)		—		—			(13,907	)		(841	)
Unrealized gain on interest rate swaps		10,157			10,157			—		—			12,642			—

Net income (loss) before income taxes		9,788			8,371			1,417		(284	)		7,930			6,904
Income tax expense		—			—			—		(4	)		—			(1	)

Net income (loss)	$	9,788		$	8,371		$	1,417	$	(288	)	$	7,930		$	6,903



PGRE’s share Ownership	Total			49.0%			24.4%		12.9%			49.0%			Various
Net income (loss)	$	4,319		$	3,973		$	346	$	(39	)	$	3,391		$	535
Add: Management fee income		108			108			—		248			44			1,742
Add: Carried interest		—			—			—		—			—			130

PGRE’s share of net income		4,427			4,081			346		209			3,435			2,407
Add: Real estate depreciation and amortization		5,706			5,706			—		34			6,485			29

FFO ⁽²⁾		10,133			9,787			346		243			9,920			2,436
Less: Unrealized gain on interest rate swaps		(4,977	)		(4,977	)		—		—			(6,195	)		—

Core FFO ⁽²⁾	$	5,156		$	4,810		$	346	$	243		$	3,725		$	2,436



Noncontrolling Interests’ share Ownership	Total			51.0%			75.6%		87.1%			51.0%			Various
Net income (loss)	$	5,469		$	4,398		$	1,071	$	(249	)	$	4,539		$	6,368
Less: Management fee expense		(108	)		(108	)		—		(248	)		(44	)		(1,742	)
Less: Carried interest		—			—			—		—			—			(130	)

Net income (loss) attributable to noncontrolling interests		5,361			4,290			1,071		(497	)		4,495			4,496
Add: Real estate depreciation and amortization		5,933			5,933			—		225			6,761			230

FFO ⁽²⁾		11,294			10,223			1,071		(272	)		11,256			4,726
Less: Unrealized gain on interest rate swaps		(5,180	)		(5,180	)		—		—			(6,447	)		—

Core FFO ⁽²⁾	$	6,114		$	5,043		$	1,071	$	(272	)	$	4,809		$	4,726

⁽¹⁾

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

- 21 -


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


	Year Ended December 31, 2016											Year Ended December 31, 2015
	Consolidated Joint Ventures								Consolidated Fund			Consolidated Joint Ventures									Consolidated Funds
	Total Consolidated Joint Ventures			One Market Plaza			PGRESS Equity Holdings L.P.		Residential Development Fund ⁽¹⁾			Total Consolidated Joint Ventures			31 West 52nd Street ⁽²⁾			One Market Plaza			Real Estate Funds ⁽¹⁾
Total revenues	$	124,069		$	124,069		$	—	$	3,363		$	166,854		$	52,382		$	114,472		$	3,414
Total operating expenses		29,763			29,763			—		2,716			48,259			18,982			29,277			1,766

Net operating income		94,306			94,306			—		647			118,595			33,400			85,195			1,648
Depreciation and amortization		(50,778	)		(50,778	)		—		(1,035	)		(72,339	)		(19,591	)		(52,748	)		(1,059	)
Income from real estate fund investments ⁽¹⁾		—			—			—		—			—			—			—			37,975
Interest and other income, net		5,743			27			5,716		1			60			47			13			1
Interest and debt expense		(55,817	)		(55,817	)		—		—			(70,998	)		(15,713	)		(55,285	)		(3,467	)
Unrealized gain on interest rate swaps		34,178			34,178			—		—			37,328			6,634			30,694			—

Net income (loss) before income taxes		27,632			21,916			5,716		(387	)		12,646			4,777			7,869			35,098
Income tax expense		(37	)		(37	)		—		(6	)		(11	)		—			(11	)		(5	)

Net income (loss)	$	27,595		$	21,879		$	5,716	$	(393	)	$	12,635		$	4,777		$	7,858		$	35,093



PGRE’s share Ownership	Total			49.0%			24.4%		12.9%			Total			64.2%			49.0%			Various
Net income (loss)	$	11,628		$	10,235		$	1,393	$	(53	)	$	6,423		$	3,067		$	3,356		$	2,151
Add: Management fee income		544			544			—		976			753			382			371			6,215
Add: Carried interest		—			—			—		—			—			—			—			5,554

PGRE’s share of net income		12,172			10,779			1,393		923			7,176			3,449			3,727			13,920
Add: Real estate depreciation and amortization		24,881			24,881			—		138			38,415			12,577			25,838			136

FFO ⁽³⁾		37,053			35,660			1,393		1,061			45,591			16,026			29,565			14,056
Less: Unrealized gain on interest rate swaps		(16,748	)		(16,748	)		—		—			(19,300	)		(4,260	)		(15,040	)		—

Core FFO ⁽³⁾	$	20,305		$	18,912		$	1,393	$	1,061		$	26,291		$	11,766		$	14,525		$	14,056



Noncontrolling Interests’ share Ownership	Total			51.0%			75.6%		87.1%			Total			35.8%			51.0%			Various
Net income (loss)	$	15,967		$	11,644		$	4,323	$	(340	)	$	6,212		$	1,710		$	4,502		$	32,942
Less: Management fee expense		(544	)		(544	)		—		(976	)		(753	)		(382	)		(371	)		(6,215	)
Less: Carried interest		—			—			—		—			—			—			—			(5,554	)

Net income (loss) attributable to noncontrolling interests		15,423			11,100			4,323		(1,316	)		5,459			1,328			4,131			21,173
Add: Real estate depreciation and amortization		25,897			25,897			—		897			33,924			7,014			26,910			923

FFO ⁽³⁾		41,320			36,997			4,323		(419	)		39,383			8,342			31,041			22,096
Less: Unrealized gain on interest rate swaps		(17,430	)		(17,430	)		—		—			(18,028	)		(2,374	)		(15,654	)		—

Core FFO ⁽³⁾	$	23,890		$	19,567		$	4,323	$	(419	)	$	21,355		$	5,968		$	15,387		$	22,096

⁽¹⁾

⁽²⁾	We acquired the remaining 35.8% equity interest that we did not previously own in 31 West 52nd Street in October 2015.

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

- 22 -


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


	As of December 31, 2016									As of December 31, 2015
	Total			712 Fifth Avenue			Oder-Center, Germany ⁽¹⁾			Total			712 Fifth Avenue			Oder-Center, Germany ⁽¹⁾
PGRE Ownership				50.0%			9.5%						50.0%			9.5%
ASSETS:
Rental property, net	$	213,903		$	207,632		$	6,271		$	220,765		$	214,139		$	6,626
Cash and cash equivalents		19,089			18,430			659			18,388			17,341			1,047
Restricted cash		75			75			—			323			323			—
Deferred rent receivable		12,790			12,790			—			12,479			12,479			—
Accounts and other receivables, net		300			300			—			1,179			1,179			—
Deferred charges, net		8,907			8,907			—			9,704			9,704			—
Other assets		690			199			491			492			311			181

Total Assets	$	255,754		$	248,333		$	7,421		$	263,330		$	255,476		$	7,854

LIABILITIES:
Notes and mortgages payable, net	$	269,063		$	245,990		$	23,073		$	269,725		$	245,582		$	24,143
Accounts payable and accrued expenses		3,633			3,460			173			5,450			5,324			126
Interest rate swap liabilities		5,036			5,036			—			9,146			9,146			—
Other liabilities		437			287			150			649			530			119

Total Liabilities		278,169			254,773			23,396			284,970			260,582			24,388

EQUITY:
Total Equity		(22,415	)		(6,440	)		(15,975	)		(21,640	)		(5,106	)		(16,534	)

Total Liabilities and Equity	$	255,754		$	248,333		$	7,421		$	263,330		$	255,476		$	7,854

⁽¹⁾ We account for our interest in Oder-Center, Germany on a one-quarter lag basis.

- 23 -


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


	Three Months Ended December 31, 2016									Three Months Ended December 31, 2015
	Total			712 Fifth Avenue			Oder-Center, Germany ⁽¹⁾			Total			712 Fifth Avenue			Oder-Center, Germany ⁽¹⁾
Total revenues	$	15,104		$	14,108		$	996		$	14,782		$	13,649		$	1,133
Total operating expenses		5,921			5,753			168			5,569			5,399			170

Net operating income		9,183			8,355			828			9,213			8,250			963
Depreciation and amortization expense		(2,976	)		(2,883	)		(93	)		(3,031	)		(2,935	)		(96	)
Interest and other income, net		19			19			—			7			7			—
Interest and debt expense		(3,101	)		(2,841	)		(260	)		(2,980	)		(2,699	)		(281	)
Unrealized gain on interest rate swaps		1,553			1,553			—			2,129			2,129			—

Net income before income taxes		4,678			4,203			475			5,338			4,752			586
Income tax expense		(3	)		—			(3	)		(2	)		—			(2	)

Net income	$	4,675		$	4,203		$	472		$	5,336		$	4,752		$	584



PGRE’s share Ownership	Total			50.0%			9.5%			Total			50.0%			9.5%
Net income	$	2,147		$	2,102		$	45		$	2,432		$	2,376		$	56
Less: Step-up basis adjustment		(25	)		—			(25	)		(26	)		—			(26	)

PGRE’s share of net income		2,122			2,102			20			2,406			2,376			30
Add: Real estate depreciation and amortization		1,476			1,442			34			1,504			1,468			36

FFO ⁽²⁾		3,598			3,544			54			3,910			3,844			66
Less: Unrealized gain on interest rate swaps		(777	)		(777	)		—			(1,065	)		(1,065	)		—

Core FFO⁽²⁾	$	2,821		$	2,767		$	54		$	2,845		$	2,779		$	66



Joint Venture Partners’ share Ownership	Total			50.0%			90.5%			Total			50.0%			90.5%
Net income	$	2,529		$	2,102		$	427		$	2,904		$	2,376		$	528
Add: Real estate depreciation and amortization		1,526			1,442			84			1,557			1,468			89

FFO ⁽²⁾		4,055			3,544			511			4,461			3,844			617
Less: Unrealized gain on interest rate swaps		(777	)		(777	)		—			(1,065	)		(1,065	)		—

Core FFO⁽²⁾	$	3,278		$	2,767		$	511		$	3,396		$	2,779		$	617

⁽¹⁾	We account for our interest in Oder-Center, Germany on a one-quarter lag basis.

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

- 24 -


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


	Year Ended December 31, 2016									Year Ended December 31, 2015
	Total			712 Fifth Avenue			Oder-Center, Germany ⁽¹⁾			Total			712 Fifth Avenue			Oder-Center, Germany ⁽¹⁾
Total revenues	$	60,797		$	56,573		$	4,224		$	59,893		$	55,375		$	4,518
Total operating expenses		23,670			22,826			844			23,581			22,956			625

Net operating income		37,127			33,747			3,380			36,312			32,419			3,893
Depreciation and amortization expense		(12,509	)		(12,127	)		(382	)		(12,165	)		(11,764	)		(401	)
Interest and other income, net		68			68			—			16			15			1
Interest and debt expense		(12,212	)		(11,128	)		(1,084	)		(12,612	)		(11,425	)		(1,187	)
Unrealized gain on interest rate swaps		4,109			4,109			—			4,223			4,223			—

Net income before income taxes		16,583			14,669			1,914			15,774			13,468			2,306
Income tax expense		(10	)		—			(10	)		(21	)		—			(21	)

Net income	$	16,573		$	14,669		$	1,904		$	15,753		$	13,468		$	2,285


PGRE’s share Ownership	Total			50.0%			9.5%			Total			50.0%			9.5%
Net income	$	7,516		$	7,335		$	181		$	6,952		$	6,734		$	218
Less: Step-up basis adjustment		(103	)		—			(103	)		(102	)		—			(102	)

PGRE’s share of net income		7,413			7,335			78			6,850			6,734			116
Add: Real estate depreciation and amortization		6,203			6,064			139			6,022			5,882			140

FFO ⁽²⁾		13,616			13,399			217			12,872			12,616			256
Less: Unrealized gain on interest rate swaps		(2,055	)		(2,055	)		—			(2,112	)		(2,112	)		—

Core FFO⁽²⁾	$	11,561		$	11,344		$	217		$	10,760		$	10,504		$	256


Joint Venture Partners’ share Ownership	Total			50.0%			90.5%			Total			50.0%			90.5%
Net income	$	9,058		$	7,335		$	1,723		$	8,801		$	6,734		$	2,067
Add: Real estate depreciation and amortization		6,410			6,064			346			6,255			5,882			373

FFO ⁽²⁾		15,468			13,399			2,069			15,056			12,616			2,440
Less: Unrealized gain on interest rate swaps		(2,055	)		(2,055	)		—			(2,112	)		(2,112	)		—

Core FFO⁽²⁾	$	13,413		$	11,344		$	2,069		$	12,944		$	10,504		$	2,440

⁽¹⁾	We account for our interest in Oder-Center, Germany on a one-quarter lag basis.

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

- 25 -


		UNCONSOLIDATED FUNDS SUMMARY
(unaudited)

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 December 31, 2016.


Fund	PGRE Ownership			60 Wall Street ⁽¹⁾			One Market Plaza			50 Beale Street			0 Bond Street ⁽²⁾
Fund II		10.0	%		46.3	%		—			—			—
Fund III		3.1	%		16.0	%		2.0	%		—			—
Fund VII/VII-H		7.2	%		—			—			42.8	%		100.0	%

Total Property Funds					62.3	%		2.0	%		42.8	%		100.0	%
Other Investors					37.7	%		98.0	%⁽³⁾		57.2	%		—

Total					100.0	%		100.0	%		100.0	%		100.0	%

The following is a summary of the Property Funds’ investments and our ownership interests in the underlying investments, as of December 31, 2016.


		PGRE			Square		%			%			Annualized Rent ⁽⁴⁾
Investments	Submarket	Ownership			Feet		Leased			Occupied			Amount			Per Square Foot ⁽⁵⁾
60 Wall Street ⁽¹⁾	Downtown		5.1	%		1,625,483		100.0	%		100.0	%	$	67,000,000	⁽⁶⁾	$	41.22	⁽⁶⁾
50 Beale Street	South Financial District		3.1	%		663,633		82.0	%		82.0	%		29,381,000			44.31
0 Bond Street ⁽²⁾	NoHo		7.2	%		64,390		46.6	%		46.6	%		3,810,000			126.94

⁽¹⁾	On January 24, 2017, Fund II, Fund III and the other investors sold their interests in 60 Wall Street to a newly formed joint venture in which we have a 5.2% ownership interest.

⁽²⁾	Formerly called 670 Broadway.

⁽³⁾	Includes a 49.0% direct ownership interest held by us.

⁽⁴⁾	See page 43 for our definition of this measure.

⁽⁵⁾	Represents office and retail space only.

⁽⁶⁾	Represents triple net base rent only.

Alternative Investment Fund (“Fund VIII”):

The following is a summary of Fund VIII and our ownership interests in the underlying investments, as of December 31, 2016.


		PGRE			Fixed /						Face Amount				Fair Value
Investments	Investment Type	Ownership			Variable rate	Interest Rate			Maturity		Total		Our Share		Total		Our Share
26 Broadway	Mezzanine Loan		1.3	%	Fixed		8.25	%		Jan-2022	$	50,000,000	$	645,000	$	50,379,000	$	650,000
1440 Broadway	Mezzanine Loan		1.3	%	Variable (LIBOR plus 600 bps)		6.65	%		Oct-2019		40,000,000		516,000		40,480,000		522,000
700 Eighth Avenue	Mortgage/Mezzanine Loans		1.3	%	Variable (LIBOR plus 600 bps)		6.65	%		Jan-2019		80,000,000		1,032,000		80,000,000		1,032,000
1285 Avenue of the Americas	Mezzanine Loan		1.3	%	Fixed		6.75	%		Jun-2023		55,000,000		710,000		55,834,000		720,000
Other	Mezzanine Loan/Preferred Equity		1.3	%	Various		7.00% - 9.61	%		Oct-2018 to Nov-2026		134,237,000		1,732,000		135,589,000		1,749,000

											$	359,237,000	$	4,635,000	$	362,282,000	$	4,673,000

- 26 -


		CAPITAL STRUCTURE

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


					As of December 31, 2016
Debt:
Consolidated debt:
Notes and mortgages payable ⁽¹⁾					$	3,408,179
Revolving credit facility						230,000

						3,638,179
Less:
Noncontrolling interest’s share of consolidated debt (One Market Plaza)						(445,209	)
Add:
PGRE’s share of unconsolidated joint venture debt (712 Fifth Avenue and Oder-Center, Germany)						125,442

PGRE’s share of total debt ⁽²⁾						3,318,412


	Shares / Units Outstanding		Share Price as of December 31, 2016
Equity:
Common stock		230,015,356	$	15.99		3,677,946
Operating Partnership units		34,511,214		15.99		551,834

Total equity		264,526,570		15.99		4,229,780

Total Market Capitalization					$	7,548,192

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

⁽²⁾	See page 43 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	$	1,013,544			3.52	%	$	1,000,000			3.54	%	$	13,544			2.37	%
1301 Avenue of the Americas		850,000			2.79	%		500,000			3.05	%		350,000			2.43	%
31 West 52nd Street		500,000			3.80	%		500,000			3.80	%		—			—
1899 Pennsylvania Avenue		87,675			4.88	%		87,675			4.88	%		—			—
Liberty Place		84,000			4.50	%		84,000			4.50	%		—			—
One Market Plaza ⁽¹⁾		872,960			6.12	%		860,546			6.13	%		12,414			4.94	%
Revolving Credit Facility		230,000			2.02	%		—			—			230,000			2.02	%

		3,638,179			3.97	%		3,032,221			4.30	%		605,958			2.32	%
Noncontrolling interest’s share ⁽²⁾		(445,209	)		6.12	%		(438,878	)		6.13	%		(6,331	)		4.94	%

PGRE’s share of consolidated debt	$	3,192,970			3.67	%	$	2,593,343			3.99	%	$	599,627			2.29	%

Unconsolidated Joint Venture Debt:
712 Fifth Avenue	$	246,500			4.40	%	$	135,000			5.78	%	$	111,500			2.72	%
Oder-Center, Germany		23,073			4.62	%		23,073			4.62	%		—			—

Total unconsolidated debt		269,573			4.42	%		158,073			5.61	%		111,500			2.72	%
Joint venture partners’ share		(144,131	)		4.43	%		(88,381	)		5.50	%		(55,750	)		2.72	%

PGRE’s share of unconsolidated debt	$	125,442			4.40	%	$	69,692			5.74	%	$	55,750			2.72	%

PGRE’s Share of Total Debt ⁽²⁾	$	3,318,412			3.70	%	$	2,663,035			4.04	%	$	655,377			2.33	%


Revolving Credit Facility Covenants: ⁽³⁾	Required	Actual
Total Debt / Total Assets	Less than 60%		42.9	%
Secured Debt / Total Assets	Less than 50%		37.2	%
Fixed Charge Coverage	Greater than 1.5x		2.3x
Unsecured Debt / Unencumbered Assets	Less than 60%		29.9	%
Unencumbered Interest Coverage	Greater than 1.75x		12.9x


Debt Composition:	Amount		%
Fixed rate debt:
PGRE’s consolidated fixed rate debt	$	2,593,343
PGRE’s unconsolidated fixed rate debt		69,692

Total fixed rate debt		2,663,035		80.3	%

Variable rate debt:
PGRE’s consolidated variable rate debt		599,627
PGRE’s unconsolidated variable rate debt		55,750

Total variable rate debt		655,377		19.7	%

PGRE’s Share of Total Debt ⁽²⁾	$	3,318,412		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 January 2024 and has a fixed rate of 4.03%. We retained $23,470 for our 49.0% share of net proceeds, after the repayment of the existing loan, closing costs and required reserves.

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

⁽³⁾

This section presents ratios as of December 31, 2016 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
Liberty Place	$	—	$	84,000		$	—		$	—		$	—		$	—		$	84,000
One Market Plaza ⁽¹⁾		—		—			872,960			—			—			—			872,960
1899 Pennsylvania Avenue		—		—			—			87,675			—			—			87,675
1301 Avenue of the Americas		—		—			—			—			850,000			—			850,000
1633 Broadway		—		—			—			—			—			1,013,544			1,013,544
31 West 52nd Street		—		—			—			—			—			500,000			500,000
Revolving Credit Facility		—		230,000			—			—			—			—			230,000

Total consolidated debt		—		314,000			872,960			87,675			850,000			1,513,544			3,638,179
Noncontrolling interest’s share ⁽²⁾		—		—			(445,209	)		—			—			—			(445,209	)

PGRE’s share of consolidated debt	$	—	$	314,000		$	427,751		$	87,675		$	850,000		$	1,513,544		$	3,192,970


Unconsolidated Joint Venture Debt:
712 Fifth Avenue	$	—	$	246,500		$	—		$	—		$	—		$	—		$	246,500
Oder-Center, Germany		—		—			—			—			—			23,073			23,073

Total unconsolidated debt		—		246,500			—			—			—			23,073			269,573
Joint venture partners’ share		—		(123,250	)		—			—			—			(20,881	)		(144,131	)

PGRE’s share of unconsolidated debt	$	—	$	123,250		$	—		$	—		$	—		$	2,192		$	125,442

PGRE’s share of total debt ⁽²⁾	$	—	$	437,250		$	427,751		$	87,675		$	850,000		$	1,515,736		$	3,318,412


Weighted average rate		—		3.17	%		6.12	%		4.88	%		2.79	%		3.62	%		3.70	%

% of debt maturing		—		13.2	%		12.9	%		2.6	%		25.6	%		45.7	%		100.0	%

⁽¹⁾	This loan was refinanced in January 2017 with a new $975,000 mortgage loan that matures in January 2024.

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

- 29 -


		PORTFOLIO SUMMARY

(unaudited)


		Paramount			Square		%			%			Annualized Rent ⁽¹⁾
Property	Submarket	Ownership			Feet		Leased ⁽¹⁾			Occupied ⁽¹⁾			Amount		Per Square Foot ⁽²⁾
As of December 31, 2016
New York:
1633 Broadway	West Side		100.0	%		2,523,429		86.3	%		85.7	%	$	148,415,000	$	71.71
1301 Avenue of the Americas	Sixth Avenue / Rock Center		100.0	%		1,780,472		93.7	%		86.5	%		115,091,000		75.53
1325 Avenue of the Americas	Sixth Avenue / Rock Center		100.0	%		805,258		96.5	%		96.5	%		50,660,000		65.69
31 West 52nd Street	Sixth Avenue / Rock Center		100.0	%		761,787		84.5	%		84.5	%		53,738,000		80.69
900 Third Avenue	East Side		100.0	%		597,402		98.0	%		96.8	%		42,021,000		73.28
712 Fifth Avenue	Madison / Fifth Ave		50.0	%		543,386		97.1	%		94.1	%		56,787,000		111.62

Subtotal / Weighted Average						7,011,734		91.0	%		88.6	%		466,712,000		76.43

PGRE’s Share						6,740,041		90.7	%		88.4	%		438,319,000		74.86

Washington, D.C.:
Waterview ⁽³⁾	Rosslyn, VA		100.0	%		636,768		98.7	%		98.7	%		34,600,000		52.46
425 Eye Street	East End		100.0	%		372,555		97.7	%		97.7	%		16,398,000		45.18
2099 Pennsylvania Avenue	CBD		100.0	%		210,792		82.3	%		62.3	%		10,147,000		77.82
1899 Pennsylvania Avenue	CBD		100.0	%		190,955		100.0	%		98.0	%		14,769,000		78.97
Liberty Place	East End		100.0	%		174,449		89.9	%		89.9	%		12,031,000		75.95

Subtotal / Weighted Average						1,585,519		95.5	%		92.6	%		87,945,000		58.72

PGRE’s Share						1,585,519		95.5	%		92.6	%		87,945,000		58.72

San Francisco:
One Market Plaza	South Financial District		49.0	%		1,580,078		98.7	%		95.9	%		104,513,000		68.08
One Front Street	North Financial District		100.0	%		643,745		99.4	%		99.4	%		36,707,000		56.73

Subtotal / Weighted Average						2,223,823		98.9	%		96.9	%		141,220,000		64.76

PGRE’s Share						1,417,983		99.0	%		97.5	%		87,918,000		62.89

Total / Weighted Average						10,821,076		93.3	%		90.9	%	$	695,877,000	$	71.14

PGRE’s Share						9,743,543		92.7	%		90.4	%	$	614,182,000	$	70.20

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

⁽²⁾	Represents office and retail space only.

⁽³⁾	On January 12, 2017, we entered into an agreement to sell Waterview for $460,000,000. The sale, which is subject to customary closing conditions, is expected to close in the second quarter of 2017.

- 30 -


		TOP TENANTS AND INDUSTRY DIVERSIFICATION

(unaudited)


							PGRE’s Share of
	Lease Expiration			Total Square Feet Occupied			Total Square Feet Occupied			% of Total Square Feet			Annualized Rent ⁽¹⁾				% of Annualized Rent
Top 10 Tenants:	Lease Expiration			Total Square Feet Occupied			Total Square Feet Occupied			% of Total Square Feet			Amount		Per Square Foot		% of Annualized Rent
As of December 31, 2016
Barclays Capital, Inc.		Dec-2020	⁽²⁾		538,518	⁽²⁾		538,518	⁽²⁾		5.5	%	$	35,471,000	$	65.87		5.8	%
The Corporate Executive Board Company		Jan-2028			625,062			625,062			6.4	%		32,761,000		52.41		5.3	%
Allianz Global Investors, LP		Jan-2031			326,457			323,629			3.3	%		28,121,000		86.89		4.6	%
Clifford Chance LLP		Jun-2024			328,992			328,992			3.4	%		26,029,000		79.12		4.2	%
Credit Agricole Corporate & Investment Bank		Feb-2023			311,291			311,291			3.2	%		25,051,000		80.47		4.1	%
Morgan Stanley & Company		Mar-2032	⁽³⁾		312,885	⁽³⁾		312,885	⁽³⁾		3.2	%		22,122,000		70.70		3.6	%
WMG Acquisition Corp. (Warner Music Group)		Jul-2029			293,487			293,487			3.0	%		16,753,000		57.08		2.7	%
Chadbourne & Parke, LLP		Sep-2024			203,863			203,863			2.1	%		16,129,000		79.12		2.6	%
Showtime Networks, Inc.		Jan-2026			238,880			238,880			2.5	%		14,179,000		59.36		2.3	%
U.S. General Services Administration		Jun-2021			310,450			310,450			3.2	%		14,152,000		45.59		2.3	%


	PGRE’s Share of
	Square Feet		% of Occupied			Annualized		% of Annualized
Industry Diversification:	Occupied		Square Feet			Rent		Rent
As of December 31, 2016
Legal Services		1,878,029		21.5	%	$	141,281,000		23.0	%
Financial Services - Commercial and Investment Banking		1,861,907		21.3	%		130,231,000		21.2	%
Technology and Media		1,365,164		15.6	%		87,760,000		14.3	%
Financial Services, all others		942,767		10.8	%		78,539,000		12.8	%
Insurance		392,507		4.5	%		32,010,000		5.2	%
Retail		266,644		3.1	%		21,975,000		3.6	%
Government		345,278		4.0	%		16,550,000		2.7	%
Consumer Products		174,082		2.0	%		12,970,000		2.1	%
Real Estate		171,521		2.0	%		11,459,000		1.9	%
Other		1,339,474		15.3	%		81,407,000		13.2	%

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

⁽²⁾	41,100 of the square feet leased expired on December 31, 2016.

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

- 31 -


		LEASING ACTIVITY

(unaudited)


	Total			New York			Washington, D.C.			San Francisco
Three Months Ended December 31, 2016:
Total square feet leased		241,551			205,821			21,311			14,419
PGRE’s share of total square feet leased:		231,401			203,025			21,311			7,065
Initial rent ⁽¹⁾	$	81.90		$	83.65		$	65.64		$	85.00
Weighted average lease term (in years)		8.5			8.5			9.7			5.0
Tenant improvements and leasing commissions:
Per square foot	$	84.51		$	85.57		$	98.34		$	15.00
Per square foot per annum	$	9.96		$	10.09		$	10.18		$	3.00
Percentage of initial rent		12.2	%		12.1	%		15.5	%		3.5	%
Rent concessions:
Average free rent period (in months)		9.0			9.0			11.3			—
Average free rent period per annum (in months)		1.1			1.1			1.2			—
Second generation space: ⁽¹⁾
Square feet		210,090			203,025			—			7,065
GAAP basis:
Straight-line rent	$	79.92		$	79.72		$	—		$	85.22
Prior straight-line rent	$	78.77		$	79.15		$	—		$	68.74
Percentage increase		1.5	%		0.7	%		—			24.0	%
Cash basis
Initial rent ⁽¹⁾	$	83.70		$	83.65		$	—		$	85.00
Prior escalated rent	$	82.05		$	82.83		$	—		$	61.65
Percentage increase		2.0	%		1.0	%		—			37.9	%

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

- 32 -


		LEASING ACTIVITY

(unaudited)


	Total			New York			Washington, D.C.			San Francisco
Year Ended December 31, 2016:
Total square feet leased		734,238			566,854			90,183			77,201
PGRE’s share of total square feet leased:		662,935			534,924			90,183			37,828
Initial rent ⁽¹⁾	$	74.12		$	73.66		$	69.81		$	92.50
Weighted average lease term (in years)		8.0			8.0			8.7			5.6
Tenant improvements and leasing commissions:
Per square foot	$	63.05		$	57.86		$	105.79		$	29.31
Per square foot per annum	$	7.93		$	7.25		$	12.17		$	5.27
Percentage of initial rent		10.7	%		9.8	%		17.4	%		5.7	%
Rent concessions:
Average free rent period (in months)		6.5			7.0			6.1			0.9
Average free rent period per annum (in months)		0.8			0.9			0.7			0.2
Second generation space: ⁽¹⁾
Square feet		485,809			446,766			3,933			35,110
GAAP basis:
Straight-line rent	$	72.98		$	71.27		$	80.13		$	93.97
Prior straight-line rent	$	66.15		$	65.62		$	80.10		$	71.28
Percentage increase		10.3	%⁽²⁾		8.6	%⁽²⁾		0.0	%		31.8	%
Cash basis:
Initial rent	$	76.05	⁽³⁾	$	74.73	⁽³⁾	$	79.82		$	92.50
Prior escalated rent	$	73.38		$	73.92		$	78.95		$	65.72
Percentage increase		3.6	%⁽²⁾		1.1	%⁽²⁾		1.1	%		40.7	%

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

⁽²⁾

Includes the effect of two above market leases aggregating 89,135 square feet that were terminated and subsequently released at market rates. Excluding the impact of these leases, the percentage increase in GAAP basis and Cash basis rents was 8.2% and 7.5%, respectively, for our New York portfolio and 10.4% and 10.3%, respectively, for the total portfolio.

⁽³⁾	The leasing statistics include the effect of a lease for the parking garage at 1633 Broadway. Excluding the effect of this lease, the initial rent was $80.72 for our New York portfolio and $79.70 for the total portfolio.

- 33 -


		LEASE EXPIRATIONS - TOTAL PORTFOLIO

(unaudited)


	Total		PGRE’s Share of
Year of	Square Feet		Square Feet		Annualized Rent ⁽¹⁾				% of
Lease Expiration ⁽²⁾	of Expiring Leases		of Expiring Leases		Amount		Per Square Foot ⁽³⁾		Annualized Rent
Month to Month		6,148		4,373	$	269,000	$	—		0.0	%

1Q 2017		275,974		261,279		16,801,000		64.59		2.4	%
2Q 2017		74,487		65,001		3,781,000		57.96		0.6	%
3Q 2017		108,889		107,105		7,430,000		69.37		1.1	%
4Q 2017		109,983		101,008		6,650,000		66.70		1.0	%

Total 2017		569,333		534,393		34,662,000		65.14		5.1	%

2018		404,058		329,894		23,858,000		81.78		3.5	%
2019		693,561		569,612		41,098,000		71.14		6.0	%
2020		562,320		473,610		34,130,000		72.09		5.0	%
2021		1,562,513		1,340,696		82,661,000		62.52		12.0	%
2022		565,436		421,593		28,581,000		78.46		4.2	%
2023		730,488		690,945		52,895,000		77.04		7.7	%
2024		673,679		649,006		49,868,000		77.04		7.3	%
2025		512,137		314,491		23,812,000		75.81		3.5	%
2026		730,413		652,769		47,533,000		69.70		6.9	%
Thereafter		3,812,562		3,748,095		266,903,000		77.34		38.8	%

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

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

⁽³⁾	Represents office and retail space only.

- 34 -


		LEASE EXPIRATIONS - NEW YORK

(unaudited)


	Total		PGRE’s Share of
Year of	Square Feet		Square Feet		Annualized Rent ⁽¹⁾				% of
Lease Expiration ⁽²⁾	of Expiring Leases		of Expiring Leases		Amount		Per Square Foot ⁽³⁾		Annualized Rent
Month to Month		575		575	$	113,000	$	—		0.0	%

1Q 2017		211,519		210,921		14,486,000		68.84		2.9	%
2Q 2017		62,381		52,895		3,205,000		60.34		0.6	%
3Q 2017		101,045		101,045		7,076,000		70.03		1.4	%
4Q 2017		31,360		31,360		2,895,000		96.55		0.6	%

Total 2017		406,305		396,221		27,662,000		70.11		5.5	%

2018		283,124		248,648		19,328,000		90.87		3.9	%
2019		262,596		246,994		20,479,000		84.40		4.1	%
2020		338,070		295,913		23,415,000		79.19		4.7	%
2021		894,478		846,752		57,071,000		69.74		11.4	%
2022		161,405		150,501		8,444,000		107.18		1.7	%
2023		514,442		482,253		36,910,000		77.08		7.4	%
2024		569,605		548,529		42,219,000		77.19		8.4	%
2025		113,903		90,508		7,368,000		81.40		1.5	%
2026		575,377		560,231		41,254,000		70.00		8.3	%
Thereafter		2,929,789		2,881,469		215,650,000		73.65		43.1	%

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

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

⁽³⁾	Represents office and retail space only.

- 35 -


		LEASE EXPIRATIONS - WASHINGTON, D.C.

(unaudited)


	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		—		—	$	—	$	—		—

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

Total 2017		—		—		—		—		—

2018		—		—		—		—		—
2019		42,081		42,081		3,345,000		74.28		3.4	%
2020		32,959		32,959		2,432,000		73.78		2.5	%
2021		316,703		316,703		15,461,000		47.09		15.9	%
2022		36,733		36,733		1,954,000		53.20		2.0	%
2023		140,657		140,657		11,286,000		80.87		11.6	%
2024		75,864		75,864		5,796,000		76.54		6.0	%
2025		56,565		56,565		4,457,000		78.80		4.6	%
2026		32,011		32,011		2,205,000		68.88		2.3	%
Thereafter		851,113		851,113		50,354,000		57.26		51.7	%

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

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

⁽³⁾	Represents office and retail space only.

- 36 -


		LEASE EXPIRATIONS - SAN FRANCISCO

(unaudited)


	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		5,573		3,798	$	156,000	$	—		0.2	%

1Q 2017		64,455		50,358		2,315,000		46.44		2.6	%
2Q 2017		12,106		12,106		576,000		47.57		0.6	%
3Q 2017		7,844		6,060		354,000		58.44		0.4	%
4Q 2017		78,623		69,648		3,755,000		53.92		4.2	%

Total 2017		163,028		138,172		7,000,000		50.87		7.8	%

2018		120,934		81,246		4,530,000		57.15		5.1	%
2019		388,884		280,537		17,274,000		59.38		19.4	%
2020		191,291		144,738		8,283,000		57.23		9.3	%
2021		351,332		177,241		10,129,000		57.22		11.4	%
2022		367,298		234,359		18,183,000		77.58		20.4	%
2023		75,389		68,035		4,699,000		67.73		5.3	%
2024		28,210		24,613		1,853,000		75.29		2.1	%
2025		341,669		167,418		11,988,000		71.76		13.5	%
2026		123,025		60,528		4,074,000		67.40		4.6	%
Thereafter		31,660		15,513		899,000		60.00		0.9	%

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

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

⁽³⁾	Represents office and retail space only.

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		CASH BASIS CAPITAL EXPENDITURES - TOTAL PORTFOLIO

(unaudited and in thousands)


	Three Months Ended						Year Ended
	December 31, 2016		December 31, 2015		September 30, 2016		December 31, 2016		December 31, 2015
Capital expenditures to maintain assets:
Recurring⁽¹⁾	$	7,600	$	5,446	$	6,502	$	20,516	$	14,566
Non-recurring⁽¹⁾		—		—		—		—		—

Total capital expenditures to maintain assets	$	7,600	$	5,446	$	6,502	$	20,516	$	14,566

Tenant improvements:
Recurring⁽¹⁾	$	9,679	$	9,977	$	7,149	$	49,927	$	36,798
Non-recurring⁽¹⁾		2,070		14,470		16,833		38,537		28,149

Total tenant improvements	$	11,749	$	24,447	$	23,982	$	88,464	$	64,947

Leasing commissions:
Recurring⁽¹⁾	$	2,025	$	22,370	$	2,195	$	8,524	$	33,573
Non-recurring⁽¹⁾		1,485		7,889		263		3,133		13,278

Total leasing commissions	$	3,510	$	30,259	$	2,458	$	11,657	$	46,851

Total capital expenditures, tenant improvements and leasing commissions:
Total recurring ⁽¹⁾	$	19,304	$	37,793	$	15,846	$	78,967	$	84,937
Total non-recurring⁽¹⁾		3,555		22,359		17,096		41,670		41,427

Total capital expenditures, tenant improvements and leasing commissions	$	22,859	$	60,152	$	32,942	$	120,637	$	126,364

Development expenditures: ⁽¹⁾
1633 Broadway—Plaza and Retail development	$	694	$	3,940	$	1,119	$	7,639	$	7,785
One Market Plaza—Lobby and Retail repositioning		—		3,973		—		4,656		16,561
Residential Development Fund		1,623		708		1,748		5,599		1,963
Other		74		—		324		1,359		—

Total development expenditures	$	2,391	$	8,621	$	3,191	$	19,253	$	26,309

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

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		CASH BASIS CAPITAL EXPENDITURES - NEW YORK

(unaudited and in thousands)


	Three Months Ended						Year Ended
	December 31, 2016		December 31, 2015		September 30, 2016		December 31, 2016		December 31, 2015
Capital expenditures to maintain assets:
Recurring⁽¹⁾	$	7,099	$	2,568	$	4,556	$	14,849	$	7,142
Non-recurring⁽¹⁾		—		—		—		—		—

Total capital expenditures to maintain assets	$	7,099	$	2,568	$	4,556	$	14,849	$	7,142

Tenant improvements:
Recurring⁽¹⁾	$	5,256	$	4,825	$	3,514	$	31,810	$	25,569
Non-recurring⁽¹⁾		1,141		10,617		15,199		32,609		18,693

Total tenant improvements	$	6,397	$	15,442	$	18,713	$	64,419	$	44,262

Leasing commissions:
Recurring⁽¹⁾	$	1,697	$	18,976	$	1,880	$	6,093	$	27,901
Non-recurring⁽¹⁾		378		4,027		199		1,618		6,343

Total leasing commissions	$	2,075	$	23,003	$	2,079	$	7,711	$	34,244

Total capital expenditures, tenant improvements and leasing commissions:
Total recurring ⁽¹⁾	$	14,052	$	26,369	$	9,950	$	52,752	$	60,612
Total non-recurring⁽¹⁾		1,519		14,644		15,398		34,227		25,036

Total capital expenditures, tenant improvements and leasing commissions	$	15,571	$	41,013	$	25,348	$	86,979	$	85,648

Development expenditures: ⁽¹⁾
1633 Broadway—Plaza and Retail development	$	694	$	3,940	$	1,119	$	7,639	$	7,785
Other		74		—		324		1,359		—

Total development expenditures	$	768	$	3,940	$	1,443	$	8,998	$	7,785

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

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		CASH BASIS CAPITAL EXPENDITURES - WASHINGTON, D.C.

(unaudited and in thousands)


	Three Months Ended						Year Ended
	December 31, 2016		December 31, 2015		September 30, 2016		December 31, 2016		December 31, 2015
Capital expenditures to maintain assets:
Recurring⁽¹⁾	$	105	$	1,424	$	588	$	1,770	$	4,821
Non-recurring⁽¹⁾		—		—		—		—		—

Total capital expenditures to maintain assets	$	105	$	1,424	$	588	$	1,770	$	4,821

Tenant improvements:
Recurring⁽¹⁾	$	125	$	559	$	79	$	2,133	$	5,410
Non-recurring⁽¹⁾		929		3,853		188		3,397		9,456

Total tenant improvements	$	1,054	$	4,412	$	267	$	5,530	$	14,866

Leasing commissions:
Recurring⁽¹⁾	$	15	$	334	$	56	$	644	$	1,065
Non-recurring⁽¹⁾		1,107		3,862		26		1,477		6,935

Total leasing commissions	$	1,122	$	4,196	$	82	$	2,121	$	8,000

Total capital expenditures, tenant improvements and leasing commissions:
Total recurring ⁽¹⁾	$	245	$	2,317	$	723	$	4,547	$	11,296
Total non-recurring⁽¹⁾		2,036		7,715		214		4,874		16,391

Total capital expenditures, tenant improvements and leasing commissions	$	2,281	$	10,032	$	937	$	9,421	$	27,687

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

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		CASH BASIS CAPITAL EXPENDITURES - SAN FRANCISCO

(unaudited and in thousands)


	Three Months Ended						Year Ended
	December 31, 2016		December 31, 2015		September 30, 2016		December 31, 2016		December 31, 2015
Capital expenditures to maintain assets:
Recurring⁽¹⁾	$	246	$	1,260	$	1,353	$	3,490	$	2,373
Non-recurring⁽¹⁾		—		—		—		—		—

Total capital expenditures to maintain assets	$	246	$	1,260	$	1,353	$	3,490	$	2,373

Tenant improvements:
Recurring⁽¹⁾	$	4,298	$	4,593	$	3,556	$	15,984	$	5,819
Non-recurring⁽¹⁾		—		—		1,446		2,531		—

Total tenant improvements	$	4,298	$	4,593	$	5,002	$	18,515	$	5,819

Leasing commissions:
Recurring⁽¹⁾	$	313	$	3,060	$	259	$	1,787	$	4,607
Non-recurring⁽¹⁾		—		—		38		38		—

Total leasing commissions	$	313	$	3,060	$	297	$	1,825	$	4,607

Total capital expenditures, tenant improvements and leasing commissions:
Total recurring ⁽¹⁾	$	4,857	$	8,913	$	5,168	$	21,261	$	12,799
Total non-recurring⁽¹⁾		—		—		1,484		2,569		—

Total capital expenditures, tenant improvements and leasing commissions	$	4,857	$	8,913	$	6,652	$	23,830	$	12,799

Development expenditures: ⁽¹⁾
One Market Plaza—Lobby and Retail repositioning	$	—	$	3,973	$	—	$	4,656	$	16,561

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

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		CASH BASIS CAPITAL EXPENDITURES - OTHER

(unaudited and in thousands)


	Three Months Ended						Year Ended
	December 31, 2016		December 31, 2015		September 30, 2016		December 31, 2016		December 31, 2015
Capital expenditures to maintain assets:
Recurring⁽¹⁾	$	150	$	194	$	5	$	407	$	230
Non-recurring⁽¹⁾		—		—		—		—		—

Total capital expenditures to maintain assets	$	150	$	194	$	5	$	407	$	230

Tenant improvements:
Recurring⁽¹⁾	$	—	$	—	$	—	$	—	$	—
Non-recurring⁽¹⁾		—		—		—		—		—

Total tenant improvements	$	—	$	—	$	—	$	—	$	—

Leasing commissions:
Recurring⁽¹⁾	$	—	$	—	$	—	$	—	$	—
Non-recurring⁽¹⁾		—		—		—		—		—

Total leasing commissions	$	—	$	—	$	—	$	—	$	—

Total capital expenditures, tenant improvements and leasing commissions:
Total recurring ⁽¹⁾	$	150	$	194	$	5	$	407	$	230
Total non-recurring⁽¹⁾		—		—		—		—		—

Total capital expenditures, tenant improvements and leasing commissions	$	150	$	194	$	5	$	407	$	230

Development expenditures: ⁽¹⁾
Residential Development Fund	$	1,623	$	708	$	1,748	$	5,599	$	1,963

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

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		DEFINITIONS

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

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

Funds Available for Distribution (“FAD”) is a supplemental measure of our operating performance and is calculated as Core FFO less (i) recurring tenant improvements, leasing commissions and other capital expenditures, (ii) straight-line rent adjustments, (iii) unrealized gain on real estate fund investments, (iv) amortization of above and below-market leases, net, plus (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 pro rata 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. 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, acquisition and transaction costs and certain other items that may vary from period to period. We also present our PGRE’s share of Adjusted EBITDA, which represents our share of the Adjusted EBITDA generated by our consolidated and unconsolidated joint ventures based on our percentage ownership in the underlying assets. Adjusted EBITDA helps compare our operating performance from period to period by removing from our operating results the impact of our capital structure (primarily interest charges from our consolidated outstanding debt and the impact of our interest rate swaps), certain non-cash expenses (primarily depreciation and amortization on our assets), the formation and performance of our real estate funds and acquisition and transaction 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.

- 43 -


		DEFINITIONS - CONTINUED

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

Same Store NOI is used to measure the operating performance of our properties that were owned by us in a similar manner during both the current period and prior reporting periods. Same Store NOI includes our share of NOI from unconsolidated joint ventures. 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. Additionally, we present PGRE’s share of Same Store NOI and Same Store Cash NOI which represents our share of Same Store NOI and Same Store Cash NOI of consolidated and unconsolidated joint ventures, based on our percentage ownership in the underlying assets.

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. Pro rata share of total debt should not be considered as a substitute for total debt determined in accordance with GAAP and should only be considered together with and as a supplement to the total debt determined in accordance with GAAP.

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

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

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

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

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

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

Capital Expenditures consist of expenditures to maintain assets, tenant improvement allowances and leasing commissions. Recurring Capital Expenditures include capital expenditures to maintain current revenues and tenant improvements and leasing commissions related to space leased that has been vacant for less than twelve months. Nonrecurring Capital Expenditures include capital expenditures completed in the year of acquisition and the following two years that were planned at the time of acquisition, as well as tenant improvements and leasing commissions on space leased that has been vacant for more than twelve months. Development Expenditures consist of hard and soft costs related to the development of a property in getting it ready for its intended use.

- 44 -