EX-99.2

EX-99.2 3 d238427dex992.htm EX-99.2 EX-99.2

Exhibit 99.2

LOGO

SUPPLEMENTAL OPERATING AND FINANCIAL DATA

FOR THE QUARTER ENDED JUNE 30, 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
Capital Expenditures - Cash Basis		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
Ralph DiRuggiero	Senior Vice President, Property Management
Gage Johnson	Senior Vice President, General Counsel and Secretary
Vito Messina	Senior Vice President, Asset Management

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

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

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		RESEARCH COVERAGE⁽¹⁾


James Feldman	Thomas Lesnick	Vin Chao	Steve Sakwa
Bank of America Merrill Lynch	Capital One Securities, Inc.	Deutsche Bank	Evercore ISI
(646) 855-5808	(571) 633-8191	(212) 250-6799	(212) 446-9462

Brad Burke	Jed Reagan	Richard Anderson	Vikram Malhotra
Goldman Sachs	Green Street Advisors	Mizuho Securities USA Inc.	Morgan Stanley
(917) 343-2082	(949) 640-8780	(212) 205-8445	(212) 761-7064

Nick Yulico	Blaine Heck
UBS	Wells Fargo
(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 of such analysts.

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		FINANCIAL HIGHLIGHTS

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


	Three Months Ended									Six Months Ended
SELECTED FINANCIAL DATA	June 30, 2016			June 30, 2015			March 31, 2016			June 30, 2016			June 30, 2015
Total revenues	$	172,303		$	162,928		$	172,918		$	345,221		$	324,154
Net income (loss) attributable to common stockholders	$	3,188		$	(4,709	)	$	(6,494	)	$	(3,306	)	$	(14,440	)
Per share—basic and diluted	$	0.01		$	(0.02	)	$	(0.03	)	$	(0.02	)	$	(0.07	)
Pro rata share of NOI ⁽¹⁾	$	100,175		$	92,452		$	100,165		$	200,340		$	180,421
Pro rata share of Cash NOI ⁽¹⁾	$	72,253		$	80,457		$	87,239		$	159,492		$	155,798
FFO attributable to common stockholders ⁽¹⁾	$	54,243		$	52,663		$	49,248		$	103,491		$	95,980
Per share—diluted	$	0.25		$	0.25		$	0.23		$	0.48		$	0.45
Core FFO attributable to common stockholders ⁽¹⁾	$	49,389		$	46,315		$	48,992		$	98,381		$	85,278
Per share—diluted	$	0.23		$	0.22		$	0.23		$	0.46		$	0.40
FAD attributable to common stockholders ⁽¹⁾	$	12,352		$	21,635		$	26,001		$	38,353		$	38,486

COMMON SHARE DATA

	Three Months Ended
Share Price:	June 30, 2016			March 31, 2016			December 31, 2015			September 30, 2015			June 30, 2015
High	$	17.40		$	17.97		$	18.56		$	18.35		$	19.73
Low	$	15.26		$	14.23		$	16.50		$	15.65		$	16.97
Closing (end of period)	$	15.94		$	15.95		$	18.10		$	16.80		$	17.16
Dividends per common share	$	0.095		$	0.095		$	0.095		$	0.095		$	0.095
Annualized dividends per common share	$	0.380		$	0.380		$	0.380		$	0.380		$	0.380
Dividend yield (on closing share price)		2.4	%		2.4	%		2.1	%		2.3	%		2.2	%

PORTFOLIO STATISTICS

	Number of			Square			% Leased⁽¹⁾			% Occupied⁽¹⁾
Region:	Properties			Feet			as of June 30, 2016			as of June 30, 2016
New York		6			7,152,207			91.8	%		88.9	%
Washington, D.C.		5			1,602,655			92.4	%		91.6	%
San Francisco		1			1,611,125			98.4	%		96.2	%

		12			10,365,987			92.9	%		90.5	%

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

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		CONSOLIDATED BALANCE SHEETS

(unaudited and in thousands)


	June 30, 2016			December 31, 2015
ASSETS:
Rental Property, at cost
Land	$	2,042,071		$	2,042,071
Buildings and improvements		5,668,268			5,610,046

		7,710,339			7,652,117
Accumulated depreciation and amortization		(323,224	)		(243,089	)

Rental property, net		7,387,115			7,409,028
Cash and cash equivalents		224,489			143,884
Restricted cash		29,043			41,823
Real estate fund investments		—			416,438
Investments in unconsolidated real estate funds		25,798			—
Investments in unconsolidated joint ventures		5,800			7,102
Preferred equity investments		54,595			53,941
Marketable securities		21,477			21,521
Deferred rent receivable		122,334			77,792
Accounts and other receivables, net		10,895			10,844
Deferred charges, net		79,617			74,991
Intangible assets, net		435,450			511,207
Other assets		11,596			6,658

Total Assets	$	8,408,209		$	8,775,229


LIABILITIES:
Notes and mortgages payable, net	$	3,012,290		$	2,922,610
Revolving credit facility		20,000			20,000
Due to affiliates ⁽¹⁾		27,299			27,299
Loans payable to noncontrolling interests		—			45,662
Accounts payable and accrued expenses		147,048			102,730
Dividends and distributions payable		25,151			25,067
Deferred income taxes		246			2,533
Interest rate swap liabilities		102,577			93,936
Intangible liabilities, net		154,658			179,741
Other liabilities		45,997			45,101

Total Liabilities		3,535,266			3,464,679

EQUITY:
Paramount Group, Inc. stockholders’ equity		3,808,073			3,761,017
Noncontrolling interests in:
Consolidated real estate funds		62,857			414,637
Consolidated joint ventures		240,483			236,849
Operating Partnership		761,530			898,047

Total Equity		4,872,943			5,310,550

Total Liabilities and Equity	$	8,408,209		$	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 share and per share amounts)


	Three Months Ended									Six Months Ended
	June 30, 2016			June 30, 2015			March 31, 2016			June 30, 2016			June 30, 2015
REVENUES:
Property rentals	$	123,408		$	128,954		$	125,002		$	248,410		$	255,356
Straight-line rent adjustments		24,673			16,091			19,869			44,542			32,042
Amortization of (above) below market leases, net		7,100			872			(3,619	)		3,481			1,762

Rental income		155,181			145,917			141,252			296,433			289,160
Tenant reimbursement income		10,334			12,063			10,789			21,123			25,551
Fee income (see details on page 9)		4,175			1,780			3,417			7,592			3,315
Other income (see details on page 9)		2,613			3,168			17,460			20,073			6,128

Total revenues		172,303			162,928			172,918			345,221			324,154
EXPENSES:
Operating		59,994			57,781			62,945			122,939			119,665
Depreciation and amortization		67,287			79,421			74,812			142,099			153,004
General and administrative (see details on page 9)		12,139			9,133			13,961			26,100			21,746
Acquisition and transaction related costs		508			8,208			935			1,443			9,347

Total expenses		139,928			154,543			152,653			292,581			303,762
Operating income		32,375			8,385			20,265			52,640			20,392
Income from real estate fund investments		—			14,072			—			—			19,293
Loss from unconsolidated real estate funds		(960	)		—			(326	)		(1,286	)		—
Income from unconsolidated joint ventures		2,003			2,011			1,496			3,499			2,986
Interest and other income, net (see details on page 9)		1,030			512			1,700			2,730			1,366
Interest and debt expense (see details on page 9)		(38,009	)		(42,236	)		(37,119	)		(75,128	)		(84,124	)
Unrealized gain on interest rate swaps		10,073			21,747			6,860			16,933			33,725

Net income (loss) before income taxes		6,512			4,491			(7,124	)		(612	)		(6,362	)
Income tax benefit (expense)		1,398			(1,343	)		(363	)		1,035			(1,917	)

Net income (loss)		7,910			3,148			(7,487	)		423			(8,279	)
Less net loss (income) attributable to noncontrolling interests in:
Consolidated real estate funds		78			(6,532	)		674			752			(8,741	)
Consolidated joint ventures		(4,107	)		(2,472	)		(1,252	)		(5,359	)		(931	)
Operating Partnership		(693	)		1,147			1,571			878			3,511

Net income (loss) attributable to common stockholders	$	3,188		$	(4,709	)	$	(6,494	)	$	(3,306	)	$	(14,440	)


Weighted average common shares outstanding
Basic		217,121,592			212,106,718			212,403,593			214,762,593			212,106,718

Diluted		217,137,557			212,106,718			212,403,593			214,762,593			212,106,718

Net income (loss) per share attributable to common stockholders
Basic	$	0.01		$	(0.02	)	$	(0.03	)	$	(0.02	)	$	(0.07	)

Diluted	$	0.01		$	(0.02	)	$	(0.03	)	$	(0.02	)	$	(0.07	)

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		SELECT INCOME STATEMENT DATA

(unaudited and in thousands)


	Three Months Ended							Six Months Ended
Fee Income:	June 30, 2016			June 30, 2015		March 31, 2016		June 30, 2016			June 30, 2015
Property management	$	1,539		$	1,386	$	1,521	$	3,060		$	2,715
Asset management ⁽¹⁾		1,783			—		1,714		3,497			—
Acquisition and Leasing		629			253		—		629			269
Other		224			141		182		406			331

Total fee income	$	4,175		$	1,780	$	3,417	$	7,592		$	3,315

⁽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							Six Months Ended
Other Income:	June 30, 2016			June 30, 2015		March 31, 2016		June 30, 2016			June 30, 2015
Lease termination income	$	93		$	247	$	10,955	$	11,048		$	638
Other (primarily tenant requested work)		2,520			2,921		6,505		9,025			5,490

Total other income	$	2,613		$	3,168	$	17,460	$	20,073		$	6,128


	Three Months Ended							Six Months Ended
General and Administrative:	June 30, 2016			June 30, 2015		March 31, 2016		June 30, 2016			June 30, 2015
Non-cash general and administrative - stock based compensation expense	$	2,556		$	1,370	$	1,772	$	4,328		$	2,544
All other general and administrative		10,326			7,401		9,111		19,437			14,792
Mark-to-market of deferred compensation plan liabilities (offset by a (decrease) increase in the mark-to-market of plan assets, which is included in interest and other income)		(743	)		362		204		(539	)		1,095
Severance costs		—			—		2,874		2,874			3,315

Total general and administrative	$	12,139		$	9,133	$	13,961	$	26,100		$	21,746


	Three Months Ended							Six Months Ended
Interest and Other Income:	June 30, 2016			June 30, 2015		March 31, 2016		June 30, 2016			June 30, 2015
Preferred equity investment income ⁽¹⁾	$	1,423		$	—	$	1,416	$	2,839		$	—
Interest income		350			150		80		430			271
Mark-to-market of deferred compensation plan assets (offset by a (decrease) increase in the mark-to-market of plan liabilities, which is included in “general and administrative” expenses)		(743	)		362		204		(539	)		1,095

Total interest and other income	$	1,030		$	512	$	1,700	$	2,730		$	1,366

⁽¹⁾ Represents 100% of the investment income from PGRESS Equity Holdings, L.P., which was acquired in December 2015, of which our share is $347 and $345 for the three months ended June 30, 2016 and March 31, 2016, respectively and $692 for the six months ended June 30, 2016.

	Three Months Ended							Six Months Ended
Interest and Debt Expense:	June 30, 2016			June 30, 2015		March 31, 2016		June 30, 2016			June 30, 2015
Interest expense	$	36,604		$	41,650	$	35,861	$	72,465		$	82,954
Amortization of deferred financing costs		1,405			586		1,258		2,663			1,170

Total interest and debt expense	$	38,009		$	42,236	$	37,119	$	75,128		$	84,124

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		FUNDS FROM OPERATIONS (“FFO”)

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


	Three Months Ended									Six Months Ended
	June 30, 2016			June 30, 2015			March 31, 2016			June 30, 2016			June 30, 2015
Reconciliation of net income (loss) to FFO and Core FFO:
Net income (loss)	$	7,910		$	3,148		$	(7,487	)	$	423		$	(8,279	)
Real estate depreciation and amortization (including pro rata share of unconsolidated joint ventures)		68,843			80,951			76,351			145,194			156,010

FFO ⁽¹⁾		76,753			84,099			68,864			145,617			147,731
Less FFO attributable to noncontrolling interests in:
Consolidated real estate funds		(144	)		(6,790	)		448			304			(9,210	)
Consolidated joint ventures		(10,560	)		(11,824	)		(8,147	)		(18,707	)		(19,193	)

FFO attributable to Paramount Group Operating Partnership		66,049			65,485			61,165			127,214			119,328
Less FFO attributable to noncontrolling interests in Operating Partnership		(11,806	)		(12,822	)		(11,917	)		(23,723	)		(23,348	)

FFO attributable to common stockholders ⁽¹⁾	$	54,243		$	52,663		$	49,248		$	103,491		$	95,980

Per diluted share	$	0.25		$	0.25		$	0.23		$	0.48		$	0.45


FFO	$	76,753		$	84,099		$	68,864		$	145,617		$	147,731
Non-core items:
Unrealized gain on interest rate swaps (including pro rata share of unconsolidated joint ventures)		(10,490	)		(22,371	)		(6,860	)		(17,350	)		(34,735	)
Acquisition and transaction related costs		508			2,336			935			1,443			3,475
Severance costs		—			—			2,874			2,874			3,315
Transfer taxes due in connection with the sale of shares by a former joint venture partner		—			5,872			—			—			5,872
Predecessor income tax true-up		—			721			—			—			721

Core FFO ⁽¹⁾		66,771			70,657			65,813			132,584			126,379
Less Core FFO attributable to noncontrolling interests in:
Consolidated real estate funds		(144	)		(6,790	)		448			304			(9,210	)
Consolidated joint ventures		(6,488	)		(6,275	)		(5,414	)		(11,902	)		(11,146	)

Core FFO attributable to Paramount Group Operating Partnership		60,139			57,592			60,847			120,986			106,023
Less Core FFO attributable to noncontrolling interests in Operating Partnership		(10,750	)		(11,277	)		(11,855	)		(22,605	)		(20,745	)

Core FFO attributable to common stockholders ⁽¹⁾	$	49,389		$	46,315		$	48,992		$	98,381		$	85,278

Per diluted share	$	0.23		$	0.22		$	0.23		$	0.46		$	0.40

Reconciliation of weighted average shares outstanding:
Weighted average shares outstanding		217,121,592			212,106,718			212,403,593			214,762,593			212,106,718
Effect of dilutive securities		15,965			5,004			4,366			—			6,467

Denominator for FFO per diluted share		217,137,557			212,111,722			212,407,959			214,762,593			212,113,185

⁽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									Six Months Ended
	June 30, 2016			June 30, 2015			March 31, 2016			June 30, 2016			June 30, 2015
Reconciliation of Core FFO to FAD:
Core FFO	$	66,771		$	70,657		$	65,813		$	132,584		$	126,379
Add (subtract) adjustments to arrive at FAD:
Amortization of stock-based compensation expense		2,556			1,370			1,772			4,328			2,544
Amortization of deferred financing costs (including pro rata share of unconsolidated joint ventures)		1,456			688			1,309			2,765			1,272
Amortization of above (below) market leases, net		(7,100	)		(872	)		3,619			(3,481	)		(1,762	)
Recurring tenant improvements, leasing commissions and other capital expenditures		(26,339	)		(16,882	)		(20,428	)		(46,767	)		(34,975	)
Straight-line rent adjustments (including pro rata share of unconsolidated joint ventures)		(24,764	)		(16,043	)		(19,970	)		(44,734	)		(31,953	)
Unrealized loss from unconsolidated real estate funds		892			—			247			1,139			—
Unrealized gains on real estate fund investments		—			(11,264	)		—			—			(12,137	)

FAD ⁽¹⁾		13,472			27,654			32,362			45,834			49,368
Less FAD attributable to noncontrolling interests in:
Consolidated real estate funds		(144	)		(967	)		448			304			(2,870	)
Consolidated joint ventures		1,712			216			(517	)		1,195			1,351

FAD attributable to Paramount Group Operating Partnership		15,040			26,903			32,293			47,333			47,849
Less FAD attributable to noncontrolling interests in Operating Partnership		(2,688	)		(5,268	)		(6,292	)		(8,980	)		(9,363	)

FAD attributable to common stockholders ^(1) (2)	$	12,352		$	21,635		$	26,001		$	38,353		$	38,486

⁽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.

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

(unaudited and in thousands)


	Three Months Ended									Six Months Ended
	June 30, 2016			June 30, 2015			March 31, 2016			June 30, 2016			June 30, 2015
Reconciliation of net income (loss) to EBITDA and Adjusted EBITDA:
Net income (loss)	$	7,910		$	3,148		$	(7,487	)	$	423		$	(8,279	)
Add (subtract) adjustments to arrive at EBITDA:
Depreciation and amortization (including pro rata share of unconsolidated joint ventures)		68,843			80,951			76,351			145,194			156,010
Interest and debt expense (including pro rata share of unconsolidated joint ventures)		39,412			43,601			38,519			77,931			87,203
Income tax (benefit) expense (including pro rata share of unconsolidated joint ventures)		(1,398	)		1,343			363			(1,035	)		1,917

EBITDA ⁽¹⁾		114,767			129,043			107,746			222,513			236,851
Less EBITDA attributable to noncontrolling interests in:
Consolidated real estate funds		(148	)		(7,585	)		450			302			(10,999	)
Consolidated joint ventures		(17,499	)		(20,486	)		(15,077	)		(32,576	)		(36,394	)

Pro rata share of EBITDA ⁽¹⁾	$	97,120		$	100,972		$	93,119		$	190,239		$	189,458


EBITDA	$	114,767		$	129,043		$	107,746		$	222,513		$	236,851
Add (subtract) adjustments to arrive at adjusted EBITDA:
Transfer taxes due in connection with the sale of shares by a former joint venture partner		—			5,872			—			—			5,872
Acquisition and transaction related costs		508			2,336			935			1,443			3,475
Severance costs		—			—			2,874			2,874			3,315
Unrealized gain on interest rate swaps (including pro rata share of unconsolidated joint ventures)		(10,490	)		(22,371	)		(6,860	)		(17,350	)		(34,735	)
EBITDA from real estate funds		791			(12,984	)		844			1,635			(17,029	)

Adjusted EBITDA ⁽¹⁾		105,576			101,896			105,539			211,115			197,749
Less Adjusted EBITDA attributable to noncontrolling interests in consolidated joint ventures		(13,427	)		(14,936	)		(12,344	)		(25,771	)		(28,347	)

Pro rata share of Adjusted EBITDA ⁽¹⁾	$	92,149		$	86,960		$	93,195		$	185,344		$	169,402

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

- 12 -


		NET OPERATING INCOME (“NOI”)
(unaudited and in thousands)


	Three Months Ended									Six Months Ended
	June 30, 2016			June 30, 2015			March 31, 2016			June 30, 2016			June 30, 2015
Reconciliation of net income (loss) to NOI and Cash NOI:
Net income (loss)	$	7,910		$	3,148		$	(7,487	)	$	423		$	(8,279	)
Add (subtract) adjustments to arrive at NOI and Cash NOI:
Depreciation and amortization		67,287			79,421			74,812			142,099			153,004
General and administrative		12,139			9,133			13,961			26,100			21,746
Interest and debt expense		38,009			42,236			37,119			75,128			84,124
Transfer taxes due in connection with the sale of shares by a former joint venture partner		—			5,872			—			—			5,872
Acquisition and transaction related costs		508			2,336			935			1,443			3,475
Income tax (benefit) expense		(1,398	)		1,343			363			(1,035	)		1,917
NOI from unconsolidated joint ventures		4,536			4,278			4,428			8,964			8,059
Income from real estate fund investments		—			(14,072	)		—			—			(19,293	)
Loss from unconsolidated real estate funds		960			—			326			1,286			—
Income from unconsolidated joint ventures		(2,003	)		(2,011	)		(1,496	)		(3,499	)		(2,986	)
Fee income		(4,175	)		(1,780	)		(3,417	)		(7,592	)		(3,315	)
Interest and other income, net		(1,030	)		(512	)		(1,700	)		(2,730	)		(1,366	)
Unrealized gain on interest rate swaps		(10,073	)		(21,747	)		(6,860	)		(16,933	)		(33,725	)

NOI ⁽¹⁾		112,670			107,645			110,984			223,654			209,233
Less NOI attributable to noncontrolling interests in:
Consolidated real estate funds		(147	)		(282	)		450			303			(479	)
Consolidated joint ventures		(12,348	)		(14,911	)		(11,269	)		(23,617	)		(28,333	)

Pro rata share of NOI ⁽¹⁾	$	100,175		$	92,452		$	100,165		$	200,340		$	180,421


NOI	$	112,670		$	107,645		$	110,984		$	223,654		$	209,233
Less:
Straight-line rent adjustments (including pro rata share of unconsolidated joint ventures)		(24,764	)		(16,043	)		(19,970	)		(44,734	)		(31,953	)
Amortization of above (below) market leases, net		(7,100	)		(872	)		3,619			(3,481	)		(1,762	)

Cash NOI ⁽¹⁾		80,806			90,730			94,633			175,439			175,518
Less Cash NOI attributable to noncontrolling interests in:
Consolidated real estate funds		(147	)		(282	)		450			303			(479	)
Consolidated joint ventures		(8,406	)		(9,991	)		(7,844	)		(16,250	)		(19,241	)

Pro rata share of Cash NOI ⁽¹⁾	$	72,253		$	80,457		$	87,239		$	159,492		$	155,798

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

- 13 -


		NOI - BY SEGMENT
(unaudited and in thousands)


	Three Months Ended June 30, 2016
	Total			New York			Washington, D.C.			San Francisco			Other
Reconciliation of net income (loss) to NOI and Cash NOI:
Net income (loss)	$	7,910		$	12,028		$	2,218		$	5,947		$	(12,283	)
Add (subtract) adjustments to arrive at NOI:
Depreciation and amortization		67,287			46,309			7,869			12,648			461
General and administrative		12,139			—			—			—			12,139
Interest and debt expense		38,009			17,614			5,129			13,836			1,430
Acquisition and transaction related costs		508			—			—			—			508
Income tax (benefit) expense		(1,398	)		—			(1,820	)		5			417
NOI from unconsolidated joint ventures		4,536			4,456			—			—			80
Loss from unconsolidated real estate funds		960			—			—			—			960
Income from unconsolidated joint ventures		(2,003	)		(1,985	)		—			—			(18	)
Fee income		(4,175	)		—			—			—			(4,175	)
Interest and other income, net		(1,030	)		(69	)		(12	)		(9	)		(940	)
Unrealized gain on interest rate swaps		(10,073	)		(2,089	)		—			(7,984	)		—

NOI ⁽¹⁾		112,670			76,264			13,384			24,443			(1,421	)
Less NOI attributable to noncontrolling interests in:
Consolidated real estate funds		(147	)		—			—			—			(147	)
Consolidated joint ventures		(12,348	)		—			—			(12,348	)		—

Pro rata share of NOI for the three months ended June 30, 2016	$	100,175		$	76,264		$	13,384		$	12,095		$	(1,568	)

Pro rata share of NOI for the three months ended June 30, 2015	$	92,452		$	70,050		$	13,087		$	10,807		$	(1,492	)


NOI ⁽¹⁾	$	112,670		$	76,264		$	13,384		$	24,443		$	(1,421	)
Add (subtract) adjustments to arrive at Cash NOI:
Straight-line rent adjustments (including pro rata share of unconsolidated joint ventures)		(24,764	)		(19,281	)		(1,792	)		(3,663	)		(28	)
Amortization of above (below) market leases, net		(7,100	)		(2,481	)		(553	)		(4,066	)		—

Cash NOI ⁽¹⁾		80,806			54,502			11,039			16,714			(1,449	)
Less Cash NOI attributable to noncontrolling interests in:
Consolidated real estate funds		(147	)		—			—			—			(147	)
Consolidated joint ventures		(8,406	)		—			—			(8,406	)		—

Pro rata share of Cash NOI for the three months ended June 30, 2016	$	72,253		$	54,502		$	11,039		$	8,308		$	(1,596	)

Pro rata share of Cash NOI for the three months ended June 30, 2015	$	80,457		$	65,073		$	10,195		$	6,706		$	(1,517	)

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

- 14 -


		NOI - BY SEGMENT
(unaudited and in thousands)


	Six Months Ended June 30, 2016
	Total			New York			Washington, D.C.			San Francisco			Other
Reconciliation of net income (loss) to NOI and Cash NOI:
Net income (loss)	$	423		$	20,117		$	1,785		$	6,417		$	(27,896	)
Add (subtract) adjustments to arrive at NOI:
Depreciation and amortization		142,099			99,470			15,611			26,168			850
General and administrative		26,100			—			—			—			26,100
Interest and debt expense		75,128			34,556			10,262			27,629			2,681
Acquisition and transaction related costs		1,443			—			—			—			1,443
Income tax (benefit) expense		(1,035	)		—			(2,536	)		33			1,468
NOI from unconsolidated joint ventures		8,964			8,803			—			—			161
Loss from unconsolidated real estate funds		1,286			—			—			—			1,286
Income from unconsolidated joint ventures		(3,499	)		(3,461	)		—			—			(38	)
Fee income		(7,592	)		—			—			—			(7,592	)
Interest and other income, net		(2,730	)		(118	)		(31	)		(15	)		(2,566	)
Unrealized gain on interest rate swaps		(16,933	)		(3,590	)		—			(13,343	)		—

NOI ⁽¹⁾		223,654			155,777			25,091			46,889			(4,103	)
Less NOI attributable to noncontrolling interests in:
Consolidated real estate funds		303			—			—			—			303
Consolidated joint ventures		(23,617	)		—			—			(23,617	)		—

Pro rata share of NOI for the six months ended June 30, 2016	$	200,340		$	155,777		$	25,091		$	23,272		$	(3,800	)

Pro rata share of NOI for the six months ended June 30, 2015	$	180,421		$	139,139		$	24,461		$	20,240		$	(3,419	)


NOI ⁽¹⁾	$	223,654		$	155,777		$	25,091		$	46,889		$	(4,103	)
Add (subtract) adjustments to arrive at Cash NOI:
Straight-line rent adjustments (including pro rata share of unconsolidated joint ventures)		(44,734	)		(35,969	)		(2,414	)		(6,382	)		31
Amortization of above (below) market leases, net		(3,481	)		5,688			(1,106	)		(8,063	)		—

Cash NOI ⁽¹⁾		175,439			125,496			21,571			32,444			(4,072	)
Less Cash NOI attributable to noncontrolling interests in:
Consolidated real estate funds		303			—			—			—			303
Consolidated joint ventures		(16,250	)		—			—			(16,250	)		—

Pro rata share of Cash NOI for the six months ended June 30, 2016	$	159,492		$	125,496		$	21,571		$	16,194		$	(3,769	)

Pro rata share of Cash NOI for the six months ended June 30, 2015	$	155,798		$	125,773		$	20,664		$	12,760		$	(3,399	)

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

- 15 -


		SAME STORE RESULTS - BY SEGMENT

(unaudited and in thousands)


	Three Months Ended June 30, 2016
SAME STORE NOI ⁽¹⁾	Total			New York			Washington, D.C.			San Francisco			Other

Pro rata share of NOI for the three months ended June 30, 2016	$	100,175		$	76,264		$	13,384		$	12,095		$	(1,568	)
Acquisitions ⁽²⁾		(3,800	)		(3,800	)		—			—			—
Lease termination income (including pro rata share of unconsolidated joint ventures)		(138	)		(106	)		—			(32	)		—
Other, net		(3,745	)		(3,745	) ⁽³⁾		—			—			—

Pro rata share of Same Store NOI ⁽¹⁾ for the three months ended June 30, 2016	$	92,492		$	68,613		$	13,384		$	12,063		$	(1,568	)


	Three Months Ended June 30, 2015
	Total			New York			Washington, D.C.			San Francisco			Other

Pro rata share of NOI for the three months ended June 30, 2015	$	92,452		$	70,050		$	13,087		$	10,807		$	(1,492	)
Acquisitions		—			—			—			—			—
Lease termination income (including pro rata share of unconsolidated joint ventures)		(214	)		(107	)		—			(107	)		—
Other, net		20			(30	)		—			50			—

Pro rata share of Same Store NOI ⁽¹⁾ for the three months ended June 30, 2015	$	92,258		$	69,913		$	13,087		$	10,750		$	(1,492	)


Increase (decrease) in pro rata share of Same Store NOI	$	234		$	(1,300	)	$	297		$	1,313		$	(76	)

% Increase (decrease)		0.3	%		(1.9	%)		2.3	%		12.2	%

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

⁽²⁾	Represents the acquisition of the remaining 35.8% equity interest that we did not previously own in 31 West 52nd Street.

⁽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 June 30, 2016
SAME STORE CASH NOI ⁽¹⁾	Total			New York			Washington, D.C.			San Francisco			Other

Pro rata share of Cash NOI for the three months ended June 30, 2016	$	72,253		$	54,502		$	11,039		$	8,308		$	(1,596	)
Acquisitions ⁽²⁾		(3,116	)		(3,116	)		—			—			—
Lease termination income (including pro rata share of unconsolidated joint ventures)		(138	)		(106	)		—			(32	)		—
Other, net		—			—			—			—			—

Pro rata share of Same Store Cash NOI ⁽¹⁾for the three months ended June 30, 2016	$	68,999		$	51,280		$	11,039		$	8,276		$	(1,596	)


	Three Months Ended June 30, 2015
	Total			New York			Washington, D.C.			San Francisco			Other

Pro rata share of Cash NOI for the three months ended June 30, 2015	$	80,457		$	65,073		$	10,195		$	6,706		$	(1,517	)
Acquisitions		—			—			—			—			—
Lease termination income (including pro rata share of unconsolidated joint ventures)		(214	)		(107	)		—			(107	)		—
Other, net		20			(30	)		—			50			—

Pro rata share of Same Store Cash NOI ⁽¹⁾ for the three months ended June 30, 2015	$	80,263		$	64,936		$	10,195		$	6,649		$	(1,517	)


(Decrease) increase in pro rata share of Same Store Cash NOI	$	(11,264	)	$	(13,656	)	$	844		$	1,627		$	(79	)

% (Decrease) increase		(14.0	%)		(21.0	%)		8.3	%		24.5	%

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

⁽²⁾	Represents the acquisition of the remaining 35.8% equity interest that we did not previously own in 31 West 52nd Street.

- 17 -


		SAME STORE RESULTS - BY SEGMENT

(unaudited and in thousands)


	Six Months Ended June 30, 2016
SAME STORE NOI ⁽¹⁾	Total			New York			Washington, D.C.			San Francisco			Other

Pro rata share of NOI for the six months ended June 30, 2016	$	200,340		$	155,777		$	25,091		$	23,272		$	(3,800	)
Acquisitions ⁽²⁾		(7,573	)		(7,573	)		—			—			—
Lease termination income (including pro rata share of unconsolidated joint ventures)		(11,138	)		(11,074	) ⁽³⁾		—			(64	)		—
Other, net		3,040			3,040	⁽⁴⁾		—			—			—

Pro rata share of Same Store NOI ⁽¹⁾ for the six months ended June 30, 2016	$	184,669		$	140,170		$	25,091		$	23,208		$	(3,800	)


	Six Months Ended June 30, 2015
	Total			New York			Washington, D.C.			San Francisco			Other

Pro rata share of NOI for the six months ended June 30, 2015	$	180,421		$	139,139		$	24,461		$	20,240		$	(3,419	)
Acquisitions		—			—			—			—			—
Lease termination income (including pro rata share of unconsolidated joint ventures)		(572	)		(358	)		—			(214	)		—
Other, net		20			(30	)		—			50			—

Pro rata share of Same Store NOI ⁽¹⁾ for the six months ended June 30, 2015	$	179,869		$	138,751		$	24,461		$	20,076		$	(3,419	)


Increase (decrease) in pro rata share of Same Store NOI	$	4,800		$	1,419		$	630		$	3,132		$	(381	)

% Increase		2.7	%		1.0	%		2.6	%		15.6	%

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

⁽²⁾	Represents the acquisition of the remaining 35.8% equity interest that we did not previously own in 31 West 52nd Street.

⁽³⁾	Includes $10,861 of cash income from the termination of a lease with a tenant at 1633 Broadway.

⁽⁴⁾	Includes $10,057 of non-cash writeoff primarily related to above-market lease asset from the termination of a tenant’s lease at 1633 Broadway, partially offset by $7,830 of income from the accelerated amortization of a below-market lease liability in connection with a tenant’s lease modification.

- 18 -


		SAME STORE RESULTS - BY SEGMENT

(unaudited and in thousands)


	Six Months Ended June 30, 2016
SAME STORE CASH NOI ⁽¹⁾	Total			New York			Washington, D.C.			San Francisco			Other

Pro rata share of Cash NOI for the six months ended June 30, 2016	$	159,492		$	125,496		$	21,571		$	16,194		$	(3,769	)
Acquisitions ⁽²⁾		(6,513	)		(6,513	)		—			—			—
Lease termination income (including pro rata share of unconsolidated joint ventures)		(11,138	)		(11,074	) ⁽³⁾		—			(64	)		—
Other, net		473			473			—			—			—

Pro rata share of Same Store Cash NOI ⁽¹⁾ for the six months ended June 30, 2016	$	142,314		$	108,382		$	21,571		$	16,130		$	(3,769	)


	Six Months Ended June 30, 2015
	Total			New York			Washington, D.C.			San Francisco			Other

Pro rata share of Cash NOI for the six months ended June 30, 2015	$	155,798		$	125,773		$	20,664		$	12,760		$	(3,399	)
Acquisitions		—			—			—			—			—
Lease termination income (including pro rata share of unconsolidated joint ventures)		(572	)		(358	)		—			(214	)		—
Other, net		20			(30	)		—			50			—

Pro rata share of Same Store Cash NOI⁽¹⁾ for the six months ended June 30, 2015	$	155,246		$	125,385		$	20,664		$	12,596		$	(3,399	)


(Decrease) increase in pro rata share of Same Store Cash NOI	$	(12,932	)	$	(17,003	)	$	907		$	3,534		$	(370	)

% (Decrease) increase		(8.3	%)		(13.6	%)		4.4	%		28.1	%

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

⁽²⁾	Represents the acquisition of the remaining 35.8% equity interest that we did not previously own in 31 West 52nd Street.

⁽³⁾	Includes $10,861 of cash income from the termination of a lease with a tenant at 1633 Broadway.

- 19 -


		CONSOLIDATED JOINT VENTURES AND FUNDS - BALANCE SHEETS

(unaudited and in thousands)


	As of June 30, 2016								As of December 31, 2015
	Consolidated Joint Ventures								Consolidated Joint Ventures
	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⁾
Ownership %				49.0%		24.4%		13.4%				49.0%		25.4%		Various
ASSETS:
Rental property, net	$	1,269,775	$	1,269,775	$	—	$	69,594	$	1,276,358	$	1,276,358	$	—	$	67,286
Cash and cash equivalents		10,438		10,081		357		2,798		7,115		6,539		576		14,495
Restricted cash		3,067		3,067		—		—		13,188		13,188		—		—
Real estate fund investments ⁽¹⁾		—		—		—		—		—		—		—		416,438
Preferred equity investments		54,595		—		54,595		—		53,941		—		53,941		—
Deferred rent receivable		24,768		24,768		—		—		18,386		18,386		—		—
Accounts and other receivables, net		428		427		1		148		327		327		—		287
Deferred charges, net		5,853		5,853		—		—		4,958		4,958		—		—
Intangible assets, net		61,163		61,163		—		—		71,305		71,305		—		—
Other assets		1,255		1,255		—		56		664		664		—		16

Total Assets	$	1,431,342	$	1,376,389	$	54,953	$	72,596	$	1,446,242	$	1,391,725	$	54,517	$	498,522


LIABILITIES:
Notes and mortgages payable, net	$	865,387	$	865,387	$	—	$	—	$	857,037	$	857,037	$	—	$	—
Loans payable to noncontrolling interests		—		—		—		—		—		—		—		45,662
Accounts payable and accrued expenses		19,646		19,646		—		45		28,548		28,548		—		936
Interest rate swap liabilities		42,061		42,061		—		—		55,404		55,404		—		—
Intangible liabilities, net		56,630		56,630		—		—		65,011		65,011		—		—
Other liabilities		3,773		3,771		2		4		2,888		2,659		229		184

Total Liabilities		987,497		987,495		2		49		1,008,888		1,008,659		229		46,782

EQUITY:
Paramount Group, Inc. stockholders’ equity		203,362		189,883		13,479		9,690		200,505		187,282		13,223		37,103
Noncontrolling interests		240,483		199,011		41,472		62,857		236,849		195,784		41,065		414,637

Total Equity		443,845		388,894		54,951		72,547		437,354		383,066		54,288		451,740

Total Liabilities and Equity	$	1,431,342	$	1,376,389	$	54,953	$	72,596	$	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 June 30, 2016											Three Months Ended June 30, 2015
	Consolidated Joint Ventures											Consolidated Joint Ventures
	Total Consolidated Joint Ventures			One Market Plaza			PGRESS Equity Holdings L.P.		Residential Development Fund ⁽¹⁾			Total Consolidated Joint Ventures			31 West 52nd Street			One Market Plaza			Real Estate Funds ⁽¹⁾
Total revenues	$	31,702		$	31,702		$	—	$	834		$	46,165		$	17,317		$	28,848		$	926
Total operating expenses		7,259			7,259			—		386			13,086			6,101			6,985			318

Net operating income		24,443			24,443			—		448			33,079			11,216			21,863			608
Depreciation and amortization		(12,648	)		(12,648	)		—		(258	)		(20,276	)		(6,537	)		(13,739	)		(298	)
Income from real estate fund investments ⁽¹⁾		—			—			—		—			—			—			—			14,072
Interest and other income, net		1,432			9			1,423		—			18			16			2			—
Interest and debt expense		(13,836	)		(13,836	)		—		—			(18,498	)		(5,218	)		(13,280	)		(793	)
Unrealized gain on interest rate swaps		7,984			7,984			—		—			11,858			3,278			8,580			—

Net income before income taxes		7,375			5,952			1,423		190			6,181			2,755			3,426			13,589
Income tax expense		(5	)		(5	)		—		(2	)		(39	)		—			(39	)		(3	)

Net income	$	7,370		$	5,947		$	1,423	$	188		$	6,142		$	2,755		$	3,387		$	13,586



Paramount Group, Inc.’s pro rata share Ownership %	Total			49.0%			24.4%		13.4%			Total			64.2%			49.0%			Various
Net income	$	3,145		$	2,798		$	347	$	25		$	3,431		$	1,769		$	1,662		$	824
Add: Management fee income		118			118			—		241			240			127			112			1,521
Add: Carried interest		—			—			—		—			—			—			—			4,709

Net income attributable to Paramount Group, Inc.		3,263			2,916			347		266			3,671			1,896			1,774			7,054
Add: Real estate depreciation and amortization		6,195			6,195			—		35			10,924			4,196			6,728			40

FFO ⁽²⁾		9,458			9,111			347		301			14,594			6,092			8,502			7,094
Less: Unrealized gain on interest rate swaps		(3,912	)		(3,912	)		—		—			(6,309	)		(2,105	)		(4,204	)		—

Core FFO ⁽²⁾	$	5,546		$	5,199		$	347	$	301		$	8,285		$	3,987		$	4,298		$	7,094



Noncontrolling Interests’ pro rata share Ownership %	Total			51.0%			75.6%		86.6%			Total			35.8%			51.0%			Various
Net income	$	4,225		$	3,149		$	1,076	$	163		$	2,711		$	986		$	1,725		$	12,762
Less: Management fee expense		(118	)		(118	)		—		(241	)		(241	)		(127	)		(112	)		(1,521	)
Less: Carried interest		—			—			—		—			—			—			—			(4,709	)

Net income (loss) attributable to noncontrolling interests		4,107			3,031			1,076		(78	)		2,472			859			1,613			6,532
Add: Real estate depreciation and amortization		6,453			6,453			—		222			9,352			2,341			7,011			258

FFO ⁽²⁾		10,560			9,484			1,076		144			11,824			3,200			8,624			6,790
Less: Unrealized gain on interest rate swaps		(4,072	)		(4,072	)		—		—			(5,549	)		(1,173	)		(4,376	)		—

Core FFO ⁽²⁾	$	6,488		$	5,412		$	1,076	$	144		$	6,275		$	2,027		$	4,248		$	6,790

⁽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.

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

- 21 -


		CONSOLIDATED JOINT VENTURES AND FUNDS - OPERATING RESULTS

(unaudited and in thousands)


	Six Months Ended June 30, 2016											Six Months Ended June 30, 2015
	Consolidated Joint Ventures											Consolidated Joint Ventures
	Total Consolidated Joint Ventures			One Market Plaza			PGRESS Equity Holdings L.P.		Residential Development Fund ⁽¹⁾			Total Consolidated Joint Ventures			31 West 52nd Street			One Market Plaza			Real Estate Funds⁽¹⁾
Total revenues	$	61,321		$	61,321		$	—	$	1,667		$	89,102		$	34,438		$	54,664		$	1,737
Total operating expenses		14,432			14,432			—		1,459			26,019			12,225			13,794			900

Net operating income		46,889			46,889			—		208			63,083			22,213			40,870			837
Depreciation and amortization		(26,168	)		(26,168	)		—		(517	)		(39,691	)		(13,051	)		(26,640	)		(541	)
Income from real estate fund investments ⁽¹⁾		—			—			—		—			—			—			—			19,293
Interest and other income, net		2,854			15			2,839		1			36			31			5			—
Interest and debt expense		(27,629	)		(27,629	)		—		—			(36,778	)		(10,374	)		(26,404	)		(1,786	)
Unrealized gain on interest rate swaps		13,343			13,343			—		—			17,189			4,735			12,454			—

Net income (loss) before income taxes		9,289			6,450			2,839		(308	)		3,839			3,554			285			17,803
Income tax expense		(33	)		(33	)		—		(2	)		(41	)		—			(41	)		(4	)

Net income (loss)	$	9,256		$	6,417		$	2,839	$	(310	)	$	3,798		$	3,554		$	244		$	17,799



Paramount Group, Inc.’s pro rata share Ownership %	Total			49.0%			24.4%		13.4%			Total			64.2%			49.0%			Various
Net income (loss)	$	3,601		$	2,909		$	692	$	(41	)	$	2,402		$	2,282		$	120		$	1,096
Add: Management fee income		296			296			—		483			465			249			216			2,855
Add: Carried interest		—			—			—		—			—			—			—			5,107

Net income (loss) attributable to Paramount Group, Inc.		3,897			3,205			692		442			2,867			2,531			336			9,058
Add: Real estate depreciation and amortization		12,820			12,820			—		69			21,429			8,378			13,051			72

FFO ⁽²⁾		16,717			16,025			692		511			24,296			10,909			13,387			9,130
Less: Unrealized gain on interest rate swaps		(6,538	)		(6,538	)		—		—			(9,142	)		(3,040	)		(6,102	)		—

Core FFO ⁽²⁾	$	10,179		$	9,487		$	692	$	511		$	15,154		$	7,869		$	7,285		$	9,130



Noncontrolling Interests’ pro rata share Ownership %	Total			51.0%			75.6%		86.6%			Total			35.8%			51.0%			Various
Net income (loss)	$	5,655		$	3,508		$	2,147	$	(269	)	$	1,396		$	1,272		$	124		$	16,703
Less: Management fee expense		(296	)		(296	)		—		(483	)		(465	)		(249	)		(216	)		(2,855	)
Less: Carried interest		—			—			—		—			—			—			—			(5,107	)

Net income (loss) attributable to noncontrolling interests		5,359			3,212			2,147		(752	)		931			1,023			(92	)		8,741
Add: Real estate depreciation and amortization		13,348			13,348			—		448			18,262			4,673			13,589			469

FFO ⁽²⁾		18,707			16,560			2,147		(304	)		19,193			5,696			13,497			9,210
Less: Unrealized gain on interest rate swaps		(6,805	)		(6,805	)		—		—			(8,047	)		(1,695	)		(6,352	)		—

Core FFO ⁽²⁾	$	11,902		$	9,755		$	2,147	$	(304	)	$	11,146		$	4,001		$	7,145		$	9,210

⁽¹⁾

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

- 22 -


		UNCONSOLIDATED JOINT VENTURES - BALANCE SHEETS

(unaudited and in thousands)


	As of June 30, 2016									As of December 31, 2015
	Total			712 Fifth Avenue			Oder-Center, Germany ⁽¹⁾			Total			712 Fifth Avenue			Oder-Center, Germany ⁽¹⁾
Ownership %				50.0%			9.5%						50.0%			9.5%
ASSETS:
Rental property, net	$	216,892		$	210,343		$	6,549		$	220,765		$	214,139		$	6,626
Cash and cash equivalents		17,051			16,406			645			18,388			17,341			1,047
Restricted Cash		—			—			—			323			323			—
Deferred rent receivable		12,862			12,862			—			12,479			12,479			—
Accounts and other receivables, net		181			181			—			1,179			1,179			—
Deferred charges, net		9,588			9,588			—			9,704			9,704			—
Other assets		856			423			433			492			311			181

Total Assets	$	257,430		$	249,803		$	7,627		$	263,330		$	255,476		$	7,854

LIABILITIES:
Notes and mortgages payable, net	$	269,770		$	245,786		$	23,984		$	269,725		$	245,582		$	24,143
Accounts payable and accrued expenses		3,248			3,229			19			5,450			5,324			126
Interest rate swap liabilities		8,312			8,312			—			9,146			9,146			—
Other liabilities		331			255			76			649			530			119

Total Liabilities		281,661			257,582			24,079			284,970			260,582			24,388

Total Equity		(24,231	)		(7,779	)		(16,452	)		(21,640	)		(5,106	)		(16,534	)

Total Liabilities and Equity	$	257,430		$	249,803		$	7,627		$	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 June 30, 2016									Three Months Ended June 30, 2015
	Total			712 Fifth Avenue			Oder-Center, Germany ⁽¹⁾			Total			712 Fifth Avenue			Oder-Center, Germany ⁽¹⁾
Total revenues	$	15,268		$	14,286		$	982		$	15,195		$	14,111		$	1,084
Total operating expenses		5,593			5,375			218			5,959			5,831			128

Net operating income		9,675			8,911			764			9,236			8,280			956
Depreciation and amortization expense		(3,131	)		(3,043	)		(88	)		(3,052	)		(2,954	)		(98	)
Interest and other income, net		19			19			—			4			4			—
Interest and debt expense		(3,005	)		(2,752	)		(253	)		(2,903	)		(2,611	)		(292	)
Unrealized gain on interest rate swaps		834			834			—			1,248			1,248			—

Net income before income taxes		4,392			3,969			423			4,533			3,967			566
Income tax expense		(2	)		—			(2	)		(3	)		—			(3	)

Net income	$	4,390		$	3,969		$	421		$	4,530		$	3,967		$	563



Paramount Group, Inc.’s pro rata share Ownership %	Total			50.0%			9.5%			Total			50.0%			9.5%
Net income	$	2,025		$	1,985		$	40		$	2,037		$	1,984		$	53
Less: Step-up basis adjustment		(22	)		—			(22	)		(26	)		—			(26	)

Net income attributable to Paramount Group, Inc.		2,003			1,985			18			2,011			1,984			27
Add: Real estate depreciation and amortization		1,556			1,521			35			1,530			1,477			53

FFO ⁽²⁾		3,559			3,506			53			3,541			3,461			80
Less: Unrealized gain on interest rate swaps		(417	)		(417	)		—			(624	)		(624	)		—

Core FFO ⁽²⁾	$	3,142		$	3,089		$	53		$	2,917		$	2,837		$	80



Joint Venture Partners’ pro rata share Ownership %	Total			50.0%			90.5%			Total			50.0%			90.5%
Net income	$	2,366		$	1,985		$	381		$	2,494		$	1,984		$	510
Add: Real estate depreciation and amortization		1,597			1,522			75			1,548			1,477			71

FFO ⁽²⁾		3,963			3,507			456			4,042			3,461			581
Less: Unrealized gain on interest rate swaps		(417	)		(417	)		—			(624	)		(624	)		—

Core FFO ⁽²⁾	$	3,546		$	3,090		$	456		$	3,418		$	2,837		$	581

⁽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)


	Six Months Ended June 30, 2016									Six Months Ended June 30, 2015
	Total			712 Fifth Avenue			Oder-Center, Germany ⁽¹⁾			Total			712 Fifth Avenue			Oder-Center, Germany ⁽¹⁾
Total revenues	$	30,634		$	28,598		$	2,036		$	30,134		$	27,805		$	2,329
Total operating expenses		11,411			10,992			419			12,372			12,057			315

Net operating income		19,223			17,606			1,617			17,762			15,748			2,014
Depreciation and amortization expense		(6,234	)		(6,051	)		(183	)		(6,093	)		(5,884	)		(209	)
Interest and other income, net		33			33			—			5			5			—
Interest and debt expense		(6,027	)		(5,500	)		(527	)		(6,661	)		(6,039	)		(622	)
Unrealized gain on interest rate swaps		834			834			—			2,020			2,020			—

Net income before income taxes		7,829			6,922			907			7,033			5,850			1,183
Income tax expense		(4	)		—			(4	)		(16	)		—			(16	)

Net income	$	7,825		$	6,922		$	903		$	7,017		$	5,850		$	1,167


Paramount Group, Inc.’s pro rata share Ownership %	Total			50.0%			9.5%			Total			50.0%			9.5%
Net income	$	3,547		$	3,461		$	86		$	3,036		$	2,925		$	111
Less: Step-up basis adjustment		(48	)		—			(48	)		(50	)		—			(50	)

Net income attributable to Paramount Group, Inc.		3,499			3,461			38			2,986			2,925			61
Add: Real estate depreciation and amortization		3,095			3,025			70			3,006			2,942			64

FFO ⁽²⁾		6,594			6,486			108			5,992			5,867			125
Less: Unrealized gain on interest rate swaps		(417	)		(417	)		—			(1,010	)		(1,010	)		—

Core FFO ⁽²⁾	$	6,177		$	6,069		$	108		$	4,982		$	4,857		$	125


Joint Venture Partners’ pro rata share Ownership %	Total			50.0%			90.5%			Total			50.0%			90.5%
Net income	$	4,278		$	3,461		$	817		$	3,981		$	2,925		$	1,056
Add: Real estate depreciation and amortization		3,187			3,026			161			3,137			2,942			195

FFO ⁽²⁾		7,465			6,487			978			7,118			5,867			1,251
Less: Unrealized gain on interest rate swaps		(417	)		(417	)		—			(1,010	)		(1,010	)		—

Core FFO ⁽²⁾	$	7,048		$	6,070		$	978		$	6,108		$	4,857		$	1,251

⁽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 June 30, 2016.


Fund	Paramount Ownership			60 Wall Street			One Market Plaza			50 Beale Street			670 Broadway
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	%⁽¹⁾		57.2	%		—

Total					100.0	%		100.0	%		100.0	%		100.0	%

The following is a summary of the Property Fund investments and our ownership interests in the underlying investments, as of June 30, 2016.


		Paramount			Square		%			%			Annualized Rent ⁽²⁾
Investments	Submarket	Ownership			Feet		Leased			Occupied			Amount			Per Square Foot ⁽³⁾
60 Wall Street	Downtown		5.1	%		1,625,483		100.0	%		100.0	%	$	67,000,000	⁽⁴⁾	$	41.22	⁽⁴⁾
50 Beale Street	South Financial District		3.1	%		663,483		98.9	%		98.9	%		34,328,000			52.91
670 Broadway	NoHo		7.2	%		64,390		46.6	%		46.6	%		3,810,000			126.94

Alternative Investment Fund (“Fund VIII”):

The following is a summary of our ownership interests in Fund VIII and the underlying investments in Fund VIII, as of June 30, 2016.


		Paramount			Fixed /						Face Amount				Fair Value
Investments	Investment Type	Ownership			Variable rate	Interest Rate			Initial Maturity		Total		Our Share		Total		Our Share
26 Broadway	Mezzanine Loan		1.3	%	Fixed		8.25	%		Jan-2022	$	50,000,000	$	645,000	$	50,701,000	$	654,000
1440 Broadway	Mezzanine Loan		1.3	%	Variable (LIBOR plus 600 bps)		6.46	%		Oct-2019		40,000,000		516,000		39,837,000		514,000
700 Eighth Avenue	Mortgage/Mezzanine Loans		1.3	%	Variable (LIBOR plus 600 bps)		6.46	%		Dec-2016		80,000,000		1,032,000		80,329,000		1,036,000
1285 Avenue of the Americas	Mezzanine Loan		1.3	%	Fixed		6.75	%		Jun-2023		55,000,000		710,000		55,867,000		721,000

											$	225,000,000	$	2,903,000	$	226,734,000	$	2,925,000

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

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

⁽³⁾	Excludes square feet and revenue from parking, storage, signage and roof space.

⁽⁴⁾	Represents triple net base rent only.

- 26 -


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


					As of June 30, 2016
Debt:
Consolidated debt:
Notes and mortgages payable ⁽¹⁾					$	3,035,672
$1.0 billion revolving credit facility						20,000

						3,055,672
Less:
Noncontrolling interest’s share of consolidated debt (One Market Plaza)						(441,348	)
Add:
Pro rata share of unconsolidated joint venture debt (712 Fifth Avenue and Oder-Center, Germany)						125,528

Total debt						2,739,852


	Shares / Units Outstanding		Share Price at June 30, 2016
Equity:
Common stock		219,490,007	$	15.94		3,498,671
Operating Partnership units		45,035,400		15.94		717,864

Total equity		264,525,407		15.94		4,216,535

Total Market Capitalization					$	6,956,387

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

- 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			2.21	%
31 West 52nd Street		500,000			3.80	%		500,000			3.80	%		—			—
900 Third Avenue		274,337			4.24	%		162,000			5.98	%		112,337			1.72	%
Waterview		210,000			5.76	%		210,000			5.76	%		—			—
1899 Pennsylvania Avenue		88,404			4.88	%		88,404			4.88	%		—			—
Liberty Place		84,000			4.50	%		84,000			4.50	%		—			—
One Market Plaza		865,387			6.12	%		858,760			6.14	%		6,627			4.65	%
$1.0 Billion Revolving Credit Facility		20,000			1.71	%		—			—			20,000			1.71	%

Total consolidated debt		3,055,672			4.58	%		2,903,164			4.72	%		152,508			1.89	%
Noncontrolling interest’s share		(441,348	)		6.12	%		(437,968	)		6.14	%		(3,380	)		4.65	%

Pro rata share of consolidated debt	$	2,614,324			4.32	%	$	2,465,196			4.47	%	$	149,128			1.83	%

Unconsolidated Joint Venture Debt:
712 Fifth Avenue	$	246,500			4.24	%	$	135,000			5.78	%	$	111,500			2.37	%
Oder-Center, Germany		23,984			4.62	%		23,984			4.62	%		—			—

Total unconsolidated debt		270,484			4.27	%		158,984			5.60	%		111,500			2.37	%
Joint venture partners’ share		(144,956	)		4.30	%		(89,206	)		5.50	%		(55,750	)		2.37	%

Pro rata share of unconsolidated debt	$	125,528			4.25	%	$	69,778			5.74	%	$	55,750			2.37	%

Pro Rata Share of Total Debt	$	2,739,852			4.31	%	$	2,534,974			4.50	%	$	204,878			1.98	%


Revolving Credit Facility Covenants: ⁽¹⁾	Required	Actual
Total Debt / Total Assets	Less than 60%		38.6	%
Secured Debt / Total Assets	Less than 50%		35.3	%
Fixed Charge Coverage	Greater than 1.5x		2.8x
Unsecured Debt / Unencumbered Assets	Less than 60%		13.6	%
Unencumbered Interest Coverage	Greater than 1.75x		19.0x


Debt Composition:	Amount		%
Fixed rate debt:
Pro rata consolidated fixed rate debt	$	2,465,196
Pro rata unconsolidated fixed rate debt		69,778

Total fixed rate debt		2,534,974		92.5	%

Variable rate debt:
Pro rata consolidated variable rate debt		149,128
Pro rata unconsolidated variable rate debt		55,750

Total variable rate debt		204,878		7.5	%

Pro Rata Share of Total Debt	$	2,739,852		100.0	%

⁽¹⁾

This section presents ratios as of June 30, 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:	2016		2017			2018			2019			2020			Thereafter			Total
900 Third Avenue	$	—	$	274,337		$	—		$	—		$	—		$	—		$	274,337
Waterview		—		210,000			—			—			—			—			210,000
Liberty Place		—		—			84,000			—			—			—			84,000
One Market Plaza		—		—			—			865,387			—			—			865,387
1899 Pennsylvania Avenue		—		—			—			—			88,404			—			88,404
1633 Broadway		—		—			—			—			—			1,013,544			1,013,544
31 West 52nd Street		—		—			—			—			—			500,000			500,000
Revolving Credit Facility		—		—			20,000			—			—			—			20,000

Total consolidated debt		—		484,337			104,000			865,387			88,404			1,513,544			3,055,672
Noncontrolling interest’s share		—		—			—			(441,348	)		—			—			(441,348	)

Pro rata share of consolidated debt	$	—	$	484,337		$	104,000		$	424,039		$	88,404		$	1,513,544		$	2,614,324


Unconsolidated Joint Venture Debt:
712 Fifth Avenue	$	—	$	—		$	246,500		$	—		$	—		$	—		$	246,500
Oder-Center, Germany		—		—			—			—			—			23,984			23,984

Total unconsolidated debt		—		—			246,500			—			—			23,984			270,484
Joint venture partners’ share		—		—			(123,250	)		—			—			(21,706	)		(144,956	)

Pro rata share of unconsolidated debt	$	—	$	—		$	123,250		$	—		$	—		$	2,278		$	125,528

Pro rata share of total debt	$	—	$	484,337		$	227,250		$	424,039		$	88,404		$	1,515,822		$	2,739,852


Weighted average rate		—		4.90	%		4.11	%		6.12	%		4.88	%		3.62	%		4.31	%

% of debt maturing		—		17.7	%		8.3	%		15.5	%		3.2	%		55.3	%		100.0	%

- 29 -


		PORTFOLIO SUMMARY

(unaudited)


		%			Square		%			%			Annualized Rent ⁽²⁾
Property	Submarket	Ownership			Feet ⁽¹⁾		Leased ⁽²⁾			Occupied ⁽²⁾			Amount		Per Square Foot ⁽³⁾
As of June 30, 2016
New York:
1633 Broadway	West Side		100.0	%		2,643,065		86.6	%		84.4	%	$	143,850,000	$	70.22
1301 Avenue of the Americas	Sixth Ave / Rock Center		100.0	%		1,767,992		89.7	%		81.8	%		107,319,000		76.07
1325 Avenue of the Americas	Sixth Ave / Rock Center		100.0	%		814,892		96.9	%		96.9	%		51,369,000		66.27
31 West 52nd Street	Sixth Ave / Rock Center		100.0	%		786,647		100.0	%		100.0	%		62,468,000		80.16
900 Third Avenue	East Side		100.0	%		596,270		96.8	%		96.0	%		41,917,000		73.96
712 Fifth Avenue	Madison / Fifth Ave		50.0	%		543,341		98.5	%		98.5	%		55,753,000		104.69

Subtotal / Weighted Average						7,152,207		91.8	%		88.9	%		462,676,000		75.77

Washington, D.C.:
Waterview	Rosslyn, VA		100.0	%		647,243		98.9	%		98.9	%		35,036,000		52.67
425 Eye Street	East End		100.0	%		380,090		97.5	%		97.5	%		16,419,000		45.39
2099 Pennsylvania Avenue	CBD		100.0	%		208,636		62.1	%		62.1	%		10,038,000		77.32
1899 Pennsylvania Avenue	CBD		100.0	%		192,481		98.3	%		98.3	%		14,662,000		80.26
Liberty Place	East End		100.0	%		174,205		87.1	%		79.8	%		10,942,000		78.11

Subtotal / Weighted Average						1,602,655		92.4	%		91.6	%		87,097,000		58.93

San Francisco:
One Market Plaza	South Financial District		49.0	%		1,611,125		98.4	%		96.2	%		97,309,000		63.76

Total / Weighted Average						10,365,987		92.9	%		90.5	%	$	647,082,000	$	71.03

⁽¹⁾	Represents the remeasured square feet, which includes an aggregate of 150,516 square feet of either Real Estate Board of New York (“REBNY”) or Building Owners and Managers Association (“BOMA”) remeasurement adjustments that are not reflected in current leases.

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

⁽³⁾	Excludes square feet and revenue from parking, storage, theater, signage and roof space.

- 30 -


		TOP TENANTS AND INDUSTRY DIVERSIFICATION

(unaudited)


	Lease Expiration			Square Feet Occupied			% of Total Square Feet			Annualized Rent ⁽¹⁾				% of Annualized Rent
Top 10 Tenants:	Lease Expiration			Square Feet Occupied			% of Total Square Feet			Amount		Per Square Foot		% of Annualized Rent
As of June 30, 2016
Barclays Capital, Inc.		Dec-2020	⁽²⁾		538,518	⁽²⁾		5.2	%	$	34,686,000	$	64.41		5.4	%
The Corporate Executive Board Company		Jan-2028			625,062			6.0	%		32,834,000		52.53		5.1	%
Allianz Global Investors, LP		Jan-2031	⁽³⁾		326,457	⁽³⁾		3.1	%		27,770,000		85.06		4.3	%
Clifford Chance LLP		Jun-2024			328,992			3.2	%		25,494,000		77.49		3.9	%
Credit Agricole Corporate & Investment Bank		Feb-2023			311,291			3.0	%		24,726,000		79.43		3.8	%
Morgan Stanley & Company		Mar-2032	⁽⁴⁾		312,885	⁽⁴⁾		3.0	%		22,070,000		70.54		3.4	%
Google, Inc.		Apr-2025			275,822			2.7	%		17,707,000		64.20		2.7	%
WMG Acquisition Corp. (Warner Music Group)		Jul-2029			293,487			2.8	%		16,301,000		55.54		2.5	%
Chadbourne & Parke, LLP		Sep-2024			203,863			2.0	%		15,884,000		77.92		2.5	%
U.S. General Services Administration		Jun-2021			310,450			3.0	%		14,253,000		45.91		2.2	%


	Square Feet		% of Occupied			Annualized		% of Annualized
Industry Diversification:	Occupied		Square Feet			Rent		Rent
As of June 30, 2016
Legal Services		1,817,010		19.7	%	$	133,831,000		20.7	%
Financial Services, all others		1,612,326		17.5	%		129,754,000		20.1	%
Financial Services - Commercial and Investment Banking		1,671,578		18.2	%		119,844,000		18.5	%
Technology and Media		1,438,309		15.6	%		91,368,000		14.1	%
Insurance		338,399		3.7	%		28,468,000		4.4	%
Retail		316,227		3.4	%		26,527,000		4.1	%
Government		334,985		3.6	%		15,906,000		2.5	%
Real Estate		205,835		2.2	%		15,668,000		2.4	%
Other Professional Services		161,148		1.8	%		10,311,000		1.6	%
Other		1,308,027		14.3	%		75,405,000		11.6	%

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

⁽²⁾	41,100 of the square feet leased expires in December 2016.

⁽³⁾	5,546 of the square feet leased expires in December 2016.

⁽⁴⁾	52,056 of the square feet leased expires in June 2017.

- 31 -


		LEASING ACTIVITY

(unaudited)


	Total			New York			Washington, D.C.		San Francisco
Three Months Ended June 30, 2016:
Total square feet leased		148,896			124,073			—		24,823
Pro rata share of total square feet leased:		115,384			103,221			—		12,163
Initial rent ⁽¹⁾	$	74.15		$	72.16		$	—	$	91.49
Weighted average lease term (in years)		6.1			6.3			—		5.0
Tenant improvements and leasing commissions:
Per square foot	$	59.51		$	64.02		$	—	$	20.25
Per square foot per annum	$	9.71		$	10.22		$	—	$	4.05
Percentage of initial rent		13.1	%		14.2	%		—		4.4	%
Rent concessions:
Average free rent period (in months)		5.2			5.8			—		—
Average free rent period per annum (in months)		0.8			0.9			—		—
Second generation space: ⁽¹⁾
Square feet		32,753			20,853			—		11,900
Cash basis:
Initial rent ⁽¹⁾	$	93.95		$	95.28		$	—	$	91.49
Prior escalated rent	$	76.44		$	87.44		$	—	$	56.05
Percentage increase		22.9	%		9.0	%		—		63.2	%
GAAP basis:
Straight-line rent	$	86.31		$	86.55		$	—	$	85.87
Prior straight-line rent	$	77.57		$	81.67		$	—	$	69.99
Percentage increase		11.3	%		6.0	%		—		22.7	%

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

- 32 -


		LEASING ACTIVITY

(unaudited)


	Total			New York			Washington, D.C.			San Francisco
Six Months Ended June 30, 2016:
Total square feet leased		303,847			221,098			38,145			44,604
Pro rata share of total square feet leased:		255,684			195,684			38,145			21,856
Initial rent ⁽¹⁾	$	76.67		$	76.49		$	71.60		$	89.08
Weighted average lease term (in years)		7.0			7.4			5.5			5.8
Tenant improvements and leasing commissions:
Per square foot	$	55.85		$	58.47		$	54.77		$	30.89
Per square foot per annum	$	7.94		$	7.85		$	9.88		$	5.28
Percentage of initial rent		10.4	%		10.3	%		13.8	%		5.9	%
Rent concessions:
Average free rent period (in months)		6.8			7.9			3.8			0.6
Average free rent period per annum (in months)		1.0			1.1			0.7			0.1
Second generation space: ⁽¹⁾
Square feet		133,096			110,026			3,933			19,137
Cash basis:
Initial rent ⁽¹⁾	$	84.65		$	84.08		$	79.82		$	89.08
Prior escalated rent	$	81.19		$	85.27		$	78.95		$	57.22
Percentage increase (decrease)		4.3	%⁽²⁾		(1.4	%)⁽²⁾		1.1	%		55.7	%
GAAP basis:
Straight-line rent	$	81.38		$	80.26		$	80.13		$	88.32
Prior straight-line rent	$	72.68		$	72.32		$	80.10		$	73.28
Percentage increase		12.0	%⁽²⁾		11.0	%⁽²⁾		—			20.5	%

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

⁽²⁾

Includes the effect of a 52,555 square foot above-market lease at 1633 Broadway that was terminated and subsequently released shortly thereafter at market rates. Excluding the impact of this lease, the percentage increase in Cash basis and GAAP basis rents was 19.3% and 23.4%, respectively, for our New York portfolio and 25.1% and 21.3%, respectively, for the total portfolio.

- 33 -


		LEASE EXPIRATIONS - TOTAL PORTFOLIO

(unaudited)


Year of	Square Feet		Annualized Rent ⁽¹⁾				% of Consolidated
Lease Expiration ⁽²⁾	of Expiring Leases		Amount		Per Square Foot ⁽³⁾		Annualized Rent
Month to Month		3,397	$	411,000	$	—		0.1	%

3Q 2016		119,590		8,758,000		73.28		1.3	%
4Q 2016		32,676		2,918,000		91.06		0.4	%

Total 2016		152,266		11,676,000		77.02		1.7	%

1Q 2017		315,723		21,670,000		69.35		3.3	%
2Q 2017		19,430		1,468,000		77.02		0.2	%
Remaining 2017		162,418		13,507,000		83.87		2.0	%

Total 2017		497,571		36,645,000		74.32		5.5	%

2018		307,725		24,410,000		79.29		3.7	%
2019		531,945		39,877,000		75.19		6.0	%
2020		539,888		38,072,000		77.77		5.7	%
2021		1,543,810		94,940,000		63.01		14.3	%
2022		428,874		28,315,000		74.82		4.3	%
2023		649,725		50,375,000		78.02		7.6	%
2024		634,165		49,388,000		78.09		7.4	%
2025		509,775		38,070,000		74.80		5.7	%
Thereafter		3,649,571		253,864,000		68.94		38.1	%

⁽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⁾	Excludes square feet and revenue from parking, storage, theater, signage and roof space.

- 34 -


		LEASE EXPIRATIONS - NEW YORK

(unaudited)


Year of	Square Feet		Annualized Rent ⁽¹⁾				% of New York
Lease Expiration ⁽²⁾	of Expiring Leases		Amount		Per Square Foot ⁽³⁾		Annualized Rent
Month to Month		575	$	110,000	$	—		0.0	%

3Q 2016		118,260		8,678,000		73.39		1.8	%
4Q 2016		28,351		2,575,000		90.72		0.5	%

Total 2016		146,611		11,253,000		76.74		2.3	%

1Q 2017		309,640		21,393,000		69.82		4.5	%
2Q 2017		19,430		1,468,000		75.08		0.3	%
Remaining 2017		140,504		12,183,000		87.56		2.5	%

Total 2017		469,574		35,044,000		75.35		7.3	%

2018		215,487		18,673,000		86.58		3.9	%
2019		257,004		21,836,000		86.46		4.6	%
2020		408,300		28,720,000		80.41		6.0	%
2021		894,429		61,029,000		72.05		12.7	%
2022		159,107		9,618,000		105.72		2.0	%
2023		508,849		39,092,000		77.35		8.2	%
2024		551,909		43,071,000		78.26		9.0	%
2025		113,903		9,732,000		85.44		2.0	%
Thereafter		2,746,158		200,516,000		72.94		42.0	%

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

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

⁽³⁾	Excludes square feet and revenue from parking, storage, theater and roof space.

- 35 -


		LEASE EXPIRATIONS - WASHINGTON, D.C.

(unaudited)


Year of	Square Feet		Annualized Rent ⁽¹⁾				% of Washington, D.C.
Lease Expiration ⁽²⁾	of Expiring Leases		Amount		Per Square Foot ⁽³⁾		Annualized Rent
Month to Month		—	$	—	$	—		—

3Q 2016		—		—		—		—
4Q 2016		—		—		—		—

Total 2016		—		—		—		—

1Q 2017		—		—		—		—
2Q 2017		—		—		—		—
Remaining 2017		—		—		—		—

Total 2017		—		—		—		—

2018		—		—		—		—
2019		42,081		3,304,000		74.37		3.8	%
2020		33,721		2,462,000		73.00		2.8	%
2021		307,305		15,215,000		47.85		17.3	%
2022		33,002		1,806,000		54.74		2.1	%
2023		140,216		11,238,000		80.52		12.8	%
2024		75,864		5,745,000		75.87		6.5	%
2025		56,124		4,359,000		77.67		5.0	%
Thereafter		751,991		43,623,000		55.43		49.7	%

⁽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⁾	Excludes square feet and revenue from parking, storage and signage.

- 36 -


		LEASE EXPIRATIONS - SAN FRANCISCO

(unaudited)


Year of	Square Feet		Annualized Rent ⁽¹⁾				% of San Francisco
Lease Expiration ⁽²⁾	of Expiring Leases		Amount		Per Square Foot ⁽³⁾		Annualized Rent
Month to Month		2,822	$	301,000	$	—		0.3	%

3Q 2016		1,330		80,000		62.88		0.1	%
4Q 2016		4,325		343,000		93.85		0.3	%

Total 2016		5,655		423,000		85.66		0.4	%

1Q 2017		6,083		277,000		45.49		0.3	%
2Q 2017		—		—		—		—
Remaining 2017		21,914		1,324,000		60.45		1.3	%

Total 2017		27,997		1,601,000		57.20		1.6	%

2018		92,238		5,737,000		62.24		5.8	%
2019		232,860		14,737,000		63.28		14.8	%
2020		97,867		6,890,000		70.41		6.9	%
2021		342,076		18,696,000		54.90		18.8	%
2022		236,765		16,891,000		71.34		17.0	%
2023		660		45,000		68.05		0.1	%
2024		6,392		572,000		89.44		0.6	%
2025		339,748		23,979,000		70.74		24.2	%
Thereafter		151,422		9,725,000		64.69		9.8	%

⁽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⁾	Excludes square feet and revenue from parking, storage and roof space.

- 37 -


		CASH BASIS CAPITAL EXPENDITURES - TOTAL PORTFOLIO
(unaudited and in thousands)


	Three Months Ended						Six Months Ended
	June 30, 2016		June 30, 2015		March 31, 2016		June 30, 2016		June 30, 2015
Capital expenditures to maintain assets:
Recurring ⁽¹⁾	$	2,471	$	1,411	$	4,541	$	7,012	$	5,476
Non-recurring ⁽¹⁾		—		—		—		—		—

Total capital expenditures to maintain assets	$	2,471	$	1,411	$	4,541	$	7,012	$	5,476

Tenant improvements:
Recurring ⁽¹⁾	$	19,523	$	12,116	$	13,576	$	33,099	$	22,600
Non-recurring ⁽¹⁾		13,603		1,431		6,031		19,634		3,124

Total tenant improvements	$	33,126	$	13,547	$	19,607	$	52,733	$	25,724

Leasing commissions:
Recurring ⁽¹⁾	$	4,345	$	3,355	$	2,311	$	6,656	$	6,899
Non-recurring ⁽¹⁾		470		1,678		915		1,385		4,265

Total leasing commissions	$	4,815	$	5,033	$	3,226	$	8,041	$	11,164

Total capital expenditures, tenant improvements and leasing commissions:
Total recurring ⁽¹⁾	$	26,339	$	16,882	$	20,428	$	46,767	$	34,975
Total non-recurring ⁽¹⁾		14,073		3,109		6,946		21,019		7,389

Total capital expenditures, tenant improvements and leasing commissions	$	40,412	$	19,991	$	27,374	$	67,786	$	42,364

Development expenditures: ⁽¹⁾
One Market Plaza—Lobby and Retail repositioning	$	196	$	3,866	$	4,460	$	4,656	$	9,167
1633 Broadway—Plaza and Retail development ⁽²⁾		2,783		879		3,043		5,826		972
Residential Development Fund		1,076		576		1,152		2,228		576
Other		570		—		391		961		—

Total development expenditures	$	4,625	$	5,321	$	9,046	$	13,671	$	10,715

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

⁽²⁾	Of the $15,000 budget, $14,494 has been expended as of June 30, 2016.

- 38 -


		CASH BASIS CAPITAL EXPENDITURES - NEW YORK
(unaudited and in thousands)


	Three Months Ended						Six Months Ended
	June 30, 2016		June 30, 2015		March 31, 2016		June 30, 2016		June 30, 2015
Capital expenditures to maintain assets:
Recurring ⁽¹⁾	$	665	$	193	$	2,529	$	3,194	$	1,752
Non-recurring ⁽¹⁾		—		—		—		—		—

Total capital expenditures to maintain assets	$	665	$	193	$	2,529	$	3,194	$	1,752

Tenant improvements:
Recurring ⁽¹⁾	$	11,351	$	7,748	$	11,689	$	23,040	$	18,041
Non-recurring ⁽¹⁾		12,358		915		3,911		16,269		2,334

Total tenant improvements	$	23,709	$	8,663	$	15,600	$	39,309	$	20,375

Leasing commissions:
Recurring ⁽¹⁾	$	1,829	$	2,733	$	687	$	2,516	$	4,835
Non-recurring ⁽¹⁾		382		1,678		659		1,041		1,678

Total leasing commissions	$	2,211	$	4,411	$	1,346	$	3,557	$	6,513

Total capital expenditures, tenant improvements and leasing commissions:
Total recurring ⁽¹⁾	$	13,845	$	10,674	$	14,905	$	28,750	$	24,628
Total non-recurring ⁽¹⁾		12,740		2,593		4,570		17,310		4,012

Total capital expenditures, tenant improvements and leasing commissions	$	26,585	$	13,267	$	19,475	$	46,060	$	28,640

Development expenditures: ⁽¹⁾
1633 Broadway—Plaza and Retail development ⁽²⁾	$	2,783	$	879	$	3,043	$	5,826	$	972
Other		570		—		391		961		—

Total development expenditures	$	3,353	$	879	$	3,434	$	6,787	$	972

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

⁽²⁾	Of the $15,000 budget, $14,494 has been expended as of June 30, 2016.

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		CASH BASIS CAPITAL EXPENDITURES - WASHINGTON, D.C.

(unaudited and in thousands)


	Three Months Ended						Six Months Ended
	June 30, 2016		June 30, 2015		March 31, 2016		June 30, 2016		June 30, 2015
Capital expenditures to maintain assets:
Recurring ⁽¹⁾	$	277	$	894	$	800	$	1,077	$	2,588
Non-recurring ⁽¹⁾		—		—		—		—		—

Total capital expenditures to maintain assets	$	277	$	894	$	800	$	1,077	$	2,588

Tenant improvements:
Recurring ⁽¹⁾	$	1,538	$	3,516	$	391	$	1,929	$	3,418
Non-recurring ⁽¹⁾		160		516		2,120		2,280		790

Total tenant improvements	$	1,698	$	4,032	$	2,511	$	4,209	$	4,208

Leasing commissions:
Recurring ⁽¹⁾	$	573	$	—	$	—	$	573	$	731
Non-recurring ⁽¹⁾		88		—		256		344		2,587

Total leasing commissions	$	661	$	—	$	256	$	917	$	3,318

Total capital expenditures, tenant improvements and leasing commissions:
Total recurring ⁽¹⁾	$	2,388	$	4,410	$	1,191	$	3,579	$	6,737
Total non-recurring ⁽¹⁾		248		516		2,376		2,624		3,377

Total capital expenditures, tenant improvements and leasing commissions	$	2,636	$	4,926	$	3,567	$	6,203	$	10,114

⁽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						Six Months Ended
	June 30, 2016		June 30, 2015		March 31, 2016		June 30, 2016		June 30, 2015
Capital expenditures to maintain assets:
Recurring ⁽¹⁾	$	1,141	$	139	$	750	$	1,891	$	864
Non-recurring ⁽¹⁾		—		—		—		—		—

Total capital expenditures to maintain assets	$	1,141	$	139	$	750	$	1,891	$	864

Tenant improvements:
Recurring ⁽¹⁾	$	6,634	$	852	$	1,496	$	8,130	$	1,141
Non-recurring ⁽¹⁾		1,085		—		—		1,085		—

Total tenant improvements	$	7,719	$	852	$	1,496	$	9,215	$	1,141

Leasing commissions:
Recurring ⁽¹⁾	$	576	$	622	$	639	$	1,215	$	1,333
Non-recurring ⁽¹⁾		—		—		—		—		—

Total leasing commissions	$	576	$	622	$	639	$	1,215	$	1,333

Total capital expenditures, tenant improvements and leasing commissions:
Total recurring ⁽¹⁾	$	8,351	$	1,613	$	2,885	$	11,236	$	3,338
Total non-recurring ⁽¹⁾		1,085		—		—		1,085		—

Total capital expenditures, tenant improvements and leasing commissions	$	9,436	$	1,613	$	2,885	$	12,321	$	3,338

Development expenditures: ⁽¹⁾
One Market Plaza—Lobby and Retail repositioning	$	196	$	3,866	$	4,460	$	4,656	$	9,167

⁽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						Six Months Ended
	June 30, 2016		June 30, 2015		March 31, 2016		June 30, 2016		June 30, 2015
Capital expenditures to maintain assets:
Recurring ⁽¹⁾	$	388	$	185	$	462	$	850	$	272
Non-recurring ⁽¹⁾		—		—		—		—		—

Total capital expenditures to maintain assets	$	388	$	185	$	462	$	850	$	272

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

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

Leasing commissions:
Recurring ⁽¹⁾	$	1,367	$	—	$	985	$	2,352	$	—
Non-recurring ⁽¹⁾		—		—				—		—

Total leasing commissions	$	1,367	$	—	$	985	$	2,352	$	—

Total capital expenditures, tenant improvements and leasing commissions:
Total recurring ⁽¹⁾	$	1,755	$	185	$	1,447	$	3,202	$	272
Total non-recurring ⁽¹⁾		—		—		—		—		—

Total capital expenditures, tenant improvements and leasing commissions	$	1,755	$	185	$	1,447	$	3,202	$	272

Development expenditures: ⁽¹⁾
Residential Development Fund	$	1,076	$	576	$	1,152	$	2,228	$	576

⁽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 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 the pro rata 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 acquisition and 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 pro rata 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 and (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 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 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 our pro rata 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 Earnings Before Interest, Taxes, Depreciation and Amortization (“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 pro rata 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.

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		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 our Pro rata 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 our pro rata 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.

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

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

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

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.

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