EX-99.2

EX-99.2 3 d693361dex992.htm EX-99.2 EX-99.2

Exhibit 99.2

LOGO

SUPPLEMENTAL OPERATING AND FINANCIAL DATA

FOR THE QUARTER ENDED DECEMBER 31, 2018


		FORWARD-LOOKING STATEMENTS

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

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		TABLE OF CONTENTS


	Page
Company Profile		4

Research Coverage		5

Selected Financial Information
Guidance		6
Financial Highlights		7
Consolidated Balance Sheets		8
Consolidated Statements of Income		9
Select Income Statement Data		10
Funds From Operations (“FFO”)		11
Funds Available for Distribution (“FAD”)		12
Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (“EBITDAre”)		13
Net Operating Income (“NOI”)		14 - 16
Same Store Results		17 - 20
Consolidated Joint Ventures and Fund		21 - 23
Unconsolidated Joint Ventures		24 - 26
Unconsolidated Funds Summary		27
Capital Structure		28
Debt Analysis		29
Debt Maturities		30

Selected Property Data
Portfolio Summary		31
Same Store Leased Occupancy		32 - 33
Top Tenants and Industry Diversification		34
Leasing Activity		35 - 36
Lease Expirations		37 - 40
Cash Basis Capital Expenditures		41 - 42

Definitions		43 - 44

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		COMPANY PROFILE

Paramount Group, Inc. (“Paramount”) or the (“Company”) is a fully-integrated real estate investment trust that owns, operates, manages, acquires and redevelops high-quality, Class A office properties located in select central business district submarkets of New York, 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
Peter Brindley		Executive Vice President, Leasing
David Zobel		Executive Vice President, Head of Acquisitions

BOARD OF DIRECTORS


Albert Behler		Director, Chairman of the Board
Thomas Armbrust		Director
Martin Bussmann		Director
Dan Emmett		Director, Chair of Nominating and Corporate Governance Committee; Lead Independent Director
Lizanne Galbreath		Director, Chair of Compensation Committee
Karin Klein		Director
Peter Linneman		Director, Chair of Audit Committee
Katharina Otto-Bernstein		Director
Mark Patterson		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 Catherwood	Derek Johnston	Steve Sakwa
Bank of America Merrill Lynch	BTIG	Deutsche Bank	Evercore ISI
(646) 855-5808	(212) 738-6140	(904) 520-4973	(212) 446-9462
james.feldman@baml.com	tcatherwood@btig.com	derek.johnston@db.com	steve.sakwa@evercoreisi.com

Andrew Rosivach	Daniel Ismail	Haendel St. Juste	Vikram Malhotra
Goldman Sachs	Green Street Advisors	Mizuho Securities USA Inc.	Morgan Stanley
(212) 902-2796	(949) 640-8780	(212) 205-7860	(212) 761-7064
andrew.rosivach@gs.com	dismail@greenst.com	haendel.st.juste@us.mizuho-sc.com	vikram.malhotra@morganstanley.com

Frank Lee	Blaine Heck
UBS	Wells Fargo
(415) 352-5679	(443) 263-6529
frank-a.lee@ubs.com	blaine.heck@wellsfargo.com

⁽¹⁾

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

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		GUIDANCE

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


	Full Year 2019
(Amounts per diluted share)	Low			High
Estimated net income attributable to common stockholders	$	0.00		$	0.04
Our share of real estate depreciation and amortization		0.88			0.88

Estimated Core FFO⁽¹⁾	$	0.88		$	0.92

Operating Assumptions:
Leasing Activity (square feet)		600,000			900,000
PGRE’s share of Same Store Leased %⁽²⁾at year end		94.0	%		96.0	%
Increase in PGRE’s share of Same Store Cash NOI⁽²⁾		5.0	%		7.0	%
Increase in PGRE’s share of Same Store NOI⁽²⁾		1.0	%		3.0	%
Financial Assumptions (at share):
Estimated net income	$	—		$	10,000
Depreciation and amortization		228,000			228,000
General and administrative expenses		65,000			63,000
Interest and debt expense, including amortization deferred financing costs		136,000			134,000
Fee income, net of income taxes		(17,000	)		(17,000	)
Other, net (primarily interest income)		(5,000	)		(5,000	)

NOI⁽²⁾		407,000			413,000
Straight-line rent and above and below-market lease revenue, net		(44,000	)		(46,000	)

Cash NOI⁽²⁾	$	363,000		$	367,000

⁽¹⁾

We are providing our Estimated Core FFO Guidance for the full year of 2019, which is reconciled above to estimated net income attributable to common stockholders per diluted share in accordance with GAAP. The estimated net income attributable to common stockholders per diluted share is not a projection and is being provided solely to satisfy the disclosure requirements of the U.S. Securities and Exchange Commission. Except as described above, these estimates reflect management’s view of current and future market conditions, including assumptions with respect to rental rates, occupancy levels and the earnings impact of the events referenced in our earnings release issued on February 13, 2019 and otherwise referenced during our conference call scheduled for February 14, 2019. These estimates do not include the impact on operating results from possible future property acquisitions or dispositions, capital markets activity or realized and unrealized gains or losses on real estate fund investments. The estimates set forth above may be subject to fluctuations as a result of several factors, including the straight-lining of rental income and the amortization of above and below-market leases. There can be no assurance that our actual results will not differ materially from the estimates set forth above.

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

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		FINANCIAL HIGHLIGHTS

(unaudited and in thousands, except per share amounts)


	Three Months Ended							Year Ended
SELECTED FINANCIAL DATA	December 31, 2018		December 31, 2017			September 30, 2018		December 31, 2018		December 31, 2017
Net income (loss) attributable to common stockholders	$	5,318	$	(6,793	)	$	37,531	$	9,147	$	86,381
Per share - basic and diluted	$	0.02	$	(0.03	)	$	0.16	$	0.04	$	0.37
Core FFO attributable to common stockholders ⁽¹⁾	$	59,290	$	51,633		$	57,748	$	229,900	$	210,072
Per share - diluted	$	0.25	$	0.22		$	0.24	$	0.96	$	0.89
PGRE’s share of Cash NOI⁽¹⁾	$	92,761	$	83,619		$	88,717	$	355,913	$	331,985
PGRE’s share of NOI⁽¹⁾	$	106,294	$	96,737		$	104,858	$	417,978	$	392,644


Same Store Cash NOI	% Change
Three Months Ended December 31, 2018 vs. December 31, 2017		13.4	%
Year Ended December 31, 2018 vs. December 31, 2017		10.3	%


Same Store Cash NOI	% Change
Three Months Ended December 31, 2018 vs. December 31, 2017		12.8	%
Year Ended December 31, 2018 vs. December 31, 2017		9.1	%

PORTFOLIO STATISTICS


	As of
	December 31, 2018			September 30, 2018			June 30, 2018			March 31, 2018			December 31, 2017
Leased %⁽¹⁾		96.4	%		96.4	%		96.4	%		94.0	%		93.5	%


Same Store Leased %	% Change
December 31, 2018 vs. September 30, 2018		0.0	%
December 31, 2018 vs. December 31, 2017		3.1	%

COMMON SHARE DATA


	Three Months Ended
	December 31, 2018			September 30, 2018			June 30, 2018			March 31, 2018			December 31, 2017
Share Price:
High	$	15.16		$	16.05		$	15.63		$	15.89		$	16.61
Low	$	12.19		$	14.83		$	13.85		$	13.70		$	15.49
Closing (end of period)	$	12.56		$	15.09		$	15.40		$	14.24		$	15.85

Dividends per common share	$	0.100		$	0.100		$	0.100		$	0.100		$	0.095
Annualized dividends per common share	$	0.400		$	0.400		$	0.400		$	0.400		$	0.380
Dividend yield (on closing share price)		3.2	%		2.7	%		2.6	%		2.8	%		2.4	%

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

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		CONSOLIDATED BALANCE SHEETS

(unaudited and in thousands)


	December 31, 2018			December 31, 2017
ASSETS:
Real estate, at cost
Land	$	2,065,206		$	2,209,506
Buildings and improvements		6,036,445			6,119,969

		8,101,651			8,329,475
Accumulated depreciation and amortization		(644,639	)		(487,945	)

Real estate, net		7,457,012			7,841,530
Cash and cash equivalents		339,653			219,381
Restricted cash		25,756			31,044
Investments in unconsolidated joint ventures		78,863			44,762
Investments in unconsolidated real estate funds		10,352			7,253
Preferred equity investments, net		36,042			35,817
Marketable securities		22,660			29,039
Accounts and other receivables, net		20,076			17,082
Deferred rent receivable		267,456			220,826
Deferred charges, net		117,858			98,645
Intangible assets, net		270,445			352,206
Other assets		109,805			20,076

Total Assets	$	8,755,978		$	8,917,661

LIABILITIES:
Notes and mortgages payable, net	$	3,566,917		$	3,541,300
Revolving credit facility		—			—
Due to affiliates		—			27,299
Accounts payable and accrued expenses		124,334			117,630
Dividends and distributions payable		25,902			25,211
Intangible liabilities, net		95,991			130,028
Other liabilities		51,170			54,109

Total Liabilities		3,864,314			3,895,577

EQUITY:
Paramount Group, Inc. equity		4,000,800			4,176,741
Noncontrolling interests in:
Consolidated joint ventures		394,995			404,997
Consolidated real estate fund		66,887			14,549
Operating Partnership		428,982			425,797

Total Equity		4,891,664			5,022,084

Total Liabilities and Equity	$	8,755,978		$	8,917,661

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		CONSOLIDATED STATEMENTS OF INCOME

(unaudited and in thousands, except per share amounts)


	Three Months Ended									Year Ended
	December 31, 2018			December 31, 2017			September 30, 2018			December 31, 2018			December 31, 2017
REVENUES:
Property rentals	$	149,654		$	142,639		$	148,359		$	592,240		$	554,907
Straight-line rent adjustments		13,390			10,924			15,688			59,061			54,453
Amortization of above and below-market leases, net		3,448			5,359			3,887			16,059			19,523

Rental income		166,492			158,922			167,934			667,360			628,883
Tenant reimbursement income		13,961			13,657			15,579			56,950			52,418
Fee income (see details on page 10)		5,676			4,374			4,079			18,629			24,212
Other income (see details on page 10)		4,546			3,304			5,004			16,022			13,454

Total revenues		190,675			180,257			192,596			758,961			718,967

EXPENSES:
Operating		67,643			68,440			69,811			274,078			266,136
Depreciation and amortization		63,684			67,894			64,610			258,225			266,037
General and administrative (see details on page 10)		13,285			16,953			14,452			57,563			61,577
Transaction related costs		608			976			450			1,471			2,027
Real estate impairment loss		—			—			—			46,000			—

Total expenses		145,220			154,263			149,323			637,337			595,777

Operating income		45,455			25,994			43,273			121,624			123,190

Income from unconsolidated joint ventures		537			1,042			472			3,468			20,185
Loss from unconsolidated real estate funds		(1	)		(90	)		(188	)		(269	)		(6,143	)
Interest and other income (loss), net (see details on page 10)		1,229			2,951			2,778			8,117			(9,031	)
Interest and debt expense (see details on page 10)		(37,657	)		(36,194	)		(37,105	)		(147,653	)		(143,762	)
Loss on early extinguishment of debt		—			—			—			—			(7,877	)
Gain on sale of real estate		—			—			36,845			36,845			133,989
Unrealized gain on interest rate swaps		—			—			—			—			1,802

Net income (loss) before income taxes		9,563			(6,297	)		46,075			22,132			112,353
Income tax expense		(968	)		(935	)		(1,814	)		(3,139	)		(5,177	)

Net income (loss)		8,595			(7,232	)		44,261			18,993			107,176
Less net (income) loss attributable to noncontrolling interests in:
Consolidated joint ventures		(2,662	)		(664	)		(2,713	)		(8,182	)		10,365
Consolidated real estate fund		(52	)		398			(86	)		(720	)		(19,797	)
Operating Partnership		(563	)		705			(3,931	)		(944	)		(11,363	)

Net income (loss) attributable to common stockholders	$	5,318		$	(6,793)		$	37,531		$	9,147		$	86,381

*Per diluted share*	$	*0.02*		$	*(0.03)*		$	*0.16*		$	*0.04*		$	*0.37*

Capitalized internal leasing costs	$	1,377		$	2,515		$	1,169		$	5,653		$	7,003

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		SELECT INCOME STATEMENT DATA

(unaudited and in thousands)


	Three Months Ended							Year Ended
	December 31, 2018			December 31, 2017		September 30, 2018		December 31, 2018			December 31, 2017
Fee Income:
Property management	$	1,695		$	1,521	$	1,476	$	6,163		$	6,336
Asset management		2,257			1,959		2,222		7,912			8,581
Acquisition and disposition		1,410			725		—		3,160			7,770
Other		314			169		381		1,394			1,525

Total fee income	$	5,676		$	4,374	$	4,079	$	18,629		$	24,212


	Three Months Ended							Year Ended
	December 31, 2018			December 31, 2017		September 30, 2018		December 31, 2018			December 31, 2017
Other Income:
Lease termination income	$	1,367		$	274	$	1,561	$	2,985		$	2,189
Other (primarily parking income and tenant requested services, including overtime heating and cooling)		3,179			3,030		3,443		13,037			11,265

Total other income	$	4,546		$	3,304	$	5,004	$	16,022		$	13,454


	Three Months Ended							Year Ended
	December 31, 2018			December 31, 2017		September 30, 2018		December 31, 2018			December 31, 2017
General and Administrative:
Cash general and administrative	$	11,086		$	9,649	$	9,132	$	38,839		$	39,045
Non-cash general and administrative - stock based compensation expense		4,401			3,100		4,330		19,646			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 (loss)”)		(2,202	)		1,578		990		(922	)		5,114
Severance costs		—			2,626		—		—			2,626

Total general and administrative	$	13,285		$	16,953	$	14,452	$	57,563		$	61,577


	Three Months Ended							Year Ended
	December 31, 2018			December 31, 2017		September 30, 2018		December 31, 2018			December 31, 2017
Interest and Other Income (Loss):
Preferred equity investment income⁽¹⁾	$	909		$	860	$	930	$	3,655		$	4,187
Interest and other income		2,522			513		858		5,384			1,256
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)		(2,202	)		1,578		990		(922	)		5,114
Valuation allowance on preferred equity investment⁽²⁾		—			—		—		—			(19,588	)

Total interest and other income (loss), net	$	1,229		$	2,951	$	2,778	$	8,117		$	(9,031)

⁽¹⁾	Represents 100% of the investment income from PGRESS Equity Holdings, L.P., of which our 24.4% share is $221, $210 and $227 for the three months ended December 31, 2018 and 2017, and September 30, 2018, respectively, and $890 and $1,029 for the years ended December 31, 2018 and 2017, respectively.

⁽²⁾

Represents the valuation allowance on 2 Herald Square, our preferred equity investment in PGRESS Equity Holdings, L.P., of which our 24.4% share is $4,780, and $14,808 was attributable to noncontrolling interest. In May 2018, the senior lender foreclosed out our interests and accordingly, we wrote off our preferred equity investment and the related valuation allowance.


	Three Months Ended						Year Ended
	December 31, 2018		December 31, 2017		September 30, 2018		December 31, 2018		December 31, 2017
Interest and Debt Expense:
Interest expense	$	34,901	$	33,373	$	34,353	$	136,630	$	132,574
Amortization of deferred financing costs		2,756		2,821		2,752		11,023		11,188

Total interest and debt expense	$	37,657	$	36,194	$	37,105	$	147,653	$	143,762

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		FFO

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


	Three Months Ended									Year Ended
	December 31, 2018			December 31, 2017			September 30, 2018			December 31, 2018			December 31, 2017
Reconciliation of net income (loss) to FFO and Core FFO:
Net income (loss)	$	8,595		$	(7,232)		$	44,261		$	18,993		$	107,176
Real estate depreciation and amortization (including our share of unconsolidated joint ventures)		65,832			69,915			66,533			266,236			273,938
Real estate impairment loss		—			—			—			46,000			—
Gain on sale of depreciable real estate		—			—			(36,845	)		(36,845	)		(110,583	)

FFO⁽¹⁾		74,427			62,683			73,949			294,384			270,531
Less FFO attributable to noncontrolling interests in:
Consolidated joint ventures		(12,143	)		(9,965	)		(12,432	)		(45,622	)		(19,748	)
Consolidated real estate fund		(52	)		398			(86	)		(720	)		(20,132	)

FFO attributable to Paramount Group Operating Partnership		62,232			53,116			61,431			248,042			230,651
Less FFO attributable to noncontrolling interests in Operating Partnership		(5,961	)		(4,995	)		(5,825	)		(23,577	)		(25,093	)

FFO attributable to common stockholders ⁽¹⁾	$	56,271		$	48,121		$	55,606		$	224,465		$	205,558

Per diluted share	$	0.24		$	0.20		$	0.23		$	0.94		$	0.87


FFO	$	74,427		$	62,683		$	73,949		$	294,384		$	270,531
Non-core items:

Our share of earnings from 712 Fifth Avenue in excess of distributions received and (distributions in excess of earnings)		2,646			176			398			2,727			(14,205	)
Transaction related costs		608			976			450			1,471			2,027
Realized and unrealized loss from unconsolidated real estate funds		85			99			270			560			6,380
“Sting” taxes in connection with the sale of real estate		—			—			1,248			1,248			—
Severance costs		—			2,626			—			—			2,626
Valuation allowance on preferred equity investment		—			—			—			—			19,588
After-tax net gain on sale of residential condominium land parcel		—			—			—			—			(21,568	)
Loss on early extinguishment of debt		—			—			—			—			7,877
Unrealized gain on interest rate swaps (including our share of unconsolidated joint ventures)		—			—			—			—			(2,750	)

Core FFO⁽¹⁾		77,766			66,560			76,315			300,390			270,506
Less Core FFO attributable to noncontrolling interests in:
Consolidated joint ventures		(12,143	)		(9,965	)		(12,432	)		(45,622	)		(35,022	)
Consolidated real estate fund		(52	)		398			(86	)		(720	)		156

Core FFO attributable to Paramount Group Operating Partnership		65,571			56,993			63,797			254,048			235,640
Less Core FFO attributable to noncontrolling interests in Operating Partnership		(6,281	)		(5,360	)		(6,049	)		(24,148	)		(25,568	)

Core FFO attributable to common stockholders⁽¹⁾	$	59,290		$	51,633		$	57,748		$	229,900		$	210,072

Per diluted share	$	0.25		$	0.22		$	0.24		$	0.96		$	0.89


Reconciliation of weighted average shares outstanding:
Weighted average shares outstanding		237,036,494			239,997,181			240,447,921			239,526,694			236,372,801
Effect of dilutive securities		40,746			37,360			41,217			28,942			28,747

Denominator for FFO and Core FFO per diluted share		237,077,240			240,034,541			240,489,138			239,555,636			236,401,548

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

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		FAD

(unaudited and in thousands)


	Three Months Ended									Year Ended
	December 31, 2018			December 31, 2017			September 30, 2018			December 31, 2018			December 31, 2017
Reconciliation of Core FFO to FAD:
Core FFO	$	77,766		$	66,560		$	76,315		$	300,390		$	270,506
Add (subtract) adjustments to arrive at FAD:
Amortization of stock-based compensation expense		4,401			3,100			4,330			19,646			14,792
Amortization of deferred financing costs (including our share of unconsolidated joint ventures)		2,830			2,895			2,824			11,316			11,645
Amortization of above and below-market leases, net (including our share of unconsolidated joint ventures)		(3,286	)		(5,196	)		(3,724	)		(15,408	)		(18,912	)
Expenditures to maintain assets		(5,125	)		(8,623	)		(2,858	)		(14,181	)		(19,038	)
Second generation tenant improvements and leasing commissions		(46,027	)		(10,744	)		(27,993	)		(109,395	)		(50,717	)
Straight-line rent adjustments (including our share of unconsolidated joint ventures)		(13,320	)		(10,765	)		(15,752	)		(59,122	)		(54,886	)

FAD⁽¹⁾		17,239			37,227			33,142			133,246			153,390
Less FAD attributable to noncontrolling interests in:
Consolidated joint ventures		(5,785	)		(5,687	)		(5,503	)		(24,415	)		(17,124	)
Consolidated real estate fund		(52	)		407			(86	)		(720	)		164

FAD attributable to Paramount Group Operating Partnership		11,402			31,947			27,553			108,111			136,430
Less FAD attributable to noncontrolling interests in Operating Partnership		(1,092	)		(3,005	)		(2,612	)		(10,255	)		(14,840	)

FAD attributable to common stockholders⁽¹⁾ ⁽²⁾	$	10,310		$	28,942		$	24,941		$	97,856		$	121,590

Dividends declared on common stock	$	23,356		$	22,841		$	24,046		$	95,506		$	90,266

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

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

- 12 -


		EBITDAre

(unaudited and in thousands)


	Three Months Ended									Year Ended
	December 31, 2018			December 31, 2017			September 30, 2018			December 31, 2018			December 31, 2017
Reconciliation of net income (loss) to EBITDAre and Adjusted EBITDAre:
Net income (loss)	$	8,595		$	(7,232)		$	44,261		$	18,993		$	107,176
Add (subtract) adjustments to arrive at EBITDAre and Adjusted EBITDAre:
Depreciation and amortization (including our share of unconsolidated joint ventures)		65,832			69,915			66,533			266,236			273,938
Interest and debt expense (including our share of unconsolidated joint ventures)		39,406			37,869			38,835			154,498			150,593
Income tax expense (including our share of unconsolidated joint ventures)		968			935			1,814			3,140			5,177
Real estate impairment loss		—			—			—			46,000			—
Gain on sale of depreciable real estate		—			—			(36,845	)		(36,845	)		(110,583	)

EBITDAre ⁽¹⁾		114,801			101,487			114,598			452,022			426,301
Less EBITDAre attributable to noncontrolling interests in:
Consolidated joint ventures		(18,832	)		(16,684	)		(19,128	)		(72,215	)		(43,564	)
Consolidated real estate fund		(52	)		398			(115	)		(721	)		(20,130	)

PGRE’s share of EBITDAre⁽¹⁾	$	95,917		$	85,201		$	95,355		$	379,086		$	362,607


EBITDAre	$	114,801		$	101,487		$	114,598		$	452,022		$	426,301
Add (subtract) adjustments to arrive at Adjusted EBITDAre:
Transaction related costs		608			976			450			1,471			2,027
Our share of earnings from 712 Fifth Avenue in excess of distributions received and (distributions in excess of earnings)		2,646			176			398			2,727			(14,205	)
EBITDAre from real estate funds		(10	)		554			142			(404	)		5,926
Severance costs		—			2,626			—			—			2,626
Pre-tax net gain on sale of residential condominium land parcel		—			—			—			—			(23,406	)
Valuation allowance on preferred equity investment		—			—			—			—			19,588
Loss on early extinguishment of debt		—			—			—			—			7,877
Unrealized gain on interest rate swaps (including our share of unconsolidated joint ventures)		—			—			—			—			(2,750	)

Adjusted EBITDAre⁽¹⁾		118,045			105,819			115,588			455,816			423,984
Less Adjusted EBITDAre attributable to noncontrolling interests in:
Consolidated joint ventures		(18,832	)		(16,685	)		(19,128	)		(72,215	)		(58,838	)
Consolidated real estate fund		—			—			—			—			384

PGRE’s share of Adjusted EBITDAre⁽¹⁾	$	99,213		$	89,134		$	96,460		$	383,601		$	365,530

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

- 13 -


		NOI

(unaudited and in thousands)


	Three Months Ended									Year Ended
	December 31, 2018			December 31, 2017			September 30, 2018			December 31, 2018			December 31, 2017
Reconciliation of net income (loss) to NOI and Cash NOI:
Net income (loss)	$	8,595		$	(7,232	)	$	44,261		$	18,993		$	107,176
Add (subtract) adjustments to arrive at NOI and Cash NOI:
Depreciation and amortization		63,684			67,894			64,610			258,225			266,037
General and administrative		13,285			16,953			14,452			57,563			61,577
Interest and debt expense		37,657			36,194			37,105			147,653			143,762
Loss on early extinguishment of debt		—			—			—			—			7,877
Transaction related costs		608			976			450			1,471			2,027
Income tax expense		968			935			1,814			3,139			5,177
NOI from unconsolidated joint ventures		6,973			4,869			4,448			20,730			19,643
Income from unconsolidated joint ventures		(537	)		(1,042	)		(472	)		(3,468	)		(20,185	)
Loss from unconsolidated real estate funds		1			90			188			269			6,143
Fee income		(5,676	)		(4,374	)		(4,079	)		(18,629	)		(24,212	)
Interest and other (income) loss, net		(1,229	)		(2,951	)		(2,778	)		(8,117	)		9,031
Real estate impairment loss		—			—			—			46,000			—
Gain on sale of real estate		—			—			(36,845	)		(36,845	)		(133,989	)
Unrealized gain on interest rate swaps		—			—			—			—			(1,802	)

NOI⁽¹⁾		124,329			112,312			123,154			486,984			448,262
Less NOI attributable to noncontrolling interests in:
Consolidated joint ventures		(18,026	)		(15,928	)		(18,303	)		(69,017	)		(55,464	)
Consolidated real estate fund		(9	)		353			7			11			(154	)

PGRE’s share of NOI ⁽¹⁾	$	106,294		$	96,737		$	104,858		$	417,978		$	392,644


NOI ⁽¹⁾	$	124,329		$	112,312		$	123,154		$	486,984		$	448,262
Less:
Straight-line rent adjustments (including our share of unconsolidated joint ventures)		(13,320	)		(10,765	)		(15,752	)		(59,122	)		(54,886	)
Amortization of above and below-market leases, net (including our share of unconsolidated joint ventures)		(3,286	)		(5,196	)		(3,724	)		(15,408	)		(18,912	)

Cash NOI ⁽¹⁾		107,723			96,351			103,678			412,454			374,464
Less Cash NOI attributable to noncontrolling interests in:
Consolidated joint ventures		(14,953	)		(13,085	)		(14,968	)		(56,552	)		(42,325	)
Consolidated real estate fund		(9	)		353			7			11			(154	)

PGRE’s share of Cash NOI⁽¹⁾	$	92,761		$	83,619		$	88,717		$	355,913		$	331,985

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

- 14 -


		NOI

(unaudited and in thousands)


	Three Months Ended December 31, 2018
	Total			New York			Washington, D.C.		San Francisco			Other
Reconciliation of net income (loss) to NOI and Cash NOI:
Net income (loss)	$	8,595		$	10,151		$	2,301	$	8,460		$	(12,317	)
Add (subtract) adjustments to arrive at NOI and Cash NOI:
Depreciation and amortization		63,684			39,578			2,402		20,953			751
General and administrative		13,285			—			—		—			13,285
Interest and debt expense		37,657			23,774			—		12,384			1,499
Transaction related costs		608			—			—		—			608
Income tax expense (benefit)		968			—			—		(1	)		969
NOI from unconsolidated joint ventures		6,973			6,881			—		—			92
Income from unconsolidated joint ventures		(537	)		(508	)		—		—			(29	)
Loss from unconsolidated real estate funds		1			—			—		—			1
Fee income		(5,676	)		—			—		—			(5,676	)
Interest and other income, net		(1,229	)		—			—		(209	)		(1,020	)

NOI⁽¹⁾		124,329			79,876			4,703		41,587			(1,837	)
Less NOI attributable to noncontrolling interests in:
Consolidated joint ventures		(18,026	)		—			—		(18,026	)		—
Consolidated real estate fund		(9	)		—			—		—			(9	)

PGRE’s share of NOI for the three months ended December 31, 2018	$	106,294		$	79,876		$	4,703	$	23,561		$	(1,846	)

PGRE’s share of NOI for the three months ended December 31, 2017	$	96,737		$	67,668		$	9,266	$	20,834		$	(1,031	)


NOI⁽¹⁾	$	124,329		$	79,876		$	4,703	$	41,587		$	(1,837	)
Add (subtract) adjustments to arrive at Cash NOI:
Straight-line rent adjustments (including our share of unconsolidated joint ventures)		(13,320	)		(10,892	)		110		(2,516	)		(22	)
Amortization of above and below-market leases, net (including our share of unconsolidated joint ventures)		(3,286	)		530			20		(3,836	)		—

Cash NOI ⁽¹⁾		107,723			69,514			4,833		35,235			(1,859	)
Less Cash NOI attributable to noncontrolling interests in:
Consolidated joint ventures		(14,953	)		—			—		(14,953	)		—
Consolidated real estate fund		(9	)		—			—		—			(9	)

PGRE’s share of Cash NOI for the three months ended December 31, 2018	$	92,761		$	69,514		$	4,833	$	20,282		$	(1,868	)

PGRE’s share of Cash NOI for the three months ended December 31, 2017	$	83,619		$	60,063		$	9,028	$	15,586		$	(1,058	)

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

- 15 -


		NOI

(unaudited and in thousands)


	Year Ended December 31, 2018
	Total			New York			Washington, D.C.			San Francisco			Other
Reconciliation of net income (loss) to NOI and Cash NOI:
Net income (loss)	$	18,993		$	35,209		$	5,578		$	30,223		$	(52,017)
Add (subtract) adjustments to arrive at NOI and Cash NOI:
Depreciation and amortization		258,225			154,820			17,357			83,346			2,702
General and administrative		57,563			—			—			—			57,563
Interest and debt expense		147,653			93,359			—			49,207			5,087
Transaction related costs		1,471			—			—			—			1,471
Income tax expense		3,139			—			—			9			3,130
NOI from unconsolidated joint ventures		20,730			20,395			—			—			335
Income from unconsolidated joint ventures		(3,468	)		(3,383	)		—			—			(85	)
Loss from unconsolidated real estate funds		269			—			—			—			269
Fee income		(18,629	)		—			—			—			(18,629	)
Interest and other income, net		(8,117	)		—			(181	)		(757	)		(7,179	)
Real estate impairment loss		46,000			—			46,000			—			—
Gain on sale of real estate		(36,845	)		—			(36,845	)		—			—

NOI⁽¹⁾		486,984			300,400			31,909			162,028			(7,353	)
Less NOI attributable to noncontrolling interests in:
Consolidated joint ventures		(69,017	)		—			—			(69,017	)		—
Consolidated real estate funds		11			—			—			—			11

PGRE’s share of NOI for the year ended December 31, 2018	$	417,978		$	300,400		$	31,909		$	93,011		$	(7,342)

PGRE’s share of NOI for the year ended December 31, 2017	$	392,644		$	268,836		$	44,801		$	85,307		$	(6,300)


NOI⁽¹⁾	$	486,984		$	300,400		$	31,909		$	162,028		$	(7,353)
Add (subtract) adjustments to arrive at Cash NOI:
Straight-line rent adjustments (including our share of unconsolidated joint ventures)		(59,122	)		(41,151	)		(1,712	)		(16,252	)		(7	)
Amortization of above and below-market leases, net (including our share of unconsolidated joint ventures)		(15,408	)		2,154			(1,407	)		(16,155	)		—

Cash NOI ⁽¹⁾		412,454			261,403			28,790			129,621			(7,360	)
Less Cash NOI attributable to noncontrolling interests in:
Consolidated joint ventures		(56,552	)		—			—			(56,552	)		—
Consolidated real estate funds		11			—			—			—			11

PGRE’s share of Cash NOI for the year ended December 31, 2018	$	355,913		$	261,403		$	28,790		$	73,069		$	(7,349)

PGRE’s share of Cash NOI for the year ended December 31, 2017	$	331,985		$	235,280		$	41,629		$	61,398		$	(6,322)

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

- 16 -


		SAME STORE RESULTS

(unaudited and in thousands)


	Three Months Ended December 31, 2018
SAME STORE CASH NOI⁽¹⁾	Total			New York			Washington, D.C.			San Francisco			Other
PGRE’s share of Cash NOI for the three months ended December 31, 2018	$	92,761		$	69,514		$	4,833		$	20,282		$	(1,868)
Acquisitions		—			—			—			—			—
Dispositions		—			—			—			—			—
Lease termination income (including our share of unconsolidated joint ventures)		(3,553	)		(3,254	)		—			(299	)		—
Other, net		90			90			—			—			—

PGRE’s share of Same Store Cash NOI⁽¹⁾for the three months ended December 31, 2018	$	89,298		$	66,350		$	4,833		$	19,983		$	(1,868)


	Three Months Ended December 31, 2017
	Total			New York			Washington, D.C.			San Francisco			Other
PGRE’s share of Cash NOI for the three months ended December 31, 2017	$	83,619		$	60,063		$	9,028		$	15,586		$	(1,058)
Acquisitions		—			—			—			—			—
Dispositions⁽²⁾		(4,469	)		—			(4,469	)		—			—
Lease termination income (including our share of unconsolidated joint ventures)		(388	)		(191	)		—			(197	)		—
Other, net		5			6			—			(1	)		—

PGRE’s share of Same Store Cash NOI⁽¹⁾for the three months ended December 31, 2017	$	78,767		$	59,878		$	4,559		$	15,388		$	(1,058	)


Increase (decrease) in PGRE’s share of Same Store Cash NOI	$	10,531		$	6,472		$	274		$	4,595		$	(810	)
% Increase		13.4	%		10.8	%		6.0	%		29.9	%

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

⁽²⁾	Represents our share of Cash NOI attributable to sold properties (2099 Pennsylvania Avenue and 425 Eye Street in Washington, D.C.) for the months in which they were not owned by us in both reporting periods.

- 17 -


		SAME STORE RESULTS

(unaudited and in thousands)


	Three Months Ended December 31, 2018
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, 2018	$	106,294		$	79,876		$	4,703		$	23,561		$	(1,846	)
Acquisitions		—			—			—			—			—
Dispositions		—			—			—			—			—
Lease termination income (including our share of unconsolidated joint ventures)		(3,553	)		(3,254	)		—			(299	)		—
Other, net		90			90			—			—			—

PGRE’s share of Same Store NOI⁽¹⁾for the three months ended December 31, 2018	$	102,831		$	76,712		$	4,703		$	23,262		$	(1,846	)


	Three Months Ended December 31, 2017
	Total			New York			Washington, D.C.			San Francisco			Other
PGRE’s share of NOI for the three months ended December 31, 2017	$	96,737		$	67,668		$	9,266		$	20,834		$	(1,031	)
Acquisitions		—			—			—			—			—
Dispositions⁽²⁾		(4,640	)		—			(4,640	)		—			—
Lease termination income (including our share of unconsolidated joint ventures)		(388	)		(191	)		—			(197	)		—
Other, net		(509	)		(4	)		—			(505	)		—

PGRE’s share of Same Store NOI⁽¹⁾for the three months ended December 31, 2017	$	91,200		$	67,473		$	4,626		$	20,132		$	(1,031	)


Increase (decrease) in PGRE’s share of Same Store NOI	$	11,631		$	9,239		$	77		$	3,130		$	(815	)
% Increase		12.8	%		13.7	%		1.7	%		15.5	%

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

⁽²⁾	Represents our share of NOI attributable to sold properties (2099 Pennsylvania Avenue and 425 Eye Street in Washington, D.C.) for the months in which they were not owned by us in both reporting periods.

- 18 -


		SAME STORE RESULTS - BY SEGMENT

(unaudited and in thousands)


	Year Ended December 31, 2018
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, 2018	$	355,913		$	261,403		$	28,790		$	73,069		$	(7,349	)
Acquisitions⁽²⁾		(4,188	)		(215	)		—			(3,973	)		—
Dispositions		—			—			—			—			—
Lease termination income (including our share of unconsolidated joint ventures)		(4,303	)		(3,526	)		—			(777	)		—
Other, net		320			316			—			4			—

PGRE’s share of Same Store Cash NOI⁽¹⁾for the year ended December 31, 2018	$	347,742		$	257,978		$	28,790		$	68,323		$	(7,349	)


	Year Ended December 31, 2017
	Total			New York			Washington, D.C.			San Francisco			Other
PGRE’s share of Cash NOI for the year ended December 31, 2017	$	331,985		$	235,280		$	41,629		$	61,398		$	(6,322	)
Acquisitions		—			—			—			—			—
Dispositions⁽³⁾		(14,160	)		—			(14,160	)		—			—
Lease termination income (including our share of unconsolidated joint ventures)		(2,381	)		(1,097	)		—			(1,284	)		—
Other, net		(50	)		50			—			23			(123	)

PGRE’s share of Same Store Cash NOI⁽¹⁾for the year ended December 31, 2017	$	315,394		$	234,233		$	27,469		$	60,137		$	(6,445	)


Increase (decrease) in PGRE’s share of Same Store Cash NOI	$	32,348		$	23,745		$	1,321		$	8,186		$	(904	)
% Increase		10.3	%		10.1	%		4.8	%		13.6	%

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

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

⁽³⁾	Represents our share of Cash NOI attributable to sold properties (Waterview, 2099 Pennsylvania Avenue and 425 Eye Street in Washington, D.C.) for the months in which they were not owned by us in both reporting periods.

- 19 -


		SAME STORE RESULTS - BY SEGMENT

(unaudited and in thousands)


	Year Ended December 31, 2018
SAME STORE NOI⁽¹⁾	Total			New York			Washington, D.C.			San Francisco			Other
PGRE’s share of NOI for the year ended December 31, 2018	$	417,978		$	300,400		$	31,909		$	93,011		$	(7,342	)
Acquisitions⁽²⁾		(5,254	)		(173	)		—			(5,081	)		—
Dispositions		—			—			—			—			—
Lease termination income (including our share of unconsolidated joint ventures)		(4,303	)		(3,526	)		—			(777	)		—
Other, net		320			316			—			4			—

PGRE’s share of Same Store NOI⁽¹⁾for the year ended December 31, 2018	$	408,741		$	297,017		$	31,909		$	87,157		$	(7,342	)


	Year Ended December 31, 2017
	Total			New York			Washington, D.C.			San Francisco			Other
PGRE’s share of NOI for the year ended December 31, 2017	$	392,644		$	268,836		$	44,801		$	85,307		$	(6,300	)
Acquisitions		—			—			—			—			—
Dispositions⁽³⁾		(14,480	)		—			(14,480	)		—			—
Lease termination income (including our share of unconsolidated joint ventures)		(2,381	)		(1,097	)		—			(1,284	)		—
Other, net		(1,053	)		234			—			(1,164	)		(123	)

PGRE’s share of Same Store NOI⁽¹⁾for the year ended December 31, 2017	$	374,730		$	267,973		$	30,321		$	82,859		$	(6,423	)


Increase (decrease) in PGRE’s share of Same Store NOI	$	34,011		$	29,044		$	1,588		$	4,298		$	(919	)
% Increase		9.1	%		10.8	%		5.2	%		5.2	%

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

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

⁽³⁾	Represents our share of NOI attributable to sold properties (Waterview, 2099 Pennsylvania Avenue and 425 Eye Street in Washington, D.C.) for the months in which they were not owned by us in both reporting periods.

- 20 -


		CONSOLIDATED JOINT VENTURES AND FUND - BALANCE SHEETS

(unaudited and in thousands)


	As of December 31, 2018										As of December 31, 2017
									Consolidated										Consolidated
	Consolidated Joint Ventures								Fund		Consolidated Joint Ventures								Fund
		Total		One		50		PGRESS		Residential		Total		One		50		PGRESS		Residential
	Consolidated		Market		Beale		Equity		Development		Consolidated		Market		Beale		Equity		Development
	Joint Ventures		Plaza		Street		Holdings L.P.		Fund		Joint Ventures		Plaza		Street		Holdings L.P.		Fund
PGRE Ownership			49.0%		31.1%		24.4%		7.4%				49.0%		31.1%		24.4%		7.4%
ASSETS:
Real estate, net	$	1,699,618	$	1,223,388	$	476,230	$	—	$	—	$	1,726,800	$	1,246,427	$	480,373	$	—	$	—
Cash and cash equivalents		54,268		33,976		19,933		359		3,648		46,839		24,658		21,792		389		656
Restricted cash		5,534		5,534		—		—		—		8,163		8,163		—		—		—
Preferred equity investments, net		36,042		—		—		36,042		—		35,817		—		—		35,817		—
Investments in unconsolidated joint ventures		—		—		—		—		52,923		—		—		—		—		16,031
Accounts and other receivables, net		1,982		903		1,079		—		125		2,548		1,423		1,125		—		2
Deferred rent receivable		51,926		46,646		5,280		—		—		44,000		43,332		668		—		—
Deferred charges, net		14,160		9,433		4,727		—		—		8,123		7,508		615		—		—
Intangible assets, net		45,818		29,398		16,420		—		—		66,112		39,421		26,691		—		—
Other assets		949		752		197		—		15,686		908		747		161		—		10

Total Assets	$	1,910,297	$	1,350,030	$	523,866	$	36,401	$	72,382	$	1,939,310	$	1,371,679	$	531,425	$	36,206	$	16,699

LIABILITIES:
Notes and mortgages payable, net	$	1,197,644	$	969,644	$	228,000	$	—	$	—	$	1,196,607	$	968,607	$	228,000	$	—	$	—
Accounts payable and accrued expenses		24,163		17,716		6,395		52		20		21,134		14,876		6,205		53		62
Intangible liabilities, net		31,582		26,156		5,426		—		—		46,365		36,793		9,572		—		—
Other liabilities		5		2		3		—		—		156		149		7		—		—

Total Liabilities		1,253,394		1,013,518		239,824		52		20		1,264,262		1,020,425		243,784		53		62

EQUITY:
Paramount Group, Inc. equity		261,908		164,958		87,577		9,373		5,475		270,051		172,182		88,695		9,174		2,088
Noncontrolling interests		394,995		171,554		196,465		26,976		66,887		404,997		179,072		198,946		26,979		14,549

Total Equity		656,903		336,512		284,042		36,349		72,362		675,048		351,254		287,641		36,153		16,637

Total Liabilities and Equity	$	1,910,297	$	1,350,030	$	523,866	$	36,401	$	72,382	$	1,939,310	$	1,371,679	$	531,425	$	36,206	$	16,699

- 21 -


		CONSOLIDATED JOINT VENTURES AND FUND - OPERATING RESULTS

(unaudited and in thousands)


	Three Months Ended December 31, 2018														Three Months Ended December 31, 2017
												Consolidated														Consolidated
	Consolidated Joint Ventures											Fund			Consolidated Joint Ventures											Fund
	Total			One								Residential			Total			One								Residential
	Consolidated			Market			50 Beale			PGRESS Equity		Development			Consolidated			Market			50 Beale			PGRESS Equity		Development
	Joint Ventures			Plaza			Street			Holdings L.P.		Fund			Joint Ventures			Plaza			Street			Holdings L.P.		Fund
Total revenues	$	45,046		$	33,293		$	11,753		$	—	$	10		$	41,416		$	32,658		$	8,758		$	—	$	—
Total operating expenses		11,710			8,382			3,328			—		—			11,325			8,351			2,974			—		452

Net operating income (loss)		33,336			24,911			8,425			—		10			30,091			24,307			5,784			—		(452	)
Depreciation and amortization		(16,574	)		(10,833	)		(5,741	)		—		—			(16,495	)		(11,542	)		(4,953	)		—		—
Interest and other income (loss), net		1,118			152			57			909		1			981			60			61			860		(53	)
Interest and debt expense		(12,384	)		(10,304	)		(2,080	)		—		—			(12,383	)		(10,303	)		(2,080	)		—		—
Income from unconsolidated joint ventures		—			—			—			—		—			—			—			—			—		49

Net income (loss) before income taxes		5,496			3,926			661			909		11			2,194			2,522			(1,188	)		860		(456	)
Income tax benefit (expense)		1			—			1			—		—			7			9			(2	)		—		—

Net income (loss)	$	5,497		$	3,926		$	662		$	909	$	11		$	2,201		$	2,531		$	(1,190	)	$	860	$	(456	)


PGRE’s share Ownership		Total			49.0%			31.1%			24.4%		7.4%			Total			49.0%			31.1%			24.4%		7.4%

Net income (loss)	$	2,331		$	1,919		$	191		$	221	$	(41	)	$	1,067		$	1,244		$	(387	)	$	210	$	(66	)
Add: Management fee income		504			162			342			—		—			470			149			321			—		8

PGRE’s share of net income (loss)		2,835			2,081			533			221		(41	)		1,537			1,393			(66	)		210		(58	)
Add: Real estate depreciation and amortization		7,093			5,309			1,784			—		—			7,194			5,652			1,542			—		—

FFO/CoreFFO⁽¹⁾	$	9,928		$	7,390		$	2,317		$	221	$	(41	)	$	8,731		$	7,045		$	1,476		$	210	$	(58	)


Noncontrolling interests’ share Ownership		Total			51.0%			68.9%			75.6%		92.6%			Total			51.0%			68.9%			75.6%		92.6%

Net income (loss)	$	3,166		$	2,007		$	471		$	688	$	52		$	1,134		$	1,287		$	(803	)	$	650	$	(390	)
Less: Management fee expense		(504	)		(162	)		(342	)		—		—			(470	)		(149	)		(321	)		—		(8	)

Net income (loss) attributable to noncontrolling interests		2,662			1,845			129			688		52			664			1,138			(1,124	)		650		(398	)
Add: Real estate depreciation and amortization		9,481			5,524			3,957			—		—			9,301			5,890			3,411			—		—

FFO/CoreFFO⁽¹⁾	$	12,143		$	7,369		$	4,086		$	688	$	52		$	9,965		$	7,028		$	2,287		$	650	$	(398	)

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

- 22 -


		CONSOLIDATED JOINT VENTURES AND FUND - OPERATING RESULTS

(unaudited and in thousands)


	Year Ended December 31, 2018														Year Ended December 31, 2017
												Consolidated															Consolidated
	Consolidated Joint Ventures											Fund			Consolidated Joint Ventures												Fund
	Total			One								Residential			Total			One									Residential
	Consolidated			Market			50 Beale			PGRESS Equity		Development			Consolidated			Market			50 Beale			PGRESS Equity			Development
	Joint Ventures			Plaza			Street ⁽¹⁾			Holdings L.P.		Fund			Joint Ventures			Plaza			Street ⁽¹⁾			Holdings L.P.			Fund
Total revenues	$	173,804		$	131,414		$	42,390		$	—	$	19		$	143,934		$	127,844		$	16,090		$	—		$	1,338
Total operating expenses		45,111			32,286			12,825			—		10			36,708			31,149			5,559			—			953

Net operating income		128,693			99,128			29,565			—		9			107,226			96,695			10,531			—			385
Depreciation and amortization		(65,789	)		(44,040	)		(21,749	)		—		—			(55,859	)		(46,777	)		(9,082	)		—			(359	)
Interest and other income (loss), net		4,412			502			255			3,655		686			(15,092	)		196			113			(15,401	)		76
Interest and debt expense		(49,207	)		(40,885	)		(8,322	)		—		—			(45,366	)		(41,563	)		(3,803	)		—			—
Loss on early extinguishment of debt		—			—			—			—		—			(2,715	)		(2,715	)		—			—			—
Gain on sale of land parcel		—			—			—			—		—			—			—			—			—			23,406	⁽²⁾
Income from unconsolidated joint ventures		—			—			—			—		(18	)		—			—			—			—			182
Unrealized gain on interest rate swaps		—			—			—			—		—			1,802			1,802			—			—			—

Net income (loss) before income taxes		18,109			14,705			(251	)		3,655		677			(10,004	)		7,638			(2,241	)		(15,401	)		23,690
Income tax (expense) benefit		(9	)		(2	)		(7	)		—		(1	)		1			4			(3	)		—			(2	)

Net income (loss)	$	18,100		$	14,703		$	(258	)	$	3,655	$	676		$	(10,003	)	$	7,642		$	(2,244	)	$	(15,401	)	$	23,688


PGRE’s share Ownership	Total			49.0%			31.1%			24.4%		7.4%			Total			49.0%			31.1%			24.4%			7.4%
Net income (loss)	$	7,933		$	7,196		$	(153	)	$	890	$	(48	)	$	(779	)	$	3,700		$	(728	)	$	(3,751	)	$	3,518
Add: Management fee income		1,985			653			1,332			—		4			1,141			553			588			—			358

PGRE’s share of net income (loss)		9,918			7,849			1,179			890		(44	)		362			4,253			(140	)		(3,751	)		3,876
Add: Real estate depreciation and amortization		28,349			21,580			6,769			—		—			25,746			22,921			2,825			—			40

FFO⁽³⁾		38,267			29,429			7,948			890		(44	)		26,108			27,174			2,685			(3,751	)		3,916
Add: Valuation allowance on preferred equity investment		—			—			—			—		—			4,780			—			—			4,780			—
Add: Loss on early extinguishment of debt		—			—			—			—		—			1,330			1,330			—			—			—
Less: Gain on sale of land parcel		—			—			—			—		—			—			—			—			—			(3,118	)
Less: Unrealized gain on interest rate swaps		—			—			—			—		—			(883	)		(883	)		—			—			—

Core FFO⁽³⁾	$	38,267		$	29,429		$	7,948		$	890	$	(44	)	$	31,335		$	27,621		$	2,685		$	1,029		$	798


Noncontrolling Interests’ share Ownership	Total			51.0%			68.9%			75.6%		92.6%			Total			51.0%			68.9%			75.6%			92.6%
Net income (loss)	$	10,167		$	7,507		$	(105	)	$	2,765	$	724		$	(9,224	)	$	3,942		$	(1,516	)	$	(11,650	)	$	20,170
Less: Management fee expense		(1,985	)		(653	)		(1,332	)		—		(4	)		(1,141	)		(553	)		(588	)		—			(358	)

Net income (loss) attributable to noncontrolling		8,182			6,854			(1,437	)		2,765		720			(10,365	)		3,389			(2,104	)		(11,650	)		19,812
Add: Real estate depreciation and amortization		37,440			22,460			14,980			—		—			30,113			23,856			6,257			—			319

FFO⁽³⁾		45,622			29,314			13,543			2,765		720			19,748			27,245			4,153			(11,650	)		20,131
Add: Valuation allowance on preferred equity investment		—			—			—			—		—			14,808			—			—			14,808			—
Add: Loss on early extinguishment of debt		—			—			—			—		—			1,385			1,385			—			—			—
Less: Gain on sale of land parcel		—			—			—			—		—			—			—			—			—			(20,288	)
Less: Unrealized gain on interest rate swaps		—			—			—			—		—			(919	)		(919	)		—			—			—

Core FFO⁽³⁾	$	45,622		$	29,314		$	13,543		$	2,765	$	720		$	35,022		$	27,711		$	4,153		$	3,158		$	(157	)

⁽¹⁾	Acquired on July 17, 2017.

⁽²⁾	Represents the gain on sale of an 80.0% equity interest in One Steuart Lane (formerly 75 Howard Street), of which our share, net of income taxes, was $1,661.

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

- 23 -


		UNCONSOLIDATED JOINT VENTURES - BALANCE SHEETS

(unaudited and in thousands)


	As of December 31, 2018									As of December 31, 2017
			712			60 Wall						712			60 Wall
	Total		Fifth Avenue			Street		Other⁽¹⁾		Total		Fifth Avenue			Street		Other⁽¹⁾
PGRE Ownership			50.0%			5.0%		Various				50.0%			5.0%		Various
ASSETS:
Real estate, net	$	1,236,989	$	202,289		$	852,951	$	181,749	$	1,196,116	$	202,040		$	873,142	$	120,934
Cash and cash equivalents		48,076		28,911			17,512		1,653		52,132		31,511			18,642		1,979
Restricted cash		2,758		2,526			—		232		4,726		4,726			—		—
Accounts and other receivables, net		6,329		6,329			—		—		296		296			—		—
Deferred rent receivable		15,206		13,618			1,588		—		15,446		13,456			1,990		—
Deferred charges, net		6,575		6,575			—		—		7,848		7,848			—		—
Intangible assets, net		97,658		—			97,658		—		126,422		—			126,422		—
Other assets		12,608		7,770			35		4,803		1,148		197			105		846

Total Assets	$	1,426,199	$	268,018		$	969,744	$	188,437	$	1,404,134	$	260,074		$	1,020,301	$	123,759

LIABILITIES:
Notes and mortgages payable, net	$	887,882	$	296,543		$	569,536	$	21,803	$	886,902	$	296,132		$	567,799	$	22,971
Accounts payable and accrued expenses		18,734		6,251			7,631		4,852		12,560		4,435			7,382		743
Other liabilities		3,576		445			850		2,281		1,636		180			850		606

Total Liabilities		910,192		303,239			578,017		28,936		901,098		300,747			576,031		24,320

EQUITY:
Total Equity		516,007		(35,221	)		391,727		159,501		503,036		(40,673	)		444,270		99,439

Total Liabilities and Equity	$	1,426,199	$	268,018		$	969,744	$	188,437	$	1,404,134	$	260,074		$	1,020,301	$	123,759

⁽¹⁾	Represents Oder-Center, Germany and One Steuart Lane.

- 24 -


		UNCONSOLIDATED JOINT VENTURES - OPERATING RESULTS

(unaudited and in thousands)


	Three Months Ended December 31, 2018												Three Months Ended December 31, 2017
				712			60 Wall									712			60 Wall
	Total			Fifth Avenue			Street			Other⁽¹⁾			Total			Fifth Avenue			Street			Other⁽¹⁾
Total revenues	$	40,760		$	18,941		$	20,630		$	1,189		$	36,653		$	14,296		$	20,412		$	1,945
Total operating expenses		13,538			6,567			6,774			197			13,983			6,173			6,994			816

Net operating income		27,222			12,374			13,856			992			22,670			8,123			13,418			1,129
Depreciation and amortization		(12,258	)		(3,120	)		(9,033	)		(105	)		(12,201	)		(3,066	)		(9,033	)		(102	)
Interest and other income, net		243			210			33			—			139			82			55			2
Interest and debt expense		(10,414	)		(2,702	)		(7,449	)		(263	)		(8,913	)		(2,702	)		(5,943	)		(268	)

Net income (loss) before income taxes		4,793			6,762			(2,593	)		624			1,695			2,437			(1,503	)		761
Income tax expense		—			—			—			—			—			—			—			—

Net income (loss)	$	4,793		$	6,762		$	(2,593	)	$	624		$	1,695		$	2,437		$	(1,503	)	$	761


PGRE’s share Ownership		Total			50.0%			5.0%			Various			Total			50.0%			5.0%			Various

Net income (loss)	$	3,308		$	3,381		$	(130	)	$	57		$	1,245		$	1,218		$	(71	)	$	98
Less: Step-up basis adjustment		(125	)		—			(97	)		(28	)		(27	)		—			—			(27	)
Less: Earnings in excess of distributions		(2,646	)		(2,646	)		—			—			(176	)		(176	)		—			—

PGRE’s share of net income (loss)		537			735			(227	)		29			1,042			1,042			(71	)		71
Less: Noncontrolling interests		—			—			—			—			(45	)		—			—			(45	)
Add: Real estate depreciation and amortization		2,148			1,560			549			39			2,021			1,533			452			36

FFO⁽²⁾		2,685			2,295			322			68			3,018			2,575			381			62
Add: Earnings in excess of distributions		2,646			2,646			—			—			176			176			—			—

Core FFO ⁽²⁾	$	5,331		$	4,941		$	322		$	68		$	3,194		$	2,751		$	381		$	62


Joint Venture Partners’ share Ownership		Total			50.0%			95.0%			Various			Total			50.0%			95.0%			Various

Net income (loss)	$	1,485		$	3,381		$	(2,463	)	$	567		$	450		$	1,219		$	(1,432	)	$	663
Add: Real estate depreciation and amortization		10,138			1,560			8,484			94			10,207			1,533			8,581			93

FFO/Core FFO⁽²⁾		11,623			4,941			6,021			661			10,657			2,752			7,149			756

⁽¹⁾	Represents Oder-Center, Germany and One Steuart Lane.

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

- 25 -


		UNCONSOLIDATED JOINT VENTURES - OPERATING RESULTS

(unaudited and in thousands)


	Year Ended December 31, 2018												Year Ended December 31, 2017
				712			60 Wall									712			60 Wall
	Total			Fifth Avenue			Street⁽¹⁾			Other⁽²⁾			Total			Fifth Avenue			Street⁽¹⁾			Other⁽²⁾
Total revenues	$	147,480		$	60,387		$	82,221		$	4,872		$	140,426		$	57,536		$	76,388		$	6,502
Total operating expenses		53,417			25,127			27,087			1,203			51,390			24,438			24,727			2,225

Net operating income		94,063			35,260			55,134			3,669			89,036			33,098			51,661			4,277
Depreciation and amortization		(48,452	)		(11,908	)		(36,133	)		(411	)		(46,409	)		(12,128	)		(33,899	)		(382	)
Interest and other income, net		803			626			176			1			381			222			150			9
Interest and debt expense		(39,406	)		(10,722	)		(27,638	)		(1,046	)		(33,461	)		(11,353	)		(21,080	)		(1,028	)
Unrealized gain on interest rate swaps		—			—			—			—			1,896			1,896			—			—

Net income (loss) before income taxes		7,008			13,256			(8,461	)		2,213			11,443			11,735			(3,168	)		2,876
Income tax expense		(10	)		—			—			(10	)		(2	)		—			—			(2	)

Net income (loss)	$	6,998		$	13,256		$	(8,461	)	$	2,203		$	11,441		$	11,735			$ (3,168)		$	2,874


PGRE’s share Ownership	Total			50.0%			5.0%			Various			Total			50.0%			5.0%			Various
Net income (loss)	$	6,403		$	6,628		$	(421	)	$	196		$	6,083		$	5,867		$	(152)		$	368
Less: Step-up basis adjustment		(208	)		—			(97	)		(111	)		(103	)		—			—			(103	)
Less: (Earnings in excess of distributions) and distributions in excess of earnings		(2,727	)		(2,727	)		—			—			14,205			14,205			—			—

PGRE’s share of net income (loss)		3,468			3,901			(518	)		85			20,185			20,072			(152	)		265
Less: Noncontrolling interests		—			—			—			—			(164	)		—			—			(164	)
Add: Real estate depreciation and amortization		8,011			5,954			1,907			150			7,901			6,064			1,698			139

FFO⁽³⁾		11,479			9,855			1,389			235			27,922			26,136			1,546			240
Add: Earnings in excess of distributions and (distributions in excess of earnings)		2,727			2,727			—			—			(14,205	)		(14,205	)		—			—
Less: Unrealized gain on interest rate swaps		—			—			—			—			(948	)		(948	)		—			—

Core FFO ⁽³⁾	$	14,206		$	12,582		$	1,389		$	235		$	12,769		$	10,983		$	1,546		$	240


Joint Venture Partners’ share Ownership	Total			50.0%			95.0%			Various			Total			50.0%			95.0%			Various
Net income (loss)	$	595		$	6,628		$	(8,040	)	$	2,007		$	5,358		$	5,868		$	(3,016	)	$	2,506
Add: Real estate depreciation and amortization		40,552			5,954			34,226			372			38,611			6,064			32,201			346

FFO⁽³⁾		41,147			12,582			26,186			2,379			43,969			11,932			29,185			2,852
Less: Unrealized gain on interest rate swaps		—			—			—			—			(948	)		(948	)		—			—

Core FFO ⁽³⁾	$	41,147		$	12,582		$	26,186		$	2,379		$	43,021		$	10,984		$	29,185		$	2,852

⁽¹⁾	Acquired on January 24, 2017.

⁽²⁾	Represents Oder-Center, Germany and One Steuart Lane.

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

- 26 -


		UNCONSOLIDATED FUNDS SUMMARY

(unaudited and in thousands)

Debt Funds:

Paramount Group Real Estate Fund VIII L.P. (Fund VIII)

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


		PGRE Ownership			Fixed / Variable rate		Interest Rate		Maturity		Face Amount				Fair Value
Investments	Investment Type	PGRE Ownership			Fixed / Variable rate		Interest Rate		Maturity		Total		Our Share		Total		Our Share
26 Broadway	Mezzanine Loan		1.3	%		Fixed		8.25%		Jan-2022	$	50,000	$	645	$	50,247	$	648
700 Eighth Avenue	Mortgage and Mezzanine Loans		1.3	%		Variable (LIBOR plus 600 bps)		8.38%		Jul-2020		70,000		903		69,729		899
1285 Avenue of the Americas	Mezzanine Loan		1.3	%		Fixed		6.75%		Jun-2023		55,000		710		55,375		714
Other	Mortgage and Mezzanine Loans/ Preferred Equity		1.3	%		Various		5.50% - 9.61%		Oct-2019 to Dec-2027		435,308		5,617		433,930		5,598

											$	610,308	$	7,875	$	609,281	$	7,859


	Total			Our Share
Committed capital	$	775,200		$	10,000
Invested and/or reserved for future funding		(688,841	)		(8,886	)

Available for future investments	$	86,359		$	1,114

Paramount Group Real Estate Fund X L.P. (Fund X)

In December 2018, we completed an initial closing of Fund X with $167,000,000 in capital commitments, including $10,000,000 from us.

- 27 -


		CAPITAL STRUCTURE

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


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

						3,599,800
Less:
Noncontrolling interests’ share of consolidated debt (One Market Plaza and 50 Beale Street)						(654,342	)
Add:
PGRE’s share of unconsolidated joint venture debt (712 Fifth Avenue, 60 Wall Street and Oder-Center, Germany)						180,879

PGRE’s share of total debt ⁽³⁾						3,126,337


	Shares / Units Outstanding		Share Price as of December 31, 2018
Equity:
Common stock⁽⁴⁾		233,135,704	$	12.56		2,928,184
Operating Partnership units		25,127,003		12.56		315,595

Total equity		258,262,707		12.56		3,243,779

Total Market Capitalization					$	6,370,116

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

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

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

⁽⁴⁾

On August 1, 2017, we received authorization from our Board of Directors to repurchase up to $200.0 million of our common stock from time to time, in the open market or in privately negotiated transactions. As of December 31, 2018, we have repurchased an aggregate of 7.56 million shares, or $105.4 million of our common stock, at a weighted average price of $13.95 per share. We currently have $94.6 million available for future repurchases. The amount and timing of future repurchases, if any, will depend on a number of factors, including, the price and availability of our shares, trading volume and general market conditions. The stock repurchase program may be suspended or discontinued at any time.

- 28 -


		DEBT ANALYSIS

(unaudited and in thousands)


	Total Debt						Fixed Rate Debt						Variable Rate Debt
	Amount			Rate			Amount			Rate			Amount			Rate
Consolidated Debt:
1633 Broadway	$	1,046,800			3.56	%	$	1,000,000			3.54	%	$	46,800			4.10	%
1301 Avenue of the Americas		850,000			3.51	%		500,000			3.05	%		350,000			4.18	%
31 West 52nd Street		500,000			3.80	%		500,000			3.80	%		—			—
One Market Plaza		975,000			4.03	%		975,000			4.03	%		—			—
50 Beale Street		228,000			3.65	%		228,000			3.65	%		—			—
Revolving Credit Facility ⁽¹⁾		—			—			—			—			—			—

Total consolidated debt		3,599,800			3.72	%		3,203,000			3.66	%		396,800			4.17	%
Noncontrolling interests’ share		(654,342	)		3.94	%		(654,342	)		3.94	%		—			—

PGRE’s share of consolidated debt ⁽²⁾	$	2,945,458			3.67	%	$	2,548,658			3.59	%	$	396,800			4.17	%

Unconsolidated Joint Venture Debt:
712 Fifth Avenue	$	300,000			3.39	%	$	300,000			3.39	%	$	—			—
60 Wall Street		575,000			4.91	%		—			—			575,000			4.91	%
Oder-Center, Germany		21,803			4.62	%		21,803			4.62	%		—			—

Total unconsolidated debt		896,803			4.39	%		321,803			3.47	%		575,000			4.91	%

Joint venture partners’ share		(715,924	)		4.58	%		(169,732	)		3.53	%		(546,192	)		4.91	%

PGRE’s share of unconsolidated debt ⁽²⁾	$	180,879			3.65	%	$	152,071			3.41	%	$	28,808			4.91	%

PGRE’s share of Total Debt⁽²⁾	$	3,126,337			3.67	%	$	2,700,729			3.58	%	$	425,608			4.22	%


	Required		Actual
Revolving Credit Facility Covenants:⁽³⁾
Total Debt / Total Assets		Less than 60%		38.1	%
Secured Debt / Total Assets		Less than 50%		38.1	%
Fixed Charge Coverage		Greater than 1.5x		3.8	x
Unsecured Debt / Unencumbered Assets		Less than 60%		0.0	%
Unencumbered Interest Coverage		Greater than 1.75x		24.1	x


	Amount		%
Debt Composition:
Fixed rate debt:
PGRE’s consolidated fixed rate debt	$	2,548,658
PGRE’s unconsolidated fixed rate debt		152,071

Total fixed rate debt		2,700,729		86.4	%

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

Total variable rate debt		425,608		13.6	%

PGRE’s share of Total Debt⁽²⁾	$	3,126,337		100.0	%

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

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

⁽³⁾

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

- 29 -


		DEBT MATURITIES

(unaudited and in thousands)


	2019			2020			2021			2022			2023			Thereafter			Total
Consolidated Debt:
1301 Avenue of the Americas	$	—		$	—		$	850,000		$	—		$	—		$	—		$	850,000
50 Beale Street		—			—			228,000			—			—			—			228,000
1633 Broadway		—			—			—			1,046,800			—			—			1,046,800
One Market Plaza		—			—			—			—			—			975,000			975,000
31 West 52nd Street		—			—			—			—			—			500,000			500,000
Revolving Credit Facility		—			—			—			—			—			—			—

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

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

Unconsolidated Joint Venture Debt:
712 Fifth Avenue	$	—		$	—		$	—		$	—		$	—		$	300,000		$	300,000
60 Wall Street		—			—			—			575,000			—			—			575,000
Oder - Center, Germany		—			—			—			21,803			—			—			21,803

Total unconsolidated debt		—			—			—			596,803			—			300,000			896,803
Joint venture partners’ share		—			—			—			(565,924	)		—			(150,000	)		(715,924	)

PGRE’s share of unconsolidated debt⁽¹⁾	$	—		$	—		$	—		$	30,879		$	—		$	150,000		$	180,879

PGRE’s share of total debt⁽¹⁾	$	—		$	—		$	920,908		$	1,077,679		$	—		$	1,127,750		$	3,126,337

Weighted average rate		—	%		—	%		3.52	%		3.60	%		—	%		3.84	%		3.67	%

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

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

- 30 -


		PORTFOLIO SUMMARY

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


													Annualized Rent⁽¹⁾
Property	Submarket	Paramount Ownership			Square Feet		% Leased⁽¹⁾			% Occupied⁽¹⁾			Amount		Per Square Foot⁽²⁾
As of December 31, 2018
New York:
1633 Broadway	West Side		100.0	%		2,518,597		95.4	%		95.4	%	$	174,341	$	74.20
1301 Avenue of the Americas	Sixth Avenue / Rock Center		100.0	%		1,781,571		97.9	%		97.9	%		134,544		77.80
1325 Avenue of the Americas	Sixth Avenue / Rock Center		100.0	%		811,439		96.7	%		81.2	%		43,331		68.38
31 West 52nd Street	Sixth Avenue / Rock Center		100.0	%		763,140		97.5	%		95.8	%		65,950		87.93
900 Third Avenue	East Side		100.0	%		599,317		92.6	%		91.6	%		39,025		71.56
712 Fifth Avenue	Madison / Fifth Avenue		50.0	%		543,411		88.4	%		85.5	%		51,971		112.48
60 Wall Street	Downtown		5.0	%		1,625,483		100.0	%		100.0	%		73,600		45.28	⁽³⁾

Subtotal / Weighted average						8,642,958		96.5	%		94.6	%		582,762		71.94

PGRE’s share						6,827,207		96.0	%		93.7	%		486,864		77.14

Washington, D.C.:
1899 Pennsylvania Avenue	CBD		100.0	%		190,955		100.0	%		100.0	%		15,722		83.03
Liberty Place	East End		100.0	%		174,090		95.8	%		94.9	%		14,338		86.49

Subtotal / Weighted average						365,045		98.0	%		97.5	%		30,060		84.62

PGRE’s share						365,045		98.0	%		97.5	%		30,060		84.62

San Francisco:
One Market Plaza	South Financial District		49.0	%		1,583,336		99.0	%		97.6	%		120,288		77.09
One Front Street	North Financial District		100.0	%		646,538		96.3	%		96.3	%		43,136		68.80
50 Beale Street	South Financial District		31.1	%		666,495		99.7	%		93.5	%		38,156		61.68

Subtotal / Weighted average						2,896,369		98.5	%		96.4	%		201,580		71.84

PGRE’s share						1,629,653		98.0	%		96.6	%		113,944		71.94

Total / Weighted average						11,904,372		97.0	%		95.1	%	$	814,402	$	72.32

PGRE’s share						8,821,905		96.4	%		94.4	%	$	630,868	$	76.45

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

⁽²⁾	Represents office and retail space only.

⁽³⁾	Represents “triple-net” rent.

- 31 -


		SAME STORE LEASED OCCUPANCY

(unaudited)


				As of December 31, 2018						As of September 30, 2018						Change in Same Store Leased %
Property	Paramount Ownership			Leased %⁽¹⁾			Same Store Leased %⁽¹⁾			Leased %⁽¹⁾			Same Store Leased %⁽¹⁾			Change in Same Store Leased %
New York:
1633 Broadway		100.0	%		95.4	%		95.4	%		95.4	%		95.4	%		—	%
1301 Avenue of the Americas		100.0	%		97.9	%		97.9	%		97.9	%		97.9	%		—	%
1325 Avenue of the Americas		100.0	%		96.7	%		96.7	%		96.7	%		96.7	%		—	%
31 West 52nd Street		100.0	%		97.5	%		97.5	%		95.8	%		95.8	%		1.7	%
900 Third Avenue		100.0	%		92.6	%		92.6	%		95.5	%		95.5	%		(2.9	%)
712 Fifth Avenue		50.0	%		88.4	%		88.4	%		91.0	%		91.0	%		(2.6	%)
60 Wall Street		5.0	%		100.0	%		100.0	%		100.0	%		100.0	%		—	%

Weighted average					96.5	%		96.5	%		96.7	%		96.7	%		(0.2	%)

PGRE’s share					96.0	%		96.0	%		96.1	%		96.1	%		(0.1	%)

Washington, D.C.:
1899 Pennsylvania Avenue		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		—	%
Liberty Place		100.0	%		95.8	%		95.8	%		95.8	%		95.8	%		—	%

Weighted average					98.0	%		98.0	%		98.0	%		98.0	%		—	%

PGRE’s share					98.0	%		98.0	%		98.0	%		98.0	%		—	%

San Francisco:
One Market Plaza		49.0	%		99.0	%		99.0	%		97.6	%		97.6	%		1.4	%
One Front Street		100.0	%		96.3	%		96.3	%		96.3	%		96.3	%		—	%
50 Beale Street		31.1	%		99.7	%		99.7	%		99.7	%		99.7	%		—	%

Weighted average					98.5	%		98.5	%		97.8	%		97.8	%		0.7	%

PGRE’s share					98.0	%		98.0	%		97.4	%		97.4	%		0.6	%

Weighted average					97.0	%		97.0	%		97.0	%		97.0	%		—	%

PGRE’s share					96.4	%		96.4	%		96.4	%		96.4	%		—	%

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

- 32 -


		SAME STORE LEASED OCCUPANCY

(unaudited)


				As of December 31, 2018						As of December 31, 2017						Change in Same Store Leased %
Property	Paramount Ownership			Leased %⁽¹⁾			Same Store Leased %⁽¹⁾			Leased %⁽¹⁾			Same Store Leased %⁽¹⁾			Change in Same Store Leased %
New York:
1633 Broadway		100.0	%		95.4	%		95.4	%		95.4	%		95.4	%		—	%
1301 Avenue of the Americas		100.0	%		97.9	%		97.9	%		97.9	%		97.9	%		—	%
1325 Avenue of the Americas		100.0	%		96.7	%		96.7	%		80.9	%		80.9	%		15.8	%
31 West 52nd Street		100.0	%		97.5	%		97.5	%		78.0	%		78.0	%		19.5	%
900 Third Avenue		100.0	%		92.6	%		92.6	%		94.7	%		94.7	%		(2.1	%)
712 Fifth Avenue		50.0	%		88.4	%		88.4	%		95.1	%		95.1	%		(6.7	%)
60 Wall Street		5.0	%		100.0	%		100.0	%		100.0	%		100.0	%		—	%

Weighted average					96.5	%		96.5	%		93.8	%		93.8	%		2.7	%

PGRE’s share					96.0	%		96.0	%		92.4	%		92.4	%		3.6	%

Washington, D.C.:
425 Eye Street⁽²⁾		100.0	%		—	%		—	%		98.7	%		—	%		—	%
2099 Pennsylvania Avenue⁽³⁾		100.0	%		—	%		—	%		88.9	%		—	%		—	%
1899 Pennsylvania Avenue		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		—	%
Liberty Place		100.0	%		95.8	%		95.8	%		94.9	%		94.9	%		0.9	%

Weighted average					98.0	%		98.0	%		96.1	%		97.5	%		0.5	%

PGRE’s share					98.0	%		98.0	%		96.1	%		97.5	%		0.5	%

San Francisco:
One Market Plaza		49.0	%		99.0	%		99.0	%		97.7	%		97.7	%		1.3	%
One Front Street		100.0	%		96.3	%		96.3	%		99.3	%		99.3	%		(3.0	%)
50 Beale Street		31.1	%		99.7	%		99.7	%		82.6	%		82.6	%		17.1	%

Weighted average					98.5	%		98.5	%		94.6	%		94.6	%		3.9	%

PGRE’s share					98.0	%		98.0	%		96.4	%		96.4	%		1.6	%

Weighted average					97.0	%		97.0	%		94.2	%		94.1	%		2.9	%

PGRE’s share					96.4	%		96.4	%		93.5	%		93.3	%		3.1	%

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

⁽²⁾	Sold on September 27, 2018.

⁽³⁾	Sold on August 9, 2018.

- 33 -


		TOP TENANTS AND INDUSTRY DIVERSIFICATION

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


								PGRE’s Share of
	Property		Lease Expiration		Total Square Feet Occupied			Total Square Feet Occupied			% of Total Square Feet			Annualized Rent⁽¹⁾				% of Annualized Rent
	Property		Lease Expiration		Total Square Feet Occupied			Total Square Feet Occupied			% of Total Square Feet			Amount		Per Square Foot		% of Annualized Rent
Top 10 Tenants:
As of December 31, 2018
Barclays Capital, Inc.		1301 Avenue of the Americas		Dec-2020		497,418			497,418			5.6	%	$	32,505	$	65.35		5.2	%
Allianz Global Investors, LP		1633 Broadway		Jan-2031		320,911			320,911			3.6	%		28,726		89.51		4.6	%
Credit Agricole Corporate & Investment Bank		1301 Avenue of the Americas		Feb-2023		312,679			312,679			3.5	%		26,794		85.69		4.2	%
Clifford Chance LLP		31 West 52nd Street		Jun-2024		328,992	⁽²⁾		328,992	⁽²⁾		3.7	%⁽²⁾		26,538		80.66		4.2	%
Norton Rose Fulbright		1301 Avenue of the Americas		Sep-2034		320,325			320,325			3.6	%		25,537		79.72		4.0	%
Morgan Stanley & Company		1633 Broadway		Mar-2032		260,829			260,829			3.0	%		19,532		74.88		3.1	%
WMG Acquisition Corp. (Warner Music Group)		1633 Broadway		Jul-2029		293,888			293,888			3.3	%		17,423		59.28		2.8	%
First Republic Bank		One Front Street		Jun-2025		232,479			232,479			2.6	%		15,647		67.31		2.5	%
Showtime Networks, Inc.		1633 Broadway		Jan-2026		238,880			238,880			2.7	%		14,852		62.17		2.4	%
Kasowitz Benson Torres & Friedman, LLP		1633 Broadway		Mar-2037		203,394			203,394			2.3	%		14,680		72.18		2.3	%


	PGRE’s Share of
	Square Feet Occupied		% of Occupied Square Feet			Annualized Rent⁽¹⁾		% of Annualized Rent
Industry Diversification:
As of December 31, 2018
Legal Services		1,864,548		22.5	%	$	145,232		23.0	%
Financial Services - Commercial and Investment Banking		1,909,853		23.0	%		140,420		22.3	%
Technology and Media		1,618,203		19.5	%		111,540		17.7	%
Financial Services, all others		951,219		11.5	%		82,802		13.1	%
Insurance		554,680		6.7	%		44,984		7.1	%
Retail		190,010		2.3	%		19,383		3.1	%
Consumer Products		192,620		2.3	%		14,876		2.4	%
Travel & Leisure		203,575		2.5	%		13,780		2.2	%
Real Estate		171,683		2.1	%		12,754		2.0	%
Other		642,339		7.6	%		45,097		7.1	%

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

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

- 34 -


		LEASING ACTIVITY ⁽¹⁾

(unaudited)


	Total			New York			Washington, D.C.		San Francisco
Three Months Ended December 31, 2018

Total square feet leased		213,269			112,121			—		101,148

PGRE’s share of total square feet leased:		143,622			108,355			—		35,267
Initial rent⁽²⁾	$	93.40		$	93.76		$	—	$	92.47
Weighted average lease term (in years)		3.3			2.5			—		5.4
Tenant improvements and leasing commissions:
Per square foot	$	33.52		$	25.85		$	—	$	53.29
Per square foot per annum	$	10.15		$	10.35		$	—	$	9.92
Percentage of initial rent		10.9	%		11.0	%		—		10.7	%
Rent concessions:
Average free rent period (in months)		1.6			1.6			—		1.4
Average free rent period per annum (in months)		0.5			0.6			—		0.3

Second generation space:⁽²⁾
Square feet		118,752			93,916			—		24,836
GAAP basis:
Straight-line rent	$	93.18		$	93.02		$	—	$	93.66
Prior straight-line rent	$	83.98		$	88.68		$	—	$	69.68
Percentage increase		11.0	%		4.9	%		—		34.4	%
Cash basis
Initial rent⁽²⁾	$	92.10		$	93.25		$	—	$	88.60
Prior escalated rent⁽²⁾	$	89.52		$	92.72		$	—	$	79.78
Percentage increase		2.9	%		0.6	%		—		11.1	%

⁽¹⁾	The leasing statistics, except for square feet leased, represent office space only.

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

- 35 -


		LEASING ACTIVITY ⁽¹⁾

(unaudited)


	Total			New York			Washington, D.C.			San Francisco
Year Ended December 31, 2018

Total square feet leased		1,014,101			576,037			26,381			411,683

PGRE’s share of total square feet leased:		766,509			555,969			26,381			184,159
Initial rent⁽²⁾	$	84.44		$	84.01		$	76.15		$	86.65
Weighted average lease term (in years)		9.1			10.0			11.1			6.2
Tenant improvements and leasing commissions:
Per square foot	$	88.95		$	95.13		$	129.56		$	66.44
Per square foot per annum	$	9.77		$	9.49		$	11.69		$	10.72
Percentage of initial rent		11.6	%		11.3	%		15.3	%		12.4	%
Rent concessions:
Average free rent period (in months)		7.3			8.9			10.1			2.3
Average free rent period per annum (in months)		0.8			0.9			0.9			0.4

Second generation space:⁽²⁾
Square feet		469,463			325,646			7,076			136,741
GAAP basis:
Straight-line rent	$	86.25		$	84.68		$	—		$	89.77
Prior straight-line rent	$	76.19		$	79.21		$	—		$	69.46
Percentage increase		13.2	%		6.9	%		—			29.3	%
Cash basis:
Initial rent⁽²⁾	$	87.45		$	87.29		$	—		$	87.81
Prior escalated rent⁽²⁾	$	77.20		$	81.29		$	—		$	68.08
Percentage increase		13.3	%		7.4	%		—			29.0	%

⁽¹⁾	The leasing statistics, except for square feet leased, represent office space only.

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

- 36 -


		LEASE EXPIRATIONS - TOTAL PORTFOLIO

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


	Total Square Feet of Expiring Leases		PGRE’s Share of
Year of Lease Expiration⁽²⁾			Square Feet of Expiring Leases		Annualized Rent⁽¹⁾				% of Annualized Rent
Year of Lease Expiration⁽²⁾			Square Feet of Expiring Leases		Amount		Per Square Foot⁽³⁾		% of Annualized Rent
Month to Month		10,459		8,362	$	500	$	50.83		0.1	%

1Q 2019		244,117		184,922		15,813		85.46		2.5	%
2Q 2019		64,131		59,870		3,552		60.00		0.6	%
3Q 2019		89,319		85,670		6,811		77.94		1.1	%
4Q 2019		150,743		129,020		11,516		89.33		1.8	%

Total 2019		548,310		459,482		37,692		81.93		6.0	%
2020		724,829		446,356		32,577		72.62		5.1	%
2021		1,239,764		1,063,359		71,954		68.83		11.2	%
2022		2,288,355		528,018		37,405		79.96		5.8	%
2023		769,530		704,152		56,525		83.76		8.8	%
2024		715,125		658,689		51,667		78.64		8.0	%
2025		1,034,174		693,699		52,621		75.88		8.2	%
2026		895,433		720,441		55,166		73.12		8.6	%
2027		169,260		131,905		10,716		81.26		1.7	%
2028		216,489		193,575		15,157		78.91		2.4	%
Thereafter		2,906,375		2,872,731		220,824		76.63		34.1	%

⁽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.

- 37 -


		LEASE EXPIRATIONS - NEW YORK

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


	Total Square Feet of Expiring Leases		PGRE’s Share of
Year of Lease Expiration⁽²⁾			Square Feet of Expiring Leases		Annualized Rent⁽¹⁾				% of Annualized Rent
Year of Lease Expiration⁽²⁾			Square Feet of Expiring Leases		Amount		Per Square Foot⁽³⁾		% of Annualized Rent
Month to Month		2,700		2,700	$	252	$	95.38		0.1	%

1Q 2019		163,548		115,688		11,337		97.77		2.3	%
2Q 2019		11,752		10,176		585		61.70		0.1	%
3Q 2019		84,341		81,725		6,473		77.57		1.3	%
4Q 2019		105,790		102,017		9,703		95.23		2.0	%

Total 2019		365,431		309,606		28,098		90.66		5.7	%
2020		315,724		271,698		20,816		77.72		4.2	%
2021		875,387		869,280		59,094		69.99		11.9	%
2022		1,786,888		231,932		12,407		68.88		2.5	%
2023		551,709		522,756		40,365		81.57		8.1	%
2024		595,384		574,887		45,271		78.94		9.1	%
2025		138,735		102,675		9,209		89.69		1.9	%
2026		593,777		572,355		43,565		71.77		8.8	%
2027		85,378		85,378		7,197		84.29		1.4	%
2028		147,554		136,133		10,897		80.64		2.2	%
Thereafter		2,862,762		2,857,778		219,860		76.69		44.1	%

⁽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.

- 38 -


		LEASE EXPIRATIONS - WASHINGTON, D.C.

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


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

1Q 2019		29,066		29,066		2,251		77.43		7.5	%
2Q 2019		—		—		—		—		—	%
3Q 2019		3,478		3,478		304		87.30		1.0	%
4Q 2019		2,461		2,461		210		85.49		0.7	%

Total 2019		35,005		35,005		2,765		78.98		9.2	%
2020		25,245		25,245		2,094		82.95		6.9	%
2021		9,877		9,877		1,308		83.33		4.3	%
2022		24,607		24,607		1,928		78.36		6.4	%
2023		137,216		137,216		11,837		86.47		39.2	%
2024		20,451		20,451		1,809		88.91		6.0	%
2025		49,390		49,390		4,477		90.64		14.8	%
2026		28,246		28,246		2,130		75.40		7.1	%
2027		10,632		10,632		935		87.91		3.1	%
2028		9,277		9,277		778		83.88		2.6	%
Thereafter		1,566		1,566		128		81.89		0.4	%

⁽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.

- 39 -


		LEASE EXPIRATIONS - SAN FRANCISCO

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


	Total		PGRE’s Share of
Year of Lease Expiration⁽²⁾	Square Feet of Expiring Leases		Square Feet of Expiring Leases		Annualized Rent⁽¹⁾				% of Annualized Rent
Year of Lease Expiration⁽²⁾	Square Feet of Expiring Leases		Square Feet of Expiring Leases		Amount		Per Square Foot⁽³⁾		% of Annualized Rent
Month to Month		7,759		5,662	$	248	$	39.78		0.2	%

1Q 2019		51,503		40,168		2,225		55.63		1.9	%
2Q 2019		52,379		49,694		2,967		59.70		2.6	%
3Q 2019		1,500		467		34		72.00		0.0	%
4Q 2019		42,492		24,542		1,603		65.31		1.4	%

Total 2019		147,874		114,871		6,829		59.53		5.9	%
2020		383,860		149,413		9,667		61.65		8.4	%
2021		354,500		184,202		11,552		62.78		10.0	%
2022		476,860		271,479		23,070		85.08		20.1	%
2023		80,605		44,180		4,323		97.28		3.7	%
2024		99,290		63,351		4,587		72.55		4.0	%
2025		846,049		541,634		38,935		71.91		33.7	%
2026		273,410		119,840		9,471		79.00		8.2	%
2027		73,250		35,895		2,584		72.07		2.2	%
2028		59,658		48,165		3,482		73.04		2.9	%
Thereafter		42,047		13,387		836		62.48		0.7	%

⁽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.

- 40 -


		CASH BASIS CAPITAL EXPENDITURES

(unaudited and in thousands)


	Three Months Ended December 31, 2018
	Total		New York		Washington, D.C		San Francisco		Other
Capital expenditures:⁽¹⁾
Expenditures to maintain assets	$	5,125	$	4,424	$	192	$	456	$	53
Second generation tenant improvements		36,094		30,747		235		5,112		—
Second generation leasing commissions		9,933		7,041		93		2,799		—
First generation leasing costs and capital expenditures		1,797		347		93		1,357		—

Total Capital Expenditures	$	52,949	$	42,559	$	613	$	9,724	$	53

Redevelopment Expenditures⁽¹⁾
31 West 52nd Street (Lobby Renovation)	$	4,284	$	4,284	$	—	$	—	$	—
One Market Plaza		966		—		—		966		—
Other		3,747		3,088		—		659		—

Total Redevelopment Expenditures	$	8,997	$	7,372	$	—	$	1,625	$	—


	Three Months Ended December 31, 2017
	Total		New York		Washington, D.C		San Francisco		Other
Capital expenditures:⁽¹⁾
Expenditures to maintain assets	$	8,623	$	6,536	$	542	$	1,367	$	178
Second generation tenant improvements		7,502		2,971		—		4,531		—
Second generation leasing commissions		3,242		1,700		15		1,527		—
First generation leasing costs and capital expenditures		7,094		5,123		1,252		719		—

Total Capital Expenditures	$	26,461	$	16,330	$	1,809	$	8,144	$	178

Redevelopment Expenditures⁽¹⁾
31 West 52nd Street (Lobby Renovation)	$	4,331	$	4,331	$	—	$	—	$	—
One Market Plaza		1,304		—		—		1,304		—
Other		1,906		624		927		355		—

Total Redevelopment Expenditures	$	7,541	$	4,955	$	927	$	1,659	$	—

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

- 41 -


		CASH BASIS CAPITAL EXPENDITURES

(unaudited and in thousands)


	Year Ended December 31, 2018
	Total		New York		Washington, D.C		San Francisco		Other
Capital expenditures:⁽¹⁾
Expenditures to maintain assets	$	14,181	$	11,520	$	842	$	1,444	$	375
Second generation tenant improvements		84,112		73,072		358		10,682		—
Second generation leasing commissions		25,283		16,657		1,161		7,465		—
First generation leasing costs and capital expenditures		9,868		2,203		2,839		4,826		—

Total Capital Expenditures	$	133,444	$	103,452	$	5,200	$	24,417	$	375

Redevelopment Expenditures⁽¹⁾
31 West 52nd Street (Lobby Renovation)	$	20,202	$	20,202	$	—	$	—	$	—
One Market Plaza		4,343		—		—		4,343		—
Other		5,249		4,240		—		1,009		—

Total Redevelopment Expenditures	$	29,794	$	24,442	$	—	$	5,352	$	—


	Year Ended December 31, 2017
	Total		New York		Washington, D.C		San Francisco		Other
Capital expenditures:⁽¹⁾
Expenditures to maintain assets	$	19,038	$	13,448	$	1,792	$	3,268	$	530
Second generation tenant improvements		34,373		23,730		4		10,639		—
Second generation leasing commissions		16,344		7,747		15		8,582		—
First generation leasing costs and capital expenditures		26,586		17,155		5,117		4,314		—

Total Capital Expenditures	$	96,341	$	62,080	$	6,928	$	26,803	$	530

Redevelopment Expenditures⁽¹⁾
31 West 52nd Street (Lobby Renovation)	$	5,461	$	5,461	$	—	$	—	$	—
One Market Plaza		5,409		—		—		5,409		—
Residential Development Fund		2,896		—		—		—		2,896
Other		4,241		2,776		927		538		—

Total Redevelopment Expenditures	$	18,007	$	8,237	$	927	$	5,947	$	2,896

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

- 42 -


		DEFINITIONS

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

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

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

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

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

- 43 -


		DEFINITIONS - CONTINUED

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

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

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

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

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

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

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

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

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

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

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

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

- 44 -