Paramount Announces Third Quarter 2020 Results

– Enters into a 16-Year lease with iconic luxury jeweler Harry Winston for a portion of the retail space at 712 Fifth Avenue –
– Reports office rent collections of 99.0% in the third quarter –

NEW YORK--()--Paramount Group, Inc. (NYSE: PGRE) (“Paramount” or the “Company”) filed its Quarterly Report on Form 10-Q for the quarter ended September 30, 2020 today and reported results for the third quarter ended September 30, 2020.

Third Quarter Highlights:

Results of Operations:

  • Reported net loss attributable to common stockholders of $7.0 million, or $0.03 per diluted share, for the quarter ended September 30, 2020, compared to net income attributable to common stockholders of $7.1 million, or $0.03 per diluted share, for the quarter ended September 30, 2019.
  • Reported Core Funds from Operations (“Core FFO”) attributable to common stockholders of $49.6 million, or $0.22 per diluted share, for the quarter ended September 30, 2020, compared to $58.5 million, or $0.25 per diluted share, for the quarter ended September 30, 2019.
  • Net loss attributable to common stockholders and Core FFO attributable to common stockholders for the quarter ended September 30, 2020, include non-cash write-offs aggregating $12.0 million, or $0.05 per diluted share, for straight-line rent receivables.
  • Reported a 1.8% decrease in Same Store Cash Net Operating Income (“NOI”) and a 1.1% increase in Same Store NOI in the quarter ended September 30, 2020, compared to the same period in the prior year.
  • Leased 104,522 square feet, of which the Company’s share was 54,721 square feet that was leased at a weighted average initial rent of $73.48 per square foot. All of the square footage leased represented second generation space, for which the Company achieved a positive mark-to-market of 3.6% on a cash basis and 9.5% on a GAAP basis.
  • Entered into a 16-year lease with iconic luxury jeweler Harry Winston to renew its existing 19,000 square foot lease at 718 Fifth Avenue (a property managed by Paramount) and expand into an additional 18,000 square feet at Paramount’s adjacent 712 Fifth Avenue. This innovative combination of the two spaces provides Harry Winston with approximately 37,000 square feet of integrated prime retail space across multiple floors at one of the most desirable corners of Fifth Avenue, and reflects the creative efforts of both the Paramount and Harry Winston teams. The 16-year lease has a weighted average initial rent of $437.43 per square foot.
  • Reported portfolio-wide rent collections of 97.5% in the third quarter, including 99.0% from office tenants and 50.4% from “non-office” tenants.

Transactions and Capital Markets Activity:

  • Ended the quarter with $1.35 billion in liquidity, comprised of $546.9 million of cash and restricted cash and $800.0 million of borrowing capacity under its revolving credit facility.
  • Repurchased 2,956,293 common shares at a weighted average price of $6.77 per share, or $20.0 million in the aggregate, of which 1,233,190 shares were repurchased in the third quarter, at a weighted average price of $6.91 per share.
  • Declared a third quarter cash dividend of $0.10 per common share on September 15, 2020, which was paid on October 15, 2020.

Financial Results

Quarter Ended September 30, 2020

Net loss attributable to common stockholders was $7.0 million, or $0.03 per diluted share, for the quarter ended September 30, 2020, compared to net income attributable to common stockholders of $7.1 million, or $0.03 per diluted share, for the quarter ended September 30, 2019. Net loss attributable to common stockholders for the quarter ended September 30, 2020 includes non-cash write-offs aggregating $12.0 million, or $0.05 per diluted share, for straight-line rent receivables.

Funds from Operations (“FFO”) attributable to common stockholders was $49.7 million, or $0.22 per diluted share, for the quarter ended September 30, 2020, compared to $58.8 million, or $0.25 per diluted share, for the quarter ended September 30, 2019. FFO attributable to common stockholders for the quarter ended September 30, 2020 includes non-cash write-offs aggregating $12.0 million, or $0.05 per diluted share, for straight-line rent receivables. In addition, FFO attributable to common stockholders for the quarters ended September 30, 2020 and 2019 includes the impact of non-core items, which are listed in the table on page 10. The aggregate of the non-core items, net of amounts attributable to noncontrolling interests, increased FFO attributable to common stockholders for the quarters ended September 30, 2020 and 2019 by $0.1 million and $0.3 million, respectively, or $0.00 per diluted share.

Core FFO attributable to common stockholders, which excludes the impact of the non-core items listed on page 10, was $49.6 million, or $0.22 per diluted share, for the quarter ended September 30, 2020, compared to $58.5 million, or $0.25 per diluted share, for the quarter ended September 30, 2019.

Nine Months Ended September 30, 2020

Net loss attributable to common stockholders was $9.9 million, or $0.04 per diluted share, for the nine months ended September 30, 2020, compared to net income attributable to common stockholders of $13.2 million, or $0.06 per diluted share, for the nine months ended September 30, 2019. Net loss attributable to common stockholders for the nine months ended September 30, 2020 includes (i) $19.0 million, or $0.08 per diluted share, of non-cash write-offs, primarily for straight-line rent receivables, and (ii) $1.8 million, or $0.01 per diluted share, of reserves for uncollectible accounts receivable.

FFO attributable to common stockholders was $162.0 million, or $0.72 per diluted share, for the nine months ended September 30, 2020, compared to $168.2 million, or $0.72 per diluted share, for the nine months ended September 30, 2019. FFO attributable to common stockholders for the nine months ended September 30, 2020 includes (i) $19.0 million, or $0.08 per diluted share, of non-cash write-offs, primarily for straight-line rent receivables, and (ii) $1.8 million, or $0.01 per diluted share, of reserves for uncollectible accounts receivable. In addition, FFO attributable to common stockholders for the nine months ended September 30, 2020 and 2019 includes the impact of non-core items, which are listed in the table on page 10. The aggregate of the non-core items, net of amounts attributable to noncontrolling interests, increased FFO attributable to common stockholders for the nine months ended September 30, 2020 by $0.8 million, or $0.00 per diluted share, and decreased FFO attributable to common stockholders for the nine months ended September 30, 2019 by $0.7 million, or $0.00 per diluted share.

Core FFO attributable to common stockholders, which excludes the impact of the non-core items listed on page 10, was $161.2 million, or $0.72 per diluted share, for the nine months ended September 30, 2020, compared to $168.9 million, or $0.72 per diluted share, for the nine months ended September 30, 2019.

Portfolio Operations

Quarter Ended September 30, 2020

Same Store Cash NOI decreased by $1.6 million, or 1.8%, to $85.8 million for the quarter ended September 30, 2020 from $87.4 million for the quarter ended September 30, 2019. Same Store NOI increased by $1.1 million, or 1.1%, to $100.2 million for the quarter ended September 30, 2020 from $99.1 million for the quarter ended September 30, 2019.

During the quarter ended September 30, 2020, the Company leased 104,522 square feet, of which the Company’s share was 54,721 square feet that was leased at a weighted average initial rent of $73.48 per square foot. This leasing activity, offset by lease expirations in the quarter, decreased same store leased occupancy (properties owned by us during both reporting periods in a similar manner and not classified as discontinued operations) by 10 basis points to 95.6% at September 30, 2020 from 95.7% at June 30, 2020. All of the square footage leased in the third quarter represented second generation space (space that had been vacant for less than twelve months) for which the Company achieved a positive mark-to-market of 3.6% on a cash basis and 9.5% on a GAAP basis. The weighted average lease term for leases signed during the third quarter was 3.2 years and weighted average tenant improvements and leasing commissions on these leases were $0.47 per square foot per annum, or 0.6% of initial rent.

Nine Months Ended September 30, 2020

Same Store Cash NOI decreased by $1.4 million, or 0.5%, to $260.4 million for the nine months ended September 30, 2020 from $261.8 million for the nine months ended September 30, 2019. Same Store NOI increased by $3.3 million, or 1.1%, to $300.2 million for the nine months ended September 30, 2020 from $296.9 million for the nine months ended September 30, 2019.

During the nine months ended September 30, 2020, the Company leased 611,876 square feet, of which the Company’s share was 350,687 square feet that was leased at a weighted average initial rent of $89.68 per square foot. This leasing activity, offset by lease expirations in the nine months, decreased same store leased occupancy (properties owned by us during both reporting periods in a similar manner and not classified as discontinued operations) by 30 basis points to 95.6% at September 30, 2020 from 95.9% at December 31, 2019. Of the 611,876 square feet leased in the nine months, 318,577 square feet represented second generation space (space that had been vacant for less than twelve months) for which the Company achieved a positive mark-to-market of 22.9% on a cash basis and 23.4% on a GAAP basis. The weighted average lease term for leases signed during the nine months was 4.3 years and weighted average tenant improvements and leasing commissions on these leases were $7.16 per square foot per annum, or 8.0% of initial rent.

Guidance

The Company had previously provided its 2020 guidance on February 12, 2020, prior to the COVID-19 pandemic, which has materially impacted the U.S. and global economy. The Company withdrew its previously issued 2020 guidance on April 29, 2020 and is not providing an updated outlook at this time given the continued economic uncertainty and rapidly-evolving circumstances related to the COVID-19 pandemic. The Company will discuss the third quarter results and provide commentary on its business performance during its third quarter conference call.

Forward-Looking Statements

This press release 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 the Company’s control and could materially affect actual results, performance or achievements. These factors include, without limitation, the negative impact of the COVID-19 global pandemic on the U.S., regional and global economies and our tenants’ financial condition and results of operations, the ability to enter into new leases or renew leases on favorable terms, dependence on tenants’ financial condition, the uncertainties of real estate development, acquisition and disposition activity, the ability to effectively integrate acquisitions, the costs and availability of financing, the ability of our joint venture partners to satisfy their obligations, the effects of local, national and international economic and market conditions, the effects of acquisitions, dispositions and possible impairment charges on our operating results, regulatory changes, including changes to tax laws and regulations, and other risks and uncertainties detailed from time to time in the Company’s filings with the U.S. Securities and Exchange Commission. The Company does not undertake a duty to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Non-GAAP Financial Measures

FFO is a supplemental measure of our performance. We present FFO in accordance with the definition adopted by the National Association of Real Estate Investment Trusts (“Nareit”). Nareit defines FFO as net income or loss, calculated in accordance with GAAP, adjusted to exclude depreciation and amortization from real estate assets, impairment losses on certain real estate assets and gains or losses from the sale of certain real estate assets or from change in control of certain 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 gains 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. In addition, we present Core FFO as 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.

FFO and Core FFO are presented as supplemental financial measures and do not fully represent our operating performance. Other REITs may use different methodologies for calculating FFO and Core FFO or use other definitions of FFO and Core FFO and, accordingly, our presentation of these measures may not be comparable to other real estate companies. Neither FFO nor Core FFO is intended to be a measure of cash flow or liquidity. Please refer to our financial statements, prepared in accordance with GAAP, for purposes of evaluating our financial condition, results of operations and cash flows.

NOI is used to measure the operating performance of our properties. NOI consists of rental revenue (which includes property rentals, tenant reimbursements and lease termination income) and certain other property-related revenue less operating expenses (which includes property-related 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, 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 in our New York and San Francisco portfolios 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, impairment of receivables arising from operating leases 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-line rent adjustments and the amortization of above and below-market leases.

A reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure can be found in this press release and in our Supplemental Information for the quarter ended September 30, 2020, which is available on our website.

Investor Conference Call and Webcast

The Company will host a conference call and audio webcast on Thursday, October 29, 2020 at 10:00 a.m. Eastern Time (ET), during which management will discuss the third quarter results and provide commentary on business performance. A question and answer session with analysts and investors will follow the prepared remarks.

The conference call can be accessed by dialing 877-407-0789 (domestic) or 201-689-8562 (international). An audio replay of the conference call will be available from 1:00 p.m. ET on October 29, 2020 through November 5, 2020 and can be accessed by dialing 844-512-2921 (domestic) or 412-317-6671 (international) and entering the passcode 13711586.

A live audio webcast of the conference call will be available through the “Investors” section of the Company’s website, www.paramount-group.com. A replay of the webcast will be archived on the Company’s website.

About Paramount Group, Inc.

Headquartered in New York City, Paramount Group, Inc. 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 City 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.

Paramount Group, Inc.

Consolidated Balance Sheets

(Unaudited and in thousands)

 

Assets:

 

September 30, 2020

 

 

December 31, 2019

 

Real estate, at cost

 

 

 

 

 

 

 

 

Land

 

$

1,966,237

 

 

$

1,966,237

 

Buildings and improvements

 

 

5,969,297

 

 

 

5,923,648

 

 

 

 

7,935,534

 

 

 

7,889,885

 

Accumulated depreciation and amortization

 

 

(920,078

)

 

 

(790,216

)

Real estate, net

 

 

7,015,456

 

 

 

7,099,669

 

Cash and cash equivalents

 

 

515,942

 

 

 

306,215

 

Restricted cash

 

 

30,965

 

 

 

25,272

 

Investments in unconsolidated joint ventures

 

 

417,592

 

 

 

449,180

 

Investments in unconsolidated real estate funds

 

 

12,867

 

 

 

10,317

 

Accounts and other receivables

 

 

15,289

 

 

 

19,231

 

Due from affiliates

 

 

-

 

 

 

36,918

 

Deferred rent receivable

 

 

326,050

 

 

 

301,588

 

Deferred charges, net

 

 

120,211

 

 

 

126,367

 

Intangible assets, net

 

 

167,675

 

 

 

203,169

 

Assets related to discontinued operations

 

 

103,787

 

 

 

104,836

 

Other assets

 

 

80,660

 

 

 

51,373

 

Total assets

 

$

8,806,494

 

 

$

8,734,135

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

Notes and mortgages payable, net

 

$

3,798,944

 

 

$

3,783,851

 

Revolving credit facility

 

 

200,000

 

 

 

36,918

 

Accounts payable and accrued expenses

 

 

109,228

 

 

 

117,356

 

Dividends and distributions payable

 

 

24,173

 

 

 

25,255

 

Intangible liabilities, net

 

 

61,485

 

 

 

73,789

 

Other liabilities

 

 

59,531

 

 

 

66,004

 

Total liabilities

 

 

4,253,361

 

 

 

4,103,173

 

Equity:

 

 

 

 

 

 

 

 

Paramount Group, Inc. equity

 

 

3,690,246

 

 

 

3,785,730

 

Noncontrolling interests in:

 

 

 

 

 

 

 

 

Consolidated joint ventures

 

 

436,576

 

 

 

360,778

 

Consolidated real estate fund

 

 

79,168

 

 

 

72,396

 

Operating Partnership

 

 

347,143

 

 

 

412,058

 

Total equity

 

 

4,553,133

 

 

 

4,630,962

 

Total liabilities and equity

 

$

8,806,494

 

 

$

8,734,135

 

 

Paramount Group, Inc.

Consolidated Statements of Income

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

 

 

 

For the Three Months Ended

 

 

For the Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental revenue

 

$

165,420

 

 

$

181,115

 

 

$

504,834

 

 

$

530,500

 

Fee and other income

 

 

11,355

 

 

 

10,138

 

 

 

27,045

 

 

 

26,485

 

Total revenues

 

 

176,775

 

 

 

191,253

 

 

 

531,879

 

 

 

556,985

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating

 

 

67,865

 

 

 

68,846

 

 

 

199,192

 

 

 

199,043

 

Depreciation and amortization

 

 

58,889

 

 

 

60,696

 

 

 

176,032

 

 

 

181,685

 

General and administrative

 

 

16,805

 

 

 

16,319

 

 

 

46,955

 

 

 

51,457

 

Transaction related costs

 

 

81

 

 

 

786

 

 

 

542

 

 

 

1,704

 

Total expenses

 

 

143,640

 

 

 

146,647

 

 

 

422,721

 

 

 

433,889

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from unconsolidated joint ventures

 

 

(4,268

)

 

 

(1,332

)

 

 

(14,444

)

 

 

(2,815

)

(Loss) income from unconsolidated real estate funds

 

 

(56

)

 

 

206

 

 

 

85

 

 

 

271

 

Interest and other income, net

 

 

1,104

 

 

 

1,222

 

 

 

2,360

 

 

 

7,705

 

Interest and debt expense

 

 

(35,792

)

 

 

(37,325

)

 

 

(108,420

)

 

 

(111,462

)

(Loss) income from continuing operations, before income taxes

 

 

(5,877

)

 

 

7,377

 

 

 

(11,261

)

 

 

16,795

 

Income tax (expense) benefit

 

 

(393

)

 

 

583

 

 

 

(1,135

)

 

 

(823

)

(Loss) income from continuing operations, net

 

 

(6,270

)

 

 

7,960

 

 

 

(12,396

)

 

 

15,972

 

Income from discontinued operations, net

 

 

2,147

 

 

 

3,040

 

 

 

5,815

 

 

 

7,202

 

Net (loss) income

 

 

(4,123

)

 

 

11,000

 

 

 

(6,581

)

 

 

23,174

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated joint ventures

 

 

(3,566

)

 

 

(3,051

)

 

 

(5,485

)

 

 

(8,253

)

Consolidated real estate fund

 

 

79

 

 

 

(109

)

 

 

1,291

 

 

 

(256

)

Operating Partnership

 

 

652

 

 

 

(758

)

 

 

895

 

 

 

(1,419

)

Net (loss) income attributable to common stockholders

 

$

(6,958

)

 

$

7,082

 

 

$

(9,880

)

 

$

13,246

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) income per Common Share - Basic:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) income from continuing operations, net

 

$

(0.04

)

 

$

0.02

 

 

$

(0.07

)

 

$

0.03

 

Income from discontinued operations, net

 

 

0.01

 

 

 

0.01

 

 

 

0.03

 

 

 

0.03

 

Net (loss) income per common share

 

$

(0.03

)

 

$

0.03

 

 

$

(0.04

)

 

$

0.06

 

Weighted average common shares outstanding

 

 

221,461,146

 

 

 

231,197,838

 

 

 

223,593,376

 

 

 

232,974,210

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) income per Common Share - Diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) income from continuing operations, net

 

$

(0.04

)

 

$

0.02

 

 

$

(0.07

)

 

$

0.03

 

Income from discontinued operations, net

 

 

0.01

 

 

 

0.01

 

 

 

0.03

 

 

 

0.03

 

Net (loss) income per common share

 

$

(0.03

)

 

$

0.03

 

 

$

(0.04

)

 

$

0.06

 

Weighted average common shares outstanding

 

 

221,461,146

 

 

 

231,229,939

 

 

 

223,593,376

 

 

 

233,004,917

 

Paramount Group, Inc.

Reconciliation of Net (Loss) Income to FFO and Core FFO

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

 

 

 

For the Three Months Ended

 

 

For the Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Reconciliation of Net (Loss) Income to FFO and Core FFO:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(4,123

)

 

$

11,000

 

 

$

(6,581

)

 

$

23,174

 

Real estate depreciation and amortization (including our share of unconsolidated joint ventures)

 

 

71,131

 

 

 

65,099

 

 

 

212,617

 

 

 

192,508

 

Adjustments related to discontinued operations

 

 

-

 

 

 

1,222

 

 

 

690

 

 

 

5,947

 

FFO

 

 

67,008

 

 

 

77,321

 

 

 

206,726

 

 

 

221,629

 

Less FFO attributable to noncontrolling interests in:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated joint ventures

 

 

(12,695

)

 

 

(12,142

)

 

 

(30,375

)

 

 

(35,167

)

Consolidated real estate fund

 

 

79

 

 

 

(109

)

 

 

1,291

 

 

 

(256

)

FFO attributable to Paramount Group Operating Partnership

 

 

54,392

 

 

 

65,070

 

 

 

177,642

 

 

 

186,206

 

Less FFO attributable to noncontrolling interests in Operating Partnership

 

 

(4,659

)

 

 

(6,294

)

 

 

(15,660

)

 

 

(17,997

)

FFO attributable to common stockholders

 

$

49,733

 

 

$

58,776

 

 

$

161,982

 

 

$

168,209

 

Per diluted share

 

$

0.22

 

 

$

0.25

 

 

$

0.72

 

 

$

0.72

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO

 

$

67,008

 

 

$

77,321

 

 

$

206,726

 

 

$

221,629

 

Non-core items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Our share of distributions from 712 Fifth Avenue in excess of earnings

 

 

(498

)

 

 

(976

)

 

 

(1,806

)

 

 

(1,037

)

Other, net

 

 

308

 

 

 

715

 

 

 

935

 

 

 

1,798

 

Core FFO

 

 

66,818

 

 

 

77,060

 

 

 

205,855

 

 

 

222,390

 

Less Core FFO attributable to noncontrolling interests in:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated joint ventures

 

 

(12,695

)

 

 

(12,142

)

 

 

(30,375

)

 

 

(35,167

)

Consolidated real estate fund

 

 

79

 

 

 

(109

)

 

 

1,291

 

 

 

(256

)

Core FFO attributable to Paramount Group Operating Partnership

 

 

54,202

 

 

 

64,809

 

 

 

176,771

 

 

 

186,967

 

Less Core FFO attributable to noncontrolling interests in Operating Partnership

 

 

(4,642

)

 

 

(6,269

)

 

 

(15,584

)

 

 

(18,075

)

Core FFO attributable to common stockholders

 

$

49,560

 

 

$

58,540

 

 

$

161,187

 

 

$

168,892

 

Per diluted share

 

$

0.22

 

 

$

0.25

 

 

$

0.72

 

 

$

0.72

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

221,461,146

 

 

 

231,197,838

 

 

 

223,593,376

 

 

 

232,974,210

 

Effect of dilutive securities

 

 

6,025

 

 

 

32,101

 

 

 

14,740

 

 

 

30,707

 

Denominator for FFO and Core FFO per diluted share

 

221,467,171

 

 

 

231,229,939

 

 

 

223,608,116

 

 

 

233,004,917

  

Paramount Group, Inc.

Reconciliation of Net (Loss) Income to Same Store NOI and Same Store Cash NOI

(Unaudited and in thousands)

 

 

 

 

 

 

 

 

 

For the Three Months Ended
September 30,

 

 

For the Nine Months Ended
September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Reconciliation of Net (Loss) Income to Same Store NOI and Same Store Cash NOI:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(4,123

)

 

$

11,000

 

 

$

(6,581

)

 

$

23,174

 

Add (subtract) adjustments to arrive at NOI and Cash NOI:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

58,889

 

 

 

60,696

 

 

 

176,032

 

 

 

181,685

 

General and administrative

 

 

16,805

 

 

 

16,319

 

 

 

46,955

 

 

 

51,457

 

Interest and debt expense

 

 

35,792

 

 

 

37,325

 

 

 

108,420

 

 

 

111,462

 

Income tax expense (benefit)

 

 

393

 

 

 

(583

)

 

 

1,135

 

 

 

823

 

NOI from unconsolidated joint ventures

 

 

12,935

 

 

 

4,973

 

 

 

36,703

 

 

 

14,569

 

Loss from unconsolidated joint ventures

 

 

4,268

 

 

 

1,332

 

 

 

14,444

 

 

 

2,815

 

Fee income

 

 

(9,153

)

 

 

(7,159

)

 

 

(21,692

)

 

 

(17,371

)

Interest and other income, net

 

 

(1,104

)

 

 

(1,222

)

 

 

(2,360

)

 

 

(7,705

)

Adjustments related to discontinued operations

 

 

10

 

 

 

1,222

 

 

 

700

 

 

 

5,947

 

Other, net

 

 

137

 

 

 

580

 

 

 

457

 

 

 

1,433

 

NOI

 

 

114,849

 

 

 

124,483

 

 

 

354,213

 

 

 

368,289

 

Less NOI attributable to noncontrolling interests in:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated joint ventures

 

 

(20,433

)

 

 

(18,765

)

 

 

(51,857

)

 

 

(54,513

)

Consolidated real estate fund

 

 

205

 

 

 

-

 

 

 

1,645

 

 

 

23

 

PGRE's share of NOI

 

 

94,621

 

 

 

105,718

 

 

 

304,001

 

 

 

313,799

 

Acquisitions

 

 

(7,160

)

 

 

-

 

 

 

(24,877

)

 

 

-

 

Dispositions / Discontinued Operations (1)

 

 

(2,157

)

 

 

(7,133

)

 

 

(6,515

)

 

 

(16,955

)

Non-cash write-offs (primarily straight-line rent receivables) (2)

 

 

13,109

 

 

 

-

 

 

 

20,794

 

 

 

-

 

Reserves for uncollectible accounts receivable (2)

 

 

-

 

 

 

172

 

 

 

1,940

 

 

 

448

 

Lease termination income and other, net

 

 

1,772

 

 

 

381

 

 

 

4,872

 

 

 

(431

)

PGRE's share of Same Store NOI

 

$

100,185

 

 

$

99,138

 

 

$

300,215

 

 

$

296,861

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOI

 

$

114,849

 

 

$

124,483

 

 

$

354,213

 

 

$

368,289

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Straight-line rent adjustments (including our share of unconsolidated joint ventures)

 

 

(5,523

)

 

 

(11,556

)

 

 

(27,364

)

 

 

(34,362

)

Amortization of above and below-market leases, net (including our share of unconsolidated joint ventures)

 

 

(2,986

)

 

 

(2,787

)

 

 

(7,519

)

 

 

(8,772

)

Adjustments related to discontinued operations

 

 

128

 

 

 

91

 

 

 

361

 

 

 

302

 

Cash NOI

 

 

106,468

 

 

 

110,231

 

 

 

319,691

 

 

 

325,457

 

Less Cash NOI attributable to noncontrolling interests in:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated joint ventures

 

 

(14,513

)

 

 

(16,680

)

 

 

(41,431

)

 

 

(47,048

)

Consolidated real estate fund

 

 

205

 

 

 

-

 

 

 

1,645

 

 

 

23

 

PGRE's share of Cash NOI

 

 

92,160

 

 

 

93,551

 

 

 

279,905

 

 

 

278,432

 

Acquisitions

 

 

(5,899

)

 

 

-

 

 

 

(19,459

)

 

 

-

 

Dispositions / Discontinued Operations (1)

 

 

(2,285

)

 

 

(6,760

)

 

 

(6,876

)

 

 

(16,664

)

Reserves for uncollectible accounts receivable (2)

 

 

-

 

 

 

172

 

 

 

1,940

 

 

 

448

 

Lease termination income and other, net

 

 

1,801

 

 

 

403

 

 

 

4,848

 

 

 

(454

)

PGRE's share of Same Store Cash NOI

 

$

85,777

 

 

$

87,366

 

 

$

260,358

 

 

$

261,762

 

________________________
(1)

Primarily represents NOI and Cash NOI from discontinued operations (1899 Pennsylvania Avenue in 2020 and 1899 Pennsylvania Avenue and Liberty Place in 2019).

(2)

Represents impairments of receivables arising from operating leases that have been consistently excluded from our same store results in prior periods as noted in our definition of these terms. In prior periods, adjustments for these items have been relatively small and as such, were included within "other".

 

Contacts

Wilbur Paes
Executive Vice President, Chief Financial Officer
212-237-3122
ir@paramount-group.com

Robert Simone
Director, Business Development & Investor Relations
212-237-3138
ir@paramount-group.com

Media:
212-492-2285
pr@paramount-group.com

Contacts

Wilbur Paes
Executive Vice President, Chief Financial Officer
212-237-3122
ir@paramount-group.com

Robert Simone
Director, Business Development & Investor Relations
212-237-3138
ir@paramount-group.com

Media:
212-492-2285
pr@paramount-group.com