1Q 2020 Investor Presentation April 2020 Cautionary Note on - - PowerPoint PPT Presentation

1Q 2020 Investor Presentation April 2020

Cautionary Note on Forward-Looking Statements

This presentation contains forward-looking statements within the meaning of the federal securities laws. You can identify these statements by our use of the words “assumes,” “believes,” “estimates,” “expects,” “guidance,” “intends,” “plans,” “projects” and similar expressions that do not relate to historical matters. You should exercise caution in interpreting and relying on forward-looking statements because they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and could materially affect actual results, performance or achievements. These factors include, without limitation, the negative impact of the coronavirus (COVID-19) global pandemic on the U.S., regional and global economies and our tenants’ financial condition and results of operations, the ability to enter into new leases or renew leases on favorable terms, dependence on tenants’ financial condition, the uncertainties of real estate development, acquisition and disposition activity, the ability to effectively integrate acquisitions, the costs and availability of financing, the ability of our joint venture partners to satisfy their obligations, the effects of local, national and international economic and market conditions, the effects of acquisitions, dispositions and possible impairment charges on our operating results, regulatory changes, including changes to tax laws and regulations, and other risks and uncertainties detailed from time to time in our filings with the U.S. Securities and Exchange Commission. We do not undertake a duty to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. The data and information herein are as of March 31, 2020 unless otherwise indicated.

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Paramount Group at a Glance

Ticker: PGRE

NYSE-LISTED COMPANY

1978

FOUNDED IN

2014

INITIAL PUBLIC OFFERING

14 (1)

REIT ASSETS

14 MM (1)

SQUARE FEET

$6 B (3)

TOTAL MARKET CAPITALIZATION

$394 MM (4)

ANNUALIZED CASH NOI

~$14 B (2)

TOTAL AUM

Paramount prides itself on being a best-in-class owner and operator of high-quality, Class A office properties in New York and San Francisco

Note: Please refer to the Appendix for all Non-GAAP reconciliations and list of defined terms. All figures as of March 31, 2020. (1) Includes 14 REIT-owned assets aggregating 13.1 million square feet and five other buildings that are managed by Paramount aggregating 1.0 million square feet. (2) Calculated based on (i) Green Street Advisors’ estimate of Gross Asset Value as of April 21, 2020 for REIT-owned assets, (ii) management’s estimate of values for managed assets and (iii) committed capital for Fund assets as of March 31, 2020. (3) Based on PGRE closing price of $8.80 on March 31, 2020. (4) Based on PGRE’s share of Cash NOI of $98.5 million for the three months ended March 31. 2020. (5) At PGRE’s share. Excluding 1899 Pennsylvania Avenue, which is under contract for sale, the leased percentage would have been 96.0%.

95.9% (5)

LEASED

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Executive Management Senior Vice Presidents

Albert Behler Chairman, Chief Executive Officer & President Wilbur Paes Chief Financial Officer & Treasurer David Zobel Acquisitions Ermelinda Berberi Chief Accounting Officer David Eaton Leasing, San Francisco Ben Goodsir Asset Management Michael Jackowitz Capital Markets Todd Januzzi Chief Information & Technology Officer Gage Johnson General Counsel Bernard Marasco Counsel – Leasing & Property Management Michael Nathan Acquisitions Douglas Neye Leasing, New York Peter Brindley Leasing Christopher Brandt Asset Management Matt Bautista Development & Construction

Deep & Experienced Management Team

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Mario Fulgieri Tax

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COVID-19 & Business Update

• Leased over 200,000 square feet in the first quarter.
• Given social distancing measures and “Stay Home/PAUSE” orders in our two

markets, physical touring activity has temporarily paused.

• Currently working to arrange virtual tours for prospective tenants while

adhering to guidelines.

• Opportunistically repurchased 10.9 million common shares in the first quarter

for $100.0 million, or a weighted average price of $9.21 per share, a ~50.0% discount to NAV (1).

• Over $1.2 billion of liquidity, with approximately $400.0 million of cash on

balance sheet and additional $800.0 million of revolver capacity.

• Additional ~$215.0 million of cash to be generated from asset sales that are

currently under contract.

1Q 2020 Highlights & Business Update

Note: Please refer to the Appendix for all Non-GAAP reconciliations and list of defined terms. (1) Based on Green Street Advisors’ estimate for NAV per share of $18.25 as of April 21, 2020.

• Highest priority is ensuring health and safety of tenants and employees,

supporting CDC guidelines and complying with government directives.

• Due to the unprecedented degree of economic uncertainty, we are

withdrawing 2020 guidance.

• Rent collections for April amounted to ~94% of total billings.

Leasing Activity Capital Allocation & Balance Sheet

8.6 MM square feet – 95.5% Leased (1)

New York Portfolio

900 Third Avenue 712 Fifth Avenue 1301 Avenue

• f the Americas

Midtown Manhattan

1325 Avenue

• f the Americas

31 West 52nd Street 1633 Broadway

98.4% Leased 91.8% Leased 99.0% Leased 98.3% Leased 75.2% Leased 82.4% Leased

60 Wall Street

100.0% Leased

6 (1) Leased occupancy expressed at PGRE’s share.

San Francisco Portfolio

4.3 MM square feet – 97.4% Leased (1)

(1) Leased occupancy expressed at PGRE’s share. 7

One Front Street

98.2% Leased 100.0% Leased

One Market Plaza

99.1% Leased

300 Mission Street 111 Sutter Street 86.3% Leased

95.7% Leased

55 Second Street Market Center

95.6% Leased

Transition to New York & San Francisco Focused REIT

Number

• f

REIT-Owned Properties Total Square Feet

(At 100%)

Annualized Rent

(At PGRE’s Share) (1)

1Q 2015 1Q 2020

8 Washington, D.C. 5 Properties 42% New York 6 Properties 50% San Francisco 1 Property 8% Washington, D.C. $76.3MM 14% New York $423.0MM 78% San Francisco $41.1MM 8% New York 7.2MM Sq. Ft. 69% San Francisco 1.6MM Sq. Ft. 16% Washington, D.C. 1.6MM Sq. Ft. 15% New York 7 Properties 50% San Francisco 6 Properties 43% Washington, D.C. 1 Property 7% New York $498.5MM 71% San Francisco $187.4MM 27% Washington, D.C. $15.1MM 2% San Francisco 4.3MM Sq. Ft. 33% New York 8.6MM Sq. Ft. 66% Washington, D.C. 191,000 Sq. Ft. 1% Note: 1899 Pennsylvania Avenue is currently under contract for sale and expected to close in 4Q 2020. (1) Please see page 19 for our definition of this measure.

Diverse and High Credit Quality Tenant Base

Industry Diversification – % of Annualized Rent Tenancy Highlights

 High percentage of PGRE’s share of annualized rent

derived from investment grade / nationally recognized

• ffice tenants.

 Weighted average remaining lease term of approximately

7 years on office leases.

 Retail, theatre and garage tenants account for less than

5.0% of PGRE’s share of annualized rent.

Other Blue Chip Tenants

(1) Please see page 19 for our definition of this measure. (2) 116,462 of the square feet leased expire on March 31, 2032. (3) 76,999 and 10,952 of the square feet leased expire on December 31, 2029 and December 31, 2030, respectively. 9

(2) (3) (1) (1) (2) (3)

PGRE's Share of Top 10 Tenants Expiration Date Square Feet Occupied % of Ann. Rent 1. 12/2020 497,418 4.7% 2. 1/2031 320,911 4.2% 3. 6/2024 328,992 4.2% 4. 2/2023 312,679 3.9% 5. 9/2034 320,325 3.9% 6. 6/2025 338,602 3.8% 7. 3/2032 260,829 2.8% 8. 7/2029 296,344 2.8% 9. 1/2026 261,196 2.4% 10. 3/2037 203,394 2.1%

Lease Expiration Schedule

Note: Figures do not include 18,075 sf of month-to-month leases or 389,655 sf of vacant space at PGRE’s share. 10 1.2% 11.2% 5-Year Average: 671,250 sf

• r 7.5% per annum (~6.3% per

annum excl. Barclays in 2021)

Capital Structure Overview

Note: Please refer to the Appendix for all Non-GAAP reconciliations and list of defined terms. (1) Represents Green Street Advisors’ estimate of NAV per share as of April 21, 2020. (2) At PGRE’s share. (3) Represents contractual amounts due pursuant to the respective debt agreements. (4) Includes $200.0 million outstanding under the revolving credit facility, the proceeds of which are held as cash on the balance sheet at March 31, 2020. (5) Represents adjustments for One Market Plaza and 300 Mission Street. (6) Represents PGRE’s share of 712 Fifth Avenue, Market Center, 55 Second Street, 111 Sutter Street, 60 Wall Street and Oder-Center Germany.

Secured vs. Unsecured (2) (3) (4) Fixed vs. Floating (2) (3) (4)

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$3,755,792 95% $200,000 5% Secured Unsecured $3,305,450 84% $650,342 16% Fixed Rate Debt Floating Rate Debt (In thousands, except per share amounts) At Green Street NAV (1) Stock Price $18.25 Common Shares 221,750 Operating Partnership Units 20,584 Total Shares / Units Outstanding 242,334 Equity Market Capitalization $4,422,600 Consolidated Debt: Notes & Mortgages Payable (2) (3) (4) 4,012,716 Less: Noncontrolling Interests' Share of Consolidated Debt (5) (661,036) Add: PGRE's Share of Unconsolidated JV Debt (6) 604,112 PGRE's Share of Total Debt (4) 3,955,792 Total Market Capitalization $8,378,392 PGRE's Share of Cash & Cash Equiv. (390,209) Total Enterprise Value $7,988,183 Net Debt $3,565,583 Net Debt / Enterprise Value 44.6% Net Debt / Annualized Adjusted EBITDAre 8.6x

Well-Laddered Debt Maturity Profile

Debt Maturity Schedue (1) (2)

Note: Please refer to the Appendix for all Non-GAAP reconciliations and list of defined terms. (1) At PGRE’s share. (2) Excludes PGRE’s Share of Oder-Center Germany debt and $200.0 million outstanding on the revolving credit facility at March 31, 2020. 12

• Wtd. Avg. Maturity:

5.6 years

• Wtd. Avg. Interest Rate:

3.28%

1633 Broadway $1,250.0 1301 AoA $850.0 31 West 52nd $500.0 Market Cntr $269.3 One Market $477.8 300 Mission $73.9 712 5th Ave. $150.0 60 Wall $28.8 111 Sutter $71.5 55 Second $82.7

$0.0 $200.0 $400.0 $600.0 $800.0 $1,000.0 $1,200.0 $1,400.0 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Schedule of Free Rent Burn Off

As of March 31, 2020, we have $45.0 million of annualized initial cash rents that are yet to contribute to Cash NOI:

• $28.5 million from commenced leases in free rent periods, and
• $16.5 million from signed leases not yet commenced.

These leases become cash paying over the next three years as detailed below:

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(In thousands) Annualized Initial Cash Rent 1 Amount Contributing to: As of March 31, 2020 100% Amount PGRE Share 2020 2021 2022 New York: Commenced Leases in Free Rent Period $24,780 $24,267 $10,461 $24,267 $24,267 Signed Leases Not Yet Commenced 8,385 6,938 299 4,950 6,938 Subtotal $33,165 $31,205 $10,760 $29,217 $31,205 San Francisco: Commenced Leases in Free Rent Period $8,572 $4,200 $1,922 $4,200 $4,200 Signed Leases Not Yet Commenced 27,236 9,600 1,340 8,880 8,880 Subtotal $35,808 $13,800 $3,262 $13,080 $13,080 Total Commenced Leases in Free Rent Period $33,352 $28,467 $12,383 $28,467 $28,467 Total Signed Leases Not Yet Commenced 35,621 16,538 1,639 13,830 15,818 Grand Total $68,973 $45,005 $14,022 $42,297 $44,285

Appendix

Reconciliation of Non-GAAP Measures

(1) Please see page 19 for our definition of this measure. 15

FFO

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

March 31, 2020 March 31, 2019 December 31, 2019 5,226 $ 7,000 $ (52,777) $ 70,940 63,688 65,368 690 2,377 1,156

• 42,000

76,856 73,065 55,747 (8,969) (11,748) (11,360) (23) (94) (57) 67,864 61,223 44,330 (6,278) (5,998) (4,352) 61,586 $ 55,225 $ 39,978 $ 0.27 $ 0.24 $ 0.18 $ 76,856 $ 73,065 $ 55,747 $ (388) 1,270 (1,001)

• 11,989
• 8,215

303 823 1,083 76,771 75,158 76,033 (8,969) (11,748) (11,360) (23) (94) (57) 67,779 63,316 64,616 (6,270) (6,203) (6,344) 61,509 $ 57,113 $ 58,272 $ 0.27 $ 0.24 $ 0.26 $ 227,769,213 233,419,299 227,276,459 35,963 39,139 50,071 227,805,176 233,458,438 227,326,530 Three Months Ended Real estate depreciation and amortization (including our share Net income (loss) Reconciliation of net income (loss) to FFO and Core FFO: Per diluted share FFO attributable to common stockholders (1) Less FFO attributable to noncontrolling interests in Operating Partnership FFO attributable to Paramount Group Operating Partnership Consolidated real estate fund Consolidated joint ventures Less FFO attributable to noncontrolling interests in: FFO (1) Adjustments related to discontinued operations

• f unconsolidated joint ventures)

Real estate impairment loss related to discontinued operations (distributions received from 712 Fifth Avenue in excess of earnings) Our share of earnings in excess of distributions received and Non-core items: FFO Consolidated joint ventures Less Core FFO attributable to noncontrolling interests in: Core FFO (1) Other, net Non-cash write-off of deferred financing costs Denominator for FFO and Core FFO per diluted share Effect of dilutive securities Weighted average shares outstanding Reconciliation of weighted average shares outstanding: Loss on early extinguishment of debt Per diluted share Core FFO attributable to common stockholders (1) Less Core FFO attributable to noncontrolling interests in Operating Partnership Core FFO attributable to Paramount Group Operating Partnership Consolidated real estate fund

Reconciliation of Non-GAAP Measures

(1) Please see page 19 for our definition of this measure. 16

NOI

(unaudited and in thousands)

March 31, 2020 March 31, 2019 December 31, 2019 5,226 $ 7,000 $ (52,777) $ 58,427 60,712 58,419 12,249 17,443 17,099 36,619 36,924 45,217

• 11,989

604 1,138 (511) 13,392 5,411 7,840 (6,330) (5,999) (5,373) 996 (3,900) (2,139) 690 2,377 1,156

• 42,000

4,372 1,717 2,800 126,245 122,823 125,720 (15,691) (17,909) (18,107) 3 29 103 110,557 $ 104,943 $ 107,716 $ 126,245 $ 122,823 $ 125,720 $ (11,804) (11,869) (11,218) (2,832) (3,240) (3,141) 119 111 132 111,728 107,825 111,493 (13,202) (14,785) (15,841) 3 29 103 98,529 $ 93,069 $ 95,755 $ Three Months Ended PGRE's share of Cash NOI (1) Consolidated real estate fund Consolidated joint ventures Less Cash NOI attributable to noncontrolling interests in: Cash NOI (1)

• ur share of unconsolidated joint ventures)

Amortization of above and below-market leases, net (including unconsolidated joint ventures) Straight-line rent adjustments (including our share of Less: NOI PGRE's share of NOI (1) Real estate impairment loss related to discontinued operations Adjustments related to discontinued operations Net income (loss) Reconciliation of net income (loss) to NOI and Cash NOI: Fee income NOI from unconsolidated joint ventures Income tax expense (benefit) Loss on early extinguishment of debt Interest and debt expense Consolidated real estate fund Consolidated joint ventures Less NOI attributable to noncontrolling interests in: NOI (1) Other, net General and administrative Depreciation and amortization Add (subtract) adjustments to arrive at NOI and Cash NOI: Adjustments related to discontinued operations Interest and other loss (income), net

Reconciliation of Non-GAAP Measures

(1) Please see page 19 for our definition of this measure. (2) Represents our share of Cash NOI attributable to acquired properties (Market Center, 55 Second Street and 111 Sutter Street in San Francisco) for the months in which they were not owned by us in both reporting periods. (3) Represents Cash NOI from discontinued operations (1899 Pennsylvania Avenue in 2020 and 1899 Pennsylvania Avenue and Liberty Place in 2019). 17

SAME STORE RESULTS

(unaudited and in thousands)

Total New York San Francisco Other 98,529 $ 69,470 $ 28,233 $ 826 $ (6,806)

• (6,806)
• (2,330)
• (2,330)

1,421 (76) (7) 1,504 90,814 $ 69,394 $ 21,420 $

• $

Total New York San Francisco Other 93,069 $ 68,801 $ 20,426 $ 3,842 $

• (4,594)
• (4,594)

(1,409) (2,161)

• 752

87,066 $ 66,640 $ 20,426 $

• $

3,748 $ 2,754 $ 994 $

• $

4.3% 4.1% 4.9% % Increase Increase in PGRE's share of Same Store Cash NOI PGRE's share of Same Store Cash NOI for the three months ended March 31, 2019 Dispositions / Discontinued Operations (3) Acquisitions (2) PGRE's share of Cash NOI for the three months ended March 31, 2019 PGRE's share of Same Store Cash NOI for the three months ended March 31, 2020 Three Months Ended March 31, 2020 Lease termination income and other, net Lease termination income and other, net Three Months Ended March 31, 2019 Dispositions / Discontinued Operations (3) Acquisitions SAME STORE CASH NOI (1) PGRE's share of Cash NOI for the three months ended March 31, 2020

Reconciliation of Non-GAAP Measures

(1) Please see page 19 for our definition of this measure. (2) Represents our share of NOI attributable to acquired properties (Market Center, 55 Second Street and 111 Sutter Street in San Francisco) for the months in which they were not owned by us in both reporting periods. (3) Represents NOI from discontinued operations (1899 Pennsylvania Avenue in 2020 and 1899 Pennsylvania Avenue and Liberty Place in 2019). 18

SAME STORE RESULTS

(unaudited and in thousands)

Total New York San Francisco Other 110,557 $ 75,492 $ 34,439 $ 626 $ (9,292)

• (9,292)
• (2,211)
• (2,211)

1,502 (76) (7) 1,585 100,556 $ 75,416 $ 25,140 $

• $

Total New York San Francisco Other 104,943 $ 77,650 $ 23,629 $ 3,664 $

• (4,483)
• (4,483)

(1,342) (2,161)

• 819

99,118 $ 75,489 $ 23,629 $

• $

1,438 $ (73) $ 1,511 $

• $

1.5% (0.1%) 6.4% Dispositions / Discontinued Operations (3) Acquisitions PGRE's share of NOI for the three months ended March 31, 2019 Lease termination income and other, net % Increase Increase in PGRE's share of Same Store NOI PGRE's share of Same Store NOI for the three months ended March 31, 2019 Acquisitions (2) PGRE's share of NOI for the three months ended March 31, 2020 SAME STORE NOI (1) Three Months Ended March 31, 2020 Three Months Ended March 31, 2019 PGRE's share of Same Store NOI for the three months ended March 31, 2020 Lease termination income and other, net Dispositions / Discontinued Operations (3)

Definitions

Annualized Rent represents the end-of-period monthly base rent plus escalations in accordance with the lease terms, multiplied by 12. 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 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. 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. Net Operating Income (“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

• f 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. 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 and not classified as discontinued operations.

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