May 2019 Cautionary Note on Forward-Looking Statements This - - PowerPoint PPT Presentation

PGRE Overview May 2019

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 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, 2019 unless otherwise indicated. The Core FFO guidance set forth in this presentation represents the guidance provided in our Supplemental Operating and Financial Data issued on May 1, 2019 which was subject to the assumptions and qualifications set forth therein. We have not updated or reaffirmed that guidance and are not doing so by restating it herein.

Consistent Focus on High Barrier-to-Entry Supply Constrained Submarkets in Gateway Cities for over 20 Years Annualized Rent (1)

 Best-in-class owner and operator of high-quality, Class A

• ffice properties in New York, San Francisco and

Washington, D.C. ─ 75.6%of Annualized Rent (1) is in New York

 13 Class A office properties with 12.2 million sf (2)  Significant contractual embedded growth from leases in

free rent periods and signed leases not yet commenced

 Strong internal growth prospects

─ Increase in-place, below-market rents as leases expire ─ Lease up of currently available space

 Redevelop and reposition properties to enhance value  Complementary investment management platform

primarily focused on debt and preferred equity investments

1 (1) Please see page 20 for our definition of this measure. (2) Includes 100% of square footage from 60 Wall Street, 712 Fifth Avenue, One Market Plaza, 50 Beale Street and 111 Sutter Street.

Paramount Group Overview

New York 75.6% San Francisco 19.9% Washington, D.C. 4.5%

Executive Management Senior Vice Presidents

Albert Behler Chairman, Chief Executive Officer & President Wilbur Paes Chief Financial Officer & Treasurer

Peter Brindley

Leasing

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

2

Our People Are Our Greatest Asset

With our deep knowledge, creative, proactive approach and winning spirit, we are Paramount.

Christopher Brandt Asset Management Matt Bautista Development & Construction

New York (6.8mm square feet) – 96.6% Leased (at PGRE share)

Irreplaceable Trophy Portfolio

3

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 98.0% Leased 97.9% Leased 97.5% Leased 70.8% Leased 92.8% Leased

60 Wall Street

100.0% Leased

Irreplaceable Trophy Portfolio

San Francisco (1.8mm square feet) – 94.4% (1) Leased (at PGRE share)

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99.2% Leased

One Front Street

92.0% Leased (1)

One Market Plaza

99.7% Leased

50 Beale Street 111 Sutter Street

70.6% Leased

(1) In April 2019, we signed a 265,000 square foot lease expansion with First Republic Bank that brought One Front Street to 100.0% leased and the San Francisco portfolio to 97.3% leased (at PGRE share).

Washington, D.C. (364,000 square feet) – 94.0% Leased (at PGRE share)

Irreplaceable Trophy Portfolio

5

NY007VUG / 540917_1.WOR

Downtown Logan Circle Dupont Circle George Washington University Foggy Bottom National Mall & Memorial Parks 9th St NW Capitol St NW Georgetown Arlington

1899 Pennsylvania Avenue Liberty Place

90.4% Leased 98.0% Leased

Diverse and High Credit Quality Tenant Base

Industry Diversification – % of Annualized Rent Tenancy Highlights

 High percentage of rent derived from investment grade /

nationally recognized tenants

 Approximately 300 tenants  Average office lease size of approximately 48,500 square

feet

 Weighted average remaining lease term of 7.2 years on

• ffice leases

Other Blue Chip Tenants

(1) 116,462 of the square feet leased expires on March 31, 2032. 6 PGRE's Share of Top 10 Tenants Expiration Date Square Feet Occupied % of Ann. Rent 1. 12/2020 497,418 5.1% 2. 1/2031 320,911 4.5% 3. 2/2023 312,679 4.2% 4. 6/2024 328,992 4.2% 5. 9/2034 320,325 4.0% 6. 3/2032 260,829 3.1% 7. 7/2029 293,888 2.8% 8. 6/2025 232,479 2.6% 9. 1/2026 238,880 2.3% 10. 3/2037 203,394 2.3%

(1) (1)

Lease Expiration Schedule

7 Note: Figures do not include 33,118 sf of month-to-month leases or 357,879 sf of vacant space at PGRE’s share. 12.2% 5.6% 7.9% 7.2% 7.9% 8.1% 1.8% 2.2% 34.3% – 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Thereafter

PGRE's Share of Sq. Ft. of Expiring Leases

3.1% 5.3% 2 Year Average 376,218 sf Or 4.2% per annum

ENERGY STAR Ratings

+17.8% Increase

“Living Wall” – One Market Plaza

LEED Certification

Focus on Sustainability

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• Avg. ENERGY STAR Score –

Current 86

• Avg. ENERGY STAR Score at

Benchmarking – 2008 73

Paramount Group is an industry leader in on-going sustainability initiatives that have helped us to manage operating costs, attract and retain premium tenants, and ultimately enhance portfolio value. We are proud to have partnered with the EPA and U.S. Green Building Council (USGBC) to promote sustainability and green building certifications.

 ENERGY STAR for Buildings is an EPA voluntary

program that certifies the most energy-efficient buildings across the country.

 As an early ENERGY STAR Leader, our entire

portfolio has earned ENERGY STAR Certifications and energy usage is monitored online in real-time.

 We are a member of the USGBC and we have

certified millions of square feet of LEED buildings.

 Our entire portfolio of REIT-owned properties (12.2 million square feet)

has earned LEED EB Gold or Platinum.

89 88 87 86 81 77 71 98 97 96 90 83 75 – 25 50 75 100 1325 AofA 31 West 52nd 712 Fifth 900 Third 1633 Broadway 1301 AofA 60 Wall 50 Beale St. One Front Street 111 Sutter Street One Market Plaza Liberty Place 1899 Penn. Ave

1Q 2019 Financial Highlights & 2019 Guidance

712 Fifth Avenue, New York

9 (1) Please see page 20 for our definition of this measure.

1Q 2019 Full Year 2019 Guidance / Assumption Core FFO (1) Per Diluted Share $0.24 $0.90 - $0.94 Same Store Cash NOI Growth (1) 11.3% 7.0% - 9.0% Same Store NOI Growth (1) 6.9% 3.0% - 5.0% Leased Square Footage 353,262 800,000 - 1,000,000 sf Cash Mark-to-Market 5.6%

2019 Core FFO Bridge

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$0.88 $0.89 $0.90 $0.91 $0.92 $0.93 $0.94 $0.95 Midpoint of Original 2019 Core FFO Guidance Higher Same Store Cash NOI Growth Higher SL Rent Lower Interest Expense Lower Int. & Other Income Midpoint of Current 2019 Core FFO Guidance

Core FFO per Share $0.90 $0.02 $0.01 $0.01 $0.02 $0.92

• Incr. in PGRE’s Share of Same

Store Cash NOI now 7.0% to 9.0% versus 5.0% to 7.0% previously

Guidance Detail and Assumptions

(1) We are increasing 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 May 1, 2019 and otherwise referenced during our conference call scheduled for May 2, 2019. These estimates do not include the impact on

• perating 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 straight-line rent adjustments 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) Please see page 20 for our definition of this measure. 11

GUIDANCE

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

(Amounts per diluted share) Low High Estimated net income attributable to common stockholders 0.01 $ 0.05 $ Our share of real estate depreciation and amortization 0.89 0.89 Estimated Core FFO (1) 0.90 $ 0.94 $ Operating Assumptions: Leasing Activity (square feet) 800,000 1,000,000 PGRE's share of Same Store Leased % (2) at year end 96.0% 97.0% Increase in PGRE's share of Same Store Cash NOI (2) 7.0% 9.0% Increase in PGRE's share of Same Store NOI (2) 3.0% 5.0% Financial Assumptions (at share): Estimated net income 4,000 $ 13,000 $ Depreciation and amortization 230,000 230,000 General and administrative expenses 64,000 62,000 Interest and debt expense, including amortization of deferred financing costs 134,500 133,500 Fee income, net of income taxes (16,500) (16,500) Other, net (primarily interest income) (4,000) (4,000) NOI (2) 412,000 418,000 Straight-line rent adjustments and above and below-market lease revenue, net (45,000) (47,000) Cash NOI (2) 367,000 $ 371,000 $ Full Year 2019

Schedule of Free Rent Burn Off

12

As of March 31, 2019, we have $53.3 million of annualized initial cash rents that are yet to contribute to Cash NOI:

• $29.5 million from commenced leases in free rent periods
• $23.8 million from signed leases not yet commenced

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

As of March 31, 2019 Annualized Initial Cash Rent Amount Contributing to: 100% Amount PGRE Share 2019 2020 2021 New York: Commenced Leases in Free Rent Period $26,327 $24,871 $10,864 $24,265 $24,871 Signed Leases Not Yet Commenced 20,058 20,058 277 9,227 20,058 Subtotal $46,385 $44,929 $11,141 $33,492 $44,929 San Francisco: Commenced Leases in Free Rent Period $10,068 $4,098 $2,067 $3,911 $4,098 Signed Leases Not Yet Commenced 5,613 3,113 1,957 3,113 3,113 Subtotal $15,680 $7,212 $4,025 $7,025 $7,212 Washington, D.C.: Commenced Leases in Free Rent Period $566 $566 $318 $566 $566 Signed Leases Not Yet Commenced 624 624 – 501 624 Subtotal $1,190 $1,190 $318 $1,067 $1,190 Total Commenced Leases in Free Rent Period $36,960 $29,535 $13,250 $28,742 $29,535 Total Signed Leases Not Yet Commenced 26,295 23,796 2,234 12,842 23,796 Grand Total $63,255 $53,330 $15,484 $41,583 $53,330

March 31, 2019 – Weighted Average Maturity of 4.3 years

13

Debt Maturity Schedule

Note: Figures exclude Oder-Center debt, of which the Company’s share is $1.9 million. 1633 Broadway $1,046.8 1301 Ave of Americas $850.0 111 Sutter Street 60 Wall Street $28.8 50 Beale Street $70.9 31 West 52nd Street 712 Fifth One Market Plaza $920.9 $1,075.6 $67.7 $477.8 $500.0 $150.0 $0 $200 $400 $600 $800 $1,000 $1,200 2019 2020 2021 2022 2023 2024 2025 2026 2027 Loan Balance at PGRE's Share ($ in millions)

Appendix

14

Fund and Property Management Overview

Funds Other Owned and / or Managed Assets

 PGRE serves as the GP of various investment funds  PGRE collectively holds partial ownership of mortgage

loans, mezzanine loans and preferred equity investments including:

─ 1.3% of mezzanine and mortgage loans and preferred

equity investments aggregating $634.7 million ($699.6 million including amounts reserved for future funding) which have interest rates ranging from 5.50% – 9.48%, through Fund VIII

─ 7.4% of Residential Development Fund (RDF) which

• wns 30.0% interest in One Steuart Lane (formerly 75

Howard), a residential development project in San Francisco

 Paramount Gateway Office Club (Fund IX) is a strategic

real estate co-investment platform with aggregate third-party equity capital commitments of $600.0 million

 In December 2018, we completed an initial closing of

Fund X with $167.0 million in capital commitments, including $10.0 million from PGRE

 PGRE generates additional revenues though other

partially owned and managed assets including:

─ 1.0% ownership and property management of 745

Fifth Avenue in the Madison / Fifth Avenue submarket

• f Midtown Manhattan

─ Property management of the retail property at 718

Fifth Avenue in the Madison / Fifth Avenue submarket

• f Midtown New York

─ Property management of the Commercial National

Bank Building in Washington, D.C.

15

Reconciliation of Non-GAAP Measures

(1) Please see page 20 for our definition of this measure. 16

FFO

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

March 31, 2019 March 31, 2018 December 31, 2018 Reconciliation of net income to FFO and Core FFO: Net income 7,000 $ 2,715 $ 8,595 $ Real estate depreciation and amortization (including our share of unconsolidated joint ventures) 66,065 67,160 65,832 FFO (1) 73,065 69,875 74,427 Less FFO attributable to noncontrolling interests in: Consolidated joint ventures (11,748) (10,207) (12,143) Consolidated real estate fund (94) (430) (52) FFO attributable to Paramount Group Operating Partnership 61,223 59,238 62,232 Less FFO attributable to noncontrolling interests in Operating Partnership (5,998) (5,585) (5,961) FFO attributable to common stockholders (1) 55,225 $ 53,653 $ 56,271 $ Per diluted share 0.24 $ 0.22 $ 0.24 $ FFO 73,065 $ 69,875 $ 74,427 $ Non-core items: Our share of earnings from 712 Fifth Avenue in excess of distributions received 1,270 1,195 2,646 Other, net 823 251 693 Core FFO (1) 75,158 71,321 77,766 Less Core FFO attributable to noncontrolling interests in: Consolidated joint ventures (11,748) (10,207) (12,143) Consolidated real estate fund (94) (430) (52) Core FFO attributable to Paramount Group Operating Partnership 63,316 60,684 65,571 Less Core FFO attributable to noncontrolling interests in Operating Partnership (6,203) (5,721) (6,281) Core FFO attributable to common stockholders (1) 57,113 $ 54,963 $ 59,290 $ Per diluted share 0.24 $ 0.23 $ 0.25 $ Reconciliation of weighted average shares outstanding: Weighted average shares outstanding 233,419,299 240,311,744 237,036,494 Effect of dilutive securities 39,139 26,954 40,746 Denominator for FFO and Core FFO per diluted share 233,458,438 240,338,698 237,077,240 Three Months Ended

Reconciliation of Non-GAAP Measures

17 (1) Please see page 20 for our definition of this measure.

NOI

(unaudited and in thousands)

March 31, 2019 March 31, 2018 December 31, 2018 Reconciliation of net income to NOI and Cash NOI: Net income 7,000 $ 2,715 $ 8,595 $ Add (subtract) adjustments to arrive at NOI and Cash NOI: Depreciation and amortization 63,089 65,156 63,684 General and administrative 17,443 12,631 13,285 Interest and debt expense 36,924 36,082 37,657 Income tax expense 1,138 477 968 NOI from unconsolidated joint ventures 5,411 4,740 6,973 Fee income (5,999) (3,465) (5,676) Interest and other income, net (3,900) (2,016) (1,229) Other, net 1,717 248 72 NOI (1) 122,823 116,568 124,329 Less NOI attributable to noncontrolling interests in: Consolidated joint ventures (17,909) (16,014) (18,026) Consolidated real estate fund 29 26 (9) PGRE's share of NOI (1) 104,943 $ 100,580 $ 106,294 $ NOI (1) 122,823 $ 116,568 $ 124,329 $ Less: Straight-line rent adjustments (including our share of unconsolidated joint ventures) (11,778) (13,197) (13,320) Amortization of above and below-market leases, net (including

• ur share of unconsolidated joint ventures)

(3,220) (4,257) (3,286) Cash NOI (1) 107,825 99,114 107,723 Less Cash NOI attributable to noncontrolling interests in: Consolidated joint ventures (14,785) (13,193) (14,953) Consolidated real estate fund 29 26 (9) PGRE's share of Cash NOI (1) 93,069 $ 85,947 $ 92,761 $ Three Months Ended

Reconciliation of Non-GAAP Measures

18 (1) Please see page 20 for our definition of this measure. (2) Represents our share of Cash NOI attributable to acquired properties (111 Sutter 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 (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.

SAME STORE RESULTS

(unaudited and in thousands)

SAME STORE CASH NOI (1) Total New York San Francisco Washington, D.C. Other PGRE's share of Cash NOI for the three months ended March 31, 2019 93,069 $ 68,801 $ 20,426 $ 4,594 $ (752) $ Acquisitions (2) (560)

• (560)
• Dispositions
• Lease termination income (including our share
• f unconsolidated joint ventures)

(2,346) (2,346)

• Other, net

185 185

• PGRE's share of Same Store Cash NOI (1) for the three months ended March 31, 2019

90,348 $ 66,640 $ 19,866 $ 4,594 $ (752) $ Total New York San Francisco Washington, D.C. Other PGRE's share of Cash NOI for the three months ended March 31, 2018 85,947 $ 62,198 $ 16,415 $ 9,215 $ (1,881) $ Acquisitions

• Dispositions (3)

(4,592)

• (4,592)
• Lease termination income (including our share
• f unconsolidated joint ventures)

(190) (190)

• Other, net
• PGRE's share of Same Store Cash NOI (1) for the three months ended March 31, 2018

81,165 $ 62,008 $ 16,415 $ 4,623 $ (1,881) $ Increase (decrease) in PGRE's share of Same Store Cash NOI 9,183 $ 4,632 $ 3,451 $ (29) $ 1,129 $ % Increase (decrease) 11.3% 7.5% 21.0% (0.6%) Three Months Ended March 31, 2019 Three Months Ended March 31, 2018

Reconciliation of Non-GAAP Measures

19 (1) Please see page 20 for our definition of this measure. (2) Represents our share of NOI attributable to acquired properties (111 Sutter 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 (2099 Pennsylvania Avenue and 425 Eye Street in Washington, D.C.) for the months in which they were not

• wned by us in both reporting periods.

SAME STORE RESULTS

(unaudited and in thousands)

SAME STORE NOI (1) Total New York San Francisco Washington, D.C. Other PGRE's share of NOI for the three months ended March 31, 2019 104,943 $ 77,650 $ 23,629 $ 4,483 $ (819) $ Acquisitions (2) (700)

• (700)
• Dispositions
• Lease termination income (including our share
• f unconsolidated joint ventures)

(2,346) (2,346)

• Other, net

185 185

• PGRE's share of Same Store NOI (1) for the three months ended March 31, 2019

102,082 $ 75,489 $ 22,929 $ 4,483 $ (819) $ Total New York San Francisco Washington, D.C. Other PGRE's share of NOI for the three months ended March 31, 2018 100,580 $ 71,149 $ 21,769 $ 9,604 $ (1,942) $ Acquisitions

• Dispositions (3)

(4,899)

• (4,899)
• Lease termination income (including our share
• f unconsolidated joint ventures)

(190) (190)

• Other, net
• PGRE's share of Same Store NOI (1) for the three months ended March 31, 2018

95,491 $ 70,959 $ 21,769 $ 4,705 $ (1,942) $ Increase (decrease) in PGRE's share of Same Store NOI 6,591 $ 4,530 $ 1,160 $ (222) $ 1,123 $ % Increase (decrease) 6.9% 6.4% 5.3% (4.7%) Three Months Ended March 31, 2019 Three Months Ended March 31, 2018

Definitions

20

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 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, 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.