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.
Paramount Group Overview 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 Washington, D.C. 4.5% office properties in New York, San Francisco and Washington, D.C. San Francisco 19.9% ─ 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 New York 75.6% ─ 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) Please see page 20 for our definition of this measure. 1 (2) Includes 100% of square footage from 60 Wall Street, 712 Fifth Avenue, One Market Plaza, 50 Beale Street and 111 Sutter Street.
Our People Are Our Greatest Asset With our deep knowledge, creative, proactive approach and winning spirit, we are Paramount. Executive Management Peter Brindley Leasing Albert Behler Wilbur Paes Peter Brindley David Zobel Chairman, Chief Executive Officer & Chief Financial Officer Leasing Acquisitions President & Treasurer Senior Vice Presidents Matt Bautista Ermelinda Berberi Christopher Brandt David Eaton Ben Goodsir Development & Construction Asset Management Chief Accounting Officer Leasing, San Francisco Asset Management Todd Januzzi Bernard Marasco Douglas Neye Michael Jackowitz Gage Johnson Michael Nathan Counsel – Leasing & Property Leasing, New York Capital Markets Chief Information & Technology General Counsel Acquisitions Management Officer 2
Irreplaceable Trophy Portfolio New York (6.8mm square feet) – 96.6% Leased (at PGRE share) 1633 Broadway 900 Third Avenue Midtown Manhattan 98.4% Leased 92.8% Leased 1325 Avenue 1301 Avenue 31 West 52 nd Street 60 Wall Street of the Americas of the Americas 712 Fifth Avenue 100.0% Leased 98.0% Leased 97.9% Leased 97.5% Leased 70.8% Leased 3
Irreplaceable Trophy Portfolio San Francisco (1.8mm square feet) – 94.4% (1) Leased (at PGRE share) One Front Street One Market Plaza 99.2% Leased 92.0% Leased (1) 111 Sutter Street 50 Beale Street 70.6% Leased 99.7% 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 4 to 97.3% leased (at PGRE share).
Irreplaceable Trophy Portfolio Washington, D.C. (364,000 square feet) – 94.0% Leased (at PGRE share) Capitol St NW Dupont Circle Logan Circle Georgetown Downtown Foggy George 9 th St NW Bottom Washington University Arlington National Mall & Memorial Parks NY007VUG / 540917_1.WOR Liberty Place 1899 Pennsylvania Avenue 90.4% Leased 98.0% Leased 5
Diverse and High Credit Quality Tenant Base PGRE's Share of Industry Diversification – % of Annualized Rent Square Feet % of Ann. Top 10 Tenants Expiration Date Occupied 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% (1) (1) 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% Tenancy Highlights 10. 3/2037 203,394 2.3% High percentage of rent derived from investment grade / Other Blue Chip Tenants 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 office leases (1) 116,462 of the square feet leased expires on March 31, 2032. 6
Lease Expiration Schedule 3,500,000 34.3% 3,000,000 PGRE's Share of Sq. Ft. of Expiring Leases 2,500,000 2,000,000 2 Year Average 1,500,000 376,218 sf Or 4.2% per annum 12.2% 1,000,000 7.9% 8.1% 7.9% 7.2% 5.6% 5.3% 500,000 3.1% 2.2% 1.8% – 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Thereafter 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.
Focus on Sustainability 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. LEED Certification 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. ENERGY STAR Ratings 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 “Living Wall” – One Market Plaza and energy usage is monitored online in real-time. 100 98 97 96 89 90 88 87 86 75 Avg. ENERGY STAR Score – 83 81 75 77 Current 71 86 50 Avg. ENERGY STAR Score at 25 Benchmarking – 2008 73 – +17.8% Increase 1325 AofA 31 West 712 Fifth 900 Third 1633 1301 AofA 60 Wall 50 Beale St. One Front 111 Sutter One Liberty 1899 Penn. 52nd Broadway Street Street Market Place Ave Plaza 8
1Q 2019 Financial Highlights & 2019 Guidance 712 Fifth Avenue, New York Full Year 2019 Guidance / 1Q 2019 Assumption Core FFO (1) Per Diluted Share $0.24 $0.90 - $0.94 Same Store 11.3% 7.0% - 9.0% Cash NOI Growth (1) Same Store 6.9% 3.0% - 5.0% NOI Growth (1) Leased Square Footage 353,262 800,000 - 1,000,000 sf Cash Mark-to-Market 5.6% - 9 (1) Please see page 20 for our definition of this measure.
2019 Core FFO Bridge $0.95 $0.02 $0.01 $0.94 $0.01 $0.93 Core FFO per Share $0.02 $0.92 $0.92 Incr. in PGRE’s Share of Same Store Cash NOI now 7.0% to 9.0% $0.91 versus 5.0% to 7.0% previously $0.90 $0.90 $0.89 $0.88 Midpoint of Original 2019 Higher Same Store Cash Higher SL Rent Lower Lower Int. & Midpoint of Current 2019 Core FFO Guidance NOI Growth Interest Expense Other Income Core FFO Guidance 10
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