UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended: September 30, 2025
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
Commission File Number: 001-36746
PARAMOUNT GROUP, INC.
(Exact name of registrant as specified in its charter)
Maryland
32-0439307
(State or other jurisdiction of
incorporation or organization)
(IRS Employer
Identification No.)
1633 Broadway, New York, NY
10019
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code: (212) 237-3100
Securities registered pursuant to Section 12(b) of the Act:
Title of each Class
Trading Symbol
Name of each exchange on which registered
Common stock of Paramount Group, Inc.,$0.01 par value per share
PGRE
New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer
Accelerated Filer
Non-Accelerated Filer
Smaller Reporting Company
Emerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of October 15, 2025, there were 221,897,427 shares of the registrant’s common stock outstanding.
Table of Contents
Item
Page Number
Part I.
Financial Information
Item 1.
Consolidated Financial Statements
3
Consolidated Balance Sheets (Unaudited) as of September 30, 2025 and December 31, 2024
Consolidated Statements of Income (Unaudited) for the three and nine months
ended September 30, 2025 and 2024
4
Consolidated Statements of Comprehensive Income (Unaudited) for the three and nine months
5
Consolidated Statements of Changes in Equity (Unaudited) for the three and nine months
6
Consolidated Statements of Cash Flows (Unaudited) for the nine months
8
Notes to Consolidated Financial Statements (Unaudited)
10
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
28
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
58
Item 4.
Controls and Procedures
59
Part II.
Other Information
Legal Proceedings
60
Item 1A.
Risk Factors
Unregistered Sales of Equity Securities and Use of Proceeds
63
Defaults Upon Senior Securities
Mine Safety Disclosures
Item 5.
Item 6.
Exhibits
64
Signatures
65
2
PART I – FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Amounts in thousands, except share, unit and per share amounts)
September 30, 2025
December 31, 2024
Assets
Real estate, at cost
Land
$
1,966,237
Buildings and improvements
6,384,243
6,325,097
8,350,480
8,291,334
Accumulated depreciation and amortization
(1,737,783
)
(1,639,529
Real estate, net
6,612,697
6,651,805
Cash and cash equivalents
330,207
375,056
Restricted cash
324,150
180,391
Accounts and other receivables
26,582
18,229
Investments in unconsolidated real estate related funds
4,416
4,649
Investments in unconsolidated joint ventures
81,509
85,952
Deferred rent receivable
352,906
356,425
Deferred charges, net of accumulated amortization of $90,418 and $91,818
126,587
100,684
Intangible assets, net of accumulated amortization of $114,133 and $147,133
41,093
50,492
Other assets
74,348
47,820
Total assets (1)
7,974,495
7,871,503
Liabilities and Equity
Notes and mortgages payable, net of unamortized deferred financing costs of $20,546 and $15,420
3,711,504
3,676,630
Accounts payable and accrued expenses
138,689
119,881
Intangible liabilities, net of accumulated amortization of $78,074 and $93,748
16,541
20,870
Other liabilities
31,473
44,625
Total liabilities (1)
3,898,207
3,862,006
Commitments and contingencies
Paramount Group, Inc. equity:
Common stock $0.01 par value per share; authorized 900,000,000 shares; issued and outstanding 221,897,427 and 217,527,797 shares in 2025 and 2024, respectively
2,219
2,175
Additional paid-in-capital
4,086,243
4,144,301
Earnings less than distributions
(1,064,525
(1,005,627
Accumulated other comprehensive income
-
428
Paramount Group, Inc. equity
3,023,937
3,141,277
Noncontrolling interests in:
Consolidated joint ventures
744,813
495,340
Consolidated real estate related funds
85,431
82,875
Operating Partnership (16,298,625 and 20,057,699 units outstanding)
222,107
290,005
Total equity
4,076,288
4,009,497
Total liabilities and equity
See notes to consolidated financial statements (unaudited).
CONSOLIDATED STATEMENTS OF INCOME
For the Three Months Ended
For the Nine Months Ended
September 30,
(Amounts in thousands, except share and per share amounts)
2025
2024
Revenues:
Rental revenue
164,687
184,235
511,741
543,636
Fee and other income
8,272
10,664
25,282
27,548
Total revenues
172,959
194,899
537,023
571,184
Expenses:
Operating
79,392
80,316
232,326
226,248
Depreciation and amortization
57,766
60,071
176,707
182,920
General and administrative
16,340
16,672
58,112
49,938
Transaction related costs
9,981
242
10,840
843
Total expenses
163,479
157,301
477,985
459,949
Other income (expense):
Loss from real estate related fund investments
(18
(22
(67
(92
Income (loss) from unconsolidated real estate related funds
71
109
(79
199
Income (loss) from unconsolidated joint ventures
661
(981
2,620
(3,098
Interest and other income, net
3,112
3,517
10,953
26,830
Interest and debt expense
(44,419
(43,805
(129,903
(124,078
(Loss) income before income taxes
(31,113
(3,584
(57,438
10,996
Income tax benefit (expense)
831
(619
1,430
(1,328
Net (loss) income
(30,282
(4,203
(56,008
9,668
Less net (income) loss attributable to noncontrolling interests in:
(279
(6,959
(5,095
(18,434
(688
581
(2,556
408
Operating Partnership
2,302
893
4,901
716
Net loss attributable to common stockholders
(28,947
(9,688
(58,758
(7,642
Loss per Common Share - Basic:
Loss per common share
(0.13
(0.04
(0.27
Weighted average common shares outstanding
220,512,867
217,314,706
219,254,194
217,208,809
Loss per Common Share - Diluted:
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Amounts in thousands)
Other comprehensive (loss) income:
Change in value of interest rate swaps and interest rate caps
(345
(3,586
(819
(14,241
Pro rata share of other comprehensive (loss) income of unconsolidated joint ventures
(34
38
Comprehensive loss
(30,627
(7,823
(56,827
(4,535
Less comprehensive (income) loss attributable to noncontrolling interests in:
2,656
1,198
5,292
1,911
Comprehensive loss attributable to common stockholders
(28,938
(13,003
(59,186
(20,650
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Accumulated
Noncontrolling Interests in
Additional
Earnings
Other
Consolidated
(Amounts in thousands, except per share
Common Shares
Paid-in-
Less than
Comprehensive
Joint
Real Estate
Total
and unit amounts)
Shares
Amount
Capital
Distributions
(Loss) Income
Ventures
Related Funds
Partnership
Equity
Balance as of June 30, 2025
220,311
2,203
4,061,826
(1,035,578
(9
743,127
84,743
246,086
4,102,398
279
688
(2,302
Common shares issued upon redemption of common units
1,586
16
21,821
(21,837
Contributions from noncontrolling interests
3,347
Distributions to noncontrolling interests
(1,940
Change in value of interest rate caps
(320
(25
Amortization of equity awards
155
2,494
2,649
Reallocation of noncontrolling interest
1,980
329
(2,309
461
Balance as of September 30, 2025
221,897
Balance as of June 30, 2024
217,455
2,173
4,135,472
(957,285
1,553
485,983
93,340
294,427
4,055,663
6,959
(581
(893
66
954
(956
Common shares issued under Omnibus share plan, net of shares withheld for taxes
(2
(807
(3,285
(301
Pro rata share of other comprehensive loss of unconsolidated joint ventures
(30
(4
239
4,134
4,373
3,762
(3,762
Balance as of September 30, 2024
217,519
4,140,427
(966,973
(1,762
492,135
92,759
292,645
4,051,406
Income (Loss)
Balance as of December 31, 2024
217,528
5,095
2,556
(4,901
4,354
44
61,446
(61,490
15
(140
11,723
(5,710
(757
(62
506
13,755
14,261
Sale of a 45.0% interest in 900 Third Avenue
(71,912
164,669
92,757
Sale of a 25.0% interest in One Front Street
(63,430
73,696
10,266
14,871
(15,200
Balance as of December 31, 2023
217,366
4,133,801
(943,935
11,246
413,925
110,589
287,089
4,014,888
18,434
(408
(716
142
2,071
(2,073
11
(178
Dividends and distributions ($0.07 per share and unit)
(15,218
(1,540
(16,758
62,220
889
63,109
(2,444
(18,311
(20,755
(13,044
(1,197
Pro rata share of other comprehensive income of unconsolidated joint ventures
36
748
14,887
15,635
3,807
(3,807
7
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30,
Cash Flows from Operating Activities:
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Straight-lining of rental revenue
3,426
(5,300
Amortization of stock-based compensation expense
Amortization of deferred financing costs
11,041
7,622
(Income) loss from unconsolidated joint ventures
(2,620
3,098
Distributions of earnings from unconsolidated joint ventures
388
372
Unrealized losses on real estate related fund investments
775
Loss (income) from unconsolidated real estate related funds
79
(199
Distributions of earnings from unconsolidated real estate related funds
141
Amortization of above and below-market leases, net
(3,980
(4,351
Non-cash gain on extinguishment of IPO related tax liability
(15,437
Other non-cash adjustments
(917
180
Changes in operating assets and liabilities:
(8,353
(609
Deferred charges
(35,029
(7,163
(25,916
(26,340
12,903
9,079
(3,097
6,479
Net cash provided by operating activities
83,040
176,570
Cash Flows from Investing Activities:
Additions to real estate
(115,840
(85,231
Distribution of capital from an unconsolidated joint venture
12,089
1,792
Contributions of capital to unconsolidated joint ventures
(5,414
(1,904
Proceeds from repayment of a mezzanine loan investment
10,000
Net cash used in investing activities
(109,165
(75,343
Cash Flows from Financing Activities:
Proceeds from notes and mortgages payable
900,000
850,000
Repayment of notes and mortgages payable
(860,000
(975,000
Proceeds from the sale of a 45.0% interest in 900 Third Avenue
83,307
Proceeds from the sale of a 25.0% interest in One Front Street
Debt issuance costs
(14,411
(10,649
Contributions from noncontrolling interests in consolidated joint ventures
Distributions to noncontrolling interests in consolidated joint ventures
Repurchase of shares related to stock compensation agreements and related tax withholdings
Contributions from noncontrolling interests in consolidated real estate related funds
Distributions to noncontrolling interests in consolidated real estate related funds
Dividends paid to common stockholders
(22,826
Distributions paid to common unitholders
(2,292
Net cash provided by (used in) financing activities
125,035
(118,591
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
Net increase (decrease) in cash and cash equivalents and restricted cash
98,910
(17,364
Cash and cash equivalents and restricted cash at beginning of period
555,447
509,599
Cash and cash equivalents and restricted cash at end of period
654,357
492,235
Reconciliation of Cash and Cash Equivalents and Restricted Cash:
Cash and cash equivalents at beginning of period
428,208
Restricted cash at beginning of period
81,391
Cash and cash equivalents at end of period
318,725
Restricted cash at end of period
173,510
Supplemental Disclosure of Cash Flow Information:
Cash payments for interest
118,822
116,298
Cash payments for income taxes, net of refunds
557
1,036
Non-Cash Transactions:
61,490
2,073
Write-off of fully amortized and/or depreciated assets
57,491
35,875
Mezzanine loan receivable in connection with the sale of a 25.0% interest in One Front Street
40,545
Additions to real estate included in accounts payable and accrued expenses
22,868
9,240
9
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As used in these consolidated financial statements, unless otherwise indicated, all references to “we,” “us,” “our,” the “Company,” and “Paramount” refer to Paramount Group, Inc., a Maryland corporation, and its consolidated subsidiaries, including Paramount Group Operating Partnership LP, a Delaware limited partnership (the “Operating Partnership”). We are a fully-integrated real estate investment trust (“REIT”) focused on owning, operating, managing, acquiring and redeveloping high-quality, Class A office properties in select central business district submarkets of New York City and San Francisco. We conduct our business through, and substantially all of our interests in properties and investments are held by, the Operating Partnership. We are the sole general partner of, and owned approximately 93.2% of, the Operating Partnership as of September 30, 2025.
As of September 30, 2025, we own and/or manage a portfolio of 17 properties aggregating 13.1 million square feet comprised of:
Additionally, we have an investment management business, where we serve as the general partner of several real estate related funds for institutional investors and high net-worth individuals.
Proposed Mergers
On September 17, 2025, we and the Operating Partnership (collectively, the “Company Parties”), Rithm Capital Corp., a Delaware corporation (“Parent”), Panorama REIT Merger Sub, Inc., a Maryland corporation and a wholly owned subsidiary of Parent (“REIT Merger Sub”), and Panorama Operating Merger Sub LP, a Delaware limited partnership and a wholly owned subsidiary of Parent (“Operating Merger Sub” and, collectively with REIT Merger Sub and Parent, the “Parent Parties”), entered into an Agreement and Plan of Merger (the “Original Merger Agreement”). On October 8, 2025, the Company Parties and the Parent Parties entered into Amendment No. 1 to the Merger Agreement (the “Amendment,” and the Original Merger Agreement as amended by the Amendment, the “Merger Agreement”).
The Merger Agreement provides that, upon the terms and subject to the conditions set forth therein, (i) Operating Merger Sub will be merged with and into the Operating Partnership, with the Operating Partnership surviving the merger (the “Partnership Merger”) and (ii) immediately following the consummation of the Partnership Merger, the Company will be merged with and into REIT Merger Sub with REIT Merger Sub surviving the merger (the “Surviving Entity” and such merger, the “Company Merger” and, together with the Partnership Merger, the “Mergers”). Upon completion of the Mergers, the Operating Partnership and the Surviving Entity will be indirectly controlled by Parent. The Mergers and the other transactions contemplated by the Merger Agreement were approved and declared advisable by the board of directors of the Company.
Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Partnership Merger (the “Partnership Merger Effective Time”), each Common Unit of the Operating Partnership (each, an “Operating Partnership Common Unit”) that is issued and outstanding immediately prior to the Partnership Merger Effective Time will be automatically cancelled and converted into the right to receive an amount in cash equal to the product of (i) the Conversion Factor (as defined in the Second Amended and Restated Limited Partnership Agreement of the Operating Partnership, dated as of October 26, 2020, by and between the Company and the limited partners party thereto) in effect on such date with respect to such Operating Partnership Common Units multiplied by (ii) $6.60, without interest (the “Partnership Merger Consideration”). The Partnership Merger Consideration is subject to decrease in the event the Operating Partnership declares and pays any additional dividends in cash or property other than stock, which dividends are necessary to maintain the Company’s tax status as a REIT.
At the effective time of the Company Merger (the “Company Merger Effective Time”), each share of common stock of the Company, par value $0.01 per share, that is issued and outstanding immediately prior to the Company Merger Effective Time will be automatically cancelled and converted into the right to receive an amount in cash equal to $6.60 per share, without interest (the “Company Merger Consideration”). The Company Merger Consideration is subject to decrease in the event the Company declares and pays any additional dividends, which dividends are necessary to maintain its tax status as a REIT.
The Merger Agreement contains customary termination rights, including, but not limited to, the right of either party to terminate the Merger Agreement (i) if the Mergers have not occurred on or before 11:59 p.m. (Eastern time) on March 17, 2026, (ii) if any governmental authority of competent jurisdiction has issued a final, non-appealable order permanently restraining or otherwise prohibiting the transactions contemplated by the Merger Agreement, or (iii) if stockholder approval has not been obtained upon a vote taken at the special meeting of the Company’s stockholders or any postponement or adjournment thereof, at which a vote on the approval of the Company Merger was taken.
In certain specified circumstances further described in the Merger Agreement, in connection with the termination of the Merger Agreement, the Company will be required to pay Parent a termination payment of $59,700,000. Pursuant to the Amendment, the definition of “Company Termination Payment” in the Original Merger Agreement was modified to provide that, notwithstanding the foregoing, the Company will instead be required to pay Parent a termination payment of $47,700,000 if the Company enters into an alternative acquisition agreement providing for a Superior Proposal (as defined in the Merger Agreement) with certain persons.
The Parent Parties have represented in the Merger Agreement that Parent had, as of the date of the Merger Agreement, and the Parent Parties will have available, as of the Company Merger Effective Time, sufficient funds or other sources of immediately available funds to pay all amounts required to be paid in connection with the Mergers.
Basis of Presentation
The accompanying consolidated financial statements are unaudited and have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in conjunction with the instructions to Form 10-Q of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosures required by GAAP for complete financial statements have been condensed or omitted. These consolidated financial statements include the accounts of Paramount and its consolidated subsidiaries, including the Operating Partnership. In the opinion of management, all significant adjustments (which include only normal recurring adjustments) and eliminations (which include intercompany balances and transactions) necessary to present fairly the financial position, results of operations and changes in cash flows have been made. The consolidated balance sheet as of December 31, 2024 was derived from audited financial statements as of that date but does not include all information and disclosures required by GAAP. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC.
Significant Accounting Policies
There are no material changes to our significant accounting policies as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.
Use of Estimates
We have made estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ materially from those estimates. The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the operating results for the full year. Certain prior year balances have been reclassified to conform to current year presentation.
Recently Issued Accounting Pronouncements
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, an update to Accounting Standards Codification (“ASC”) Topic 740, Income Taxes. ASU 2023-09 enhances income tax disclosures by expanding the effective tax rate reconciliation and requiring disaggregated income tax information by jurisdictions. ASU 2023-09 is effective for fiscal years that begin after December 15, 2024, with early adoption permitted. We will adopt the provisions of ASU 2023-09 in our Annual Report on Form 10-K for the year ended December 31, 2025, and we do not believe that the adoption will have a material impact on our consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, an update to ASC Topic 220, Income Statement - Reporting Comprehensive Income. ASU 2024-03 requires disaggregated disclosures in the notes to the financial statements of each income statement line item that contains certain categories of expenses, including employee compensation, depreciation and amortization. ASU 2024-03 is effective for our year ending December 31, 2027, and interim periods beginning after December 15, 2027, with early adoption permitted. We are evaluating the impact of ASU 2024-03 on our consolidated financial statements and the related disclosures.
In May 2025, the FASB issued ASU 2025-03, an update to ASC Topic 805, Business Combinations, and ASC Topic 810, Consolidation. ASU 2025-03 amends the guidance for determining the accounting acquirer in a business combination in which the legal acquiree is a variable interest entity (“VIE”). This amendment aligns the determination of the accounting acquirer for VIEs with the guidance used for other business combinations. ASU 2025-03 is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. We are evaluating the impact of ASU 2025-03 on our consolidated financial statements and related disclosures.
In July 2025, the FASB issued ASU 2025-05, an update to ASC Topic 326, Financial Instruments - Credit Losses. ASU 2025-05 simplifies the guidance for estimating expected credit losses for accounts receivable and other current assets by assuming current conditions as of the balance sheet date do not change for the remaining life of the asset. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, with early adoption permitted. We are evaluating the impact of ASU 2025-05 on our consolidated financial statements and related disclosures.
On January 17, 2025, we sold a 45.0% equity interest in 900 Third Avenue, a 600,000 square foot Class A office building located in New York, at a gross asset valuation of $210,000,000. We realized net proceeds of $94,000,000 from the sale after transaction costs, of which $9,450,000 was received in December 2024 upon execution of the contract. Since the newly formed joint venture is deemed to be a VIE and we are the primary beneficiary, we continue to consolidate the financial position and the results of operations of 900 Third Avenue into our consolidated financial statements and the sale was accounted for as an equity transaction.
On May 5, 2025, we sold a 25.0% equity interest in One Front Street, a 649,000 square foot Class A office building located in San Francisco, at a gross asset valuation of $255,000,000. As part of the transaction, we have provided $40,545,000 of seller financing for a two-year term at a fixed rate of 5.50%. We realized net proceeds of $11,500,000 from the sale, after transaction and other costs. Since the newly formed joint venture is deemed to be a VIE and we are the primary beneficiary, we continue to consolidate the financial position and the results of operations of One Front Street into our consolidated financial statements and the sale was accounted for as an equity transaction.
12
Real Estate Related Fund Investments (Fund X)
We are the general partner and investment manager of Paramount Group Real Estate Fund X, LP (“Fund X”) and own a 13.0% interest in the fund. The following table sets forth the details of income or loss from real estate related fund investments for the three and nine months ended September 30, 2025 and 2024.
Net investment (loss) income
683
Net unrealized losses
(775
Less: noncontrolling interests in consolidated real estate related funds
19
93
(Loss) income from real estate related fund investments attributable to Paramount Group, Inc.
(3
1
Residential Development Fund (“RDF”)
We are also the general partner of RDF in which we own a 7.4% interest. RDF owns a 35.0% interest in One Steuart Lane, a for-sale residential condominium project, in San Francisco, California. We consolidate the financial results of RDF into our consolidated financial statements and reflect the 92.6% interest that we do not own as noncontrolling interests in consolidated real estate related funds. RDF accounts for its 35.0% interest in One Steuart Lane under the equity method of accounting. Accordingly, our economic interest in One Steuart Lane (based on our 7.4% ownership interest in RDF) is 2.6%. See Note 6, Investments in Unconsolidated Joint Ventures.
We are the general partner and investment manager of Paramount Group Real Estate Fund VIII, LP (“Fund VIII”), which invests in real estate and related investments. As of September 30, 2025, our ownership interest in Fund VIII was approximately 1.3%. We account for our investment in Fund VIII under the equity method of accounting.
As of September 30, 2025 and December 31, 2024, our share of the investments in the unconsolidated real estate related funds was $4,416,000 and $4,649,000, respectively, which is reflected as “investments in unconsolidated real estate related funds” on our consolidated balance sheets. We recognized income of $71,000 and $109,000 during the three months ended September 30, 2025 and 2024, respectively, and loss of $79,000 and income of $199,000 during the nine months ended September 30, 2025 and 2024, respectively, for our share of earnings, which is reflected as “income (loss) from unconsolidated real estate related funds” in our consolidated statements of income.
13
In August 2024, the joint venture that owned Market Center, in which we had a 67.0% ownership interest, ceased making debt service payments on the non-recourse mortgage loan due to insufficient property cash flows. In January 2025, the joint venture defaulted on the $416,544,000 mortgage loan, as it was not repaid at maturity. Subsequently, on May 30, 2025, the lenders completed the sale of Market Center through a deed-in-lieu of foreclosure. In December 2023, we wrote off our investment in Market Center to zero and discontinued the equity method of accounting. Accordingly, this sale did not have any impact on our consolidated financial statements.
The following tables summarize our investments in unconsolidated joint ventures as of the dates thereof and the income or loss from these investments for the periods set forth below.
Paramount
As of
Our Share of Investments:
Ownership
One Steuart Lane (1)
35.0% (2)
66,932
76,579
1600 Broadway (1)
9.2%
7,774
8,161
60 Wall Street
5.0%
6,803
1,212
Other (3)
Various
Our Share of Net Income (Loss):
One Steuart Lane
602
(721
2,442
(828
1600 Broadway
55
177
(1,576
(315
(695
14
The following tables provide the combined summarized financial information of our unconsolidated joint ventures as of the dates thereof and for the periods set forth below.
Balance Sheets:
1,383,558
1,567,771
Cash and cash equivalents and restricted cash
124,488
154,669
Intangible assets, net
35,474
42,672
For-sale residential condominium units (1)
175,089
195,113
32,724
42,128
29,351
26,813
Total assets
1,780,684
2,029,166
Notes and mortgages payable, net
1,412,745
1,783,587
42,324
59,860
Intangible liabilities, net
1,682
2,480
67,961
73,129
Total liabilities
1,524,712
1,919,056
255,972
110,110
Income Statements:
24,985
35,374
84,209
106,557
Other income (2)
11,368
2,188
39,701
20,432
36,353
37,562
123,910
126,989
Operating (3)
22,717
23,985
72,630
80,345
8,207
12,464
29,094
38,232
30,924
36,449
101,724
118,577
Interest and other income
1,788
1,855
5,334
4,351
(8,536
(14,782
(42,673
(44,729
Gain on extinguishment of debt
162,517
(4)
Gain on settlement of interest rate swap
2,498
(1,319
(9,316
147,364
(29,468
Income tax expense
(1
(29
(26
(9,317
147,335
(29,494
The following tables summarize our intangible assets (acquired above-market leases and acquired in-place leases) and intangible liabilities (acquired below-market leases) and the related amortization as of the dates thereof and for the periods set forth below.
Intangible assets:
Gross amount
155,226
197,625
Accumulated amortization
(114,133
(147,133
Intangible liabilities:
94,615
114,618
(78,074
(93,748
Amortization of above and below-market leases, net (component of "rental revenue")
1,151
1,379
3,980
Amortization of acquired in-place leases (component of "depreciation and amortization")
2,522
2,970
8,740
12,070
The following table sets forth amortization of acquired above and below-market leases, net and amortization of acquired in-place leases for the three-month period from October 1, 2025 through December 31, 2025, and each of the five succeeding years commencing from January 1, 2026.
Above and Below-Market Leases, Net
In-Place Leases
998
2,116
2026
2,854
6,915
2027
2,541
6,271
2028
2,493
6,258
2029
2,066
5,634
2030
1,677
4,545
On May 5, 2025, we terminated our revolving credit facility following the sale of a 25.0% equity interest in One Front Street, which was one of the two remaining properties supporting our credit facility. There was no outstanding balance on the facility at the time of termination.
On August 5, 2025, we completed a $900,000,000 refinancing of 1301 Avenue of the Americas, a 1.8 million square-foot Class A office building in New York City. The new five-year interest-only loan has a fixed rate of 6.39% and matures in August 2030. The proceeds from the refinancing were used to repay the existing $860,000,000 loan that bore interest at SOFR plus 277 basis points and was scheduled to mature in August 2026. We retained net proceeds of approximately $26,000,000 after the repayment of the existing loan and closing costs.
The following table summarizes our consolidated outstanding debt.
Interest Rate
Maturity
Fixed/
as of
Date
Variable Rate
Notes and mortgages payable:
1633 Broadway
90.0%
Dec-2029
Fixed
2.99%
1,250,000
One Market Plaza
49.0%
Feb-2027
4.08%
1301 Avenue of the Americas
100.0%
Aug-2030
6.39%
860,000
31 West 52nd Street (1)
Jun-2026
3.80%
500,000
300 Mission Street (1)
31.1%
Oct-2026
4.50%
232,050
Total notes and mortgages payable
4.26%
3,732,050
3,692,050
Less: unamortized deferred financing costs
(20,546
(15,420
Total notes and mortgages payable, net
Prior to August 2024, we had interest rate swap agreements with an aggregate notional amount of $500,000,000 to fix SOFR at 0.49% through August 2024. We also had interest rate cap agreements with an aggregate notional amount of $360,000,000 to cap SOFR at 4.50% through August 2024. In August 2024, upon the expiration of these agreements, we entered into new interest rate cap agreements for an aggregate notional amount of $860,000,000 to cap SOFR at 3.50% through August 2025. These interest rate swaps and interest rate caps were designated as cash flow hedges and therefore changes in their fair values were recognized in other comprehensive income or loss (outside of earnings). We recognized other comprehensive losses of $345,000 and $3,586,000 for the three months ended September 30, 2025 and 2024, respectively, and $819,000 and $14,241,000 for the nine months ended September 30, 2025 and 2024, respectively, from the changes in the fair value of these derivative financial instruments, which are recorded as a component of other comprehensive loss in our consolidated financial statements. See Note 11, Accumulated Other Comprehensive Income.
The table below provides additional details on our interest rate caps that are designated as cash flow hedges.
Notional
Effective
Benchmark
Strike
Fair Value as of
Property
Rate
Aug-2024
Aug-2025
SOFR
3.50
%
3,650
Total interest rate cap assets designated as cash flow hedges (included in "other assets")
17
Stock Repurchase Program
We currently have $15,000,000 of capacity under a $200,000,000 stock repurchase program which was approved by our board of directors in November 2019, and allows us to repurchase shares of our common stock from time to time, in the open market or in privately negotiated transactions. We did not repurchase any shares in the nine months ended September 30, 2025. Under the terms of the Merger Agreement, subject to the restrictions set forth therein, we may not repurchase any shares of our common stock without the prior written consent of Parent.
The following table sets forth changes in accumulated other comprehensive income by component for the three and nine months ended September 30, 2025 and 2024, respectively, including amounts attributable to noncontrolling interests in the Operating Partnership.
Amount of income (loss) related to the cash flow hedges recognized in other comprehensive loss (1)
(876
642
1,008
Amounts reclassified from accumulated other comprehensive income decreasing interest and debt expense (1)
(2,710
(1,461
(15,249
Amount of income (loss) related to unconsolidated joint ventures recognized in other comprehensive loss
Consolidated Joint Ventures
Noncontrolling interests in consolidated joint ventures as of September 30, 2025 were $744,813,000, and represent the equity interests held by third parties in 1633 Broadway, 900 Third Avenue, One Market Plaza, 300 Mission Street, and One Front Street. The noncontrolling interests in consolidated joint ventures as of September 30, 2025, are net of a $40,545,000 mezzanine loan receivable that was issued as seller financing in connection with the sale of a 25.0% interest in One Front Street. As of December 31, 2024, noncontrolling interests in consolidated joint ventures were $495,340,000, and represented equity interests held by third parties in 1633 Broadway, One Market Plaza and 300 Mission Street.
Consolidated Real Estate Related Funds
Noncontrolling interests in our consolidated real estate related funds consist of equity interests held by third parties in RDF and Fund X. As of September 30, 2025 and December 31, 2024, the noncontrolling interests in our consolidated real estate related funds aggregated $85,431,000 and $82,875,000, respectively.
Noncontrolling interests in the Operating Partnership represent common units of the Operating Partnership that are held by third parties, including management, and units issued to management under equity incentive plans. Common units of the Operating Partnership may be tendered for redemption to the Operating Partnership for cash. We, at our option, may assume that obligation and pay the holder either cash or common shares on a one-for-one basis. Since the number of common shares outstanding is equal to the number of common units owned by us, the redemption value of each common unit is equal to the market value of each common share and distributions paid to each common unitholder is equivalent to dividends paid to common stockholders. As of September 30, 2025 and December 31, 2024, noncontrolling interests in the Operating Partnership on our consolidated balance sheets had a carrying amount of $222,107,000 and $290,005,000, respectively, and a redemption value of $106,593,000 and $99,085,000, respectively, based on the closing share price of our common stock on the New York Stock Exchange at the end of each period.
18
In the normal course of business, we are the general partner of various types of investment vehicles, which may be considered VIEs. We may, from time to time, own equity or debt securities through vehicles, each of which are considered variable interests. Our involvement in financing the operations of the VIEs is generally limited to our investments in the entity. We consolidate these entities when we are deemed to be the primary beneficiary.
Consolidated VIEs
We are the sole general partner of, and owned approximately 93.2% of, the Operating Partnership as of September 30, 2025. The Operating Partnership is considered a VIE and is consolidated in our consolidated financial statements. Since we conduct our business through and substantially all of our interests are held by the Operating Partnership, the assets and liabilities on our consolidated financial statements represent the assets and liabilities of the Operating Partnership. As of September 30, 2025 and December 31, 2024, the Operating Partnership held interests in consolidated VIEs owning properties and real estate related funds that were determined to be VIEs. The assets of these consolidated VIEs may only be used to settle the obligations of the entities and such obligations are secured only by the assets of the entities and are non-recourse to the Operating Partnership or us. The following table summarizes the assets and liabilities of consolidated VIEs of the Operating Partnership.
3,938,898
3,199,972
364,339
280,258
14,708
10,067
201,373
192,939
Deferred charges, net
56,786
38,610
22,930
28,569
25,032
7,078
Total VIE assets
4,690,998
3,834,072
2,325,671
2,320,880
68,066
54,877
10,042
12,581
6,436
Total VIE liabilities
2,410,215
2,393,672
Unconsolidated VIEs
As of September 30, 2025, the Operating Partnership held variable interests in entities that own our unconsolidated real estate related funds and an unconsolidated joint venture that were deemed to be VIEs. The following table summarizes our investments in these entities and the maximum risk of loss from these investments.
Investments in unconsolidated real estate funds
Investment in unconsolidated joint venture
Asset management fees and other receivables
794
482
Maximum risk of loss
12,013
6,343
Financial Assets Measured at Fair Value
The following table summarizes the fair value of our financial assets that are measured at fair value on our consolidated balance sheet as of the date set forth below, based on their levels in the fair value hierarchy.
As of December 31, 2024
Level 1
Level 2
Level 3
Interest rate cap assets (included in "other assets")
Financial Liabilities Not Measured at Fair Value
Financial liabilities not measured at fair value on our consolidated balance sheets consist of notes and mortgages payable. The following table summarizes the carrying amounts and fair value of these financial instruments as of the dates set forth below.
As of September 30, 2025
Carrying Amount
Fair Value
Notes and mortgages payable
3,554,506
3,412,126
We lease office, retail and storage space to tenants, primarily under non-cancellable operating leases which generally have terms ranging from five to fifteen years. Most of our leases provide tenants with extension options at either fixed or market rates and few of our leases provide tenants with options to terminate early, but such options generally impose an economic penalty on the tenant upon exercising. Rental revenue is recognized in accordance with ASC Topic 842, Leases, and includes (i) fixed payments of cash rents, which represent revenue each tenant pays in accordance with the terms of its respective lease and that is recognized on a straight-line basis over the non-cancellable term of the lease, and includes the effects of rent steps and rent abatements under the leases, (ii) variable payments of tenant reimbursements, which are recoveries of all or a portion of the operating expenses and real estate taxes of the property and are recognized in the same period as the expenses are incurred, (iii) amortization of acquired above and below-market leases, net and (iv) lease termination income.
The following table sets forth the details of our rental revenue.
Rental revenue:
146,712
156,190
445,240
475,420
Variable
17,975
28,045
66,501
68,216
Total rental revenue
The following table is a schedule of future undiscounted cash flows under non-cancellable operating leases in effect as of September 30, 2025, for the three-month period from October 1, 2025 through December 31, 2025, and each of the five succeeding years and thereafter commencing January 1, 2026.
135,534
513,976
523,072
544,302
530,602
484,175
Thereafter
2,100,959
4,832,620
20
The following table sets forth the details of our fee and other income.
Fee income:
Asset management
1,944
2,134
5,724
6,756
Property management
1,280
1,695
4,179
5,096
Acquisition, disposition, leasing and other
900
2,947
3,466
5,476
Total fee income
4,124
6,776
13,369
17,328
Other income (1)
4,148
3,888
11,913
10,220
Total fee and other income
The following table sets forth the details of interest and other income, net.
Interest income, net
11,393
15,437
Total interest and other income, net
The following table sets forth the details of interest and debt expense.
Interest expense
39,774
41,178
118,862
116,456
4,645
(1)
2,627
Total interest and debt expense
44,419
43,805
129,903
124,078
21
Stock-Based Compensation
Our 2024 Equity Incentive Plan (the “2024 Plan”) provides for grants of equity awards to our executive officers, non-employee directors and employees in order to attract and motivate talent for which we compete. In addition, equity awards are an effective management retention tool as they vest over multiple years based on continued employment. Equity awards are granted in the form of (i) restricted stock and (ii) long-term incentive plan (“LTIP”) units, which represent a class of partnership interests in our Operating Partnership and are typically comprised of Time-Based LTIP units, Performance-Based LTIP units, Time-Based Appreciation Only LTIP units and Performance-Based Appreciation Only LTIP units.
We account for all stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation. We recognized stock-based compensation expense of $2,649,000 and $4,373,000 for the three months ended September 30, 2025 and 2024, respectively, and $14,261,000 and $15,635,000 for the nine months ended September 30, 2025 and 2024, respectively, related to awards granted in prior periods. The stock-based compensation expense for the nine months ended September 30, 2025, includes $4,438,000 of expense relating to the acceleration of vesting of the equity awards for two of our former named executive officers.
Completion of the 2022 Performance-Based Awards Program (“2022 Performance Program”)
On December 31, 2024, the three-year performance measurement period for our 2022 Performance Program ended. On February 7, 2025, the Compensation Committee of our board of directors determined that 26.7%, or 474,463 of the LTIP units that were granted under the 2022 Performance Program, were earned. Of the LTIP units that were earned, 237,225 units vested immediately on February 7, 2025 and the remaining 237,238 units are scheduled to vest on December 31, 2025.
The following table summarizes our net income or loss, and the number of common shares used in the computation of basic and diluted income or loss per common share, which includes the weighted average number of common shares outstanding and the effect of dilutive potential common shares, if any.
(Amounts in thousands, except per share amounts)
Numerator:
Earnings allocated to unvested participating securities
(14
Numerator for loss per common share - basic and diluted
(7,656
Denominator:
Denominator for basic loss per common share - weighted average shares
220,513
217,315
219,254
217,209
Effect of dilutive stock-based compensation plans (1)
Denominator for diluted loss per common share - weighted average shares
Loss per common share - basic and diluted
22
HT Consulting GmbH
Albert Behler, our Chairman, Chief Executive Officer and President, owns 100% of HT Consulting GmbH (“HTC”), a licensed broker in Germany. We have an agreement with HTC to supervise selling efforts for our joint ventures and private equity real estate related funds (or investments in feeder vehicles for these funds) to investors in Germany. Through August 15, 2025, we agreed to pay HTC for the costs incurred plus a mark-up of 10%. We incurred costs aggregating $159,000 and $141,000 for the three months ended September 30, 2025 and 2024, respectively, and $378,000 and $386,000 for the nine months ended September 30, 2025 and 2024, respectively, in connection with this agreement, with no costs incurred from and after August 15, 2025. As of September 30, 2025 and December 31, 2024, we owed $267,000 and $113,000, respectively, to HTC under this agreement, which is included as a component of “accounts payable and accrued expenses” on our consolidated balance sheets. Subsequent to August 15, 2025, we have agreed to pay HTC a success-based fee. We did not incur any costs in connection with this revised agreement.
Aircraft Services
Mr. Behler owns 50% of a private aviation company, in addition to owning a private aircraft that is managed by third-party aviation management companies. From time to time, Mr. Behler had utilized aircraft sourced from his private aviation company and his private aircraft for business travel. We did not incur any costs for the three months ended September 30, 2025. We incurred costs aggregating $439,000 for the three months ended September 30, 2024, and $147,000 and $1,243,000 for the nine months ended September 30, 2025 and 2024, respectively, related to the charter by Mr. Behler of such aircraft for business purposes, which is included as a component of “general and administrative” in our consolidated statements of income.
Kramer Design Services
Kramer Design Services (“Kramer Design”) is 100% owned by the spouse of Mr. Behler. In February 2025, we entered into agreements with Kramer Design to provide branding and design services relating to certain of our properties in San Francisco for an aggregate cost of $220,000 excluding expenses. We incurred costs aggregating $123,000 and $162,000 for the three and nine months ended September 30, 2025 respectively, in connection with services rendered pursuant to these agreements. In addition, we had entered into an agreement with Kramer Design to develop branding and signage for the Paramount Club, our amenity center at 1301 Avenue of the Americas, which opened in May 2024. We incurred costs aggregating $42,000 for the nine months ended September 30, 2024, in connection with services rendered pursuant to this agreement.
Mannheim Trust
The Mannheim Trust is for the benefit of the children of Dr. Martin Bussmann, who is a member of our board of directors. A subsidiary of Mannheim Trust leases 3,127 square feet of office space at 712 Fifth Avenue, our 50.0% owned unconsolidated joint venture, pursuant to a lease agreement which expires in August 2026. We recognized $31,000 and $30,000 for the three months ended September 30, 2025 and 2024, respectively, and $92,000 and $89,000 for the nine months ended September 30, 2025 and 2024, respectively, for our share of rental income pursuant to this lease.
ParkProperty Capital, LP
ParkProperty Capital, LP (“ParkProperty”), an entity partially owned by Katharina Otto-Bernstein, leases 4,233 square feet at 1325 Avenue of the Americas, pursuant to a lease agreement that expires in November 2027. Ms. Otto-Bernstein is a former member of our board of directors whose term ended in May 2025 and is currently one of our significant stockholders. We recognized rental revenue of $72,000 and $71,000 for the three months ended September 30, 2025 and 2024, respectively, and $214,000 and $212,000 for the nine months ended September 30, 2025 and 2024, respectively, pursuant to this lease.
23
Debevoise and Plimpton LLP
We have entered into indemnification agreements with each of our directors and executive officers, including Wilbur Paes, our former Chief Operating Officer, Chief Financial Officer and Treasurer. Pursuant to the indemnification agreement with Mr. Paes, we have agreed to reimburse Mr. Paes for certain costs incurred in connection with the investigation described in Note 22, Commitments and Contingencies. These costs include certain legal fees incurred for Mr. Paes’s counsel, Debevoise and Plimpton LLP (“Debevoise”), where Mr. Paes’s brother is a partner, which aggregated $635,000 and $909,000 for the three and nine months ended September 30, 2025, respectively. As of September 30, 2025, we owed $13,000 to Debevoise under this agreement, which is included as a component of “accounts payable and accrued expenses” on our consolidated balance sheets.
Management Agreements
We provide property management, leasing and other related services to certain properties owned by members of the Otto Family, which are collectively one of our significant stockholders. We recognized fee income of $136,000 and $195,000 for the three months ended September 30, 2025 and 2024, respectively, and $427,000 and $562,000 for the nine months ended September 30, 2025 and 2024, respectively, in connection with these agreements, which is included as a component of “fee and other income” in our consolidated statements of income. As of September 30, 2025 and December 31, 2024, amounts owed to us under these agreements aggregated $39,000 and $31,000, respectively, which are included as a component of “accounts and other receivables” on our consolidated balance sheets.
We also provide asset management, property management, leasing and other related services to our unconsolidated joint ventures and real estate related funds. We recognized fee income of $3,230,000 and $5,404,000 for the three months ended September 30, 2025 and 2024, respectively, and $9,743,000 and $14,214,000 for the nine months ended September 30, 2025 and 2024, respectively, in connection with these agreements, which is included as a component of “fee and other income” in our consolidated statements of income. As of September 30, 2025 and December 31, 2024, amounts owed to us under these agreements aggregated $1,220,000 and $1,652,000, respectively, which are included as a component of “accounts and other receivables” on our consolidated balance sheets.
24
Insurance
We carry commercial general liability coverage on our properties, with limits of liability customary within the industry. Similarly, we are insured against the risk of direct and indirect physical damage to our properties including coverage for perils such as floods, earthquakes and windstorms. Our policies also cover the loss of rental income during an estimated reconstruction period. Our policies reflect limits and deductibles customary in the industry and specific to the buildings and portfolio. We also obtain title insurance policies when acquiring new properties. We currently have coverage for losses incurred in connection with both domestic and foreign terrorist-related activities, as well as cybersecurity incidents. While we do carry commercial general liability insurance, property insurance, terrorism insurance and cybersecurity insurance, these policies include limits and terms we consider commercially reasonable. In addition, there are certain losses (including, but not limited to, losses arising from known environmental conditions or acts of war) that are not insured, in full or in part, because they are either uninsurable or the cost of insurance makes it, in our belief, economically impractical to maintain such coverage. Should an uninsured loss arise against us, we would be required to use our own funds to resolve the issue, including litigation costs. We believe the policy specifications and insured limits are adequate given the relative risk of loss, the cost of the coverage and industry practice and, in consultation with our insurance advisors, we believe the properties in our portfolio are adequately insured.
Other Commitments and Contingencies
We are a party to various claims and routine litigation arising in the ordinary course of business. Some of these claims or others to which we may be subject from time to time may result in defense costs, settlements, fines or judgments against us, some of which are not, or cannot be, covered by insurance. Payment of any such costs, settlements, fines or judgments that are not insured could have an adverse impact on our financial position and results of operations. Should any litigation arise, we would contest it vigorously. In addition, certain litigation or the resolution of certain litigation may affect the availability or cost of some of our insurance coverage, which could adversely impact our results of operations and cash flow, expose us to increased risks that would be uninsured, and/or adversely impact our ability to attract officers and directors.
The Division of Enforcement of the SEC is conducting an investigation into the adequacy of our disclosures concerning executive compensation, perquisites, the use of corporate assets, related party transactions, and conflicts of interest. The investigation also covers possible failures of our controls and procedures relating to the topics of those disclosures. We are cooperating with the SEC. We are unable to estimate the likely outcome of this matter, or a reasonably probable range of potential costs or exposure, or the potential duration of the process, at this time.
The terms of our consolidated mortgage debt agreements in place include certain restrictions and covenants which may limit, among other things, certain investments, the incurrence of additional indebtedness and liens and the disposition or other transfer of assets and interests in the borrower and other credit parties, and require compliance with certain debt yield, debt service coverage and loan to value ratios. As of September 30, 2025, we believe we are in compliance with all of our covenants.
On March 29, 2024, the joint venture that owns 60 Wall Street, in which we have a 5.0% ownership interest, modified the existing $575,000,000 non-recourse mortgage loan and extended the maturity to May 2029. In connection with the modification, the joint venture committed to redevelop the property and fund the necessary costs to complete the project. On behalf of the joint venture, we have provided the lender with certain guarantees, including a completion guarantee. We have agreements with our joint venture partners that indemnify us for their share of guarantees we provided. In accordance with GAAP, we recorded a liability equal to the fair value of the obligations undertaken in issuing the guarantees and record an asset equal to the fair value of the indemnification we have received. As of September 30, 2025, we have a $13,314,000 asset and liability, which are included as a component of “other assets” and “other liabilities,” on our consolidated balance sheets.
25
Our operating segments, which consist of each one of our properties, are aggregated into two reportable segments based on two geographic regions in which we conduct our business: New York and San Francisco. Our determination of segments is aligned with our method of internal reporting and the way our Chief Executive Officer, who is also our Chief Operating Decision Maker, makes key operating decisions, evaluates financial results and manages our business.
The following tables provide Paramount's share of Net Operating Income (“NOI”) for each reportable segment for the periods set forth below.
For the Three Months Ended September 30, 2025
New York
San Francisco
Property-related revenues
168,835
112,225
56,040
570
Real estate related taxes
(38,559
(30,086
(8,473
Other operating expenses (1)
(40,833
(24,346
(14,610
(1,877
NOI attributable to noncontrolling interests in consolidated joint ventures
(18,686
(3,340
(15,346
NOI from unconsolidated joint ventures
4,743
3,156
1,570
Paramount's share of NOI (2)
75,500
57,609
19,181
(1,290
For the Three Months Ended September 30, 2024
188,123
116,383
71,523
217
(37,955
(29,440
(8,515
(42,361
(26,172
(14,983
(1,206
(23,723
(2,424
(21,299
5,384
3,407
2,018
(41
89,468
61,754
28,744
(1,030
For the Nine Months Ended September 30, 2025
523,654
336,082
185,981
1,591
(115,264
(88,942
(26,322
(117,062
(72,427
(38,177
(6,458
(61,385
(10,048
(51,337
14,706
9,620
4,960
126
244,649
174,285
75,105
(4,741
For the Nine Months Ended September 30, 2024
553,856
347,669
206,337
(150
(112,379
(87,191
(25,188
(113,869
(69,801
(41,203
(2,865
(70,532
(7,600
(62,932
16,611
10,442
6,128
41
273,687
193,519
83,142
(2,974
26
The following table provides a reconciliation of Paramount's share of NOI to net loss attributable to common stockholders for the periods set forth below.
Paramount's share of NOI
18,686
23,723
61,385
70,532
Adjustments to arrive at net (loss) income:
Fee income
(57,766
(60,071
(176,707
(182,920
(16,340
(16,672
(58,112
(49,938
(9,981
(242
(10,840
(843
(4,743
(5,384
(14,706
(16,611
Other, net
53
87
(146
107
The following table provides the total assets for each of our reportable segments as of the dates set forth below.
Total Assets as of:
5,318,143
2,356,144
300,208
5,138,087
2,332,583
400,833
27
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements, including the related notes included therein.
Forward-Looking Statements
We make statements in this Quarterly Report on Form 10-Q that are considered “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which are usually identified by the use of words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “seeks,” “should,” “will,” and variations of such words or similar expressions. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and are including this statement for purposes of complying with those safe harbor provisions. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. All forward-looking statements are made only as of the date of this Quarterly Report on Form 10-Q. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control including, without limitation:
Accordingly, there is no assurance that our expectations will be realized. Except as otherwise required by the U.S. federal securities laws, we disclaim any obligations or undertaking to publicly release any updates or revisions to any forward-looking statement contained herein (or elsewhere) to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. A reader should review carefully our consolidated financial statements and the notes thereto as well as Item 1A entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024.
29
On September 17, 2025, we and the Operating Partnership (collectively, the “Company Parties”), Rithm Capital Corp., a Delaware corporation (“Parent”), Panorama REIT Merger Sub, Inc., a Maryland corporation and a wholly owned subsidiary of Parent (“REIT Merger Sub”), and Panorama Operating Merger Sub LP, a Delaware limited partnership and a wholly owned subsidiary of Parent (“Operating Merger Sub” and, collectively with REIT Merger Sub and Parent, the “Parent Parties”), entered into an Agreement and Plan of Merger (the “ Original Merger Agreement”). On October 8, 2025, the Company Parties and the Parent Parties entered into Amendment No. 1 to the Merger Agreement (the “Amendment,” and the Original Merger Agreement as amended by the Amendment, the “Merger Agreement”).
In certain specified circumstances further described in the Merger Agreement, in connection with the termination of the Merger Agreement, the Company will be required to pay Parent a termination payment of $59.7 million. Pursuant to the Amendment, the definition of “Company Termination Payment” in the Original Merger Agreement was modified to provide that, notwithstanding the foregoing, the Company will instead be required to pay Parent a termination payment of $47.7 million if the Company enters into an alternative acquisition agreement providing for a Superior Proposal (as defined in the Merger Agreement) with certain persons.
30
Critical Accounting Estimates
There are no material changes to our critical accounting estimates disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.
Recently Issued Accounting Literature
A summary of our recently issued accounting literature and their potential impact on our consolidated financial statements, if any, are included in Note 2, Basis of Presentation and Significant Accounting Policies, to our consolidated financial statements in this Quarterly Report on Form 10-Q.
Business Overview
We are a fully-integrated REIT focused on owning, operating, managing, acquiring and redeveloping high-quality, Class A office properties in select central business district submarkets of New York City and San Francisco. We conduct our business through, and substantially all of our interests in properties and investments are held by, Paramount Group Operating Partnership LP, a Delaware limited partnership (the “Operating Partnership”). We are the sole general partner of, and owned approximately 93.2% of, the Operating Partnership as of September 30, 2025.
Additionally, we have an investment management business where we serve as the general partner of several real estate related funds for institutional investors and high net-worth individuals.
Dispositions
900 Third Avenue
On January 17, 2025, we sold a 45.0% equity interest in 900 Third Avenue, a 600,000 square foot Class A office building located in New York, at a gross asset valuation of $210,000,000. We realized net proceeds of $94,000,000 from the sale after transaction costs, of which $9,450,000 was received in December 2024 upon execution of the contract.
One Front Street
On May 5, 2025, we sold a 25.0% equity interest in One Front Street, a 649,000 square foot Class A office building located in San Francisco, at a gross asset valuation of $255,000,000. As part of the transaction, we have provided $40,545,000 of seller financing for a two-year term at a fixed rate of 5.50%. We realized net proceeds of $11,500,000 from the sale, after transaction and other costs.
31
Financings
Revolving Credit Facility
On August 5, 2025, we completed a $900,000,000 refinancing of 1301 Avenue of the Americas, a 1.8 million square-foot Class A office building in New York City. The new five-year interest-only loan has a fixed rate of 6.39% and matures in August 2030. The proceeds from the refinancing were used to repay the existing $860,000,000 loan that bore interest at a weighted average rate of SOFR plus 277 basis points and was scheduled to mature in August 2026. We retained net proceeds of approximately $26,000,000 after the repayment of the existing loan and closing costs.
In August 2024, the joint venture that owned Market Center, in which we had a 67.0% ownership interest, ceased making debt service payments on the non-recourse mortgage loan due to insufficient property cash flows. In January 2025, the joint venture defaulted on the $416,544,000 mortgage loan, as it was not repaid at maturity. Subsequently, on May 30, 2025, the lenders completed the sale of Market Center through a deed-in-lieu of foreclosure.
32
Leasing Results - Three Months Ended September 30, 2025
The following table presents the details on the leases signed during the three months ended September 30, 2025. It is not intended to coincide with the commencement of rental revenue in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The leasing statistics, except for square feet leased, represent office space only.
Three Months Ended September 30, 2025
Total square feet leased
547,812
463,575
84,237
Pro rata share of total square feet leased:
481,246
440,567
40,679
Initial rent (1)
82.45
81.08
97.20
Weighted average lease term (in years)
13.2
13.8
6.7
Tenant improvements and leasing commissions:
Per square foot
173.44
182.35
76.97
Per square foot per annum
13.13
13.21
11.46
Percentage of initial rent
15.9%
16.3%
11.8%
Rent concessions:
Average free rent period (in months)
11.3
12.0
3.9
Average free rent period per annum (in months)
0.9
0.6
Second generation space: (2)
Square feet
130,756
98,896
31,860
Cash basis:
85.50
82.87
93.66
Prior escalated rent (3)
80.33
73.64
101.10
Percentage increase (decrease)
6.4%
12.5%
(7.4%)
GAAP basis:
Straight-line rent
84.78
80.82
97.05
Prior straight-line rent
74.42
69.77
88.85
Percentage increase
13.9%
15.8%
The following table presents same store leased occupancy (at share) as of the dates set forth below.
Same Store Leased Occupancy (1)
89.7
93.8
74.4
As of June 30, 2025
85.4
88.1
75.1
33
In the three months ended September 30, 2025, we leased 547,812 square feet, of which our share was 481,246 square feet that was leased at a weighted average initial rent of $82.45 per square foot. This leasing activity, partially offset by lease expirations in the three months, increased same store leased occupancy by 430 basis points to 89.7% at September 30, 2025 from 85.4% at June 30, 2025.
Of the 547,812 square feet leased in the three months, 130,756 square feet represented our share of second generation space for which rental rates increased by 13.9% on a GAAP basis and 6.4% on a cash basis. The weighted average lease term for leases signed during the three months was 13.2 years and weighted average tenant improvements and leasing commissions on these leases were $13.13 per square foot per annum, or 15.9% of initial rent.
In the three months ended September 30, 2025, we leased 463,575 square feet in our New York portfolio, of which our share was 440,567 square feet that was leased at a weighted average initial rent of $81.08 per square foot. This leasing activity, partially offset by lease expirations in the three months, increased same store leased occupancy by 570 basis points to 93.8% at September 30, 2025 from 88.1% at June 30, 2025.
Of the 463,575 square feet leased in the three months, 98,896 square feet represented our share of second generation space for which rental rates increased by 15.8% on a GAAP basis and 12.5% on a cash basis. The weighted average lease term for leases signed during the three months was 13.8 years and weighted average tenant improvements and leasing commissions on these leases were $13.21 per square foot per annum, or 16.3% of initial rent.
In the three months ended September 30, 2025, we leased 84,237 square feet in our San Francisco portfolio, of which our share was 40,679 square feet that was leased at a weighted average initial rent of $97.20 per square foot. This leasing activity, offset by lease expirations in the three months, decreased same store leased occupancy by 70 basis points to 74.4% at September 30, 2025 from 75.1% at June 30, 2025.
Of the 84,237 square feet leased in the three months, 31,860 square feet represented our share of second generation space for which rental rates increased by 9.2% on a GAAP basis and decreased 7.4% on a cash basis. The weighted average lease term for leases signed during the three months was 6.7 years and weighted average tenant improvements and leasing commissions on these leases were $11.46 per square foot per annum, or 11.8% of initial rent.
34
Leasing Results - Nine Months Ended September 30, 2025
The following table presents the details on the leases signed during the nine months ended September 30, 2025. It is not intended to coincide with the commencement of rental revenue in accordance with GAAP. The leasing statistics, except for square feet leased, represent office space only.
Nine Months Ended September 30, 2025
1,236,396
953,065
283,331
923,314
779,992
143,322
83.87
81.95
94.34
13.1
9.1
182.17
183.79
173.36
13.93
13.32
18.99
16.6%
16.2%
20.1%
12.5
8.9
1.0
417,702
319,147
98,555
88.12
86.08
94.71
89.37
83.95
106.92
Percentage (decrease) increase
(1.4%)
2.5%
(11.4%)
88.04
84.31
100.10
82.62
79.04
94.22
6.6%
6.7%
6.2%
84.8
85.0
83.8
35
In the nine months ended September 30, 2025, we leased 1,236,396 square feet, of which our share was 923,314 square feet that was leased at a weighted average initial rent of $83.87 per square foot. This leasing activity, partially offset by lease expirations in the nine months, including the scheduled expiration of Google’s lease in April 2025 at One Market Plaza in our San Francisco portfolio, increased same store leased occupancy by 490 basis points to 89.7% at September 30, 2025 from 84.8% at December 31, 2024.
Of the 1,236,396 square feet leased in the nine months, 417,702 square feet represented our share of second generation space for which rental rates increased by 6.6% on a GAAP basis and decreased by 1.4% on a cash basis. The weighted average lease term for leases signed during the nine months was 13.1 years and weighted average tenant improvements and leasing commissions on these leases were $13.93 per square foot per annum, or 16.6% of initial rent.
In the nine months ended September 30, 2025, we leased 953,065 square feet in our New York portfolio, of which our share was 779,992 square feet that was leased at a weighted average initial rent of $81.95 per square foot. This leasing activity, partially offset by lease expirations in the nine months, increased same store leased occupancy by 880 basis points to 93.8% at September 30, 2025 from 85.0% at December 31, 2024.
Of the 953,065 square feet leased in the nine months, 319,147 square feet represented our share of second generation space for which rental rates increased by 6.7% on a GAAP basis and 2.5% on a cash basis. The weighted average lease term for leases signed during the nine months was 13.8 years and weighted average tenant improvements and leasing commissions on these leases were $13.32 per square foot per annum, or 16.2% of initial rent.
In the nine months ended September 30, 2025, we leased 283,331 square feet in our San Francisco portfolio, of which our share was 143,322 square feet that was leased at a weighted average initial rent of $94.34 per square foot. This leasing activity, offset by lease expirations in the nine months, including the scheduled expiration of Google’s lease in April 2025 at One Market Plaza, decreased same store leased occupancy by 940 basis points to 74.4% at September 30, 2025 from 83.8% at December 31, 2024. The decrease in same store leased occupancy was driven primarily by the scheduled expiration of Google’s lease in April 2025 at One Market Plaza.
Of the 283,331 square feet leased in the nine months, 98,555 square feet represented our share of second generation space for which rental rates increased by 6.2% on a GAAP basis and decreased by 11.4% on a cash basis. The weighted average lease term for leases signed during the nine months was 9.1 years and weighted average tenant improvements and leasing commissions on these leases were $18.99 per square foot per annum, or 20.1% of initial rent.
Financial Results - Three Months Ended September 30, 2025 and 2024
Net Income, FFO and Core FFO
Net loss attributable to common stockholders was $28,947,000, or $0.13 per diluted share, for the three months ended September 30, 2025, compared to $9,688,000, or $0.04 per diluted share, for the three months ended September 30, 2024. Net loss attributable to common stockholders for the three months ended September 30, 2025 includes $9,043,000, or $0.04 per diluted share, of transaction related costs relating to the proposed Mergers.
Funds from Operations (“FFO”) attributable to common stockholders was $17,112,000, or $0.08 per diluted share, for the three months ended September 30, 2025, compared to $40,078,000, or $0.18 per diluted share, for the three months ended September 30, 2024. FFO attributable to common stockholders for the three months ended September 30, 2025 includes $9,043,000, or $0.04 per diluted share, of transaction related costs relating to the proposed Mergers. FFO attributable to common stockholders for the three months ended September 30, 2025 and 2024 also includes the impact of non-core items, which are listed in the table on page 57. The aggregate of the non-core items, net of amounts attributable to noncontrolling interests, decreased FFO attributable to common stockholders for the three months ended September 30, 2025 and 2024 by $14,397,000 and $445,000, respectively, or $0.06 and $0.01 per diluted share, respectively.
Core Funds from Operations (“Core FFO”) attributable to common stockholders, which excludes the impact of the non-core items listed on page 57, was $31,509,000, or $0.14 per diluted share, for the three months ended September 30, 2025, compared to $40,523,000 or $0.19 per diluted share, for the three months ended September 30, 2024.
Same Store Results
The table below summarizes the percentage increase or decrease in our share of Same Store NOI and Same Store Cash NOI, by segment, for the three months ended September 30, 2025 versus September 30, 2024.
Same Store NOI
(12.0
%)
(5.0
(28.0
Same Store Cash NOI
(8.0
5.6
(33.9
See pages 51-57 “Non-GAAP Financial Measures” for a reconciliation of these measures to the most directly comparable GAAP measure and the reasons why we believe these non-GAAP measures are useful.
37
Financial Results - Nine Months Ended September 30, 2025 and 2024
Net loss attributable to common stockholders was $58,758,000, or $0.27 per diluted share, for the nine months ended September 30, 2025, compared to $7,642,000, or $0.04 per diluted share, for the nine months ended September 30, 2024. Net loss attributable to common stockholders for the nine months ended September 30, 2025 includes (i) $9,608,000, or $0.04 per diluted share, of transaction related costs relating to the proposed Mergers, and (ii) $7,535,000, or $0.03 per diluted share, of expense relating to acceleration of equity awards and severance payments. Net loss attributable to common stockholders for the nine months ended September 30, 2024 includes a $14,148,000, or $0.07 per diluted share, non-cash gain on extinguishment of a tax liability related to our initial public offering.
FFO attributable to common stockholders was $80,982,000, or $0.37 per diluted share, for the nine months ended September 30, 2025, compared to $142,554,000, or $0.66 per diluted share, for the nine months ended September 30, 2024. FFO attributable to common stockholders for the nine months ended September 30, 2025 includes (i) $9,608,000, or $0.04 per diluted share, of transaction related costs relating to the proposed Mergers, and (ii) $7,535,000, or $0.03 per diluted share, of expense relating to acceleration of equity awards and severance payments. FFO attributable to common stockholders for the nine months ended September 30, 2024 includes $14,148,000, or $0.07 per diluted share, of a non-cash gain on extinguishment of a tax liability related to our initial public offering. FFO attributable to common stockholders for the nine months ended September 30, 2025 and 2024 also includes the impact of other non-core items, which are listed in the table on page 57. The aggregate of the non-core items, net of amounts attributable to noncontrolling interests, decreased FFO attributable to common stockholders for the nine months ended September 30, 2025 by $25,345,000, or $0.11 per diluted share, and increased FFO attributable to common stockholders for the nine months ended September 30, 2024 by $10,665,000, or $0.05 per diluted share.
Core FFO attributable to common stockholders, which excludes the impact of the non-core items listed on page 57, was $106,327,000, or $0.48 per diluted share, for the nine months ended September 30, 2025, compared to $131,889,000, or $0.61 per diluted share, for the nine months ended September 30, 2024.
The table below summarizes the percentage increase or decrease in our share of Same Store NOI and Same Store Cash NOI, by segment, for the nine months ended September 30, 2025 versus September 30, 2024.
(7.3
(7.9
(5.9
(3.8
(3.0
(5.5
Results of Operations - Three Months Ended September 30, 2025 and 2024
The following pages summarize our consolidated results of operations for the three months ended September 30, 2025 and 2024.
For the Three Months Ended September 30,
Change
(19,548
(2,392
(21,940
(924
(2,305
(332
9,739
6,178
Income from unconsolidated real estate related funds
(38
1,642
(405
(614
Loss before income taxes
(27,529
1,450
Net loss
(26,079
6,680
(1,269
1,409
(19,259
39
Revenues
Our revenues, which consist of rental revenue and fee and other income, were $172,959,000 for the three months ended September 30, 2025, compared to $194,899,000 for the three months ended September 30, 2024, a decrease of $21,940,000. Below are the details of the increase or decrease by segment.
Same store operations
(18,404
(3,191
(15,213
(2)
Lease termination income
(1,229
(1,179
(3)
(50
85
(65
153
(Decrease) increase in rental revenue
(4,373
(15,328
(190
(415
(2,047
Decrease in fee income
(2,652
Other income
260
215
(155
200
Increase (decrease) in other income
(Decrease) increase in fee and other income
(2,452
Total decrease in revenues
(4,158
(15,483
(2,299
40
Expenses
Our expenses, which consist of operating, depreciation and amortization, general and administrative and transaction related costs, were $163,479,000 for the three months ended September 30, 2025, compared to $157,301,000 for the three months ended September 30, 2024, an increase of $6,178,000. Below are the details of the increase or decrease by segment.
(255
160
(669
(1,397
728
(Decrease) increase in operating
(1,237
Operations
(536
(1,600
(169
Decrease in depreciation and amortization
Decrease in general and administrative
Increase in transaction related costs
Total increase (decrease) in expenses
(1,773
(2,015
9,966
Loss from Real Estate Related Fund Investments
Loss from real estate related fund investments was $18,000 for the three months ended September 30, 2025, compared to $22,000 for the three months ended September 30, 2024, a decrease in loss of $4,000.
Income from Unconsolidated Real Estate Related Funds
Income from unconsolidated real estate related funds was $71,000 for the three months ended September 30, 2025, compared to $109,000 for the three months ended September 30, 2024, a decrease in income of $38,000. This decrease resulted primarily from lower investment income in the current year.
Income (Loss) from Unconsolidated Joint Ventures
Income from unconsolidated joint ventures was $661,000 for the three months ended September 30, 2025, compared to loss from unconsolidated joint ventures of $981,000 for the three months ended September 30, 2024, an increase in income of $1,642,000. This increase resulted primarily from Residential Development Fund’s (“RDF”) share of higher gains on the sale of residential condominium units at One Steuart Lane in the current year.
Interest and Other Income, net
Interest and other income, net was $3,112,000 for the three months ended September 30, 2025, compared to $3,517,000 for the three months ended September 30, 2024, a decrease in income of $405,000. This decrease resulted primarily from lower yields on investments in the current year.
Interest and Debt Expense
Interest and debt expense was $44,419,000 for the three months ended September 30, 2025, compared to $43,805,000 for the three months ended September 30, 2024, an increase of $614,000. This increase resulted primarily from a $2,257,000 write-off of deferred financing costs in connection with the refinancing of 1301 Avenue of the Americas in August 2025, partially offset by amortization of deferred financing costs in the prior year relating to our revolving credit facility which was terminated in May 2025.
Income Tax Benefit (Expense)
Income tax benefit was $831,000 for the three months ended September 30, 2025, compared to income tax expense of $619,000 for the three months ended September 30, 2024, an increase in income tax benefit of $1,450,000. This increase resulted primarily from a true-up of the prior year’s tax provision in the current year.
Net Income Attributable to Noncontrolling Interests in Consolidated Joint Ventures
Net income attributable to noncontrolling interests in consolidated joint ventures was $279,000 for the three months ended September 30, 2025, compared to $6,959,000 for the three months ended September 30, 2024, a $6,680,000 decrease in net income attributable to noncontrolling interests in consolidated joint ventures. This decrease in income resulted primarily from lower net income attributable to noncontrolling interests in One Market Plaza and 300 Mission Street.
Net (Income) Loss Attributable to Noncontrolling Interests in Consolidated Real Estate Related Funds
Net income attributable to noncontrolling interests in consolidated real estate related funds was $688,000 for the three months ended September 30, 2025, compared to net loss attributable to noncontrolling interests in consolidated real estate related funds of $581,000 for the three months ended September 30, 2024, an increase in net income attributable to noncontrolling interests in consolidated real estate related funds of $1,269,000. This increase in income resulted primarily from RDF’s share of higher gains on the sale of residential condominium units at One Steuart Lane.
Net Loss Attributable to Noncontrolling Interests in Operating Partnership
Net loss attributable to noncontrolling interests in the Operating Partnership was $2,302,000 for the three months ended September 30, 2025, compared to $893,000 for the three months ended September 30, 2024, an increase in net loss allocated to noncontrolling interests of $1,409,000. This increase in loss resulted from higher net loss subject to allocation to the unitholders of the Operating Partnership.
42
Results of Operations - Nine Months Ended September 30, 2025 and 2024
The following pages summarize our consolidated results of operations for the nine months ended September 30, 2025 and 2024.
(31,895
(2,266
(34,161
6,078
(6,213
8,174
9,997
18,036
(Loss) income from unconsolidated real estate related funds
(278
5,718
(15,877
(5,825
(68,434
2,758
(65,676
13,339
(2,964
4,185
(51,116
43
Our revenues, which consist of rental revenue and fee and other income, were $537,023,000 for the nine months ended September 30, 2025, compared to $571,184,000 for the nine months ended September 30, 2024, a decrease of $34,161,000. Below are the details of the increase or decrease by segment.
(29,391
(9,570
(19,821
(1,426
(1,469
(1,078
(684
(46
(348
Decrease in rental revenue
(11,723
(19,824
(1,032
(2,010
(3,959
1,693
136
(532
2,089
(1,870
(11,587
(20,356
(2,218
Our expenses, which consist of operating, depreciation and amortization, general and administrative and transaction related costs, were $477,985,000 for the nine months ended September 30, 2025, compared to $459,949,000 for the nine months ended September 30, 2024, an increase of $18,036,000. Below are the details of the increase or decrease by segment.
4,258
6,150
(1,892
1,820
(1,951
3,771
Increase (decrease) in operating
4,199
(3,863
(1,953
(397
Severance costs
8,188
Increase in general and administrative
(5)
336
(3,845
21,545
Loss from real estate related fund investments was $67,000 for the nine months ended September 30, 2025, compared to $92,000 for the nine months ended September 30, 2024, a decrease in loss of $25,000.
(Loss) Income from Unconsolidated Real Estate Related Funds
Loss from unconsolidated real estate related funds was $79,000 for the nine months ended September 30, 2025, compared to income from unconsolidated real estate related funds of $199,000 for the nine months ended September 30, 2024, a decrease in income of $278,000. This decrease resulted primarily from unrealized losses on mezzanine loan investments and lower investment income in the current year.
45
Income from unconsolidated joint ventures was $2,620,000 for the nine months ended September 30, 2025, compared to loss from unconsolidated joint ventures of $3,098,000 for the nine months ended September 30, 2024, an increase in income of $5,718,000. This increase in income resulted from:
One Steuart Lane (higher income in the current year)
3,270
60 Wall Street (losses in the prior year)
1,753
695
Total increase in income
Interest and other income, net was $10,953,000 for the nine months ended September 30, 2025, compared to $26,830,000 for the nine months ended September 30, 2024, a decrease in income of $15,877,000. This decrease resulted primarily from a $15,437,000 non-cash gain on extinguishment of a tax liability related to our initial public offering in the prior year and lower yields on investments in the current year.
Interest and debt expense was $129,903,000 for the nine months ended September 30, 2025, compared to $124,078,000 for the nine months ended September 30, 2024, an increase of $5,825,000. This increase resulted primarily from (i) the expiration of interest rate swaps on $500,000,000 of our debt at 1301 Avenue of the Americas in August 2024 and (ii) $4,008,000 of write-offs of deferred financing costs in connection with the refinancing of 1301 Avenue of the Americas in August 2025 and the modification and termination of our credit facility in May 2025, partially offset by (iii) lower interest expense on the $360,000,000 variable rate portion of our debt at 1301 Avenue of the Americas and (iv) lower amortization of deferred financing costs in the current year relating to our revolving credit facility.
Income tax benefit was $1,430,000 for the nine months ended September 30, 2025, compared to income tax expense of $1,328,000 for the nine months ended September 30, 2024, an increase in income tax benefit of $2,758,000. This increase resulted primarily from a true-up of the prior year’s tax provision in the current year.
Net income attributable to noncontrolling interests in consolidated joint ventures was $5,095,000 for the nine months ended September 30, 2025, compared to $18,434,000 for the nine months ended September 30, 2024, a $13,339,000 decrease in net income attributable to noncontrolling interests in consolidated joint ventures. This decrease in income resulted primarily from lower net income attributable to noncontrolling interests in One Market Plaza and 300 Mission Street in the current year.
Net income attributable to noncontrolling interests in consolidated real estate related funds was $2,556,000 for the nine months ended September 30, 2025, compared to net loss attributable to noncontrolling interests in consolidated real estate related funds of $408,000 for the nine months ended September 30, 2024, an increase in net income attributable to noncontrolling interests in consolidated real estate related funds of $2,964,000. This increase in income resulted primarily from RDF’s share of higher gains on the sale of residential condominium units at One Steuart Lane in the current year.
Net loss attributable to noncontrolling interests in the Operating Partnership was $4,901,000 for the nine months ended September 30, 2025, compared to $716,000 for the nine months ended September 30, 2024, an increase in net loss allocated to noncontrolling interests of $4,185,000. This increase in loss resulted from higher net loss subject to allocation to the unitholders of the Operating Partnership.
46
Liquidity and Capital Resources
Liquidity
Our primary sources of liquidity include existing cash balances and cash flow from operations. As of September 30, 2025, we had $654,357,000 of liquidity comprised of $330,207,000 of cash and cash equivalents and $324,150,000 of restricted cash.
We expect that these sources will provide adequate liquidity over the next 12 months for all anticipated needs, including scheduled interest payments on our outstanding indebtedness, existing and anticipated capital improvements, the cost of securing new and renewal leases, and all other capital needs related to the operations of our business.
We anticipate that our long-term needs including debt maturities and potential acquisitions will be funded by operating cash flow, third-party joint venture capital, mortgage financings and/or re-financings, and the issuance of long-term debt or equity and cash on hand. Although we may be able to anticipate and plan for certain of our liquidity needs, unexpected increases in uses of cash that are beyond our control and which affect our financial condition and results of operations may arise, or our sources of liquidity may be fewer than, and the funds available from such sources may be less than, anticipated or required.
Consolidated Debt
As of September 30, 2025, our outstanding consolidated debt aggregated $3.73 billion. The $500,000,000 mortgage loan at 31 West 52nd Street is scheduled to mature in June 2026 and the $232,050,000 loan at 300 Mission Street is scheduled to mature in October 2026. Although these loan balances exceed our projected liquidity at the time of their respective maturities, we are currently exploring various refinancing options and believe that, based on each property’s operating performance, it is probable that we will be successful in refinancing each loan prior to its maturity. We may refinance these debts or any of our maturing debt when it comes due or repay it early depending on prevailing market conditions, liquidity requirements and other factors. The amounts involved in connection with these transactions could be material to our consolidated financial statements.
Dividend Policy
In September 2024, we suspended our regular quarterly dividend. The decision by our board of directors to suspend our regular quarterly dividend aligns with our commitment to fortify our balance sheet and maintain significant financial flexibility. The timing and frequency of future dividends will be authorized by our board of directors, in its sole discretion, depending on a variety of factors, including our financial performance, our debt service requirements, our capital expenditure requirements, the requirements to maintain our qualification as a REIT and other factors that our board of directors may deem relevant from time to time.
Under the terms of the Merger Agreement, subject to the restrictions set forth therein, we may not declare discretionary dividends without the prior written consent of Parent, but we may declare or pay dividends to maintain our qualification as a REIT. The amount in cash payable to our stockholders as the Company Merger Consideration is subject to decrease in the event we declare and pay any such dividends in cash or property other than stock, as more fully described in the Merger Agreement.
Off Balance Sheet Arrangements
As of September 30, 2025, our unconsolidated joint ventures had $1.42 billion of outstanding indebtedness, of which our share was $362,179,000. We do not guarantee the indebtedness of our unconsolidated joint ventures other than providing customary environmental indemnities and guarantees of specified non-recourse carve outs relating to specified covenants and representations; however, we may elect to fund additional capital to a joint venture through equity contributions (generally on a basis proportionate to our ownership interests), advances or partner loans in order to enable the joint venture to repay this indebtedness upon maturity.
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Cash Flows
Cash and cash equivalents and restricted cash were $654,357,000 and $555,447,000 as of September 30, 2025 and December 31, 2024, respectively, and $492,235,000 and $509,599,000 as of September 30, 2024 and December 31, 2023, respectively. Cash and cash equivalents and restricted cash increased by $98,910,000 for the nine months ended September 30, 2025, and decreased by $17,364,000 for the nine months ended September 30, 2024. The following table sets forth the changes in cash flow.
Net cash provided by (used in):
Operating activities
Investing activities
Financing activities
Operating Activities
Nine months ended September 30, 2025 – We generated $83,040,000 of cash from operating activities for the nine months ended September 30, 2025, primarily from (i) $141,989,000 of net income (before $197,997,000 of non-cash adjustments), and (ii) $543,000 of distributions from unconsolidated joint ventures and real estate related funds, partially offset by (iii) $59,492,000 of net changes in operating assets and liabilities. Non-cash adjustments of $197,997,000 were primarily comprised of depreciation and amortization, loss from unconsolidated joint ventures, straight-lining of rental revenue, amortization of above and below-market leases, net and amortization of stock-based compensation.
Nine months ended September 30, 2024 – We generated $176,570,000 of cash from operating activities for the nine months ended September 30, 2024, primarily from (i) $194,611,000 of net income (before $184,943,000 of non-cash adjustments), (ii) $513,000 of distributions from unconsolidated joint ventures and real estate related funds, and (iii) $18,554,000 of net changes in operating assets and liabilities. Non-cash adjustments of $184,943,000 were primarily comprised of depreciation and amortization, non-cash gain on extinguishment of a tax liability related to our initial public offering, loss from unconsolidated joint ventures, straight-lining of rental revenue, amortization of above and below-market leases, net and amortization of stock-based compensation.
Investing Activities
Nine months ended September 30, 2025 – We used $109,165,000 of cash for investing activities for the nine months ended September 30, 2025, for (i) $115,840,000 for additions to real estate, which were comprised of spending for tenant improvements and other building improvements, and (ii) $5,414,000 for contributions of capital to an unconsolidated joint venture, partially offset by (iii) $12,089,000 of a distribution of capital from an unconsolidated joint venture.
Nine months ended September 30, 2024 – We used $75,343,000 of cash for investing activities for the nine months ended September 30, 2024, for (i) $85,231,000 for additions to real estate, which were comprised of spending for tenant improvements and other building improvements and (ii) $1,904,000 for contributions of capital to an unconsolidated joint venture, partially offset by (iii) $10,000,000 of proceeds from the repayment of a mezzanine loan investment, and (iv) $1,792,000 of a distribution of capital from an unconsolidated joint venture.
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Financing Activities
Nine months ended September 30, 2025 – We generated $125,035,000 of cash from financing activities for the nine months ended September 30, 2025, from (i) $900,000,000 of proceeds from notes and mortgages payable in connection with the refinancing of the 1301 Avenue of the Americas loan, (ii) $83,307,000 of proceeds received for the sale of a 45.0% equity interest in 900 Third Avenue, (iii) $10,266,000 of proceeds received for the sale of a 25.0% equity interest in One Front Street, (iv) $11,723,000 of contributions from noncontrolling interests in 900 Third Avenue and One Front Street, partially offset by (v) $860,000,000 for repayment of notes and mortgages payable in connection with the refinancing of the 1301 Avenue of the Americas loan and $14,411,000 for payment of the related debt issuance costs, (vi) $5,710,000 distributions to noncontrolling interests in 300 Mission Street and 1633 Broadway, and (vii) $140,000 for the repurchase of shares related to stock compensation agreements and related tax withholdings.
Nine months ended September 30, 2024 – We used $118,591,000 of cash for financing activities for the nine months ended September 30, 2024, primarily for (i) $975,000,000 for repayment of notes and mortgages payable in connection with the modification and extension of the One Market Plaza non-recourse mortgage loan and $10,649,000 for payment of the related debt issuance costs, (ii) $25,118,000 for dividends and distributions to common stockholders and unitholders, (iii) $18,311,000 for distributions to noncontrolling interests in Fund X and RDF, (iv) $2,444,000 for distributions to noncontrolling interests in 1633 Broadway, and (v) $178,000 for the repurchase of shares related to stock compensation agreements and related tax withholdings, partially offset by (vi) $850,000,000 of proceeds from notes and mortgages payable in connection with the modification and extension of the One Market Plaza non-recourse mortgage loan, (vii) $62,220,000 of contributions from noncontrolling interests in One Market Plaza and (viii) $889,000 of contributions from noncontrolling interests in Fund X.
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Non-GAAP Financial Measures
We use and present NOI, Same Store NOI, FFO and Core FFO, as supplemental measures of our performance. The summary below describes our use of these measures, provides information regarding why we believe these measures are meaningful supplemental measures of our performance and reconciles these measures from net income or loss, the most directly comparable GAAP measure. 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.
Net Operating Income (“NOI”)
We use NOI 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 include property-related expenses such as cleaning, security, repairs and maintenance, utilities, property administration and real estate taxes). We also use 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 Paramount’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 the property level. The following tables present reconciliations of our net income or loss to Paramount's share of NOI and Cash NOI for the three and nine months ended September 30, 2025 and 2024.
Reconciliation of net (loss) income to NOI and Cash NOI:
(13,413
4,868
(21,737
Adjustments to arrive at NOI:
(4,124
40,051
1,043
Income from unconsolidated joint ventures
(661
(59
(602
(3,112
(1,216
(572
(1,324
32,430
11,989
Income tax benefit
(831
(53
Amounts attributable to noncontrolling interests in consolidated joint ventures
Adjustments to arrive at Cash NOI:
Straight-line rent adjustments (including our share of unconsolidated joint ventures)
(1,065
(231
(798
(36
Amortization of above and below-market leases, net (including our share of unconsolidated joint ventures)
(1,245
(723
(522
314
659
Paramount's share of Cash NOI
73,504
56,310
18,520
(1,326
51
(9,078
17,213
(12,338
(6,776
40,587
18,272
Loss (income) from unconsolidated joint ventures
981
(55
225
811
(3,517
(899
(502
(2,116
30,216
12,817
772
619
(87
(2,191
(6,115
3,818
106
(1,697
(767
(930
(1,470
(214
(1,256
84,110
54,658
30,376
(34,452
34,245
(55,801
(13,369
119,928
53,551
3,228
(2,442
(10,953
(2,861
(1,717
(6,375
92,273
35,397
2,233
Income tax (benefit) expense
(1,430
(1,439
146
4,072
(4,117
8,153
(4,275
(2,200
(2,075
(4,589
(1,184
(3,405
239,857
166,784
77,778
(4,705
52
Reconciliation of net income (loss) to NOI and Cash NOI:
Net income (loss)
(15,297
46,470
(21,505
(17,328
123,791
55,504
3,625
Loss from unconsolidated joint ventures
1,575
590
933
(26,830
(2,723
(1,183
(22,924
83,315
38,481
2,282
1,328
84
1,228
(107
(6,694
(14,290
7,561
(5,304
(2,275
(3,029
(2,059
(479
(1,580
259,630
176,475
86,094
(2,939
The tables below set forth the reconciliations of our share of NOI to our share of Same Store NOI and Same Store Cash NOI for the three and nine months ended September 30, 2025 and 2024. These metrics are used to measure the operating performance of our properties that were owned by us in a similar manner during both the current and prior reporting periods, and represent our share of Same Store NOI and Same Store Cash 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 vary from period to period. Same Store Cash NOI excludes the effect of non-cash items such as the straight-line rent adjustments and the amortization of above and below-market leases.
Paramount's share of NOI for the three months ended
September 30, 2025 (1)
Non-same store adjustments:
1,351
1,290
Paramount's share of Same Store NOI for the
three months ended September 30, 2025
76,851
57,638
19,213
September 30, 2024 (1)
Dispositions (2)
(3,342
(1,308
(2,034
(1,204
2,435
1,405
1,030
three months ended September 30, 2024
87,357
60,672
26,685
% Decrease
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Paramount's share of Cash NOI for the three months ended
1,387
1,326
Paramount's share of Same Store Cash NOI for the
74,891
56,339
18,552
(3,817
(1,536
(2,281
2,329
924
81,418
53,348
28,070
% (Decrease) increase
Paramount's share of NOI for the nine months ended
(1,672
(1,627
(45
5,479
706
4,741
nine months ended September 30, 2025
248,456
173,364
75,092
(7,516
(4,165
(3,351
(3,177
(3,152
5,038
2,055
2,974
nine months ended September 30, 2024
268,032
188,257
79,775
Paramount's share of Cash NOI for the nine months ended
5,443
4,705
243,628
165,863
77,765
(8,154
(4,392
5,003
2,939
253,302
170,986
82,316
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Funds from Operations (“FFO”) and Core Funds from Operations (“Core FFO”)
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 and adjustments, realized and unrealized gains or losses on real estate related 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. Neither FFO nor Core FFO is intended to be a measure of cash flow or liquidity. Please refer to our consolidated financial statements, prepared in accordance with GAAP, for purposes of evaluating our financial condition, results of operations and cash flows. The following table presents a reconciliation of net income or loss to FFO and Core FFO for the periods set forth below.
Reconciliation of net (loss) income to FFO and Core FFO:
Real estate depreciation and amortization (including our share of unconsolidated joint ventures)
60,796
63,487
185,811
192,946
Amounts attributable to noncontrolling interests in consolidated joint ventures and real estate related funds
(12,041
(15,511
(41,822
(46,981
FFO attributable to the Operating Partnership
18,473
43,773
87,981
155,633
Amounts attributable to noncontrolling interests in the Operating Partnership
(1,361
(3,695
(6,999
(13,079
FFO attributable to common stockholders
17,112
40,078
80,982
142,554
Per diluted share
0.08
0.18
0.37
0.66
Adjustments for non-core items:
Write-off of deferred financing costs
2,257
4,008
3,304
244
4,396
2,959
Core FFO attributable to the Operating Partnership
34,015
44,259
115,413
143,998
(2,506
(3,736
(9,086
(12,109
Core FFO attributable to common stockholders
31,509
40,523
106,327
131,889
0.14
0.19
0.48
0.61
Reconciliation of weighted average shares outstanding:
Weighted average shares outstanding
Effect of dilutive securities
41,597
14,505
34,657
36,985
Denominator for FFO and Core FFO per diluted share
220,554,464
217,329,211
219,288,851
217,245,794
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk is the risk of loss from adverse changes in market prices and interest rates. Our future earnings, cash flows and fair values relevant to financial instruments are dependent upon prevalent market interest rates. Our primary market risk results from our indebtedness, which bears interest at both fixed and variable rates. We manage our market risk on variable rate debt by entering into interest rate swap agreements to fix the rate or interest rate cap agreements to limit exposure to increases in rates, on all or a portion of the debt for varying periods through maturity. This in turn, reduces the risks of variability of cash flows created by variable rate debt and mitigates the risk of increases in interest rates. Our objective when undertaking such arrangements is to reduce our floating rate exposure and we do not enter into hedging arrangements for speculative purposes. Subject to maintaining our status as a REIT for federal income tax purposes, we may utilize swap and cap arrangements in the future.
The following table summarizes our consolidated debt, the weighted average interest rates and the fair value as of September 30, 2025.
Fixed Rate Debt:
31 West 52nd Street
493,660
300 Mission Street
228,865
845,431
1,082,301
904,249
Total Consolidated Debt
732,050
In addition to the above, our unconsolidated joint ventures had $1.42 billion of outstanding indebtedness as of September 30, 2025, of which our share was $362,179,000.
The following table summarizes our share of total indebtedness and the effect to interest expense of a 100 basis point increase in variable rates.
(Amounts in thousands, except per share amount)
Balance
WeightedAverageInterest Rate
Effect of 1% Increase inBase Rates
Paramount's share of consolidated debt:
Variable rate
6.27
Fixed rate
3,013,680
4.33
2,113,680
3.45
2,973,680
4.26
Paramount's share of debt of non-consolidated
entities (non-recourse):
104,627
6.44
1,046
379,216
6.31
257,552
4.08
256,040
4.03
362,179
4.76
635,256
5.39
Noncontrolling interests' share of above
(77
Total change in annual net income
969
0.00
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is processed, recorded, summarized and reported within the time periods specified in the SEC’s rules and regulations, and that such information is accumulated and communicated to management, including our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
We carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), regarding the effectiveness of our disclosure controls and procedures as of September 30, 2025, the end of the period covered by this Quarterly Report on Form 10-Q. Based on the foregoing evaluation, our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer) concluded that, as of the end of the period covered by this quarterly report, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in reports filed or submitted under the Exchange Act is processed, recorded, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), as appropriate, to allow for timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There were no changes to our internal control over financial reporting in connection with the evaluation referenced above that occurred during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
ITEM 1.LEGAL PROCEEDINGS
The Division of Enforcement of the U.S. Securities and Exchange Commission (the “SEC”) is conducting an investigation into the adequacy of our disclosures concerning executive compensation, perquisites, the use of corporate assets, related party transactions, and conflicts of interest. The investigation also covers possible failures of our controls and procedures relating to the topics of those disclosures. We are cooperating with the SEC. We are unable to estimate the likely outcome of this matter, or a reasonably probable range of potential costs or exposure, or the potential duration of the process, at this time. If the SEC believes that violations occurred, it could seek remedies including, but not limited to, civil monetary penalties and injunctive relief, and/or file litigation against us.
In addition to the matter described above, from time to time, we are a party to various claims and routine litigation arising in the ordinary course of business. As of September 30, 2025, we do not believe that the results of any such other claims or litigation, individually or in the aggregate, will have a material adverse effect on our business, financial position, results of operations or cash flows.
ITEM 1A.RISK FACTORS
The following risk factors amend and supplement the risk factors described under “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, and should be read in conjunction with the other risk factors presented in the Annual Report on Form 10-K.
We may from time to time be subject to litigation which could have an adverse effect on our financial condition, results of operations, cash flow and trading price of our common stock.
We are a party to various claims and routine litigation arising in the ordinary course of business. Some of these claims or others, to which we may be subject from time to time, may result in defense costs, settlements, fines or judgments against us, some of which are not, or cannot be, covered by insurance. Payment of any such costs, settlements, fines or judgments that are not insured could have an adverse impact on our financial position and results of operations. In addition, certain litigation or the resolution of certain litigation may affect the availability or cost of some of our insurance coverage, which could adversely impact our results of operations and cash flow, expose us to increased risks that would be uninsured, and/or adversely impact our ability to attract officers and directors.
The Division of Enforcement of the SEC is conducting an investigation into the adequacy of our disclosures concerning executive compensation, perquisites, the use of corporate assets, related party transactions, and conflicts of interest. The investigation also covers possible failures of our controls and procedures relating to the topics of those disclosures. We are cooperating with the SEC. While we are unable to estimate the likely outcome of this matter or a reasonably probable range of potential costs or exposure, or the potential duration of the process, at this time, responding to an investigation of this type can be costly and time-consuming. If the SEC believes that violations occurred, it could also seek remedies including, but not limited to, civil monetary penalties and injunctive relief, and/or file litigation against us.
We have also received two demand letters from purported shareholders, requesting that the Board investigate alleged breaches of fiduciary duties or other violations of law resulting from our publicly disclosed related party transactions, which may result in costs for us and/or distractions for management.
Risks Related to the Proposed Mergers
We are subject to various risks related to the proposed Mergers with Rithm Capital Corp.
The risks, contingencies and other uncertainties that could result in the failure of the proposed Mergers to be completed or, if completed, that could have a material adverse effect on our business, financial condition or results of operations following the proposed transaction, and any anticipated benefits of the proposed Mergers, include:
Moreover, we have incurred and expect to incur a number of non-recurring costs associated with the proposed Mergers, for which we will receive little or no benefit if the Mergers are not completed. These costs include financial advisory, legal, accounting, consulting and other advisory fees, severance/employee benefit-related costs, financing-related fees and costs, public company filing fees and other regulatory fees, printing costs and other related costs. There are a number of factors beyond our control that could affect the total amount or the timing of these costs and expenses. Many of these costs are payable by us regardless of whether or not the proposed Mergers are completed and may relate to activities that we would not have undertaken other than to complete the Mergers.
The consummation of the Mergers is subject to certain closing conditions, including, among others, the approval of the Company Merger by our stockholders, some or all of which may not be satisfied or completed within the expected timeframe, if at all.
Completion of the Mergers is subject to a number of closing conditions, including, among others, the approval of the Company Merger by the affirmative vote of the holders of shares of our common stock entitled to cast a majority of all the votes entitled to be cast at a stockholders meeting on the Company Merger. We can provide no assurance that such approval will be obtained or that all closing conditions will otherwise be satisfied (or waived, if applicable), and, even if such approval can be obtained and all closing conditions are satisfied (or waived, if applicable), we can provide no assurance that other events will not intervene to delay or result in the termination of the proposed Mergers. Additionally, under circumstances specified in the Merger Agreement, we or Parent may terminate the Merger Agreement. Any adverse consequence of the pending Mergers could be exacerbated by any delays in completion of the Mergers or termination of the Merger Agreement.
Each party’s obligation to consummate the Mergers is also subject to the accuracy of the representations and warranties of the other party (subject to customary materiality qualifications) and compliance in all material respects with the covenants and agreements contained in the Merger Agreement as of the closing of the Mergers, including, with respect to us, covenants to conduct our business in the ordinary course and to not engage in certain kinds of transactions prior to closing. In addition, the Merger Agreement may be terminated under certain specified circumstances, including, but not limited to, in connection with a change in the recommendation of our Board of Directors to enter into an agreement for a Superior Proposal. As a result, we cannot assure you that the Mergers will be completed even if our stockholders approve the Company Merger, or that, if completed, it will be exactly on the terms set forth in the Merger Agreement or within the expected timeframe.
We may not complete the proposed Mergers within the timeframe anticipated or at all, which could have an adverse effect on our business, financial results and operations.
The proposed Mergers may not be completed within the expected timeframe, or at all, as a result of various factors and conditions, some of which may be beyond our control. If the Mergers are not completed for any reason, including as a result of the stockholders failing to approve the Company Merger, our stockholders will not receive any payment for their shares of our common stock. Instead, we will remain a public company, our common stock will continue to be listed and traded on The New York Stock Exchange and registered under the Exchange Act, and we will be required to continue to file periodic reports with the SEC. Moreover, our ongoing business may be materially adversely affected, and we would be subject to a number of risks, including the following:
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If the Mergers are not consummated, the risks described above may materialize, and they may have a material adverse effect on our business operations, financial results and stock price, particularly to the extent that the current market price of our common stock reflects an assumption that the Mergers will be completed.
We will be subject to various uncertainties while the Mergers are pending that may cause disruption and may make it more difficult to maintain relationships with tenants and other third-party business partners.
Our efforts to complete the Mergers could cause substantial disruptions in, and create uncertainty surrounding, the business, which may materially adversely affect results of operation and the business. Uncertainty as to whether the Mergers will be completed may affect our ability to recruit prospective employees or to retain and motivate existing employees. Employee retention may be particularly challenging while the Mergers are pending because employees may experience uncertainty about their roles following the Mergers. As mentioned above, a substantial amount of management’s and employees’ attention is being directed toward the completion of the Mergers and thus is being diverted from its day-to-day operations. Uncertainty as to the future could adversely affect our business and our relationship with tenants and potential tenants. For example, tenants and other third parties may defer decisions concerning working with us, or seek to change existing business relationships with us. Changes to or termination of existing business relationships could adversely affect our revenue, earnings and financial condition, as well as the market price of our common stock. The adverse effects of the pendency of the Mergers could be exacerbated by any delays in completion of the Mergers or termination of the Merger Agreement.
In certain instances, the Merger Agreement requires us to pay a termination fee to Parent, which could affect the decisions of a third party considering making an alternative acquisition proposal.
In certain specified circumstances further described in the Merger Agreement, in connection with the termination of the Merger Agreement, we will be required to pay Parent a termination fee of $59.7 million, including if Parent terminates the Merger Agreement after the Company Board changes its recommendation to the stockholders or if the Company terminates the Merger Agreement to enter into an alternative acquisition agreement with respect to a Superior Proposal. Pursuant to the Amendment, the definition of “Company Termination Payment” in the Original Merger Agreement was modified to provide that, notwithstanding the foregoing, the Company will instead be required to pay Parent a termination payment of $47.7 million if the Company enters into an alternative acquisition agreement providing for a Superior Proposal with certain persons. This payment could affect the structure, pricing and terms proposed by a third party seeking to acquire or merge with us and could discourage a third party from making a competing acquisition proposal or inquiry, including a proposal that would be more favorable to our stockholders than the Mergers. For these and other reasons, termination of the Merger Agreement could materially and adversely affect business operations and financial results, which in turn would materially and adversely affect the price of our common stock.
We may be the target of securities class action and derivative lawsuits which could result in substantial costs and may delay or prevent the Mergers from being completed.
Securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into merger agreements. Even if the lawsuits are without merit, defending against these claims can result in substantial costs and divert management time and resources. An adverse judgment could result in monetary damages, which could have a negative impact on our liquidity and financial condition. Additionally, if a plaintiff is successful in obtaining an injunction prohibiting completion of the proposed Mergers, then that injunction may delay or prevent the proposed Mergers from being completed, which may adversely affect our business, financial position and results of operation.
62
ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Recent Sales of Unregistered Securities
During the three months ended September 30, 2025, we issued an aggregate of 136,156 shares of common stock in exchange for 136,156 common units of our Operating Partnership held by certain limited partners. These shares were issued in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act. We relied on this exemption based upon factual representations received from the limited partners who received shares of common stock.
Recent Purchases of Equity Securities
We currently have $15,000,000 of capacity under a $200,000,000 stock repurchase program which was approved by our board of directors in November 2019, and allows us to repurchase shares of our common stock from time to time, in the open market or in privately negotiated transactions. We did not repurchase any shares in the three months ended September 30, 2025. Under the terms of the Merger Agreement, subject to the restrictions set forth therein, we may not repurchase any shares of our common stock without the prior written consent of Parent.
ITEM 3.DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4.MINE SAFETY DISCLOSURES
Not Applicable.
ITEM 5.OTHER INFORMATION
Rule 10b5-1 Trading Arrangement
During the three months ended September 30, 2025, none of our directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934) adopted, terminated or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K).
ITEM 6.EXHIBITS
Exhibits required by Item 601 of Regulation S-K are filed, or furnished as indicated, herewith or incorporated herein by reference and are listed in the following Exhibit Index:
EXHIBIT INDEX
ExhibitNumber
Exhibit Description
2.1+
Agreement and Plan of Merger, dated as of September 17, 2025, by and among Rithm Capital Corp., Panorama REIT Merger Sub, Inc., Panorama Operating Merger Sub LP, Paramount Group, Inc. and Paramount Group Operating Partnership LP, incorporated by reference to Exhibit 2.1 to the Registrant’s Form 8-K filed with the SEC on September 17, 2025.
2.2+
Amendment No. 1 to Agreement and Plan of Merger, dated as of October 8, 2025, by and among Rithm Capital Corp., Panorama REIT Merger Sub, Inc., Panorama Operating Merger Sub LP, Paramount Group, Inc. and Paramount Group Operating Partnership LP., incorporated by reference to Annex B to the Registrant’s Preliminary Proxy Statement on Schedule 14A filed with the SEC on October 29, 2025.
10.1*
Amendment to the Second Amended and Restated Agreement of Limited Partnership of Paramount Group Operating Partnership LP, dated as of September 17, 2025.
10.2*†
Amendment No.1 to Paramount Group, Inc. Executive Severance Plan.
10.3*†
Form of Retention Bonus Letter Agreement.
10.4†
Separation Agreement and Release among Paramount Group, Inc., Paramount Group Management LP, Paramount Group Operating Partnership LP and Wilbur Paes, dated July 1, 2025, incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed with the SEC on July 8, 2025.
10.5†
Separation Agreement and Release among Paramount Group, Inc., Paramount Group Management LP, Paramount Group Operating Partnership LP and Gage Johnson, dated August 4, 2025, incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed with the SEC on August 7, 2025.
31.1*
Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*
Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**
Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**
Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*
The following materials from the Paramount Group, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 formatted in Inline XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Equity, (v) the Consolidated Statements of Cash Flows, and (vi) the related Notes to Consolidated Financial Statements. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
104*
Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101.)
_______________________________
*
Filed herewith
**
Furnished herewith
†
Indicates management contract or compensatory plan or arrangement
+
Certain exhibits and schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished to the Securities and Exchange Commission upon request.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Paramount Group, Inc.
Date:
October 29, 2025
By:
/s/ Ermelinda Berberi
Executive Vice President, Chief Financial Officer and Treasurer
Ermelinda Berberi
(duly authorized officer, principal financial officer and principal accounting officer)