8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): August 6, 2015

Paramount Group, Inc.

(Exact Name of Registrant as Specified in Charter)

Maryland	001-36746	32-0439307
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1633 Broadway, Suite 1801 New York, New York	10019
(Address of Principal Executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (212) 237-3100

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2.):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On August 6, 2015, Paramount Group, Inc. (the “Company”) issued a press release announcing its financial results for the second quarter ended June 30, 2015 and issuing guidance for full year 2015. A copy of that press release as well as the supplemental information referred to in the press release is available on the Company’s website and are attached hereto as Exhibits 99.1 and 99.2 and incorporated herein by reference. This Item 2.02 and the attached exhibits 99.1 and 99.2 are being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Exchange Act.

The Company will host a webcast and conference call at 10:00 a.m. Eastern Time on August 7, 2015, to discuss second quarter 2015 results. The number to call is 1-877-407-0789 (domestic) and 1-201-689-8562 (international). A live webcast will be available in the Investors section of the Company’s website. A replay of the conference call will be available through August 21, 2015, by dialing 1-877-870-5176 (domestic) and 1-858-384-5517 (international) and entering the passcode 13614434.

In the press release referred to above, the Company discloses that the non-GAAP financial measure of Core Funds From Operations (“Core FFO”) attributable to Paramount Group, Inc. was $46.3 million, or $0.22 per diluted share, for the quarter ended June 30, 2015, and included $4.7 million, or $0.02 per diluted share, of carried interest from fund investments. Net loss attributable to Paramount Group, Inc., which is the most directly comparable GAAP financial measure, was $4.7 million, or $0.02 per diluted share, for the quarter ended June 30, 2015.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits:

Exhibit Number	Description
99.1	Press release dated August 6, 2015 and entitled “Paramount Announces Second Quarter 2015 Results and Issues Guidance for Full Year 2015”
99.2	Supplemental information entitled “Paramount Group, Inc. Supplemental Operating and Financial Data for the Quarter Ended June 30, 2015”

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 hereunto duly authorized.

PARAMOUNT GROUP, INC.
By:	/s/ Gage Johnson
Name:	Gage Johnson
Title:	Senior Vice President, General Counsel and Secretary

Date: August 6, 2015

EX-99.1

Exhibit 99.1

Paramount Announces Second Quarter 2015 Results and

Issues Guidance for Full Year 2015

– Reports Core FFO of $0.22 per Diluted Share –

NEW YORK - August 6, 2015 – Paramount Group, Inc. (NYSE: PGRE) (the “Company”) today reported results for the quarter ended June 30, 2015.

Second Quarter Highlights:

• Reported Core Funds from Operations (“Core FFO”) attributable to Paramount Group, Inc. of $46.3 million, or $0.22 per diluted share, for the quarter ended June 30, 2015, including $4.7 million, or $0.02 per diluted share, of carried interest from fund investments.

• Leased 199,972 square feet at a weighted average initial rent of $71.84 per square foot, of which 138,232 square feet represents second generation space for which the Company achieved positive mark-to-markets of 15.4% on a cash basis and 19.0% on a GAAP basis.

• Portfolio leased percentage increased to 94.8% at June 30, 2015, up 20 basis points from March 31, 2015 and 90 basis points from December 31, 2014.

• On May 21, 2015, the Company’s Board of Directors declared a regular quarterly cash dividend of $0.095 per share for the second quarter ended June 30, 2015, which was paid on July 15, 2015.

• During the second quarter, the Company raised an additional $95.2 million for Fund VIII (the Company’s real estate debt fund), bringing total capital commitments to $580.2 million of which $51.0 million has been invested.

• In July 2015, Fund VII (the Company’s real estate equity fund) entered into an agreement to acquire 670 Broadway, a 77,480 square foot creative office building located in the NoHo submarket of Manhattan, for $112.0 million.

Financial Results:

Quarter Ended June 30, 2015

Net loss attributable to Paramount Group, Inc. was $4.7 million, or $0.02 per diluted share, for the quarter ended June 30, 2015.

Core FFO attributable to Paramount Group, Inc. was $46.3 million, or $0.22 per diluted share, for the quarter ended June 30, 2015, including $4.7 million, or $0.02 per diluted share, of carried interest from fund investments. Core FFO attributable to Paramount Group, Inc. for the quarter ended June 30, 2015 excludes the impact of (i) unrealized gains on interest rate swaps, including the Company’s pro rata share of such gains of a partially owned entity, (ii) transfer taxes due in connection with the sale of shares by a former joint venture partner, (iii) acquisition and transaction related costs and (iv) a true-up in the income tax liability related to the Company’s predecessor. The aggregate of these items, net of amounts attributable to non-controlling interests, increased FFO attributable to Paramount Group, Inc. by $6.3 million, or $0.03 per diluted share. FFO attributable to Paramount Group, Inc., which includes the impact of these items, was $52.7 million, or $0.25 per diluted share, for the quarter ended June 30, 2015.

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Six Months Ended June 30, 2015

Net loss attributable to Paramount Group, Inc. was $14.4 million, or $0.07 per diluted share, for the six months ended June 30, 2015.

Core FFO attributable to Paramount Group, Inc. was $85.3 million, or $0.40 per diluted share, for the six months ended June 30, 2015, including $5.1 million, or $0.02 per diluted share, of carried interest from fund investments. Core FFO attributable to Paramount Group, Inc. for the six months ended June 30, 2015 excludes the impact of (i) unrealized gains on interest rate swaps, including the Company’s pro rata share of such gains of a partially owned entity, (ii) transfer taxes due in connection with the sale of shares by a former joint venture partner, (iii) acquisition and transaction related costs, (iv) a true-up in the income tax liability related to the Company’s predecessor and (v) severance costs. The aggregate of these items, net of amounts attributable to noncontrolling interests, increased FFO attributable to Paramount Group, Inc. by $10.7 million, or $0.05 per diluted share. FFO attributable to Paramount Group, Inc., which includes the impact of these items, was $96.0 million, or $0.45 per diluted share, for the six months ended June 30, 2015.

Portfolio Operations

As of June 30, 2015, the Company’s portfolio consisted of 12 Class A office properties aggregating approximately 10.4 million square feet that was 94.8% leased.

During the second quarter, the Company leased 199,972 square feet at a weighted average initial rent of $71.84 per square foot. This leasing activity, offset by lease expirations during the quarter, increased portfolio wide occupancy by 20 basis points from March 31, 2015. Of the 199,972 square feet leased in the second quarter, 138,232 square feet represent second generation space (space that has been vacant for less than twelve months) for which the Company achieved positive mark-to-markets of 15.4% on a cash basis and 19.0% on a GAAP basis. The weighted average lease term for leases signed during the second quarter was 11.1 years and tenant improvements and leasing commissions on these leases were $7.38 per square foot per annum, or 10.3% of initial rent.

During the six months ended June 30, 2015, the Company leased 355,800 square feet at a weighted average initial rent of $73.67 per square foot. Of 355,800 square feet leased during the six months, 161,962 square feet represent second generation space for which the Company achieved positive mark-to-markets of 15.7% on a cash basis and 18.3% on a GAAP basis. The weighted average lease term for leases signed during the six months was 12.6 years and tenant improvements and leasing commissions on these leases were $7.61 per square foot per annum, or 10.3% of initial rent.

Guidance

Based on management’s expectation as of the date of this release, the Company is providing guidance for the full year 2015 for Projected Core FFO per diluted share. Except as described below, the estimates reflect management’s view of current and future market conditions, including assumptions with respect to rental rates, occupancy levels and the earnings impact of the events referenced in this release and otherwise referenced during the conference call referred to below. The estimates do not include the impact on operating results from possible future property acquisitions or dispositions, capital markets activity or unrealized gains or losses on real estate fund investments. The estimates set forth below may be subject to fluctuations as a result of several factors, including the straight lining of rental income and

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the amortization of above and below market leases. There can be no assurance that the Company’s actual results will not differ materially from the estimates set forth below. The Company is also providing the following reconciliation of Projected Core FFO per diluted share to estimated net loss per diluted share in accordance with GAAP. The estimated net loss per diluted share is not a projection and is being provided solely to satisfy the disclosure requirements of the U.S. Securities and Exchange Commission.

For the Year Ending December 31, 2015:	Low			High
Estimated net loss attributable to common stockholders per diluted share	$	(0.16	)	$	(0.14	)
Pro rata share of real estate depreciation and amortization, including the Company’s share of partially owned entities		1.00			1.00
Adjustments for non-core items1		(0.05	)		(0.05	)
Projected Core FFO per diluted share	$	0.79		$	0.81

Investor Conference Call and Webcast

The Company will host a webcast and conference call at 10:00 a.m. Eastern Time on August 7, 2015, to discuss second quarter 2015 results. The number to call is 1-877-407-0789 (domestic) and 1-201-689-8562 (international). A live webcast will be available in the Investors section of the Company’s website. A replay of the conference call will be available through August 21, 2015, by dialing 1-877-870-5176 (domestic) and 1-858-384-5517 (international) and entering the passcode 13614434.

Forward Looking Statements

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

¹  Represents non-core items for the six months ended June 30, 2015, which are summarized in this press release and the Company’s Supplemental Package. The Company is not making projections for non-core items that may impact its financial results in the third and fourth quarters of 2015, which may include unrealized gains or losses on interest rate swaps, acquisition and transaction related costs and other items that are not included in Core FFO.

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Non GAAP Financial Measures

FFO is a supplemental measure of our performance. We present FFO in accordance with the definition adopted by National Association of Real Estate Investment Trusts, (“NAREIT”). NAREIT defines FFO as GAAP net income or loss adjusted to exclude net gain from sales of depreciated real estate assets, impairment losses on depreciable real estate and depreciation and amortization expense from real estate assets, including the pro rata 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, including acquisition and transaction related costs and unrealized gains or losses on interest rate swaps, which we believe enhances the comparability of our FFO across periods.

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

A reconciliation of each Non-GAAP financial measure to the most directly comparable GAAP financial measure can be found in this press release and in our Supplemental Package.

About Paramount Group, Inc.

Headquartered in New York City, Paramount Group, Inc. is a fully-integrated real estate investment trust that owns, operates, manages, acquires and redevelops high-quality, Class A office properties located in select central business district submarkets of New York City, Washington, D.C. and San Francisco. Paramount is focused on maximizing the value of its portfolio by leveraging the sought-after locations of its assets and its proven property management capabilities to attract and retain high-quality tenants.

Contact Information:

Investor Relations:

212-492-2298

ir@paramount-group.com

Media:

212-492-2285

pr@paramount-group.com

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Paramount Group, Inc.

Consolidated Balance Sheets

(Unaudited and in thousands)

	June 30, 2015			December 31, 2014
ASSETS:
Rental Property
Land	$	2,042,071		$	2,042,071
Buildings and improvements		5,534,885			5,488,168
		7,576,956			7,530,239
Accumulated depreciation and amortization		(162,377	)		(81,050	)
Rental Property, net		7,414,579			7,449,189
Real estate fund investments		335,545			323,387
Investments in partially owned entities		6,128			5,749
Cash and cash equivalents		438,088			438,599
Restricted cash		45,737			55,728
Marketable securities		21,524			20,159
Deferred rent receivable		40,308			8,267
Accounts and other receivables, net		10,781			7,692
Deferred charges, net		49,547			39,165
Intangible assets, net		583,126			669,385
Other assets		9,529			13,121
Total Assets	$	8,954,892		$	9,030,441
LIABILITIES:
Mortgages and notes payable	$	2,853,237		$	2,852,287
Credit facility		—			—
Due to affiliates		27,299			27,299
Loans payable to noncontrolling interests		43,981			42,195
Accounts payable and accrued expenses		96,595			93,472
Deferred income taxes		2,659			2,861
Interest rate swap liabilities		160,473			194,196
Intangible liabilities, net		201,839			219,228
Dividends and distributions payable		25,066			—
Other liabilities		45,922			43,950
Total Liabilities		3,457,071			3,475,488
EQUITY:
Paramount Group, Inc. stockholders’ equity		3,889,542			3,910,862
Noncontrolling interests in consolidated joint ventures and funds		703,596			685,888
Noncontrolling interests in Operating Partnership		904,683			958,203
Total Equity	$	5,497,821		$	5,554,953
Total Liabilities and Equity	$	8,954,892		$	9,030,441

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Paramount Group, Inc.

Consolidated Statements of Income

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

	Quarter Ended June 30, 2015			Six Months Ended June 30, 2015
REVENUES:
Property rentals	$	128,954		$	255,356
Straight-line rent adjustments		16,091			32,042
Amortization of below-market leases, net		872			1,762
Rental income		145,917			289,160
Tenant reimbursement income		12,063			25,551
Fee income		1,780			3,315
Other income		3,168			6,128
Total revenues		162,928			324,154
EXPENSES:
Operating		57,781			119,665
Depreciation and amortization		79,421			153,004
General and administrative		9,133			21,746
Acquisition and transaction related costs		8,208			9,347
Total expenses		154,543			303,762
Operating income		8,385			20,392
Income from real estate fund investments		14,072			19,293
Income from partially owned entities		2,011			2,986
Unrealized gains on interest rate swaps		21,747			33,725
Interest and other income, net		512			1,366
Interest and debt expense		(42,236	)		(84,124	)
Net income (loss) before income taxes		4,491			(6,362	)
Income tax expense		(1,343	)		(1,917	)
Net income (loss)		3,148			(8,279	)
Less net (income) loss attributable to noncontrolling interests in:
Consolidated joint ventures and funds		(9,004	)		(9,672	)
Operating partnership		1,147			3,511
Net loss attributable to Paramount Group, Inc.	$	(4,709	)	$	(14,440	)
Weighted average common shares outstanding:
Basic		212,106,718			212,106,718
Diluted		212,106,718			212,106,718
Net loss per share attributable to Paramount Group, Inc.:
Basic	$	(0.02	)	$	(0.07	)
Diluted	$	(0.02	)	$	(0.07	)

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Paramount Group, Inc.

Reconciliation of Net Income (Loss) to Funds from Operations

and Core Funds from Operations

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

	Quarter Ended June 30, 2015			Six Months Ended June 30, 2015
Reconciliation of net income (loss) to FFO:
Net income (loss)	$	3,148		$	(8,279	)
Real estate depreciation and amortization		79,421			153,004
Pro rata share of real estate depreciation and amortization of partially owned entities		1,530			3,006
FFO		84,099			147,731
Less FFO attributable to noncontrolling interests in consolidated joint ventures and funds		(18,614	)		(28,403	)
FFO attributable to Paramount Group Operating Partnership		65,485			119,328
Less FFO attributable to noncontrolling interests in Operating Partnership		(12,822	)		(23,348	)
FFO attributable to Paramount Group, Inc. common shareholders plus assumed conversions	$	52,663		$	95,980
Per diluted share	$	0.25		$	0.45
Reconciliation of FFO to Core FFO:
FFO	$	84,099		$	147,731
Non-core (income) expense:
Transfer taxes due in connection with sale of shares by former joint venture partner		5,872			5,872
Acquisition and transaction related costs		2,336			3,475
Predecessor income tax true-up		721			721
Severance costs		—			3,315
Unrealized gains on interest rate swaps		(21,747	)		(33,725	)
Pro rata share of unrealized gains on interest rate swaps of partially owned entities		(624	)		(1,010	)
Core FFO		70,657			126,379
Less Core FFO attributable to noncontrolling interests in consolidated joint ventures and funds		(13,065	)		(20,356	)
Core FFO attributable to Paramount Group Operating Partnership		57,592			106,023
Less Core FFO attributable to noncontrolling interests in Operating Partnership		(11,277	)		(20,745	)
Core FFO attributable to Paramount Group, Inc. common shareholders plus assumed conversions	$	46,315			85,278
Per diluted share	$	0.22		$	0.40

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Paramount Group, Inc.

Reconciliation of Net Income to Funds from Operations

and Core Funds from Operations – continued

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

	Quarter Ended June 30, 2015		Six Months Ended June 30, 2015
Reconciliation of weighted average shares outstanding:
Weighted average shares outstanding		212,106,718		212,106,718
Effect of dilutive securities		5,004		6,467
Denominator for FFO per diluted share		212,111,722		212,113,185

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EX-99.2

Exhibit 99.2

SUPPLEMENTAL OPERATING AND FINANCIAL DATA

FOR THE QUARTER ENDED JUNE 30, 2015

SAFE HARBOR

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

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TABLE OF CONTENTS

	Page
Company Profile	4
Research Coverage	5
Selected Financial Information
Financial Highlights	6
Consolidated Balance Sheets	7
Consolidated Statements of Income	8
Funds From Operations (“FFO”)	9
Funds Available for Distribution (“FAD”)	10
Net Operating Income (“NOI”)	11
Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”)	12
Consolidated Joint Ventures and Funds	13 - 14
Unconsolidated Joint Ventures	15 - 16
Capital Structure	17
Debt Analysis	18
Debt Maturities	19
Selected Property Data
Portfolio Summary	20
Funds Summary	21
Top Tenants and Industry Diversification	22
Leasing Activity	23 - 24
Lease Expirations	25
Capital Expenditures - Cash Basis	26
Definitions	27

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COMPANY PROFILE

Paramount Group, Inc. (“Paramount”) is a fully-integrated real estate investment trust that owns, operates, manages, acquires and redevelops high-quality, Class A office properties located in select central business district submarkets of New York City, Washington, D.C. and San Francisco. Paramount is focused on maximizing the value of its portfolio by leveraging the sought-after locations of its assets and its proven property management capabilities to attract and retain high-quality tenants.

EXECUTIVE MANAGEMENT

Albert Behler	Chairman, Chief Executive Officer and President
Michael Walsh	Executive Vice President, Chief Financial Officer and Treasurer
Jolanta Bott	Executive Vice President, Operations and Human Resources
Theodore Koltis	Executive Vice President, Leasing
Daniel Lauer	Executive Vice President, Chief Investment Officer
Ralph DiRuggiero	Senior Vice President, Property Management
Gage Johnson	Senior Vice President, General Counsel and Secretary
Vito Messina	Senior Vice President, Asset Management
Wilbur Paes	Senior Vice President, Chief Accounting Officer
BOARD OF DIRECTORS
Albert Behler	Director, Chairman of the Board
Thomas Armbrust	Director
Dan Emmett	Director, Chair of Audit Committee
Lizanne Galbreath	Director, Chair of Compensation Committee
Peter Linneman	Director, Chair of Nominating and Corporate Governance Committee; Lead Independent Director
David O’Connor	Director
Katharina Otto-Bernstein	Director
COMPANY INFORMATION
Corporate Headquarters	Investor Relations	Stock Exchange Listing	Trading Symbol
1633 Broadway, Suite 1801	IR@paramount-group.com	New York Stock Exchange	PGRE
New York, NY 10019	(212) 492-2298
(212) 237-3100

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RESEARCH COVERAGE ⁽¹⁾

James Feldman	Vin Chao	Steve Sakwa	Brad Burke
Bank of America Merrill Lynch	Deutsche Bank	Evercore ISI	Goldman Sachs
(646) 855-5808	(212) 250-6799	(212) 446-9462	(917) 343-2082
Jed Reagan	Richard Anderson	Vance Edelson	Ross Nussbaum
Green Street Advisors	Mizuho Securities USA Inc.	Morgan Stanley	UBS
(949) 640-8780	(949) 640-8780	(212) 761-0078	(212) 713-2484
Brendan Maiorana
Wells Fargo
(443) 263-6516

⁽¹⁾  With the exception of Green Street Advisors, an independent research firm, the equity analysts listed above are those analysts that, according to First Call Corporation, have published research material on the Company and are listed as covering the Company. Please note that any opinions, estimates or forecasts regarding the Company’s performance made by such analysts do not represent the opinions, estimates or forecasts of the Company or its management. The Company does not by its reference above, imply its endorsement of or concurrence with any information, conclusions or recommendations made by any of such analysts.

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	FINANCIAL HIGHLIGHTS
(unaudited and in thousands, except square feet and per share data)

	Quarter Ended
	June 30, 2015			March 31, 2015
SELECTED FINANCIAL DATA
Total revenues	$	162,928		$	161,226
Pro rata share of NOI (1)	$	92,452		$	87,969
Pro rata share of Cash NOI (1)	$	80,457		$	75,341
Net loss attributable to Paramount Group, Inc.	$	(4,709	)	$	(9,731	)
Per share - basic	$	(0.02	)	$	(0.05	)
Per share - diluted	$	(0.02	)	$	(0.05	)
FFO attributable to Paramount Group, Inc. common
shareholders plus assumed conversions (1)	$	52,663		$	43,317
Per share - diluted	$	0.25		$	0.20
FFO payout ratio (1)		38.3	%		46.5	%
Core FFO attributable to Paramount Group, Inc.
common shareholders plus assumed conversions	$	46,315		$	38,963
Per share - diluted	$	0.22		$	0.18
Core FFO payout ratio (1)		43.5	%		51.7	%
FAD attributable to Paramount Group, Inc.	$	21,635		$	16,852
FAD payout ratio (1)		93.1	%		119.6	%

COMMON SHARE DATA

	Quarter Ended
	June 30, 2015			March 31, 2015
Share Price
High	$	19.73		$	20.21
Low	$	16.97		$	17.66
Closing (end of period)	$	17.16		$	19.30
Dividends per common share	$	0.095		$	0.095	(2)
Annualized dividends per common share	$	0.380		$	0.380
Dividend yield (on closing share price)		2.2	%		2.0	%

PORTFOLIO STATISTICS

	Number of		Square		% Occupied (1)			% Leased (1)
	Properties		Feet		at June 30, 2015			at June 30, 2015
Region:
New York		6		7,152,207		93.3	%		95.2	%
Washington, D.C.		5		1,602,655		86.4	%		90.2	%
San Francisco		1		1,611,125		97.3	%		97.8	%
		12		10,365,987		92.9	%		94.8	%

⁽¹⁾  See page 27 for our definition of this measure.

⁽²⁾  Excludes the $0.039 cash dividend for the 38 day period following the completion of our initial public offering and related formation transactions and ending on December 31, 2014.

- 6 -

	CONSOLIDATED BALANCE SHEETS
(unaudited and in thousands)

	June 30, 2015			March 31, 2015			December 31, 2014
ASSETS:
Rental Property
Land	$	2,042,071		$	2,042,071		$	2,042,071
Buildings and improvements		5,534,885			5,503,475			5,488,168
		7,576,956			7,545,546			7,530,239
Accumulated depreciation and amortization		(162,377	)		(121,165	)		(81,050	)
Rental Property, net		7,414,579			7,424,381			7,449,189
Real estate fund investments		335,545			324,282			323,387
Investments in partially owned entities		6,128			6,370			5,749
Cash and cash equivalents		438,088			380,889			438,599
Restricted cash		45,737			53,864			55,728
Marketable securities		21,524			21,386			20,159
Deferred rent receivable		40,308			24,261			8,267
Accounts and other receivables, net		10,781			12,863			7,692
Deferred charges, net		49,547			43,713			39,165
Intangible assets, net		583,126			629,021			669,385
Other assets		9,529			31,948			13,121
Total Assets	$	8,954,892		$	8,952,978		$	9,030,441
LIABILITIES:
Mortgages and notes payable	$	2,853,237		$	2,852,754		$	2,852,287
Credit facility		—			—			—
Due to affiliates (1)		27,299			27,299			27,299
Loans payable to noncontrolling interests		43,981			43,188			42,195
Accounts payable and accrued expenses		96,595			78,282			93,472
Deferred income taxes		2,659			3,183			2,861
Interest rate swap liabilities		160,473			182,218			194,196
Intangible liabilities, net		201,839			210,964			219,228
Dividends and distributions payable		25,066			—			—
Other liabilities		45,922			45,742			43,950
Total Liabilities		3,457,071			3,443,630			3,475,488
EQUITY:
Paramount Group, Inc. stockholders’ equity		3,889,542			3,829,373			3,910,862
Noncontrolling interests in consolidated joint ventures and funds		703,596			685,176			685,888
Noncontrolling interests in Operating Partnership		904,683			994,799			958,203
Total Equity		5,497,821			5,509,348			5,554,953
TOTAL LIABILITIES AND EQUITY	$	8,954,892		$	8,952,978		$	9,030,441

⁽¹⁾  Represents notes payable to affiliates, which are due in October 2017 and bear interest at a fixed rate of 0.50%.

- 7 -

	CONSOLIDATED STATEMENTS OF INCOME
(unaudited and in thousands, except share and per share data)

	Quarter Ended
	June 30, 2015			March 31, 2015
REVENUES:
Property rentals	$	128,954		$	126,402
Straight-line rent adjustments		16,091			15,951
Amortization of below-market leases, net		872			890
Rental income		145,917			143,243
Tenant reimbursement income		12,063			13,488
Fee income		1,780			1,535
Other income		3,168			2,960
Total revenues		162,928			161,226
EXPENSES:
Operating		57,781			61,884
Depreciation and amortization		79,421			73,583
General and administrative (1)		9,133			12,613
Acquisition and transaction related costs		8,208			1,139
Total expenses		154,543			149,219
Operating income		8,385			12,007
Income from real estate fund investments		14,072			5,221
Income from partially owned entities		2,011			975
Unrealized gains on interest rate swaps		21,747			11,978
Interest and other income, net		512			854
Interest and debt expense		(42,236	)		(41,888	)
Net income (loss) before income taxes		4,491			(10,853	)
Income tax expense		(1,343	)		(574	)
Net income (loss)		3,148			(11,427	)
Less net (income) loss attributable to noncontrolling interests in:
Consolidated joint ventures and funds		(9,004	)		(668	)
Operating Partnership		1,147			2,364
Net loss attributable to Paramount Group, Inc.	$	(4,709	)	$	(9,731	)
Weighted average common shares outstanding
Basic		212,106,718			212,106,718
Diluted		212,106,718			212,106,718
Net loss per share attributable to Paramount Group, Inc.
Basic	$	(0.02	)	$	(0.05	)
Diluted	$	(0.02	)	$	(0.05	)

⁽¹⁾  Includes $3,315 of severance costs in the quarter ended March 31, 2015 and expense of $362 and $733 in the quarters ended June 30, 2015 and March 31, 2015, respectively, from the mark-to-market of investments in our deferred compensation plan for which there is a corresponding increase in interest and other income, net.

- 8 -

	FUNDS FROM OPERATIONS (“FFO”)
(unaudited and in thousands, except share and per share data)

	Quarter Ended
	June 30, 2015			March 31, 2015
Reconciliation of net income (loss) to FFO:
Net income (loss)	$	3,148		$	(11,427	)
Real estate depreciation and amortization		79,421			73,583
Pro rata share of real estate depreciation and amortization of partially owned entities		1,530			1,476
FFO (1)		84,099			63,632
Less FFO attributable to noncontrolling interests in consolidated joint ventures and funds		(18,614	)		(9,789	)
FFO attributable to Paramount Group Operating Partnership		65,485			53,843
Less FFO attributable to noncontrolling interests in Operating Partnership		(12,822	)		(10,526	)
FFO attributable to Paramount Group, Inc. common shareholders plus assumed conversions (1)	$	52,663		$	43,317
Per diluted share	$	0.25		$	0.20
Reconciliation of FFO to Core FFO:
FFO	$	84,099		$	63,632
Non-core (income) expense:
Transfer taxes due in connection with the sale of shares by a former joint venture partner		5,872			—
Acquisition and transaction related costs		2,336			1,139
Predecessor income tax true-up		721			—
Severance costs		—			3,315
Unrealized gains on interest rate swaps		(21,747	)		(11,978	)
Pro rata share of unrealized gains on interest rate swaps of partially owned entities		(624	)		(386	)
Core FFO (1)		70,657			55,722
Less Core FFO attributable to noncontrolling interests in consolidated joint ventures and funds		(13,065	)		(7,291	)
Core FFO attributable to Paramount Group Operating Partnership		57,592			48,431
Less Core FFO attributable to noncontrolling interests in Operating Partnership		(11,277	)		(9,468	)
Core FFO attributable to Paramount Group, Inc. common shareholders plus assumed conversions (1)	$	46,315		$	38,963
Per diluted share	$	0.22		$	0.18
Reconciliation of weighted average shares outstanding:
Weighted average shares outstanding		212,106,718			212,106,718
Effect of dilutive securities		5,004			11,928
Denominator for FFO per diluted share		212,111,722			212,118,646

⁽¹⁾  See page 27 for our definition of this measure.

- 9 -

	FUNDS AVAILABLE FOR DISTRIBUTION (“FAD”)
(unaudited and in thousands)

	Quarter Ended
	June 30, 2015			March 31, 2015
Reconciliation of Core FFO to FAD
Core FFO	$	70,657		$	55,722
Add:
Amortization of stock-based compensation expense		1,370			1,174
Amortization of deferred financing costs		688			584
Less:
Recurring tenant improvements, leasing commissions and other capital expenditures		(16,882	)		(18,093	)
Straight-line rent adjustments		(16,091	)		(15,951	)
Unrealized gains on real estate fund investments		(11,264	)		(873	)
Amortization of below-market leases, net		(872	)		(890	)
Pro rata share of straight-line rent adjustments of partially owned entities		48			41
FAD (1)		27,654			21,714
Less FAD attributable to noncontrolling interests in consolidated joint ventures and funds		(751	)		(768	)
FAD attributable to Paramount Group Operating Partnership		26,903			20,946
Less FAD attributable to noncontrolling interests in Operating Partnership		(5,268	)		(4,094	)
FAD attributable to Paramount Group, Inc. (1)	$	21,635		$	16,852
FAD payout ratio (1)		93.1	%		119.6	%

⁽¹⁾  See page 27 for our definition of this measure.

- 10 -

	NET OPERATING INCOME (“NOI”)
(unaudited and in thousands)

	Quarter Ended
	June 30, 2015			March 31, 2015
Reconciliation of net income (loss) to NOI:
Net income (loss)	$	3,148		$	(11,427	)
Add:
Depreciation and amortization		79,421			73,583
General and administrative expenses		9,133			12,613
Interest and debt expense		42,236			41,888
Transfer taxes due in connection with the sale of shares by a former joint venture partner		5,872			—
Acquisition and transaction related costs		2,336			1,139
Income tax expense		1,343			574
NOI from partially owned entities		4,278			3,781
Less:
Income from real estate fund investments		(14,072	)		(5,221	)
Income from partially owned entities		(2,011	)		(975	)
Fee income		(1,780	)		(1,535	)
Unrealized gains on interest rate swaps		(21,747	)		(11,978	)
Interest and other income, net		(512	)		(854	)
NOI (1)		107,645			101,588
Less NOI attributable to noncontrolling interests in consolidated joint ventures		(15,193	)		(13,619	)
Pro rata share of NOI (1)	$	92,452		$	87,969
Reconciliation of NOI to Cash NOI:
NOI	$	107,645		$	101,588
Less:
Straight-line rent adjustments		(16,091	)		(15,951	)
Amortization of below-market leases, net		(872	)		(890	)
Pro rata share of straight-line rent adjustments of partially owned entities		48			41
Cash NOI (1)		90,730			84,788
Less Cash NOI attributable to noncontrolling interests in consolidated joint ventures		(10,273	)		(9,447	)
Pro rata share of Cash NOI (1)	$	80,457		$	75,341

⁽¹⁾  See page 27 for our definition of this measure.

- 11 -

	EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (“EBITDA”)
(unaudited and in thousand)

	Quarter Ended
	June 30, 2015			March 31, 2015
Reconciliation of net income (loss) to EBITDA:
Net income (loss)	$	3,148		$	(11,427	)
Add:
Depreciation and amortization		79,421			73,583
Interest and debt expense		42,236			41,888
Income tax expense		1,343			574
Pro rata share of above adjustments of partially owned entities		2,895			3,190
EBITDA (1)		129,043			107,808
Less EBITDA attributable to noncontrolling interests in consolidated joint ventures and funds		(28,071	)		(19,323	)
Pro rata share of EBITDA (1)	$	100,972		$	88,485
Reconciliation of EBITDA to Adjusted EBITDA:
EBITDA	$	129,043		$	107,808
Add:
Transfer taxes due in connection with the sale of shares by a former joint venture partner		5,872			—
Acquisition and transaction related costs		2,336			1,139
Severance costs		—			3,315
Less:
Unrealized gains on interest rate swaps		(21,747	)		(11,978	)
EBITDA from real estate fund investments		(15,124	)		(4,010	)
Pro rata share of unrealized gains on interest rate swaps of partially owned entities		(624	)		(386	)
Adjusted EBITDA (1)		99,756			95,888
Less Adjusted EBITDA attributable to noncontrolling interests in consolidated joint ventures		(14,936	)		(13,411	)
Pro rata share of Adjusted EBITDA (1)	$	84,820		$	82,477
(1)       See page 27 for our definition of this measure.

- 12 -

	CONSOLIDATED JOINT VENTURES AND FUNDS - BALANCE SHEETS
(unaudited and in thousands)

	As of June 30, 2015
	Consolidated Properties
	31 West 52nd Street		One Market Plaza		Real Estate Funds (1)		Total
Ownership %	64.2%		49.0%		Various
ASSETS:
Rental property, net	$	819,090	$	1,275,185	$	65,476	$	2,159,751
Real estate fund investments		—		—		335,545		335,545
Cash and cash equivalents		22,234		8,172		31,238		61,644
Restricted cash		9		24,267		—		24,276
Deferred rent receivable		2,315		9,168		—		11,483
Accounts and other receivables, net		1,236		134		3,197		4,567
Deferred charges, net		—		1,334		—		1,334
Intangible assets, net		83,251		82,315		—		165,566
Other assets		536		1,397		896		2,829
Total Assets	$	928,671	$	1,401,972	$	436,352	$	2,766,995
LIABILITIES:
Mortgages and notes payable	$	413,490	$	855,339	$	—	$	1,268,829
Loans payable to noncontrolling interests		—		—		43,981		43,981
Accounts payable and accrued expenses		3,747		22,934		293		26,974
Interest rate swap liabilities		24,013		73,647		—		97,660
Intangible liabilities, net		43,006		73,861		—		116,867
Other liabilities		211		419		426		1,056
Total Liabilities		484,467		1,026,200		44,700		1,555,367
EQUITY:
Paramount Group, Inc. stockholders’ equity		285,217		184,196		38,619		508,032
Noncontrolling interests in consolidated joint ventures and funds		158,987		191,576		353,033		703,596
Total Equity		444,204		375,772		391,652		1,211,628
TOTAL LIABILITIES AND EQUITY	$	928,671	$	1,401,972	$	436,352	$	2,766,995

⁽¹⁾  See page 21 for details of our ownership interest in the Funds and the Funds’ ownership interest in the underlying  investments.

- 13 -

	CONSOLIDATED JOINT VENTURES AND FUNDS - OPERATING RESULTS
(unaudited and in thousands)

	Quarter Ended June 30, 2015
	Consolidated Properties
	31 West 52nd Street			One Market Plaza			Real Estate Funds (1)			Total
Total revenues	$	17,317		$	28,848		$	926		$	47,091
Total operating expenses		6,105			7,017			318			13,440
Net operating income		11,212			21,831			608			33,651
Depreciation and amortization expense		(6,538	)		(13,739	)		(298	)		(20,575	)
Income from real estate fund investments		—			—			14,072			14,072
Unrealized gains on interest rate swaps		3,278			8,580			—			11,858
Interest and other income, net		21			34			—			55
Interest and debt expense		(5,218	)		(13,280	)		(793	)		(19,291	)
Net income before income taxes		2,755			3,426			13,589			19,770
Income tax expense		—			(39	)		(3	)		(42	)
Net income	$	2,755		$	3,387		$	13,586		$	19,728
Paramount Group, Inc.’s pro rata share
Ownership %	64.2%			49.0%			Various			Total
Net income	$	1,770		$	1,664		$	824		$	4,258
Add: Management fee income		126			110			1,521			1,757
Add: Carried interest		—			—			4,709			4,709
Net income attributable to Paramount Group, Inc.		1,896			1,774			7,054			10,724
Add: Real estate depreciation and amortization		4,197			6,728			40			10,965
FFO (2) attributable to Paramount Group, Inc.		6,093			8,502			7,094			21,689
Less: Unrealized gains on interest rate swaps		(2,104	)		(4,204	)		—			(6,308	)
Core FFO attributable to Paramount Group, Inc.	$	3,989		$	4,298		$	7,094		$	15,381
Noncontrolling Interests’ pro rata share
Ownership %	35.8%			51.0%			Various			Total
Net income	$	985		$	1,723		$	12,762		$	15,470
Less: Management fee expense		(126	)		(110	)		(1,521	)		(1,757	)
Less: Carried interest		—			—			(4,709	)		(4,709	)
Net income attributable to noncontrolling interests		859			1,613			6,532			9,004
Add: Real estate depreciation and amortization		2,341			7,011			258			9,610
FFO attributable to noncontrolling interests		3,200			8,624			6,790			18,614
Less: Unrealized gains on interest rate swaps		(1,174	)		(4,375	)		—			(5,549	)
Core FFO attributable to noncontrolling interests	$	2,026		$	4,249		$	6,790		$	13,065

⁽¹⁾  See page 21 for details of our ownership interest in the Funds and the Funds’ ownership interest in the underlying  investments.

⁽²⁾  See page 27 for our definition of this measure.

- 14 -

	UNCONSOLIDATED JOINT VENTURES - BALANCE SHEETS
(unaudited and in thousands)

	As of June 30, 2015
	712 Fifth Avenue			Oder-Center, Germany			Total
Ownership %	50.0%			9.5%
ASSETS:
Rental property, net	$	198,722		$	6,626		$	205,348
Cash and cash equivalents		13,838			973			14,811
Restricted cash		323			—			323
Deferred rent receivable		13,122			—			13,122
Accounts and other receivables, net		188			—			188
Deferred charges, net		28,191			—			28,191
Other assets		494			206			700
Total Assets	$	254,878		$	7,805		$	262,683
LIABILITIES:
Mortgages and notes payable	$	246,500		$	24,014		$	270,514
Accounts payable and accrued expenses		3,055			181			3,236
Interest rate swap liabilities		11,349			—			11,349
Other liabilities		856			53			909
Total Liabilities		261,760			24,248			286,008
Total Equity		(6,882	)		(16,443	)		(23,325	)
TOTAL LIABILITIES AND EQUITY	$	254,878		$	7,805		$	262,683

- 15 -

	UNCONSOLIDATED JOINT VENTURES - OPERATING RESULTS
(unaudited and in thousands)

	Quarter Ended June 30, 2015
	712			Oder-Center,
	Fifth Avenue			Germany			Total
Total revenues	$	14,111		$	1,084		$	15,195
Total operating expenses		5,831			128			5,959
Net operating income		8,280			956			9,236
Depreciation and amortization expense		(2,954	)		(98	)		(3,052	)
Unrealized gains on interest rate swaps		1,248			—			1,248
Interest and other income, net		4			—			4
Interest and debt expense		(2,611	)		(292	)		(2,903	)
Net income before income taxes		3,967			566			4,533
Income tax expense		—			(3	)		(3	)
Net income	$	3,967		$	563		$	4,530
Paramount Group, Inc.’s pro rata share Ownership %	50.0%			9.5%			Total
Net income	$	1,984		$	53		$	2,037
Less: Step-up basis adjustment		—			(26	)		(26	)
Net income attributable to Paramount Group, Inc.		1,984			27			2,011
Add: Real estate depreciation and amortization		1,477			53			1,530
FFO (1) attributable to Paramount Group, Inc.		3,461			80			3,541
Less: Unrealized gains on interest rate swaps		(624	)		—			(624	)
Core FFO attributable to Paramount Group, Inc.	$	2,837		$	80		$	2,917
Joint Venture Partners’ pro rata share Ownership %	50.0%			90.5%			Total
Net income	$	1,984		$	510		$	2,494
Add: Real estate depreciation and amortization		1,477			89			1,566
FFO attributable to joint venture partner		3,461			599			4,060
Less: Unrealized gains on interest rate swaps		(624	)		—			(624	)
Core FFO attributable to joint venture partner	$	2,837		$	599		$	3,436

⁽¹⁾ See page 27 for our definition of this measure.

- 16 -

	CAPITAL STRUCTURE
(unaudited and in thousands, except share and per share data)

					As of June 30, 2015
Debt:
Consolidated debt:
Mortgages and notes payable					$	2,853,237
$1.0 billion credit facility						—
						2,853,237
Less:
Noncontrolling interests’ share of consolidated debt (One Market Plaza and 31 West 52nd Street)						(584,252	)
Add:
Pro rata share of unconsolidated joint venture debt (712 Fifth Avenue and Oder-Center, Germany)						125,531
Total debt						2,394,516
	Shares / Units Outstanding		Share Price at As of June 30, 2015
Equity:
Common stock		212,111,937	$	17.16		3,639,841
Operating Partnership units		51,660,088		17.16		886,487
		263,772,025		17.16		4,526,328
Total Market Capitalization					$	6,920,844

- 17 -

	DEBT ANALYSIS
(unaudited and in thousands)

	Total Debt						Fixed Rate Debt						Variable Rate Debt
	Amount			Rate			Amount			Rate			Amount			Rate
Consolidated Debt:
1633 Broadway	$	926,260			5.39	%	$	772,100			6.15	%	$	154,160			1.61	%
31 West 52nd Street		413,490			4.99	%		337,500			5.74	%		75,990			1.66	%
900 Third Avenue		274,337			5.10	%		255,000			5.35	%		19,337			1.77	%
Waterview		210,000			5.76	%		210,000			5.76	%		—			—
1899 Pennsylvania Avenue		89,811			4.88	%		89,811			4.88	%		—			—
Liberty Place		84,000			4.50	%		84,000			4.50	%		—			—
One Market Plaza		855,339			6.14	%		855,339			6.14	%		—			—
Total consolidated debt		2,853,237			5.51	%		2,603,750			5.89	%		249,487			1.64	%
Noncontrolling interests’ share		(584,252	)					(557,048	)					(27,204	)
Pro rata share of consolidated debt	$	2,268,985			5.43	%	$	2,046,702			5.84	%	$	222,283			1.64	%
Unconsolidated Joint Venture Debt:
712 Fifth Avenue	$	246,500			4.08	%	$	135,000			5.78	%	$	111,500			2.03	%
Oder-Center, Germany		24,014			4.62	%		24,014			4.62	%		—			0.00	%
Total unconsolidated debt		270,514			4.13	%		159,014			5.60	%		111,500			2.03	%
Joint venture partners’ share		(144,983	)					(89,233	)					(55,750	)
Pro rata share of unconsolidated debt	$	125,531			4.09	%	$	69,781			5.74	%	$	55,750			2.03	%
Pro Rata Share of Total Debt	$	2,394,516			5.36	%	$	2,116,483			5.84	%	$	278,033			1.72	%

	Required	Actual
Credit Facility Covenants: (1)
Total Debt / Total Assets	Less than 60%		40.1	%
Secured Debt / Total Assets	Less than 50%		36.4	%
Fixed Charge Coverage	Greater than 1.5x		2.4	x
Unsecured Debt / Unencumbered Assets	Less than 60%		13.8	%
Unencumbered Interest Coverage	Greater than 1.75x		14.3	x

	Amount		%
Debt Composition:
Fixed rate debt:
Pro rata consolidated fixed rate debt	$	2,046,702
Pro rata unconsolidated fixed rate debt		69,781
Total fixed rate debt		2,116,483		88.4	%
Variable rate debt:
Pro rata consolidated variable rate debt		222,283
Pro rata unconsolidated variable rate debt		55,750
Total variable rate debt		278,033		11.6	%
Pro Rata Share of Total Debt	$	2,394,516		100.0	%

⁽¹⁾  This section presents ratios as of June 30, 2015 in accordance with the terms of the Company’s credit facility, which has been filed with the SEC. Management is not presenting these ratios and the related calculations for any other purpose or for any other period, and is not intending for these measures to otherwise provide information to investors about the Company’s financial condition or results of operations. Investors should not rely on these measures other than for purposes of testing our compliance with the credit facility.

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	DEBT MATURITIES
(unaudited and in thousands)

	2015		2016			2017			2018			2019			Thereafter			Total
Consolidated Debt:
1633 Broadway	$	—	$	926,260		$	—		$	—		$	—		$	—		$	926,260
31 West 52nd Street		—		—			413,490			—			—			—			413,490
900 Third Avenue		—		—			274,337			—			—			—			274,337
Waterview		—		—			210,000			—			—			—			210,000
1899 Pennsylvania Avenue		—		—			—			—			—			89,811			89,811
Liberty Place		—		—			—			84,000			—			—			84,000
One Market Plaza		—		—			—			—			855,339			—			855,339
Total consolidated debt		—		926,260			897,827			84,000			855,339			89,811			2,853,237
Noncontrolling interests’ share		—		—			(148,029	)		—			(436,223	)		—			(584,252	)
Pro rata share of consolidated debt	$	—	$	926,260		$	749,798		$	84,000		$	419,116		$	89,811		$	2,268,985
Unconsolidated Debt:
712 Fifth Avenue	$	—	$	—		$	—		$	246,500		$	—		$	—		$	246,500
Oder-Center, Germany		—		—			—			—			—			24,014			24,014
Total unconsolidated debt		—		—			—			246,500			—			24,014			270,514
Joint venture partners’ share		—		—			—			(123,250	)		—			(21,733	)		(144,983	)
Pro rata share of unconsolidated debt	$	—	$	—		$	—		$	123,250		$	—		$	2,281		$	125,531
Pro rata share of debt	$	—	$	926,260		$	749,798		$	207,250		$	419,116		$	92,092			2,394,516
Weighted average rate		—		5.39	%		5.25	%		4.25	%		6.14	%		4.87	%		5.36	%
% of Debt Maturing		—		38.7	%		31.3	%		8.7	%		17.5	%		3.8	%		100.0	%

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	PORTFOLIO SUMMARY
(unaudited)

Property	Submarket	% Ownership			Square Feet (1)		% Occupied (2)			% Leased (2)			Annualized Rent (2)
													Amount		Per Square Foot (3)
As of June 30, 2015
New York:
1633 Broadway	West Side		100.0	%		2,643,065		95.7	%		95.7	%	$	160,808,000	$	69.13
1301 Avenue of the Americas	Sixth Ave /Rock Center		100.0	%		1,767,992		85.4	%		91.2	%		110,867,000		74.19
1325 Avenue of the Americas	Sixth Ave /Rock Center		100.0	%		814,892		91.1	%		94.2	%		46,766,000		65.91
31 West 52nd Street	Sixth Ave /Rock Center		64.2	%		786,647		100.0	%		100.0	%		59,015,000		77.44
900 Third Avenue	East Side		100.0	%		596,270		96.0	%		97.0	%		40,818,000		72.11
712 Fifth Avenue	Madison/Fifth		50.0	%		543,341		98.5	%		98.5	%		56,475,000		106.06
Subtotal /Weighted Average						7,152,207		93.3	%		95.2	%		474,749,000		74.38
Washington, D.C.:
Waterview	Rosslyn, VA		100.0	%		647,243		98.9	%		98.9	%		33,739,000		50.86
425 Eye Street	East End		100.0	%		380,090		88.9	%		96.4	%		15,052,000		45.81
2099 Pennsylvania Avenue	CBD		100.0	%		208,636		62.0	%		62.0	%		9,937,000		76.66
1899 Pennsylvania Avenue	CBD		100.0	%		192,481		71.9	%		88.8	%		11,033,000		81.05
Liberty Place	East End		100.0	%		174,205		80.1	%		80.1	%		10,833,000		76.97
Subtotal /Weighted Average						1,602,655		86.4	%		90.2	%		80,594,000		57.68
San Francisco:
One Market Plaza	South Financial District		49.0	%		1,611,125		97.3	%		97.8	%		96,057,000		62.43
Total /Weighted Average						10,365,987		92.9	%		94.8	%	$	651,400,000	$	69.93

⁽¹⁾  Represents the remeasured square feet, which includes an aggregate of 197,196 square feet of either REBNY or BOMA remeasurement adjustments that are not reflected in current leases.

⁽²⁾  See page 27 for our definition of this measure.

⁽³⁾  Excludes square feet and revenue from parking, storage, theater, signage and roof space.

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	FUNDS SUMMARY
(unaudited)

Property Funds:

The following is a summary of the Property Funds, our ownership interest in these Funds and the Funds’ ownership interest in the underlying investments, as of June 30, 2015.

	% Ownership			60 Wall Street			One Market Plaza			50 Beale Street
Fund II		10.0	%		46.3	%		—			—
Fund III		3.1	%		16.0	%		2.0	%		—
Fund VII/VII-H		7.2	%		—			—			42.8	%
Total Property Funds					62.3	%		2.0	%		42.8	%
Other Investors					37.7	%		98.0	%(1)		57.2	%
Total					100.0	%		100.0	%		100.0	%

The following is a summary of the Property Fund investments and our ownership interest in the underlying investments, as of June 30, 2015.

	Submarket	% Ownership			Square Feet		% Leased			Annualized Rent (2)
										Amount			Per Square Foot (3)
60 Wall Street	Downtown		5.1	%		1,625,483		100.0	%	$	67,000,000	(4)	$	41.22	(4)
50 Beale Street	South Financial District		3.1	%		663,483		98.6	%		33,304,000			50.91

Alternative Investment Funds:

The following is a summary of our ownership interest in the Alternative Investment Funds and the Funds’ underlying investments, as of June 30, 2015.

		%		Interest/				Investment
Fund	Investment Type	Ownership		Dividend Rate		Initial Maturity		Total		Our Share
Fund VIII	Mezzanine loan		1.7%		8.3%		Jan-2022	$	46,747,000	$	805,000
PGRESS Funds	Preferred Equity Investments		4.9% - 5.4%		10.3% - 15.0%		Sep-2015 - Feb-2019		95,717,000		4,615,000

⁽¹⁾  Includes a 49.0% direct ownership interest held by us.

⁽²⁾  See page 27 for our definition of this measure.

⁽³⁾  Excludes square feet and revenue from parking, storage, signage and roof space.

⁽⁴⁾  Represents triple net base rent only.

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	TOP TENANTS AND INDUSTRY DIVERSIFICATION
(unaudited)

	Lease Expiration			Square Feet Occupied			% of Total Square Feet			Annualized Rent (1)				% of Annualized Rent
										Amount		Per Square Foot
Top 10 Tenants:
As of June 30, 2015
The Corporate Executive Board Company		Jan-2028			625,062			6.0	%	$	31,709,000	$	50.73		4.9	%
Barclays Capital, Inc.		Dec-2020			497,418			4.8	%		29,207,000		58.72		4.5	%
Allianz Global Investors, LP		Jan-2031	(2)		326,457	(2)		3.1	%		26,198,000		80.25		4.0	%
Credit Agricole Corporate & Investment Bank		Feb-2023			313,879			3.0	%		25,219,000		80.35		3.9	%
Clifford Chance, LLP		Jun-2024			328,992			3.2	%		24,925,000		75.76		3.8	%
Commerzbank AG		May-2016			287,535			2.8	%		24,422,000		84.94		3.7	%
Kasowitz Benson Torres & Friedman, LLP		Mar-2037	(3)		302,213	(3)		2.9	%		18,904,000		62.55		2.9	%
Deloitte & Touche, LLP		Mar-2016			212,052			2.0	%		16,853,000		79.48		2.6	%
Google		Apr-2025			249,709			2.4	%		16,310,000		65.32		2.5	%
WMG Acquisition Corp. (Warner Music Group)		Jul-2029			293,487			2.8	%		16,241,000		55.34		2.5	%

	Square Feet Occupied		% of Occupied Square Feet			Annualized Rent		% of Annualized Rent
Industry Diversification:
As of June 30, 2015
Financial Services - Commercial and Investment Banking		1,894,950		20.1	%	$	136,836,000		21.0	%
Legal Services		1,795,801		19.1	%		131,199,000		20.1	%
Financial Services - All other		1,380,036		14.7	%		109,203,000		16.8	%
Technology and Media		1,425,865		15.2	%		87,256,000		13.4	%
Insurance		401,284		4.3	%		30,548,000		4.7	%
Retail		322,377		3.4	%		26,505,000		4.1	%
Accounting		275,263		2.9	%		20,835,000		3.2	%
Real Estate		223,998		2.4	%		16,289,000		2.5	%
Government		316,700		3.4	%		14,684,000		2.3	%
Other		1,374,199		14.6	%		78,045,000		12.0	%

⁽¹⁾  See page 27 for our definition of this measure.

⁽²⁾  5,546 of the square feet leased expires in December 2018.

⁽³⁾  100,422 of the square feet leased expires in November 2015.

- 22 -

	LEASING ACTIVITY
(unaudited)

	Total			New York			Washington, D.C.			San Francisco
Quarter Ended June 30, 2015:
Total square feet leased		199,972			137,975			28,863			33,134
Pro rata share of total square feet leased:		171,405			126,306			28,863			16,236
Initial rent (1)	$	71.84		$	78.58		$	40.72		$	74.72
Weighted average lease term (years)		11.1			10.5			15.1			8.1
Tenant improvements and leasing commissions:
Per square foot	$	81.57		$	78.23		$	109.30		$	58.27
Per square foot per annum	$	7.38		$	7.43		$	7.25		$	7.20
Percentage of initial rent		10.3	%		9.5	%		17.8	%		9.6	%
Rent concessions:
Average free rent period (in months)		8.4			8.2			13.4			1.1
Average free rent period per annum (in months)		0.8			0.8			0.9			0.1
Second generation space: (1)
Square feet		138,232			126,306			—			11,926
Cash basis:
Initial rent (1)	$	78.26		$	78.58		$	—		$	74.86
Prior escalated rent	$	67.80		$	68.68		$	—		$	58.54
Percentage increase		15.4	%		14.4	%		—			27.9	%
GAAP basis:
Straight-line rent	$	76.96		$	76.60		$	—		$	80.81
Prior straight-line rent	$	64.69		$	65.31		$	—		$	58.09
Percentage increase		19.0	%		17.3	%		—			39.1	%

⁽¹⁾  See page 27 for our definition of this measure.

- 23 -

	LEASING ACTIVITY
(unaudited)

	Total			New York			Washington, D.C.			San Francisco
Six Months Ended June 30, 2015:
Total square feet leased		355,800			289,486			33,180			33,134
Pro rata share of total square feet leased:		325,693			276,277			33,180			16,236
Initial rent (1)	$	73.67		$	77.08		$	44.79		$	74.72
Weighted average lease term (years)		12.6			12.7			13.8			8.1
Tenant improvements and leasing commissions:
Per square foot	$	95.80		$	96.90		$	105.02		$	58.27
Per square foot per annum	$	7.61		$	7.64		$	7.60		$	7.20
Percentage of initial rent		10.3	%		9.9	%		17.0	%		9.6	%
Rent concessions:
Average free rent period (in months)		10.8			11.2			12.3			1.1
Average free rent period per annum (in months)		0.9			0.9			0.9			0.1
Second generation space: (1)
Square feet		161,962			145,719			4,317			11,926
Cash basis:
Initial rent (1)	$	76.87		$	77.18		$	72.00		$	74.86
Prior escalated rent	$	66.45		$	67.04		$	68.58		$	58.54
Percentage increase		15.7	%		15.1	%		5.0	%		27.9	%
GAAP basis:
Straight-line rent	$	75.39		$	74.91		$	76.56		$	80.81
Prior straight-line rent	$	63.75		$	64.08		$	68.39		$	58.09
Percentage increase		18.3	%		16.9	%		11.9	%		39.1	%

⁽¹⁾  See page 27 for our definition of this measure.

- 24 -

	LEASE EXPIRATIONS
(unaudited)

Year of Lease Expiration (3)	Square Feet of Expiring Leases		Annualized Rent (1)				% of Annualized Rent
			Amount		Per Square Foot (2)
Month to Month		7,282	$	687,000	$	80.80		0.1	%
3Q 2015		244,872		17,565,000		72.48		2.6	%
4Q 2015		251,881		16,956,000		67.29		2.6	%
Total 2015		496,753		34,521,000		69.82		5.2	%
1Q 2016		3,314		1,515,000		151.57		0.2	%
2Q 2016		521,486		41,685,000		82.98		6.3	%
Remaining 2016		265,539		17,778,000		67.11		2.7	%
2017		587,768		43,500,000		74.61		6.5	%
2018		371,446		28,063,000		75.43		4.2	%
2019		448,362		34,097,000		76.63		5.1	%
2020		675,321		44,673,000		71.23		6.7	%
2021		1,303,775		76,367,000		59.98		11.5	%
2022		277,974		18,586,000		85.77		2.8	%
2023		664,222		52,868,000		80.03		8.0	%
2024		682,055		52,930,000		78.05		8.0	%
Thereafter		3,319,988		217,114,000		65.09		32.7	%

⁽¹⁾  See page 27 for our definition of this measure.

⁽²⁾  Excludes square feet and revenue from parking, storage, theater, signage and roof space.

⁽³⁾  Leases that expire on the last day of the quarter are treated as occupied and are reflected as expiring space in the following quarters.

- 25 -

	CAPITAL EXPENDITURES - CASH BASIS
(unaudited and in thousands)

	Quarter Ended
	June 30, 2015		March 31, 2015
Capital expenditures to maintain assets:
Recurring (1)	$	273	$	3,754
Non-recurring (1)		—		—
Total capital expenditures to maintain assets	$	273	$	3,754
Tenant improvements:
Recurring (1)	$	13,254	$	10,795
Non-recurring (1)		1,431		1,693
Total tenant improvements	$	14,685	$	12,488
Leasing commissions:
Recurring (1)	$	3,355	$	3,544
Non-recurring (1)		1,678		2,587
Total leasing commissions	$	5,033	$	6,131
Total capital expenditures, tenant improvements and leasing commissions:
Total recurring (1)	$	16,882	$	18,093
Total non-recurring (1)		3,109		4,280
Total capital expenditures, tenant improvements and leasing commissions	$	19,991	$	22,373
Development expenditures (1)(2)	$	5,321	$	5,394

⁽¹⁾  See page 27 for our definition of this measure.

⁽²⁾  Primarily represents development expenditures relating to the lobby and retail repositioning at One Market Plaza. Of the $25,000 budgeted, $11,234 has been expended as of June 30, 2015.

- 26 -

DEFINITIONS

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) is calculated by adjusting EBITDA for certain other items, including acquisition and transaction related costs and unrealized gains or losses on interest rate swaps, including our share of such adjustments of unconsolidated joint ventures.

Annualized Rent represents the end of period monthly base rent plus escalations in accordance with the lease terms, multiplied by 12.

Capital Expenditures consist of expenditures to maintain assets, tenant improvement allowances and leasing commissions. Recurring Capital Expenditures include capital expenditures to maintain current revenues and tenant improvements and leasing commissions related to space leased that has not been vacant for more than twelve months. Nonrecurring Capital Expenditures include capital expenditures completed in the year of acquisition and the following two years that were planned at the time of acquisition, as well as tenant improvements and leasing commissions on space leased that has been vacant for more than twelve months. Development Expenditures consist of hard and soft costs related to the development of a property in getting it ready for its intended use.

Core FFO Payout Ratio is calculated as dividends per share divided by Core FFO per share.

Core Funds from Operations (“Core FFO”) is calculated by adjusting FFO for certain other items, including acquisition and transaction related costs and unrealized gains or losses on interest rate swaps, including our share of such adjustments of unconsolidated joint ventures.

Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) is calculated as GAAP net income or loss plus (i) depreciation and amortization (ii) interest and debt expense and (iii) income tax expense, including our share of such adjustments of unconsolidated joint ventures.

FAD Payout Ratio is calculated as total dividends divided by FAD.

FFO Payout Ratio is calculated as dividends per share divided by FFO per share.

Funds Available for Distribution (“FAD”) is calculated as Core FFO less (i) recurring tenant improvements, leasing commissions and other capital expenditures (ii) straight-line rent adjustments (iii) unrealized gains on real estate fund investments and (iv) amortization of above and below-market leases, net, plus (v) amortization of stock-based compensation expense and (vi) amortization of deferred financing costs.

Funds from Operations (“FFO”) is calculated in accordance with the definition adopted by National Association of Real Estate Investment Trusts (“NAREIT”). NAREIT defines FFO as GAAP net income or loss adjusted to exclude net gains from sales of depreciated real estate assets, impairment losses on depreciable real estate and depreciation and amortization expense from real estate assets, including our share of such adjustments of unconsolidated joint ventures.

Initial Rent represents the weighted average cash basis starting rent per square foot and does not include free rent or periodic step-ups in rent.

Leased % represents percentage of square feet that is leased, including signed leases not yet commenced.

Net Operating Income (“NOI”) is calculated as GAAP net income or loss plus (i) depreciation and amortization (ii) general and administrative expenses (iii) interest and debt expense (iv) acquisition and transaction related costs and (v) income tax expense, less (vi) fee income (vii) unrealized gains or losses on interest rate swaps (viii) interest and other income and (ix) the gain on consolidation of a partially owned entity, including our share of such adjustments of unconsolidated joint ventures. We also present Cash NOI which deducts from NOI, straight-line rent adjustments and the amortization of above and below-market leases, net, including our share of such adjustments of unconsolidated joint ventures. In addition, we present our pro rata 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.

Occupied % represents the percentage of space for which we have commenced rental revenue in accordance with GAAP.

Second Generation Space relates to space leased that has not been vacant for more than twelve months.

- 27 -