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): February 23, 2016

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 February 23, 2016, Paramount Group, Inc. (the “Company”) issued a press release announcing its financial results for the fourth quarter ended December 31, 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 February 24, 2016, to discuss fourth 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 archived on the Company’s website and will be available through March 2, 2016, by dialing 1-877-870-5176 (domestic) and 1-858-384-5517 (international) and entering the passcode 13628287.

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 common stockholders was $45.2 million, or $0.21 per diluted share, for the quarter ended December 31, 2015 and $172.8 million, or $0.81 per diluted share, for the year ended December 31, 2015. Net income (loss) attributable to common stockholders, which is the most directly comparable GAAP financial measure, was an income of $8.9 million, or $0.04 per diluted share, for the quarter ended December 31, 2015 and $(4.4) million, or $(0.02) per diluted share, for the year ended December 31, 2015.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits:

Exhibit Number	Description
99.1	Press release dated February 23, 2016 and entitled “Paramount Announces Fourth Quarter 2015 Results”
99.2	Supplemental information entitled “Paramount Group, Inc. Supplemental Operating and Financial Data for the Quarter Ended December 31, 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: February 23, 2016

EX-99.1

Exhibit 99.1

Paramount Announces Fourth Quarter 2015 Results

– Reports Fourth Quarter Core FFO of $0.21 per Diluted Share –

– Reports 2015 Core FFO of $0.81 per Diluted Share –

– Leases 1.4 Million Square Feet in 2015 –

– Initiates Guidance for Full Year 2016 –

NEW YORK—February 23, 2016 – Paramount Group, Inc. (NYSE: PGRE) (“Paramount” or the “Company”) today reported results for the quarter ended December 31, 2015.

Fourth Quarter Highlights:

• Reported Core Funds from Operations (“Core FFO”) attributable to common stockholders of $45.2 million, or $0.21 per diluted share, for the quarter ended December 31, 2015.

• Leased 647,828 square feet at a weighted average initial rent of $79.80 per square foot, of which 443,336 square feet represents second generation space for which the Company achieved positive mark-to-markets of 17.3% on a cash basis and 19.4% on a GAAP basis.

• On October 1, 2015, the Company completed the acquisition of the remaining 35.8% equity interest it did not previously own in 31 West 52^nd Street from its joint venture partner for approximately $230.0 million in cash and the assumption of $148.0 million of existing debt.

• On October 29, 2015, Fund VII (the Company’s real estate equity fund) completed the acquisition of 670 Broadway, a 75,945 square foot creative office building in the NoHo submarket of Manhattan, for $112.0 million.

• On November 24, 2015, Fund VIII (the Company’s debt fund) made two loans aggregating $80.0 million, secured by 700 Eighth Avenue, a 26,126 square foot retail property in the Times Square submarket of Manhattan. The loans bear interest at an average rate of LIBOR plus 600 bps, mature in December 2016 and have a one-year extension option.

• On December 1, 2015, the Company completed a $1.0 billion refinancing of 1633 Broadway. The new seven-year loan is interest only at LIBOR plus 175 bps and can be increased at the Company’s option by $250.0 million to $1.25 billion. The existing loan was scheduled to mature in December 2016 and had a weighted average interest rate of 5.35%. In addition, the Company entered into interest rate swap agreements with an aggregate notional amount of $1.0 billion fixing LIBOR at 1.84%. Accordingly, the interest rate on the loan is fixed at 3.59%, and the effective interest rate, including amortization of fees and additional mortgage recording taxes, is 3.87%, through December 2021 when the interest rate swaps begin to expire.

• On December 15, 2015, the Company’s Board of Directors declared a regular quarterly cash dividend of $0.095 per share for the fourth quarter ended December 31, 2015, which was paid on January 15, 2016.

1

Financial Results

Quarter Ended December 31, 2015

Net income attributable to common stockholders was $8.9 million, or $0.04 per diluted share, for the quarter ended December 31, 2015.

FFO attributable to common stockholders was $61.6 million, or $0.29 per diluted share. FFO attributable to common stockholders includes the impact of (i) unrealized gains on interest rate swaps, including the Company’s pro rata share of such gains of an unconsolidated joint venture, and (ii) acquisition and transaction related costs. The aggregate of these items, net of amounts attributable to noncontrolling interests, increased FFO attributable to common stockholders by $16.4 million, or $0.08 per diluted share.

Core FFO attributable to common stockholders, which excludes the impact of these items, was $45.2 million, or $0.21 per diluted share, for the quarter ended December 31, 2015.

Year Ended December 31, 2015

Net loss attributable to common stockholders was $4.4 million, or $0.02 per diluted share, for the year ended December 31, 2015.

FFO attributable to common stockholders was $209.3 million, or $0.99 per diluted share. FFO attributable to common stockholders includes the impact of (i) unrealized gains on interest rate swaps, including the Company’s pro rata share of such gains of an unconsolidated joint venture, (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 common stockholders by $36.5 million, or $0.18 per diluted share.

Core FFO attributable to common stockholders, which excludes the impact of these items, was $172.8 million, or $0.81 per diluted share, for the year ended December 31, 2015.

2

Portfolio Operations

Quarter Ended December 31, 2015

During the fourth quarter, the Company leased 647,828 square feet at a weighted average initial rent of $79.80 per square foot. This leasing activity, offset by lease expirations during the quarter, increased portfolio wide leased percentage by 240 basis points from September 30, 2015 from 92.9% to 95.3%. Of the 647,828 square feet leased in the fourth quarter, 443,336 square feet represents second generation space (space that has been vacant for less than twelve months) for which the Company achieved positive mark-to-markets of 17.3% on a cash basis and 19.4% on a GAAP basis. The weighted average lease term for leases signed during the fourth quarter was 13.0 years and weighted average tenant improvements and leasing commissions on these leases were $7.46 per square foot per annum, or 9.4% of initial rent.

Year Ended December 31, 2015

During the year ended December 31, 2015, the Company leased 1,393,770 square feet at a weighted average initial rent of $78.48 per square foot. This leasing activity, offset by lease expirations during the year, increased portfolio wide leased percentage by 140 basis points from December 31, 2014 from 93.9% to 95.3%. Of the 1,393,770 square feet leased during 2015, 930,514 square feet represents second generation space for which the Company achieved positive mark-to-markets of 15.6% on a cash basis and 16.0% on a GAAP basis. The weighted average lease term for leases signed during the year was 11.9 years and weighted average tenant improvements and leasing commissions on these leases were $7.55 per square foot per annum, or 9.6% of initial rent.

3

Guidance

The Company is providing Estimated Core FFO Guidance for 2016 in a range of $0.80 to $0.84 per diluted share. The Estimated Core FFO Guidance for 2016 when compared to the full year 2015 Core FFO results assumes, among other items, (i) a $10.0 million to $15.0 million increase in the Company’s pro rata share of NOI including the acquisition of our partner’s share of 31 West 52^nd Street, (ii) a decrease in interest expense of $7.0 million to $11.0 million (primarily due to the $1.0 billion refinancing of 1633 Broadway), (iii) an increase in general and administrative expenses of $8.0 million to $10.0 million (primarily due to non-cash amortization resulting from layering of equity grants) and (iv) a $6.0 million to $8.0 million decrease in income from fund investments primarily due to the recognition of a carried interest promote in the second quarter of 2015, that is not expected to be recognized in 2016.

The Company is providing the following reconciliation of Estimated 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, 2016:	Low			High
Estimated net loss attributable to common stockholders per diluted share	$	(0.10	)	$	(0.06	)
Pro rata share of real estate depreciation and amortization, including the Company’s share of unconsolidated joint ventures		0.90			0.90
Estimated FFO per diluted share	$	0.80		$	0.84
Adjustments for non-core items1		—			—
Estimated Core FFO per diluted share	$	0.80		$	0.84

Except as described above, these estimates reflect management’s view of current and future market conditions, including assumptions with respect to rental rates, occupancy levels and the earnings impact of the events referenced in this release and otherwise to be 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 above may be subject to fluctuations as a result of several factors, including the straight-lining of rental income and 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 above.

¹  The Company is not making projections for non-core items that may impact its financial results in 2016, 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.

4

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.

Non GAAP Financial Measures

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 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 Information for the quarter ended December 31, 2015, which is available on our website.

5

Investor Conference Call and Webcast

The Company will host a webcast and conference call at 10:00 a.m. Eastern Time on Wednesday, February 24, 2016, to discuss fourth quarter 2015 results. The number to call is 1-877-407-0789 (domestic) or 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 archived on the Company’s website and will be available through March 2, 2016, by dialing 1-877-870-5176 (domestic) or 1-858-384-5517 (international) and entering the passcode 13628287.

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

6

Paramount Group, Inc.

Consolidated Balance Sheets

(Unaudited and in thousands)

	December 31, 2015			December 31, 2014
ASSETS:
Rental Property
Land	$	2,042,071		$	2,042,071
Buildings and improvements		5,610,046			5,488,168
		7,652,117			7,530,239
Accumulated depreciation and amortization		(243,089	)		(81,050	)
Rental Property, net		7,409,028			7,449,189
Real estate fund investments		416,438			323,387
Preferred equity investments		53,941			—
Investments in unconsolidated joint ventures		7,102			5,749
Cash and cash equivalents		143,884			438,599
Restricted cash		41,823			55,728
Marketable securities		21,521			20,159
Deferred rent receivable		77,792			8,267
Accounts and other receivables, net		10,844			7,692
Deferred charges, net		93,905			39,165
Intangible assets, net		511,207			669,385
Other assets		6,658			13,121
Total Assets	$	8,794,143		$	9,030,441
LIABILITIES:
Notes and mortgages payable	$	2,941,524		$	2,852,287
Revolving credit facility		20,000			—
Due to affiliates		27,299			27,299
Loans payable to noncontrolling interests		45,662			42,195
Accounts payable and accrued expenses		102,730			93,472
Dividends and distributions payable		25,067			—
Deferred income taxes		2,533			2,861
Interest rate swap liabilities		93,936			194,196
Intangible liabilities, net		179,741			219,228
Other liabilities		45,101			43,950
Total Liabilities		3,483,593			3,475,488
EQUITY:
Paramount Group, Inc. stockholders’ equity		3,761,017			3,910,862
Noncontrolling interests in consolidated joint ventures and funds		651,486			685,888
Noncontrolling interests in Operating Partnership		898,047			958,203
Total Equity	$	5,310,550		$	5,554,953
Total Liabilities and Equity	$	8,794,143		$	9,030,441

7

Paramount Group, Inc.

Consolidated Statements of Income

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

	Quarter Ended			Year Ended
	December 31, 2015			December 31, 2015
REVENUES:
Property rentals	$	124,559		$	507,091
Straight-line rent adjustments		19,663			69,522
Amortization of below-market leases, net		6,678			9,917
Rental income		150,900			586,530
Tenant reimbursement income		10,929			50,885
Fee income		4,848			10,248
Other income		3,851			14,745
Total revenues		170,528			662,408
EXPENSES:
Operating		61,735			244,754
Depreciation and amortization		70,966			294,624
General and administrative		13,644			42,056
Acquisition and transaction related costs		523			10,355
Total expenses		146,868			591,789
Operating income		23,660			70,619
Income from real estate fund investments		7,749			37,975
Income from unconsolidated joint ventures		2,406			6,850
Unrealized gain on interest rate swaps		26,263			75,760
Interest and other income, net		1,268			871
Interest and debt expense		(41,421	)		(168,366	)
Net income before income taxes		19,925			23,709
Income tax benefit (expense)		140			(2,566	)
Net income		20,065			21,143
Less net (income) loss attributable to noncontrolling interests in:
Consolidated joint ventures and funds		(8,991	)		(26,632	)
Operating Partnership		(2,169	)		1,070
Net income (loss) attributable to common stockholders	$	8,905		$	(4,419	)
Net income (loss) per share attributable to common stockholders:
Basic	$	0.04		$	(0.02	)
Diluted	$	0.04		$	(0.02	)
Weighted average common shares outstanding:
Basic		212,106,718			212,106,718
Diluted		212,111,790			212,106,718

8

Paramount Group, Inc.

Reconciliation of Net Income to Funds from Operations

and Core Funds from Operations

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

	Quarter Ended			Year Ended
	December 31, 2015			December 31, 2015
Reconciliation of net income to FFO and Core FFO:
Net income	$	20,065		$	21,143
Real estate depreciation and amortization		70,966			294,624
Pro rata share of real estate depreciation and amortization of unconsolidated joint ventures		1,503			6,021
FFO		92,534			321,788
Less FFO attributable to noncontrolling interests in consolidated joint ventures and funds		(15,982	)		(61,479	)
FFO attributable to Paramount Group Operating Partnership		76,552			260,309
Less FFO attributable to noncontrolling interests in Operating Partnership		(14,993	)		(50,960	)
FFO attributable to common stockholders	$	61,559		$	209,349
Per diluted share	$	0.29		$	0.99
FFO	$	92,534		$	321,788
Non-core (income) expense:
Transfer taxes due in connection with sale of shares by former joint venture partner		—			5,872
Acquisition and transaction related costs		523			4,483
Predecessor income tax true-up		—			721
Severance costs		—			3,315
Unrealized gains on interest rate swaps		(26,263	)		(75,760	)
Pro rata share of unrealized gains on interest rate swaps of an unconsolidated joint venture		(1,065	)		(2,112	)
Core FFO		65,729			258,307
Less Core FFO attributable to noncontrolling interests in consolidated joint ventures and funds		(9,535	)		(43,451	)
Core FFO attributable to Paramount Group Operating Partnership		56,194			214,856
Less Core FFO attributable to noncontrolling interests in Operating Partnership		(11,006	)		(42,060	)
Core FFO attributable to common stockholders	$	45,188		$	172,796
Per diluted share	$	0.21		$	0.81

9

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		Year Ended
	December 31, 2015		December 31, 2015
Reconciliation of weighted average shares outstanding:
Weighted average shares outstanding		212,106,718		212,106,718
Effect of dilutive securities		5,072		4,572
Denominator for FFO per diluted share		212,111,790		212,111,290

10

EX-99.2

Exhibit 99.2

SUPPLEMENTAL OPERATING AND FINANCIAL DATA

FOR THE QUARTER ENDED DECEMBER 31, 2015

FORWARD-LOOKING STATEMENTS

This supplemental information 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	27-28

- 3 -

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

- 4 -

RESEARCH COVERAGE⁽¹⁾

James Feldman	Thomas Lesnick	Vin Chao	Gabe Hilmoe
Bank of America Merrill Lynch	Capital One Securities, Inc.	Deutsche Bank	Evercore ISI
(646) 855-5808	(571) 633-8191	(212) 250-6799	(212) 446-9459
Brad Burke	Jed Reagan	Richard Anderson	Sumit Sharma
Goldman Sachs	Green Street Advisors	Mizuho Securities USA Inc.	Morgan Stanley
(917) 343-2082	(949) 640-8780	(212) 205-8445	(212) 761-7567
Ross Nussbaum	Brendan Maiorana
UBS	Wells Fargo
(212) 713-2484	(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.

- 5 -

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

	Quarter Ended
SELECTED FINANCIAL DATA	December 31, 2015			September 30, 2015			June 30, 2015			March 31, 2015
Total revenues	$	170,528		$	167,726		$	162,928		$	161,226
Pro rata share of NOI (1)	$	96,812		$	91,428		$	92,452		$	87,969
Pro rata share of Cash NOI (1)	$	75,320		$	77,223		$	80,457		$	75,341
Net income (loss) attributable to common stockholders	$	8,905		$	1,116		$	(4,709	)	$	(9,731	)
Per share—basic and diluted	$	0.04		$	0.01		$	(0.02	)	$	(0.05	)
FFO attributable to common stockholders (1)	$	61,559		$	51,810		$	52,663		$	43,317
Per share—diluted	$	0.29		$	0.24		$	0.25		$	0.20
FFO payout ratio (1)		32.7	%		38.9	%		38.3	%		46.5	%
Core FFO attributable to common stockholders (1)	$	45,188		$	42,330		$	46,315		$	38,963
Per share—diluted	$	0.21		$	0.20		$	0.22		$	0.18
Core FFO payout ratio (1)		44.6	%		47.6	%		43.5	%		51.7	%
FAD attributable to common stockholders (1)	$	(404	)	$	22,449		$	21,635		$	16,852
FAD payout ratio (1)		n/a			89.8	%		93.1	%		119.6	%
COMMON SHARE DATA
	Quarter Ended
Share Price:	December 31, 2015			September 30, 2015			June 30, 2015			March 31, 2015
High	$	18.56		$	18.35		$	19.73		$	20.21
Low	$	16.50		$	15.65		$	16.97		$	17.66
Closing (end of period)	$	18.10		$	16.80		$	17.16		$	19.30
Dividends per common share	$	0.095		$	0.095		$	0.095		$	0.095	(2)
Annualized dividends per common share	$	0.380		$	0.380		$	0.380		$	0.380
Dividend yield (on closing share price)		2.1	%		2.3	%		2.2	%		2.0	%
PORTFOLIO STATISTICS
	Number of			Square			% Leased(1)			% Occupied(1)
Region:	Properties			Feet			at December 31, 2015			at December 31, 2015
New York		6			7,152,207			95.7	%		89.1	%
Washington, D.C.		5			1,602,655			90.3	%		88.8	%
San Francisco		1			1,611,125			98.4	%		97.2	%
		12			10,365,987			95.3	%		90.3	%

⁽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)

	December 31, 2015			September 30, 2015			June 30, 2015			March 31, 2015			December 31, 2014
ASSETS:
Rental Property
Land	$	2,042,071		$	2,042,071		$	2,042,071		$	2,042,071		$	2,042,071
Buildings and improvements		5,610,046			5,567,789			5,534,885			5,503,475			5,488,168
		7,652,117			7,609,860			7,576,956			7,545,546			7,530,239
Accumulated depreciation and amortization		(243,089	)		(202,105	)		(162,377	)		(121,165	)		(81,050	)
Rental Property, net		7,409,028			7,407,755			7,414,579			7,424,381			7,449,189
Real estate fund investments		416,438			336,393			335,545			324,282			323,387
Preferred equity investments (see page 13)		53,941			—			—			—			—
Investments in unconsolidated joint ventures		7,102			6,537			6,128			6,370			5,749
Cash and cash equivalents		143,884			418,095			438,088			380,889			438,599
Restricted cash		41,823			92,696			45,737			53,864			55,728
Marketable securities		21,521			20,365			21,524			21,386			20,159
Deferred rent receivable		77,792			58,117			40,308			24,261			8,267
Accounts and other receivables, net		10,844			12,313			10,781			12,863			7,692
Deferred charges, net		93,905			54,467			49,547			43,713			39,165
Intangible assets, net		511,207			546,432			583,126			629,021			669,385
Other assets		6,658			33,636			9,529			31,948			13,121
Total Assets	$	8,794,143		$	8,986,806		$	8,954,892		$	8,952,978		$	9,030,441
LIABILITIES:
Notes and mortgages payable	$	2,941,524		$	2,853,735		$	2,853,237		$	2,852,754		$	2,852,287
Revolving credit facility		20,000			—			—			—			—
Due to affiliates (1)		27,299			27,299			27,299			27,299			27,299
Loans payable to noncontrolling interests		45,662			44,822			43,981			43,188			42,195
Accounts payable and accrued expenses		102,730			97,157			96,595			78,282			93,472
Dividends and distributions payable		25,067			25,066			25,066			—			—
Deferred income taxes		2,533			2,560			2,659			3,183			2,861
Interest rate swap liabilities		93,936			163,301			160,473			182,218			194,196
Intangible liabilities, net		179,741			193,042			201,839			210,964			219,228
Other liabilities		45,101			44,958			45,922			45,742			43,950
Total Liabilities		3,483,593			3,451,940			3,457,071			3,443,630			3,475,488
EQUITY:
Paramount Group, Inc. stockholders’ equity		3,761,017			3,855,843			3,889,542			3,829,373			3,910,862
Noncontrolling interests in consolidated joint ventures and funds		651,486			781,343			703,596			685,176			685,888
Noncontrolling interests in Operating Partnership		898,047			897,680			904,683			994,799			958,203
Total Equity		5,310,550			5,534,866			5,497,821			5,509,348			5,554,953
TOTAL LIABILITIES AND EQUITY	$	8,794,143		$	8,986,806		$	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
	December 31, 2015			September 30, 2015			June 30, 2015			March 31, 2015
REVENUES:
Property rentals	$	124,559		$	127,176		$	128,954		$	126,402
Straight-line rent adjustments		19,663			17,817			16,091			15,951
Amortization of below-market leases, net		6,678			1,477			872			890
Rental income		150,900			146,470			145,917			143,243
Tenant reimbursement income		10,929			14,405			12,063			13,488
Fee income		4,848			2,085			1,780			1,535
Other Income		3,851			4,766			3,168			2,960
Total revenues		170,528			167,726			162,928			161,226
EXPENSES:
Operating		61,735			63,354			57,781			61,884
Depreciation and amortization		70,966			70,654			79,421			73,583
General and administrative (1)		13,644			6,666			9,133			12,613
Acquisition and transaction related costs		523			485			8,208			1,139
Total expenses		146,868			141,159			154,543			149,219
Operating income		23,660			26,567			8,385			12,007
Income from real estate fund investments		7,749			10,933			14,072			5,221
Income from unconsolidated joint ventures		2,406			1,458			2,011			975
Unrealized gain on interest rate swaps		26,263			15,772			21,747			11,978
Interest and other income (loss), net (2)		1,268			(1,763	)		512			854
Interest and debt expense		(41,421	)		(42,821	)		(42,236	)		(41,888	)
Net income (loss) before income taxes		19,925			10,146			4,491			(10,853	)
Income tax benefit (expense)		140			(789	)		(1,343	)		(574	)
Net income (loss)		20,065			9,357			3,148			(11,427	)
Less net (income) loss attributable to noncontrolling interests in:
Consolidated joint ventures and funds		(8,991	)		(7,969	)		(9,004	)		(668	)
Operating Partnership		(2,169	)		(272	)		1,147			2,364
Net income (loss) attributable to common stockholders	$	8,905		$	1,116		$	(4,709	)	$	(9,731	)
Weighted average common shares outstanding
Basic		212,106,718			212,106,718			212,106,718			212,106,718
Diluted		212,111,790			212,108,079			212,106,718			212,106,718
Net income (loss) per share attributable to common stockholders
Basic	$	0.04		$	0.01		$	(0.02	)	$	(0.05	)
Diluted	$	0.04		$	0.01		$	(0.02	)	$	(0.05	)

⁽¹⁾  Excluding the mark-to-market of investments in our deferred compensation plan, general and administrative expenses were $12,602, $8,606, $8,771 and $11,880 for the quarters ended December 31, 2015, September 30, 2015, June 30, 2015 and March 31, 2015, respectively.

⁽²⁾  Excluding the mark-to-market of investments in our deferred compensation plan, interest and other income (loss), net was $226, $177, $150 and $121 for the quarters ended December 31, 2015, September 30, 2015, June 30, 2015 and March 31, 2015, respectively.

- 8 -

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

	Quarter Ended
	December 31, 2015			September 30, 2015			June 30, 2015			March 31, 2015
Reconciliation of net income (loss) to FFO and Core FFO:
Net income (loss)	$	20,065		$	9,357		$	3,148		$	(11,427	)
Real estate depreciation and amortization		70,966			70,654			79,421			73,583
Pro rata share of real estate depreciation and amortization of unconsolidated joint ventures		1,503			1,512			1,530			1,476
FFO (1)		92,534			81,523			84,099			63,632
Less FFO attributable to noncontrolling interests in consolidated joint ventures and funds		(15,982	)		(17,094	)		(18,614	)		(9,789	)
FFO attributable to Paramount Group Operating Partnership		76,552			64,429			65,485			53,843
Less FFO attributable to noncontrolling interests in Operating Partnership		(14,993	)		(12,619	)		(12,822	)		(10,526	)
FFO attributable to common stockholders (1)	$	61,559		$	51,810		$	52,663		$	43,317
Per diluted share	$	0.29		$	0.24		$	0.25		$	0.20
FFO	$	92,534		$	81,523		$	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		523			485			2,336			1,139
Predecessor income tax true-up		—			—			721			—
Severance costs		—			—			—			3,315
Unrealized gain on interest rate swaps		(26,263	)		(15,772	)		(21,747	)		(11,978	)
Pro rata share of unrealized gain on interest rate swaps of an unconsolidated joint venture		(1,065	)		(37	)		(624	)		(386	)
Core FFO (1)		65,729			66,199			70,657			55,722
Less Core FFO attributable to noncontrolling interests in consolidated joint ventures and funds		(9,535	)		(13,560	)		(13,065	)		(7,291	)
Core FFO attributable to Paramount Group Operating Partnership		56,194			52,639			57,592			48,431
Less Core FFO attributable to noncontrolling interests in Operating Partnership		(11,006	)		(10,309	)		(11,277	)		(9,468	)
Core FFO attributable to common stockholders (1)	$	45,188		$	42,330		$	46,315		$	38,963
Per diluted share	$	0.21		$	0.20		$	0.22		$	0.18
Reconciliation of weighted average shares outstanding:
Weighted average shares outstanding		212,106,718			212,106,718			212,106,718			212,106,718
Effect of dilutive securities		5,072			1,361			5,004			11,928
Denominator for FFO per diluted share		212,111,790			212,108,079			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
	December 31, 2015			September 30, 2015			June 30, 2015			March 31, 2015
Reconciliation of Core FFO to FAD:
Core FFO	$	65,729		$	66,199		$	70,657		$	55,722
Add:
Amortization of stock-based compensation expense (recurring)		1,297			1,613			1,370			1,174
Amortization of deferred financing costs (including pro rata share of unconsolidated joint ventures)		862			635			688			584
Less:
Recurring tenant improvements, leasing commissions and other capital expenditures		(41,325	)		(12,703	)		(16,882	)		(18,093	)
Straight-line rent adjustments		(19,663	)		(17,817	)		(16,091	)		(15,951	)
Unrealized gains on real estate fund investments		(4,435	)		(1,830	)		(11,264	)		(873	)
Amortization of below-market leases, net		(6,678	)		(1,477	)		(872	)		(890	)
Pro rata share of straight-line rent adjustments of unconsolidated joint ventures		175			146			48			41
FAD (1)		(4,038	)		34,766			27,654			21,714
Less FAD attributable to noncontrolling interests in consolidated joint ventures and funds		3,536			(6,849	)		(751	)		(768	)
FAD attributable to Paramount Group Operating Partnership		(502	)		27,917			26,903			20,946
Less FAD attributable to noncontrolling interests in Operating Partnership		98			(5,468	)		(5,268	)		(4,094	)
FAD attributable to common stockholders (1) (2)	$	(404	)	$	22,449		$	21,635		$	16,852
FAD payout ratio (1) (2)		n/a			89.8	%		93.1	%		119.6	%

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

⁽²⁾ FAD attributable to common stockholders and the related payout ratios on a quarterly basis are not necessarily indicative of future FAD and related payout ratios due to the fluctuation in the timing of tenant improvements, leasing commissions and cash rents received from leases for which such costs are incurred.

- 10 -

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

	Quarter Ended
	December 31, 2015			September 30, 2015			June 30, 2015			March 31, 2015
Reconciliation of net income (loss) to NOI and Cash NOI:
Net income (loss)	$	20,065		$	9,357		$	3,148		$	(11,427	)
Add:
Depreciation and amortization		70,966			70,654			79,421			73,583
General and administrative expenses		13,644			6,666			9,133			12,613
Interest and debt expense		41,421			42,821			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		523			485			2,336			1,139
Income tax (benefit) expense		(140	)		789			1,343			574
NOI from unconsolidated joint ventures		4,218			4,303			4,278			3,781
Less:
Income from real estate fund investments		(7,749	)		(10,933	)		(14,072	)		(5,221	)
Income from unconsolidated joint ventures		(2,406	)		(1,458	)		(2,011	)		(975	)
Fee income		(4,848	)		(2,085	)		(1,780	)		(1,535	)
Unrealized gain on interest rate swap		(26,263	)		(15,772	)		(21,747	)		(11,978	)
Interest and other (income) loss, net		(1,268	)		1,763			(512	)		(854	)
NOI (1)		108,163			106,590			107,645			101,588
Less NOI attributable to noncontrolling interests in consolidated joint ventures		(11,351	)		(15,162	)		(15,193	)		(13,619	)
Pro rata share of NOI (1)	$	96,812		$	91,428		$	92,452		$	87,969
NOI	$	108,163		$	106,590		$	107,645		$	101,588
Less:
Straight-line rent adjustments		(19,663	)		(17,817	)		(16,091	)		(15,951	)
Amortization of below-market leases, net		(6,678	)		(1,477	)		(872	)		(890	)
Pro rata share of straight-line rent adjustments of unconsolidated joint ventures		175			146			48			41
Cash NOI (1)		81,997			87,442			90,730			84,788
Less Cash NOI attributable to noncontrolling interests in consolidated joint ventures		(6,677	)		(10,219	)		(10,273	)		(9,447	)
Pro rata share of Cash NOI (1)	$	75,320		$	77,223		$	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 thousands)

	Quarter Ended
	December 31, 2015			September 30, 2015			June 30, 2015			March 31, 2015
Reconciliation of net income (loss) to EBITDA and Adjusted EBITDA:
Net income (loss)	$	20,065		$	9,357		$	3,148		$	(11,427	)
Add:
Depreciation and amortization		70,966			70,654			79,421			73,583
Interest and debt expense		41,421			42,821			42,236			41,888
Income tax (benefit) expense		(140	)		789			1,343			574
Pro rata share of above adjustments of unconsolidated joint ventures		2,880			2,885			2,895			3,190
EBITDA (1)		135,192			126,506			129,043			107,808
Less   EBITDA attributable to noncontrolling interests in consolidated joint ventures and funds		(23,416	)		(27,466	)		(28,071	)		(19,323	)
Pro rata share of EBITDA (1)	$	111,776		$	99,040		$	100,972		$	88,485
EBITDA	$	135,192		$	126,506		$	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		523			485			2,336			1,139
Severance costs		—			—			—			3,315
Less:
Unrealized gain on interest rate swaps		(26,263	)		(15,772	)		(21,747	)		(11,978	)
EBITDA from real estate fund investments		(6,114	)		(9,730	)		(15,124	)		(4,010	)
Pro rata share of unrealized gain on interest rate swaps of an unconsolidated joint venture		(1,065	)		(37	)		(624	)		(386	)
Adjusted EBITDA (1)		102,273			101,452			99,756			95,888
Less   Adjusted EBITDA attributable to noncontrolling interests in consolidated joint ventures		(11,401	)		(14,934	)		(14,936	)		(13,411	)
Pro rata share of Adjusted EBITDA (1)	$	90,872		$	86,518		$	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 December 31, 2015
	One		Real Estate		PGRESS Equity
	Market Plaza		Funds (1)		Holdings L.P.(2)		Total
Ownership %	49.0%		Various		25.4%
ASSETS:
Rental property, net	$	1,276,358	$	67,286	$	—	$	1,343,644
Real estate fund investments		—		416,438		—		416,438
Preferred equity investments		—		—		53,941		53,941
Cash and cash equivalents		6,539		14,495		576		21,610
Restricted cash		13,188		—		—		13,188
Deferred rent receivable		18,386		—		—		18,386
Accounts and other receivables, net		327		287		—		614
Deferred charges, net		4,958		—		—		4,958
Intangible assets, net		71,305		—		—		71,305
Other assets		664		16		—		680
Total Assets	$	1,391,725	$	498,522	$	54,517	$	1,944,764
LIABILITIES:
Notes and mortgages payable	$	857,037	$	—	$	—	$	857,037
Loans payable to noncontrolling interests		—		45,662		—		45,662
Accounts payable and accrued expenses		28,548		936		—		29,484
Interest rate swap liabilities		55,404		—		—		55,404
Intangible liabilities, net		65,011		—		—		65,011
Other liabilities		2,659		184		229		3,072
Total Liabilities		1,008,659		46,782		229		1,055,670
EQUITY:
Paramount Group, Inc. stockholders’ equity		187,282		37,103		13,223		237,608
Noncontrolling interests in consolidated joint ventures and funds		195,784		414,637		41,065		651,486
Total Equity		383,066		451,740		54,288		889,094
TOTAL LIABILITIES AND EQUITY	$	1,391,725	$	498,522	$	54,517	$	1,944,764

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

⁽²⁾  On December 16, 2015, we acquired PGRESS-A, which owned a 20% interest in a PGRESS Equity Holdings L.P., for $12,150,000. PGRESS Equity Holdings L.P. owns certain preferred equity investments that are also owned by PGRESS and PGRESS-H (together with PGRESS-A, the “PGRESS Funds”). Prior to our acquisition of PGRESS-A, we owned a 5.4% interest in the underlying investments held by the PGRESS and PGRESS-H Funds, which were consolidated into our consolidated financial statements and were reflected as a component of “real estate funds” above. Subsequent to our acquisition of PGRESS-A, we are required to consolidate PGRESS Equity Holdings L.P. Accordingly, we reclassified the underlying investments to “preferred equity investments.”

- 13 -

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

	Quarter Ended December 31, 2015
	One			Real Estate
	Market Plaza			Funds (1)			Total
Total revenues	$	30,652		$	814		$	31,466
Total operating expenses		8,216			559			8,775
Net operating income		22,436			255			22,691
Depreciation and amortization expense		(13,246	)		(259	)		(13,505	)
Income from real estate fund investments		—			7,749			7,749
Unrealized gain on interest rate swaps		12,642			—			12,642
Interest and other income, net		5			—			5
Interest and debt expense		(13,907	)		(841	)		(14,748	)
Net income before income taxes		7,930			6,904			14,834
Income tax expense		—			(1	)		(1	)
Net income	$	7,930		$	6,903		$	14,833
Paramount Group, Inc.’s pro rata share Ownership %	49.0%			Various			Total
Net income	$	3,391		$	535		$	3,926
Add: Management fee income		44			1,742			1,786
Add: Carried interest		—			130			130
Net income attributable to Paramount Group, Inc.		3,435			2,407			5,842
Add: Real estate depreciation and amortization		6,491			23			6,514
FFO (2)		9,926			2,430			12,356
Less: Unrealized gain on interest rate swaps		(6,195	)		—			(6,195	)
Core FFO (2)	$	3,731		$	2,430		$	6,161
Noncontrolling Interests’ pro rata share Ownership %	51.0%			Various			Total
Net income	$	4,539		$	6,368		$	10,907
Less: Management fee expense		(44	)		(1,742	)		(1,786	)
Less: Carried interest		—			(130	)		(130	)
Net income attributable to noncontrolling interests		4,495			4,496			8,991
Add: Real estate depreciation and amortization		6,755			236			6,991
FFO (2)		11,250			4,732			15,982
Less: Unrealized gain on interest rate swaps		(6,447	)		—			(6,447	)
Core FFO (2)	$	4,803		$	4,732		$	9,535

⁽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 December 31, 2015
	712			Oder-Center,
	Fifth Avenue			Germany (1)			Total
Ownership %	50.0%			9.5%
ASSETS:
Rental property, net	$	214,139		$	6,626		$	220,765
Cash and cash equivalents		17,341			1,047			18,388
Restricted Cash		323			—			323
Deferred rent receivable		12,479			—			12,479
Accounts and other receivables, net		1,179			—			1,179
Deferred charges, net		10,622			—			10,622
Other assets		311			181			492
Total Assets	$	256,394		$	7,854		$	264,248
LIABILITIES:
Notes and mortgages payable	$	246,500		$	24,143		$	270,643
Accounts payable and accrued expenses		5,324			126			5,450
Interest rate swap liabilities		9,146			—			9,146
Other liabilities		530			119			649
Total Liabilities		261,500			24,388			285,888
Total Equity		(5,106	)		(16,534	)		(21,640	)
TOTAL LIABILITIES AND EQUITY	$	256,394		$	7,854		$	264,248

⁽¹⁾ We account for our interest in Oder-Center on a one quarter lag basis.

- 15 -

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

	Quarter Ended December 31, 2015
	712			Oder-Center,
	Fifth Avenue			Germany (2)			Total
Total revenues	$	13,649		$	1,133		$	14,782
Total operating expenses		5,398			170			5,568
Net operating income		8,251			963			9,214
Depreciation and amortization expense		(2,935	)		(96	)		(3,031	)
Unrealized gain on interest rate swaps		2,129			—			2,129
Interest and other income, net		7			—			7
Interest and debt expense		(2,699	)		(281	)		(2,980	)
Net income before income taxes		4,753			586			5,339
Income tax expense		—			(3	)		(3	)
Net income	$	4,753		$	583		$	5,336
Paramount Group, Inc.’s pro rata share Ownership %	50.0%			9.5%			Total
Net income	$	2,376		$	56		$	2,432
Less: Step-up basis adjustment		—			(26	)		(26	)
Net income attributable to Paramount Group, Inc.		2,376			30			2,406
Add: Real estate depreciation and amortization		1,468			35			1,503
FFO (1)		3,844			65			3,909
Less: Unrealized gain on interest rate swaps		(1,065	)		—			(1,065	)
Core FFO (1)	$	2,779		$	65		$	2,844
Joint Venture Partners’ pro rata share Ownership %	50.0%			90.5%			Total
Net income	$	2,377		$	527		$	2,904
Add: Real estate depreciation and amortization		1,468			89			1,557
FFO (1)		3,845			616			4,461
Less: Unrealized gain on interest rate swaps		(1,065	)		—			(1,065	)
Core FFO (1)	$	2,780		$	616		$	3,396

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

⁽²⁾  We account for our interest in Oder-Center on a one quarter lag basis.

- 16 -

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

					As of December 31, 2015
Debt:
Consolidated debt:
Notes and mortgages payable					$	2,941,524
$1.0 billion revolving credit facility						20,000
						2,961,524
Less:
Noncontrolling interests’ share of consolidated debt (One Market Plaza)						(437,089	)
Add:
Pro rata share of unconsolidated joint venture debt (712 Fifth Avenue and Oder-Center, Germany)						125,544
Total debt						2,649,979
	Shares / Units Outstanding		Share Price at December 31, 2015
Equity:
Common stock		212,112,137	$	18.10		3,839,229
Operating Partnership units		51,660,088		18.10		935,048
		263,772,225		18.10		4,774,277
Total Market Capitalization					$	7,424,256

- 17 -

	DEBT ANALYSIS
(unaudited and in thousands)

	Total Debt						Fixed Rate Debt						Variable Rate Debt
Consolidated Debt:	Amount			Rate			Amount			Rate			Amount			Rate
1633 Broadway	$	1,013,544			3.52	%	$	1,000,000			3.54	%	$	13,544			2.15	%
31 West 52nd Street		413,490			4.23	%		237,600			6.04	%		175,890			1.79	%
900 Third Avenue		274,337			4.22	%		162,000			5.98	%		112,337			1.69	%
Waterview		210,000			5.76	%		210,000			5.76	%		—			—
1899 Pennsylvania Avenue		89,116			4.88	%		89,116			4.88	%		—			—
Liberty Place		84,000			4.50	%		84,000			4.50	%		—			—
One Market Plaza		857,037			6.14	%		857,037			6.14	%		—			—
$1.0 Billion Revolving Credit Facility		20,000			1.54	%		—			—			20,000			1.54	%
Total consolidated debt		2,961,524			4.66	%		2,639,753			5.01	%		321,771			1.75	%
Noncontrolling interests’ share		(437,089	)		6.14	%		(437,089	)		6.14	%		—
Pro rata share of consolidated debt	$	2,524,435			4.40	%	$	2,202,664			4.79	%	$	321,771			1.75	%
Unconsolidated Joint Venture Debt:
712 Fifth Avenue	$	246,500			4.22	%	$	135,000			5.78	%	$	111,500			2.34	%
Oder-Center, Germany		24,143			4.62	%		24,143			4.62	%		—			—
Total unconsolidated debt		270,643			4.26	%		159,143			5.60	%		111,500			2.34	%
Joint venture partners’ share		(145,099	)		4.28	%		(89,349	)		5.49	%		(55,750	)		2.34	%
Pro rata share of unconsolidated debt	$	125,544			4.23	%	$	69,794			5.74	%	$	55,750			2.34	%
Pro Rata Share of Total Debt	$	2,649,979			4.39	%	$	2,272,458			4.82	%	$	377,521			1.84	%

Revolving Credit Facility Covenants: (1)	Required	Actual
Total Debt / Total Assets	Less than 60%		42.7	%
Secured Debt / Total Assets	Less than 45%		38.9	%
Fixed Charge Coverage	Greater than 1.5x		2.4x
Unsecured Debt /Unencumbered Assets	Less than 60%		14.6	%
Unencumbered Interest Coverage	Greater than 1.75x		19.8x

Debt Composition:	Amount		%
Fixed rate debt:
Pro rata consolidated fixed rate debt	$	2,202,664
Pro rata unconsolidated fixed rate debt		69,794
Total fixed rate debt		2,272,458		85.8	%
Variable rate debt:
Pro rata consolidated variable rate debt		321,771
Pro rata unconsolidated variable rate debt		55,750
Total variable rate debt		377,521		14.2	%
Pro Rata Share of Total Debt	$	2,649,979		100.0	%

⁽¹⁾  This section presents ratios as of December 31, 2015 in accordance with the terms of the Company’s revolving 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 revolving credit facility.

- 18 -

	DEBT MATURITIES
(unaudited and in thousands)

Consolidated Debt:	2016		2017			2018			2019			2020			Thereafter			Total
31 West 52nd Street	$	—	$	413,490		$	—		$	—		$	—		$	—		$	413,490
900 Third Avenue		—		274,337			—			—			—			—			274,337
Waterview		—		210,000			—			—			—			—			210,000
Liberty Place		—		—			84,000			—			—			—			84,000
One Market Plaza		—		—			—			857,037			—			—			857,037
1899 Pennsylvania Avenue		—		—			—			—			89,116			—			89,116
1633 Broadway		—		—			—			—			—			1,013,544			1,013,544
Revolving Credit Facility		—		—			20,000			—			—			—			20,000
Total consolidated debt		—		897,827			104,000			857,037			89,116			1,013,544			2,961,524
Noncontrolling interests’ share		—		—			—			(437,089	)		—			—			(437,089	)
Pro rata share of consolidated debt	$	—	$	897,827		$	104,000		$	419,948		$	89,116		$	1,013,544		$	2,524,435
Unconsolidated Joint Venture Debt:
712 Fifth Avenue	$	—	$	—		$	246,500		$	—		$	—		$	—		$	246,500
Oder-Center, Germany		—		—			—			—			—			24,143			24,143
Total unconsolidated debt		—		—			246,500			—			—			24,143			270,643
Joint venture partners’ share		—		—			(123,250	)		—			—			(21,849	)		(145,099	)
Pro rata share of unconsolidated debt	$	—	$	—		$	123,250		$	—		$	—		$	2,294		$	125,544
Pro rata share of total debt	$	—	$	897,827		$	227,250		$	419,948		$	89,116		$	1,015,838		$	2,649,979
Weighted average rate		—		4.59	%		4.09	%		6.14	%		4.88	%		3.52	%		4.39	%
% of Debt Maturing		—		33.9	%		8.6	%		15.8	%		3.4	%		38.3	%		100.0	%

- 19 -

	PORTFOLIO SUMMARY
(unaudited)

		%			Square		%			%			Annualized Rent (2)
Property	Submarket	Ownership			Feet (1)		Leased (2)			Occupied (2)			Amount		Per Square Foot (3)
As of December 31, 2015
New York:
1633 Broadway	West Side		100.0	%		2,643,065		92.7	%		83.5	%	$	141,165,000	$	69.60
1301 Avenue of the Americas	Sixth Ave / Rock Center		100.0	%		1,767,992		97.0	%		85.5	%		112,348,000		75.04
1325 Avenue of the Americas	Sixth Ave / Rock Center		100.0	%		814,892		96.5	%		94.2	%		49,875,000		67.27
31 West 52nd Street	Sixth Ave /Rock Center		100.0	%		786,647		100.0	%		100.0	%		60,298,000		79.09
900 Third Avenue	East Side		100.0	%		596,270		96.0	%		95.2	%		41,479,000		73.79
712 Fifth Avenue	Madison/Fifth		50.0	%		543,341		98.5	%		98.5	%		55,658,000		104.52
Subtotal / Weighted Average						7,152,207		95.7	%		89.1	%		460,823,000		75.36
Washington, D.C.:
Waterview	Rosslyn, VA		100.0	%		647,243		98.9	%		98.9	%		34,086,000		51.41
425 Eye Street	East End		100.0	%		380,090		96.5	%		90.1	%		15,292,000		45.72
2099 Pennsylvania Avenue	CBD		100.0	%		208,636		62.0	%		62.0	%		10,034,000		77.32
1899 Pennsylvania Avenue	CBD		100.0	%		192,481		88.8	%		88.8	%		13,471,000		79.85
Liberty Place	East End		100.0	%		174,205		80.1	%		80.1	%		10,872,000		76.52
Subtotal /Weighted Average						1,602,655		90.3	%		88.8	%		83,755,000		58.31
San Francisco:
One Market Plaza	South Financial District		49.0	%		1,611,125		98.4	%		97.2	%		98,006,000		63.63
Total / Weighted Average						10,365,987		95.3	%		90.3	%	$	642,584,000	$	70.71

⁽¹⁾  Represents the remeasured square feet, which includes an aggregate of 164,742 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.

- 20 -

	FUNDS SUMMARY
(unaudited)

Property Funds:

The following is a summary of the Property Funds, our ownership interests in these Funds and the Funds’ ownership interest in the underlying investments, as of December 31, 2015.

	% Ownership			60 Wall Street			One Market Plaza			50 Beale Street			670 Broadway
Fund II		10.0	%		46.3	%		—			—			—
Fund III		3.1	%		16.0	%		2.0	%		—			—
Fund VII/VII-H		7.2	%		—			—			42.8	%		100.0	%
Total Property Funds					62.3	%		2.0	%		42.8	%		100.0	%
Other Investors					37.7	%		98.0	%(1)		57.2	%		—
Total					100.0	%		100.0	%		100.0	%		100.0	%

The following is a summary of the Property Fund investments and our ownership interests in the underlying investments, as of December 31, 2015.

		%			Square		%			%			Annualized Rent (2)
	Submarket	Ownership			Feet		Leased			Occupied			Amount			Per Square Foot (3)
60 Wall Street	Downtown		5.1	%		1,625,483		100.0	%		100.0	%	$	67,000,000	(4)	$	41.22	(4)
50 Beale Street	South Financial District		3.1	%		663,483		98.6	%		98.6	%		33,783,000			52.77
670 Broadway	South Financial District		7.2	%		75,945		71.3	%		37.5	%		1,486,000			63.27

Alternative Investment Funds:

The following is a summary of our ownership interests in the Alternative Investment Funds and the Funds’ underlying investments, as of December 31, 2015.

		%								Investment
Investment	Investment Type	Ownership			Interest Rate			Initial Maturity		Total		Our Share
26 Broadway(5)	Mezzanine Loan		1.7	%		8.3	%		Jan-2022	$	46,678,000	$	794,000
1440 Broadway(6)	Mezzanine Loan		1.7	%		6.4	%		Oct-2019		40,619,000		691,000
700 Eighth Ave (7)	Mortgage/Mezzanine Loans		1.7	%		6.4	%		Dec-2016		80,317,000		1,365,000
										$	167,614,000	$	2,850,000

⁽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.

⁽⁵⁾  Represents a $46,000,000 mezzanine loan secured by the equity interest in the owner of 26 Broadway and bears interest at a fixed rate of 8.3%.

⁽⁶⁾  Represents a $40,000,000 mezzanine loan secured by the equity interest in the owner of 1440 Broadway and bears interest at LIBOR plus 600 bps.

⁽⁷⁾  Represents a senior mortgage and mezzanine loan aggregating $80,000,000 secured by 700 Eighth Avenue, and bears interest at LIBOR plus 600 bps.

- 21 -

	TOP TENANTS AND INDUSTRY DIVERSIFICATION
(unaudited)

	Lease Expiration			Square Feet Occupied			% of Total Square Feet			Annualized Rent (1)				% of Annualized Rent
Top 10 Tenants:										Amount		Per Square Foot
As of December 31, 2015
The Corporate Executive Board Company		Jan-2028			625,062			6.0	%	$	32,048,000	$	51.27		5.0	%
Barclays Capital, Inc.		Dec-2020			497,418			4.8	%		29,071,000		58.44		4.5	%
Allianz Global Investors, LP		Jan-2031	(2)		326,457	(2)		3.1	%		26,170,000		80.16		4.1	%
Clifford Chance LLP		Jun-2024			328,992			3.2	%		25,510,000		77.54		4.0	%
Credit Agricole Corporate & Investment Bank		Feb-2023			311,291			3.0	%		24,726,000		79.43		3.8	%
Commerzbank AG		May-2016	(3)		287,535	(3)		2.8	%		24,271,000		84.41		3.8	%
Google, Inc.		Apr-2025			275,822			2.7	%		17,495,000		63.43		2.7	%
Deloitte & Touche, LLP		Mar-2016			212,052			2.0	%		16,735,000		78.92		2.6	%
WMG Acquisition Corp. (Warner Music Group)		Jul-2029			293,487			2.8	%		16,311,000		55.58		2.5	%
Chadbourne & Parke LLP		Sep-2034			203,102			2.0	%		15,884,000		78.21		2.5	%

	Square Feet		% of Occupied			Annualized		% of Annualized
Industry Diversification:	Occupied		Square Feet			Rent		Rent
As of December 31, 2015
Legal Services		1,782,122		19.4	%	$	131,355,000		20.4	%
Financial Services - Commercial and Investment Banking		1,726,657		18.8	%		124,469,000		19.4	%
Financial Services - All other		1,396,171		15.2	%		112,087,000		17.4	%
Technology and Media		1,433,307		15.6	%		89,537,000		14.0	%
Retail		321,436		3.5	%		28,326,000		4.4	%
Insurance		338,399		3.7	%		26,869,000		4.2	%
Accounting		275,263		3.0	%		20,718,000		3.2	%
Real Estate		205,835		2.2	%		15,677,000		2.4	%
Government		316,700		3.5	%		14,677,000		2.3	%
Other		1,385,376		15.1	%		78,869,000		12.3	%

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

⁽²⁾  5,546 of the square feet leased expires in December 2016.

⁽³⁾  As of December 31, 2015, 144,712 of this square footage has been leased to other tenants pursuant to signed leases that are expected to commence following the May 2016 expiration.

- 22 -

	LEASING ACTIVITY
(unaudited)

	Total (1)			New York (1)			Washington, D.C.		San Francisco
Quarter Ended December 31, 2015:
Total square feet leased		647,828			478,451			—		169,377
Pro rata share of total square feet leased:		561,446			478,451			—		82,995
Initial rent (2)	$	79.80		$	78.90		$	—	$	85.01
Weighted average lease term (in years)		13.0			14.2			—		5.9
Tenant improvements and leasing commissions:
Per square foot	$	96.77		$	107.03		$	—	$	37.63
Per square foot per annum	$	7.46		$	7.54		$	—	$	6.40
Percentage of initial rent		9.4	%		9.6	%		—		7.5	%
Rent concessions:
Average free rent period (in months)		10.0			11.0			—		3.9
Average free rent period per annum (in months)		0.8			0.8			—		0.7
Second generation space: (2)
Square feet		443,336			360,341			—		82,995
Cash basis:
Initial rent (2)	$	79.68		$	78.45		$	—	$	85.01
Prior escalated rent	$	67.95		$	70.51		$	—	$	56.81
Percentage increase		17.3	%		11.3	%		—		49.6	%
GAAP basis:
Straight-line rent	$	80.75		$	79.83		$	—	$	84.72
Prior straight-line rent	$	67.61		$	70.51		$	—	$	55.00
Percentage increase		19.4	%		13.2	%		—		54.0	%

⁽¹⁾  The leasing statistics (excluding square feet leased) include the effect of a lease extension for the parking garage at 31 West 52nd Street.

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

- 23 -

	LEASING ACTIVITY
(unaudited)

	Total (1)			New York (1)			Washington, D.C.			San Francisco
Year Ended December 31, 2015:
Total square feet leased		1,393,770			1,074,761			49,633			269,376
Pro rata share of total square feet leased:		1,220,654			1,039,027			49,633			131,994
Initial rent (2)	$	78.48		$	78.37		$	56.58		$	87.64
Weighted average lease term (in years)		11.9			12.6			11.1			6.2
Tenant improvements and leasing commissions:
Per square foot	$	89.71		$	95.80		$	92.63		$	40.70
Per square foot per annum	$	7.55		$	7.57		$	8.35		$	6.60
Percentage of initial rent		9.6	%		9.7	%		14.8	%		7.5	%
Rent concessions:
Average free rent period (in months)		9.6			10.4			10.3			3.2
Average free rent period per annum (in months)		0.8			0.8			0.9			0.5
Second generation space: (2)
Square feet		930,514			787,585			20,770			122,159
Cash basis:
Initial rent (2)	$	79.52		$	78.31		$	78.62		$	87.47
Prior escalated rent	$	68.78		$	70.59		$	64.86		$	57.79
Percentage increase		15.6	%		10.9	%		21.2	%		51.3	%
GAAP basis:
Straight-line rent	$	79.60		$	78.54		$	77.00		$	86.85
Prior straight-line rent	$	68.62		$	70.95		$	51.72		$	56.48
Percentage increase		16.0	%		10.7	%		48.9	%		53.8	%

⁽¹⁾  The leasing statistics (excluding square feet leased) include the effect of a lease extension for the parking garage at 31 West 52nd Street.

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

- 24 -

	LEASE EXPIRATIONS
(unaudited)

Year of	Square Feet		Annualized Rent (1)				% of
Lease Expiration (2)	of Expiring Leases		Amount		Per Square Foot (3)		Annualized Rent
Month to Month		5,593	$	631,000	$	104.08		0.1	%
1Q 2016		9,111		911,000		100.00		0.1	%
2Q 2016		366,010		30,019,000		81.49		4.5	%
3Q 2016		160,772		11,675,000		72.65		1.7	%
4Q 2016		27,427		2,045,000		76.28		0.3	%
Total 2016		563,320		44,650,000		79.02		6.6	%
2017		553,297		40,453,000		73.75		6.0	%
2018		323,095		25,631,000		79.20		3.8	%
2019		500,762		37,617,000		75.50		5.6	%
2020		465,698		32,852,000		79.17		4.9	%
2021		1,521,322		89,931,000		59.99		13.4	%
2022		531,263		35,346,000		73.97		5.3	%
2023		670,462		53,101,000		79.70		7.9	%
2024		682,055		53,564,000		78.99		8.0	%
2025		465,438		34,118,000		73.43		5.1	%
Thereafter		3,300,647		223,413,000		67.23		33.3	%

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

⁽²⁾  Leases that expire on the last day of the quarter are treated as occupied and are reflected as expiring space in the following quarter.

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

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	CAPITAL EXPENDITURES - CASH BASIS
(unaudited and in thousands)

	Quarter Ended
	December 31, 2015		September 30, 2015		June 30, 2015		March 31, 2015
Capital expenditures to maintain assets:
Recurring (1)	$	5,549	$	3,101	$	273	$	3,754
Non-recurring (1)		—		—		—		—
Total capital expenditures to maintain assets	$	5,549	$	3,101	$	273	$	3,754
Tenant improvements:
Recurring (1)	$	10,064	$	5,298	$	13,254	$	10,795
Non-recurring (1)		14,470		10,555		1,431		1,693
Total tenant improvements	$	24,534	$	15,853	$	14,685	$	12,488
Leasing commissions:
Recurring (1)	$	25,712	$	4,304	$	3,355	$	3,544
Non-recurring (1)		7,890		1,124		1,678		2,587
Total leasing commissions	$	33,602	$	5,428	$	5,033	$	6,131
Total capital expenditures, tenant improvements and leasing commissions:
Total recurring (1)	$	41,325	$	12,703	$	16,882	$	18,093
Total non-recurring (1)		22,360		11,679		3,109		4,280
Total capital expenditures, tenant improvements and leasing commissions	$	63,685	$	24,382	$	19,991	$	22,373
Development expenditures (1)
One Market Plaza—Lobby and Retail repositioning	$	3,973	$	3,421	$	3,866	$	5,301
1633 Broadway—Plaza and Retail development (2)		3,940		2,873		879		93
Other		708		679		576		—
Total Development expenditures	$	8,621	$	6,973	$	5,321	$	5,394

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

⁽²⁾ Of the $15,000 budget, $8,683 has been expended as of December 31, 2015.

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DEFINITIONS

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. FFO is commonly used in the real estate industry to assist investors and analysts in comparing results of real estate companies because it excludes the effect of real estate depreciation and amortization and net gains on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions. FFO attributable to common stockholders represents the pro rata share of FFO that is attributable to common stockholders and is calculated by reducing noncontrolling interest in consolidated joint ventures and funds and noncontrolling interest in Operating Partnership’s pro rata share of FFO from FFO.

FFO Payout Ratio is calculated as dividends per share divided by 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. We present Core FFO as an alternative measure of our operating performance, which adjusts FFO for items that we believe enhance the comparability of our FFO across periods. In future periods, we may also exclude other items from Core FFO that we believe may help investors compare our results. Core FFO attributable to common stockholders represents the pro rata share of Core FFO that is attributable to common stockholders and is calculated by reducing noncontrolling interest in consolidated joint ventures and funds and noncontrolling interest in Operating Partnership’s pro rata share of Core FFO from Core FFO.

Core FFO Payout Ratio is calculated as dividends per share divided by Core 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. FAD is commonly used in the real estate industry as a measure of the ability to fund cash needs and make dividend payments. FAD does not represent cash generated from operating activities determined in accordance with GAAP, as presented in our consolidated statements of cash flow and may not be comparable to other real estate companies. FAD attributable to common stockholders represents the pro rata share of FAD that is attributable to common stockholders and is calculated by reducing noncontrolling interest in consolidated joint ventures and funds and noncontrolling interest in Operating Partnership’s pro rata share of FAD from FAD.

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

Net Operating Income (“NOI”) is a metric we use to measure the operating performance of our properties, and consists of property-related revenue (which includes rental revenue, tenant reimbursement income and certain other income) less operating expenses (which includes building expenses such as cleaning, security, repairs and maintenance, utilities, property administration and real estate taxes). We also present Cash NOI which deducts from NOI, straight-line rent adjustments and the amortization of above and below-market leases, 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. NOI and Cash NOI are metrics we use to measure the operating performance of our properties. We use these metrics internally as performance measures and believe they provide useful information to investors regarding our financial condition and results of operations because they reflect only those income and expense items that are incurred at property level. Other real estate companies may use different methodologies for calculating NOI and Cash NOI, and accordingly, our presentation of NOI and Cash NOI may not be comparable to other real estate companies.

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DEFINITIONS - CONTINUED

Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) is calculated as net income plus interest expense, income taxes, depreciation and amortization expenses. We present EBITDA because we believe that EBITDA, along with cash flow from operating activities, investing activities and financing activities, provides investors with an additional indicator of its ability to incur and service debt. EBITDA should not be considered as an alternative to net income (determined in accordance with GAAP), as an indication of our financial performance, as an alternative to net cash flows from operating activities (determined in accordance with GAAP), or as a measure of its liquidity.

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) is calculated by adjusting EBITDA to eliminate the impact of the performance of our real estate funds, gains and losses on interest rate swaps, acquisition and transaction costs and certain other items that may vary from period to period. We also present our pro rata share of Adjusted EBITDA, which represents our share of the Adjusted EBITDA generated by our consolidated and unconsolidated operating assets based on our percentage ownership of such assets. Adjusted EBITDA helps compare our operating performance from period to period by removing from our operating results the impact of our capital structure (primarily interest charges from our consolidated outstanding debt and the impact of our interest rate swaps), certain non-cash expenses (primarily depreciation and amortization on our assets), the formation and performance of our real estate funds and acquisition and transaction costs that may vary from period to period. In future periods, we may also exclude other items from Adjusted EBITDA that we believe may help investors compare our results. Adjusted EBITDA should not be considered as an alternative to net income (loss) determined in accordance with GAAP. Other real estate companies may use different methodologies for calculating Adjusted EBITDA or similar metrics, and accordingly, our presentation of Adjusted EBITDA may not be comparable to other real estate companies.

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

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

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

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.

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

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.

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