
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Maryland

32-0439307

(State or other jurisdiction of

incorporation or organization)

(IRS Employer

Identification No.)

1633 Broadway, Suite 1801, New York, NY

10019

(Address of principal executive offices)

(Zip Code)


Large Accelerated Filer	☒		Accelerated Filer	☐
Non-Accelerated Filer	☐	~~(Do not check if smaller reporting company)~~	Smaller Reporting Company	☐
			Emerging Growth Company	☐

(Amounts in thousands, except share, unit and per share amounts)

ASSETS
September 30, 2017

December 31, 2016

Real estate, at cost

Land
$
2,209,506

$
2,091,535

Buildings and improvements

6,097,220

5,757,558

8,306,726

7,849,093

Accumulated depreciation and amortization

(443,555
)

(318,161
)
Real estate, net

7,863,171

7,530,932

Cash and cash equivalents

185,028

162,965

Restricted cash

32,320

29,374

Investments in unconsolidated joint ventures

46,014

6,411

Investments in unconsolidated real estate funds

8,146

28,173

Preferred equity investments, net of allowance of $19,588 and $0

35,763

55,051

Marketable securities

27,867

22,393

Accounts and other receivables, net of allowance of $324 and $202

13,822

15,251

Deferred rent receivable

209,226

163,695

Deferred charges, net of accumulated amortization of $16,628 and $9,832

88,846

71,184

Intangible assets, net of accumulated amortization of $189,209 and $166,841

373,053

412,225

Assets held for sale

-

346,685

Other assets

40,752

22,829

Total assets ⁽¹⁾
$
8,924,008

$
8,867,168

LIABILITIES AND EQUITY

Notes and mortgages payable, net of deferred financing costs of $44,029 and $43,281
$
3,539,071

$
3,364,898

Revolving credit facility

-

230,000

Due to affiliates

27,299

27,299

Accounts payable and accrued expenses

97,679

103,896

Dividends and distributions payable

25,211

25,151

Intangible liabilities, net of accumulated amortization of $71,453 and $55,349

138,563

153,018

Other liabilities

54,029

76,959

Total liabilities ⁽¹⁾

3,881,852

3,981,221

Commitments and contingencies

Paramount Group, Inc. equity:

Common stock $0.01 par value per share; authorized 900,000,000 shares; issued
and outstanding 240,073,742 and 230,015,356 shares in 2017 and 2016, respectively

2,400

2,300

Additional paid-in-capital

4,286,265

4,116,987

Earnings less than distributions

(104,059
)

(129,654
)
Accumulated other comprehensive income

1,014

372

Paramount Group, Inc. equity

4,185,620

3,990,005

Noncontrolling interests in:

Consolidated joint ventures

408,035

253,788

Consolidated real estate fund

14,947

64,793

Operating Partnership (24,977,743 and 34,511,214 units outstanding)

433,554

577,361

Total equity

5,042,156

4,885,947

Total liabilities and equity
$
8,924,008

$
8,867,168

(1)

Represents the consolidated assets and liabilities of Paramount Group Operating Partnership LP, a Delaware limited partnership (the “Operating Partnership”). The Operating Partnership is a consolidated variable interest entity (“VIE”), of which we are the sole general partner and own approximately 93.4% as of June 30, 2023. As of June 30, 2023, the assets and liabilities of the Operating Partnership include $4,003,965 and $2,570,004 of assets and liabilities, respectively, of certain VIEs that are consolidated by the Operating Partnership. See Note 12, Variable Interest Entities (“VIEs”).

⁽¹⁾

Represents the consolidated assets and liabilities of Paramount Group Operating Partnership LP, a Delaware limited partnership (the “Operating Partnership”). The Operating Partnership is a consolidated variable interest entity (“VIE”), of which we are the sole general partner and own approximately 90.6% as of September 30, 2017. The assets and liabilities of the Operating Partnership, as of September 30, 2017, include $1,970,149 and $1,272,907 of assets and liabilities, respectively, of certain VIEs that are consolidated by the Operating Partnership. See Note 13, ~~Variable Interest Entities.~~

Common Shares

Noncontrolling Interests in

(Amounts in thousands, except per share and
   unit amounts)

Shares

Amount

Additional
Paid-in-Capital

Earnings Less than Distributions

Accumulated Other Comprehensive Income (Loss)

Consolidated Joint
Ventures

Consolidated Real Estate Funds

Operating
Partnership

Total
Equity

Balance as of December 31, 2015

212,112

$
2,122

$
3,802,858

$
(36,120
)

$
(7,843
)

$
236,849

$
414,637

$
898,047

$
5,310,550

Deconsolidation of real estate fund
   investments upon adoption of ASU 2015-02

-

-

-

-

-

-

(351,035
)

-

(351,035
)
Balance as of January 1, 2016

212,112

2,122

3,802,858

(36,120
)

(7,843
)

236,849

63,602

898,047

4,959,515

Net income (loss)

-

-

-

(3,445
)

-

10,062

(819
)

(906
)

4,892

Common shares issued upon redemption of
   common units

7,403

74

126,068

-

-

-

-

(126,142
)

-

Common shares issued under Omnibus
   share plan

97

-

-

-

-

-

-

-

-

Dividends and distributions ($0.285 per share
   and unit)

-

-

-

(61,953
)

-

-

-

(13,496
)

(75,449
)
Distributions to noncontrolling interests

-

-

-

-

-

(2,692
)

-

-

(2,692
)
Change in value of interest rate swaps

-

-

-

-

(27,231
)

-

-

(6,581
)

(33,812
)
Pro rata share of other comprehensive
   loss of unconsolidated joint ventures

-

-

-

-

(18
)

-

-

(1
)

(19
)
Amortization of equity awards

-

-

1,605

-

-

-

-

8,019

9,624

Other

-

-

18

191

-

15

7

-

231

Balance as of September 30, 2016

219,612

$
2,196

$
3,930,549

$
(101,327
)

$
(35,092
)

$
244,234

$
62,790

$
758,940

$
4,862,290

Balance as of December 31, 2016

230,015

$
2,300

$
4,116,987

$
(129,654
)

$
372

$
253,788

$
64,793

$
577,361

$
4,885,947

Net income (loss)

-

-

-

93,174

-

(11,029
)

20,195

12,068

114,408

Common shares issued upon redemption of
   common units

10,001

100

166,424

-

-

-

-

(166,524
)

-

Common shares issued under Omnibus
   share plan, net of shares withheld for taxes

58

-

-

(154
)

-

-

-

-

(154
)
Dividends and distributions ($0.285 per share
   and unit)

-

-

-

(67,425
)

-

-

-

(8,204
)

(75,629
)
Contributions from noncontrolling interests

-

-

-

-

-

96,472

4,305

-

100,777

Distributions to noncontrolling interests

-

-

-

-

-

(41,203
)

(74,346
)

-

(115,549
)
Consolidation of 50 Beale Street

-

-

-

-

-

110,007

-

-

110,007

Change in value of interest rate swaps

-

-

-

-

600

-

-

129

729

Pro rata share of other comprehensive income
   (loss) of unconsolidated joint ventures

-

-

-

-

42

-

-

(3
)

39

Amortization of equity awards

-

-

2,244

-

-

-

10,882

13,126

Other

-

-

610

-

-

-

-

7,845

8,455

Balance as of September 30, 2017

240,074

$
2,400

$
4,286,265

$
(104,059
)

$
1,014

$
408,035

$
14,947

$
433,554

$
5,042,156

For the Nine Months Ended September 30,

(Amounts in thousands)
2017

2016

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income
$
114,408

$
4,892

Adjustments to reconcile net income to net cash provided by
operating activities:

Depreciation and amortization

198,143

208,475

Amortization of deferred financing costs

8,367

4,121

Gain on sale of real estate

(133,989
)

-

Straight-lining of rental income

(43,529
)

(67,843
)
Amortization of above and below-market leases, net

(14,164
)

(6,593
)
Loss on early extinguishment of debt

7,877

-

Unrealized gain on interest rate swaps

(1,802
)

(29,661
)
Realized and unrealized gains on marketable securities

(3,198
)

(341
)
Valuation allowance on preferred equity investment

19,588

-

Income from unconsolidated joint ventures

(19,143
)

(5,291
)
Distributions of earnings from unconsolidated joint ventures

3,380

5,824

Loss from unconsolidated real estate funds

6,053

2,540

Distributions of earnings from unconsolidated real estate funds

275

308

Amortization of stock-based compensation expense

11,692

8,766

Other non-cash adjustments

395

1,981

Changes in operating assets and liabilities:

Accounts and other receivables

2,260

(1,455
)
Deferred charges

(25,429
)

(11,266
)
Other assets

(18,094
)

(39,338
)
Accounts payable and accrued expenses

(10,710
)

(3,335
)
Deferred income taxes

(1,499
)

(2,979
)
Other liabilities

4,190

1,343

Net cash provided by operating activities

105,071

70,148

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from sale of real estate

540,333

-
��
Acquisitions of real estate

(161,184
)

-

Additions to real estate

(59,255
)

(107,445
)
Investments in unconsolidated joint ventures

(28,886
)

-

Distributions of capital from unconsolidated joint ventures

20,000

-

Deposits on real estate

-

(50,000
)
Changes in restricted cash

(8,224
)

11,380

Distributions of capital from unconsolidated real estate funds

13,849

-

Contributions of capital to unconsolidated real estate funds

(790
)

(1,084
)
Net cash provided by (used in) investing activities

315,843

(147,149
)

For the Nine Months Ended September 30,

(Amounts in thousands)
2017

2016

CASH FLOWS FROM FINANCING ACTIVITIES:

Repayments of notes and mortgages payable
$
(1,044,821
)

$
(414,564
)
Proceeds from notes and mortgages payable

991,556

509,578

Repayment of borrowings under revolving credit facility

(290,000
)

(80,000
)
Borrowings under revolving credit facility

60,000

110,000

Distributions to noncontrolling interests

(115,549
)

(2,692
)
Contributions from noncontrolling interests

100,777

-

Dividends paid to common stockholders

(66,469
)

(61,241
)
Settlement of interest rate swap liabilities

(19,425
)

(16,040
)
Loss on early extinguishment of debt

(7,877
)

-

Debt issuance costs

(7,344
)

(6,532
)
Transfer tax refund in connection with the acquisition of noncontrolling interests

9,555

-

Distributions paid to common unitholders

(9,100
)

(14,124
)
Repurchase of shares related to stock compensation agreements
and related tax withholdings

(154
)

-

Net cash (used in) provided by financing activities

(398,851
)

24,385

Net increase (decrease) in cash and cash equivalents

22,063

(52,616
)
Cash and cash equivalents at beginning of period

162,965

143,884

Decrease in cash due to deconsolidation of real estate fund investments

-

(7,987
)
Cash and cash equivalents at end of period
$
185,028

$
83,281

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash payments for interest
$
106,731

$
106,015

Cash payments for income taxes, net of refunds

5,042

1,524

NON-CASH TRANSACTIONS:

Common shares issued upon redemption of common units
$
166,524

$
126,142

Dividends and distributions declared but not yet paid

25,211

25,151

Write-off of fully amortized and/or depreciated assets

5,958

8,475

Additions to real estate included in accounts payable and accrued expenses

10,986

6,609

Purchases of marketable securities resulting in a decrease to restricted cash

2,278

139

Change in fair value of interest rate swaps

(729
)

33,812

Consolidation (deconsolidation) of real estate and real estate fund investments

102,512

(396,697
)
Assumption of notes and mortgages payable

228,000

-

1.	~~Organization and Business~~

Organization and Business

As used in these consolidated financial statements, unless otherwise indicated, all references to “we,” “us,” “our,” the “Company,” and “Paramount” refer to Paramount Group, Inc., a Maryland corporation, and its consolidated subsidiaries, including Paramount Group Operating Partnership LP, a Delaware limited partnership (the “Operating Partnership”)~~, a Delaware Limited Partnership.~~. We are a fully-integrated real estate investment trust (“REIT”) focused on owning, operating, managing, acquiring and redeveloping high-quality, Class A office properties in select central business district submarkets of New York City ~~Washington, D.C.~~ and San Francisco. ~~As of September 30, 2017, our portfolio consisted of 14 Class A office properties aggregating approximately 12.5 million square feet.~~ We conduct our business through, and substantially all of our interests in properties and investments are held by, the Operating Partnership. We are the sole general partner of, and owned approximately ~~90.6%~~93.4% of, the Operating Partnership as of ~~September~~June 30, ~~2017.~~2023.

As of June 30, 2023, we owned and/or managed a portfolio of 18 properties aggregating 13.8 million square feet comprised of:

2.	~~Basis of Presentation and Significant Accounting Policies~~

•

Eight wholly and partially owned Class A properties aggregating 8.7 million square feet in New York, comprised of 8.2 million square feet of office space and 0.5 million square feet of retail, theater and amenity space;

•

Six wholly and partially owned Class A properties aggregating 4.3 million square feet in San Francisco, comprised of 4.1 million square feet of office space and 0.2 million square feet of retail space; and

•

Four managed properties aggregating 0.8 million square feet in New York and Washington, D.C.

Additionally, we have an investment management business, where we serve as the general partner of several real estate related funds for institutional investors and high net-worth individuals.

Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements are unaudited and have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in conjunction with the instructions to Form 10-Q of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosures required by GAAP for complete financial statements have been condensed or omitted. These consolidated financial statements include the accounts of Paramount and its consolidated subsidiaries, including the Operating Partnership. ~~All~~In the opinion of management, all significant ~~inter-company amounts have been eliminated. In our opinion, all~~ adjustments (which include only normal recurring adjustments) and eliminations (which include intercompany balances and transactions) necessary to present fairly the financial position, results of operations and changes in cash flows have been made. ~~Certain~~The consolidated balance sheet as of December 31, 2022 was derived from audited financial statements as of that date but does not include all information and ~~footnote~~ disclosures ~~normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted.~~required by GAAP. These consolidated financial statements ~~have been prepared in accordance with the instructions to Form 10-Q of the Securities and Exchange Commission (“SEC”) and~~ should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2022, as filed with the SEC.

Significant Accounting Policies

There are no material changes to our significant accounting policies as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022.

PARAMOUNT GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Use of Estimates

We have made estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ materially from those estimates. The results of operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2023, are not necessarily indicative of the operating results for the full year.

~~Significant Accounting Policies~~

~~There are no material changes to our significant accounting policies as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2016.~~

Recently Issued Accounting Pronouncements ~~Not Impacting Our Financial Statements~~

In March ~~2016, the FASB issued ASU 2016-09, an update to ASC Topic 718,~~ ~~Compensation – Stock Compensation.~~ ASU 2016-09 improves the accounting for share-based payments including income tax consequences and the classification of awards as either equity awards or liability awards. ASU 2016-09 is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2016, with early adoption permitted. We adopted the provisions of ASU 2016-09 on January 1, 2017. This adoption did not have any impact on our consolidated financial statements.

~~In June 2016, the FASB issued ASU 2016-13, an update to ASC Topic 326, Financial Instruments – Credit Losses.~~ ASU 2016-13 requires measurement and recognition of expected credit losses on financial instruments measured at amortized cost at the end of each reporting period rather than recognizing the credit losses when it is probable that the loss has been incurred in accordance with current guidance. ASU 2016-13 is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2019, with early adoption permitted for fiscal years beginning after December 15, 2018. We are evaluating the impact of ASU 2016-13 but do not believe the adoption will have a material impact on our consolidated financial statements.

~~PARAMOUNT GROUP, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

~~In August 2016, the FASB issued ASU 2016-15, an update to ASC Topic 230,~~ ~~Statement of Cash Flows~~ to provide guidance for areas where there is diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2017, with early adoption permitted. We adopted the provisions of ASU 2016-15 retrospectively on January 1, 2017. This adoption did not have a material impact on our consolidated financial statements.

~~In October 2016, the FASB issued ASU 2016-17, an update to ASC Topic 810,~~ ~~Consolidation. ASU 2016-17 requires~~ a reporting entity to consider only its proportionate indirect interest in the VIE held through a common control party in evaluating whether it is the primary beneficiary of a VIE. Currently, ASU 2015-02 requires the reporting entity to treat the common control party’s interest in the VIE as if the reporting entity held the interest itself. ASU 2016-17 is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2016. We adopted the provisions of ASU 2016-17 on January 1, 2017. This adoption did not have any impact on our consolidated financial statements.

~~In May 2017, the FASB issued ASU 2017-09, an update to ASC Topic 718,~~ ~~Compensation – Stock Compensation.~~ ASU 2017-09 clarifies the types of changes to the terms and conditions of a share-based payment award that requires modification accounting. ASU 2017-09 does not change the accounting for modification of share-based awards, but clarifies that modification accounting should only be applied if there is a change to the value, vesting condition or award classification and would not be required if the changes are considered non-substantive. ASU 2017-09 is effective for interim and annual reporting periods in fiscal years that begin after December 31, 2017, with early adoption permitted. We will adopt the provisions of ASU 2017-09 on January 1, 2018 and do not believe that the adoption of ASU 2017-09 will have an impact on our consolidated financial statements.

~~In August 2017, the FASB issued ASU 2017-12, an update to ASC Topic 815,~~ ~~Derivatives and Hedging.~~ ASU 2017-12 improves transparency and understandability of information by better aligning the financing reporting for hedging relationships with the risk management activities. ASU 2017-12 also simplifies the application of hedge accounting through changes in both the designation and measurement of qualifying hedging relationships. ASU 2017-12 is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2018, with early adoption permitted. We are evaluating the impact of ASU 2017-12 but do not believe the adoption will have an impact on our consolidated financial statements.

~~Recently Issued Accounting Pronouncements Potentially Impacting Our Financial Statements~~

~~In May 2014,~~2020, the Financial Accounting ~~Standard’s~~Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ~~2014-09, an update to~~2020-04, which adds ASC Topic ~~606,~~ ~~Revenue~~848, Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 provides temporary optional expedients and exceptions to ease financial reporting burdens related to applying current GAAP to modifications of contracts, hedging relationships and other transactions in connection with the transition from ~~Contracts with Customers~~.the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. ASU 2014-09, as amended, supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of this guidance is that an entity should recognize revenue when it transfers promised goods or services2020-04 was effective beginning March 12, 2020 to customers in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. This guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. This guidance is effective for fiscal years beginning after December ~~15, 2017, and for interim periods within those fiscal years, and can be applied using a full retrospective or modified retrospective approach. We plan to implement ASU 2014-09 on~~31, 2022. In January 1, 2018, using the modified retrospective approach. While we do not believe the adoption of ASU 2014-09 will have a material impact on our consolidated financial statements, it will result in additional disclosures on our consolidated financial statements.

~~In February 2016,~~2021, the FASB issued ASU ~~2016-02, an update~~2021-01 to ~~ASC Topic 842,~~ ~~Leases.~~clarify that certain optional expedients and exceptions apply to modifications of derivative contracts and certain hedging relationships affected by changes in the interest rates used for discounting cash flows, computing variation margin settlements, and for calculating price alignment interest. ASU ~~2016-02 amends~~2021-01 was effective beginning January 7, 2021 to December 31, 2022. In December 2022, the ~~existing guidance~~FASB issued ASU 2022-06 to extend the effectiveness date of ASU 2020-04 and ASU 2021-01 from December 31, 2022 to December 31, 2024. During the three months ended June 30, 2023, we entered into loan modifications in connection with the transition from LIBOR to Secured Overnight Financing Rate (“SOFR”) for ~~lease accounting, including requiring lessees~~our variable rate loans and we applied the practical expedient to ~~recognize most leases on their balance sheets. ASU 2016-02 requires lessees~~all such modifications. We will continue to apply ~~a dual approach, classifying leases~~ASU 2020-04 and ASU 2021-01 prospectively as ~~either financing or operating~~ and ~~recording a right-of-use asset and a lease liability for all leases with a term greater than 12 months. ASU 2016-02 requires lessors~~when we enter into transactions to account for leases using an approach that is substantially similar to existing guidance for sales-type leases, direct financing leases and operating leases. ASU 2016-02 is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2018, with early adoption permitted. We plan to adopt the provisions of ASU 2016-02 on January 1, 2019 using the modified retrospective approach. While we believe that the key changes in ASU 2016-02 relate to the separation of and allocation of consideration to, lease component (rental income) and non-lease components (revenue related to various services we provide), we continue to evaluate the other potential implications that this update will have on our consolidated financial statements.which these updates apply.

Consolidated Real Estate Related Funds

Real Estate Related Fund Investments (Fund X)

~~In November 2016, the FASB issued ASU 2016-18, an update to ASC Topic 230,~~ ~~Statement of Cash Flows~~ ~~to provide guidance on~~ ~~classification and presentation of changes in restricted cash on the statement of cash flows. ASU 2016-18 requires that an~~ ~~entity’s reconciliation of the beginning-of-period and end-of-period total amounts shown on the statement of cash flows to include restricted cash with cash and cash equivalents.~~ ASU 2016-18 is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2017, with early adoption permitted. We will adopt the provisions of ASU 2016-18 on January 1, 2018. This adoption will impact the presentation of our consolidated statements of cash flows, as well as require additional disclosures to reconcile cash and cash equivalents and restricted cash

Real estate related fund investments on our consolidated balance sheets represent the investments of Paramount Group Real Estate Fund X, LP (“Fund X”), which invests in mezzanine loans. We are the general partner and investment manager of Fund X, which, prior to ~~our consolidated statements~~December 12, 2022, was accounted for under the equity method of ~~cash flows.~~

~~In January 2017, the FASB issued ASU 2017-01, an update to ASC Topic 805,~~ ~~Business Combinations.~~ ASU 2017-01 narrows the definition of a business and provides a framework for making reasonable judgments about whether a transaction involves an asset or a business. ASU 2017-01 clarifies that when substantially all the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. ASU 2017-01 also requires that a set cannot be considered a business unless it includes, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output. ASU 2017-01 is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2017, with early adoption permitted for transactions (i.e., acquisitions or dispositions) that occurred before the issuance date or effective date of the standard if the transactions were not reported in financial statements that have been issued or made available for issuance. We adopted the provisions of ASU 2017-01 on October 1, 2016 and concluded that the acquisition of our One Front Street property in December 2016 and 50 Beale in July 2017 did not meet the definition of a business and therefore were treated as asset acquisitions.

~~In February 2017, the FASB issued ASU 2017-05, an update to ASC Topic 610,~~ ~~Other Income. ASU 2017-05 clarifies the scope and~~ accounting for derecognition of a nonfinancial asset and eliminates the guidance in ASC 360-20 specific to real estate sales and partial sales. ASU 2017-05 requires an entity that transfers control of a nonfinancial asset to measure any noncontrolling interest it retains (or receives) at fair value. ASU 2017-05 is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2017, with early adoption permitted for entities concurrently early adopting ASU 2014-09. We plan to adopt the provisions of ASU 2017-05 on January 1, 2018, using the modified retrospective approach. Upon adoption, we expect to record a $7,086,000 adjustment to “investments in unconsolidated joint ventures” relating to the measurement of our consolidated Residential Development Fund’s (“RDF”) retained interest in 75 Howard Street, a fully-entitled residential condominium land parcel (“75 Howard”) at fair value. See(see Note 5, 4, Investments in Unconsolidated ~~Joint Ventures~~Real Estate Related Funds).

~~PARAMOUNT GROUP, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

3.	~~Acquisitions~~

~~50 Beale Street~~

~~Prior~~Subsequent to ~~July 17, 2017,~~December 12, 2022, we ~~owned a 3.1% economic~~increased our ownership interest in ~~50 Beale Street, a 660,625 square foot Class A office building in San Francisco, California (“50 Beale”) through two real estate funds that owned 42.8% of the property (See Note 6,~~ ~~Real Estate~~ Fund ~~Investments). The remaining 57.2% was owned by third party investors. On July 17, 2017, we~~X to 13.0% and a new joint venture in which we have a 36.6% interest, completed the acquisition of 62.2% of the property from our two funds and the third party investors. Subsequent to the acquisition, we own a direct 13.2% interest in the property and the new joint venture owns the remaining 49.0% interest. Accordingly, our economic interest in the property is 31.1%. We began consolidating ~~the accounts of 50 Beale~~Fund X into our consolidated financial ~~statements from the date of acquisition because the property is held through a VIE and we are deemed to be the primary beneficiary of the VIE.~~statements.

The acquisition valued the property at $517,500,000 and included the assumption of $228,000,000 of existing debt that bears interest at a fixed rate of 3.65% and is scheduled to mature in October 2021. The following table summarizes the allocation of purchase price between the assets acquired and liabilities assumed on the date of acquisition.

(Amounts in thousands)

Purchase price allocation:

Land

$
141,097

Building and improvements

343,819

In-place lease intangible assets

27,965

Above-market lease intangible assets

2,976

Accounts receivable and other assets

1,338

Below-market lease intangible liabilities

(11,472
)
Accounts payable and other liabilities

(6,532
)
Notes and mortgages payable

(228,000
)
Net assets acquired

$
271,191

4.	~~Dispositions~~

~~Waterview~~

On May 3, 2017, we completed the sale of Waterview, a 636,768 square foot, Class A office building in Rosslyn, Virginia for $460,000,000 and recognized a net gain of $110,583,000, which is included as a component of “gain on sale of real estate” on our consolidated statement of income for the nine months ended September 30, 2017.

The following table sets forth the details of income or loss from real estate related fund investments for the ~~assets~~three and six months ended June 30, 2023.



	For the Three Months Ended			For the Six Months Ended
(Amounts in thousands)	June 30, 2023		��	June 30, 2023
Net investment income	$	3,048		$	7,709
Net realized losses		(1,224	)		(1,224	)
Net unrealized losses (1)		(44,468	)		(45,579	)
Loss from real estate related fund investments		(42,644	)		(39,094	)
Less: noncontrolling interests in consolidated real estate related funds		37,390			34,573
Loss from real estate related fund investments attributable to Paramount Group, Inc.	$	(5,254	)	$	(4,521	)

(1)

Primarily represents an unrealized loss on a mezzanine loan investment based on a negotiated transaction price.

(Amounts in thousands)

Land

$
78,300

Building and improvements, net

251,671

Deferred charges

14,512

Deferred rent receivable

2,202

Assets held for sale

$
346,685

5.	~~Investments in Unconsolidated Joint Ventures~~

Investments in Unconsolidated Real Estate Related Funds

We are the general partner and investment manager of Paramount Group Real Estate Fund VIII, LP (“Fund VIII”) which invests in real estate and related investments. As of June 30, 2023, our ownership interest in Fund VIII was approximately 1.3%. We account for our investment in Fund VIII under the equity method of accounting.

Prior to December 12, 2022, we owned an 8.2% interest in Fund X and accounted for our investment in Fund X under the equity method of accounting. Subsequent to December 12, 2022, we began consolidating Fund X into our consolidated financial statements (see Note 3, Consolidated Real Estate Related Funds).

As of June 30, 2023 and December 31, 2022, our share of the investments in the unconsolidated real estate related funds was $5,270,000 and $3,411,000, respectively, which is reflected as “investments in unconsolidated real estate related funds” on our consolidated balance sheets. We recognized an income of $32,000 and $155,000 during the three months ended June 30, 2023 and 2022, respectively, and a loss of $146,000 and an income of $325,000 during the six months ended June 30, 2023 and 2022, respectively, for our share of earnings, which is reflected as “income (loss) from unconsolidated real estate related funds” on our consolidated statements of income.

Investments in Unconsolidated Joint Ventures

The following tables summarize our investments in unconsolidated joint ventures as of ~~September 30, 2017~~the dates thereof and ~~December 31, 2016 and~~the income or loss from these investments for the ~~three~~periods set forth below.


(Amounts in thousands)	Paramount	As of
Our Share of Investments:	Ownership	June 30, 2023			December 31, 2022
712 Fifth Avenue (1)	50.0%	$	-		$	-
Market Center	67.0%		186,233			192,948
55 Second Street (2)	44.1%		84,202			85,340
111 Sutter Street (3)	49.0%		-			-
1600 Broadway (2)	9.2%		8,907			9,113
60 Wall Street	5.0%		-	(4)		25,034
One Steuart Lane (2)	35.0% (5)		115,902			77,961
Oder-Center, Germany (2)	9.5%		3,433			3,107
Investments in unconsolidated joint ventures		$	398,677		$	393,503


	For the Three Months Ended							For the Six Months Ended
(Amounts in thousands)	June 30,							June 30,
Our Share of Net Income (Loss):	2023				2022			2023				2022
712 Fifth Avenue (1)	$	-			$	-		$	-			$	-
Market Center		(2,579	)			(2,487	)		(5,234	)			(4,850	)
55 Second Street (2)		(499	)			(792	)		(1,138	)			(1,471	)
111 Sutter Street (3)		-				(681	)		-				(1,459	)
1600 Broadway (2)		3				(20	)		-				(68	)
60 Wall Street		(24,984	)	(4)		53			(25,001	)	(4)		65
One Steuart Lane (2)		(358	)			(518	)		(2,774	)			(1,787	)
Oder-Center, Germany (2)		15				29			(17	)			41
Loss from unconsolidated joint ventures	$	(28,402	)		$	(4,416	)	$	(34,164	)		$	(9,529	)

(1)

At December 31, 2022, our basis in the joint venture that owns 712 Fifth Avenue was negative $13,427. Since we have no further obligation to fund additional capital to the joint venture, we no longer recognize our proportionate share of earnings from the joint venture. Instead, we recognize income only to the extent we receive cash distributions from the joint venture and ~~nine~~recognize losses to the extent we make cash contributions to the joint venture. For the six months ended ~~September~~June 30, ~~2017~~2023, the joint venture had net income of $2,374 of which our 50.0% share was $1,187. Accordingly, our basis in the joint venture, taking into account our share of income, was negative $12,240 as of June 30, 2023.

(2)

As of June 30, 2023, the carrying amount of our investments in 55 Second Street, 1600 Broadway, One Steuart Lane and ~~2016.~~Oder-Center is greater than our share of equity in these investments by $464, $308, $640 and $4,223, respectively, and primarily represents the unamortized portion of our capitalized acquisition costs.

(3)

At December 31, 2022, our basis in the joint venture that owns 111 Sutter Street was negative $107. Since we have no further obligation to fund additional capital to the joint venture, we no longer recognize our proportionate share of earnings from the joint venture. Instead, we recognize income only to the extent we receive cash distributions from the joint venture and recognize losses to the extent we make cash contributions to the joint venture. For the six months ended June 30, 2023, the joint venture had net loss of $7,773 of which our 49.0% share was $3,809. Accordingly, our basis in the joint venture, taking into account our share of loss, was negative $3,916 as of June 30, 2023.

(4)

In May 2023, the joint venture that owns 60 Wall Street defaulted on the $575,000 non-recourse mortgage loan securing the property. The joint venture is currently in negotiations with the lender to modify the loan. Additionally, in the second quarter of 2023, the joint venture recognized a $455,893 real estate impairment loss. Accordingly, we recognized a $24,734 impairment loss on our investment in 60 Wall Street. This impairment, together with our share of operating losses recognized in the second quarter, reduced our investment balance to below zero as of June 30, 2023. Since we have no further obligation to fund additional capital to the joint venture, we are no longer required to recognize our proportionate share of earnings from the joint venture until such time that our basis in the joint venture becomes positive. In the meantime, we will recognize income only to the extent we receive cash distributions from the joint venture and recognize losses to the extent we make cash contributions to the joint venture.

(5)

Represents our consolidated Residential Development Fund’s (“RDF”) economic interest in One Steuart Lane, a for-sale residential condominium project. Our economic interest in One Steuart Lane (based on our 7.4% ownership interest in RDF) is 2.6%.

(Amounts in thousands)

Paramount

As of

Our Share of Investments:

Ownership

September 30, 2017

December 31, 2016

712 Fifth Avenue

50.0%

$
-

⁽¹⁾
$
2,912

60 Wall Street

5.0%

26,406

-

75 Howard

20.0%

⁽²⁾

16,077

-

Oder-Center, Germany

9.5%

3,531

3,499

Investments in unconsolidated joint ventures

$
46,014

$
6,411

For the Three Months Ended

For the Nine Months Ended

(Amounts in thousands)

Paramount

September 30,

September 30,

Our Share of Net Income (Loss):

Ownership

2017

2016

2017

2016

712 Fifth Avenue

50.0%

$
596

⁽¹⁾
$
1,772

$
19,030

⁽¹⁾
$
5,233

60 Wall Street

5.0%

(45
)

-

(81
)

-

75 Howard

20.0%

⁽²⁾

100

-

133

-

Oder-Center, Germany

9.5%

20

20

61

58

Income from unconsolidated joint ventures

$
671

$
1,792

$
19,143

$
5,291

⁽¹⁾

Prior to June 30, 2017, the basis of our investment in the property was $4,928. On June 30, 2017, we received a $20,000 distribution for our
50.0% share of net proceeds from refinancing the property. Because the distributions resulted in our basis becoming negative and because we have no further obligation to fund additional capital to the venture, in accordance with GAAP, we can no longer recognize our proportionate share of earnings from the venture until our basis is above zero. Accordingly, we are only recognizing income to the extent we receive cash distributions from the venture.

⁽²⁾	~~Represents RDF’s ownership interest in the property. We own a 7.4% ownership interest in RDF; accordingly, our economic interest in 75 Howard is 1.5%.~~

PARAMOUNT GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

~~712 Fifth Avenue~~

The following tables provide the combined summarized financial information of ~~712 Fifth Avenue~~our unconsolidated joint ventures as of the dates thereof and for the periods set forth below.


(Amounts in thousands)	As of
Balance Sheets:	June 30, 2023		December 31, 2022
Real estate, net	$	1,962,354	$	2,377,084
Cash and cash equivalents and restricted cash		213,591		252,540
Intangible assets, net		59,545		69,599
For-sale residential condominium units (1)		317,818		322,232
Other assets		87,951		87,054
Total assets	$	2,641,259	$	3,108,509

Notes and mortgages payable, net	$	1,738,958	$	1,834,916
Intangible liabilities, net		7,644		10,972
Other liabilities		56,801		50,783
Total liabilities		1,803,403		1,896,671
Equity		837,856		1,211,838
Total liabilities and equity	$	2,641,259	$	3,108,509


(Amounts in thousands)	For the Three Months Ended June 30,						For the Six Months Ended June 30,
Income Statements:	2023			2022			2023			2022
Revenues:
Rental revenue	$	40,385		$	54,516		$	80,606		$	112,036
Other income (2)		3,861			31,444			5,618			50,026
Total revenues		44,246			85,960			86,224			162,062
Expenses:
Operating (2)		24,990			52,293			49,691			94,801
Depreciation and amortization		17,713			23,508			35,478			50,406
Total expenses		42,703			75,801			85,169			145,207
Other income (expense):
Interest and other income		783			58			1,492			16
Interest and debt expense		(17,915	)		(16,335	)		(33,361	)		(33,933	)
Real estate impairment loss		(455,893	)		-			(455,893	)		-
Loss before income taxes		(471,482	)		(6,118	)		(486,707	)		(17,062	)
Income tax expense		(19	)		(14	)		(30	)		(43	)
Net loss	$	(471,501	)	$	(6,132	)	$	(486,737	)	$	(17,105	)

(Amounts in thousands)
As of

Balance Sheets:
September 30, 2017

December 31, 2016

Real estate, net
$
204,083

$
207,632

Other assets

56,710

40,701

Total assets
$
260,793

$
248,333

Notes and mortgages payable, net
$
296,051

$
245,990

Other liabilities

5,765

8,783

Total liabilities

301,816

254,773

Equity ⁽¹⁾

(41,023
)

(6,440
)
Total liabilities and equity
$
260,793

$
248,333

(1)

Represents the cost of residential condominium units at One Steuart Lane that are available for sale.

(2)

Includes proceeds and cost of sales from the sale of residential condominium units at One Steuart Lane.

⁽¹⁾

As of September 30, 2017, the carrying amount of our investment is greater than our share of the equity by $20,512. This basis difference resulted from distributions in excess of the equity in net earnings of the property.

(Amounts in thousands)
For the Three Months Ended September 30,

For the Nine Months Ended September 30,

Income Statements:
2017

2016

2017

2016

Rental income
$
12,626

$
12,107

$
38,284

$
37,501

Tenant reimbursement income

1,338

1,342

3,855

3,351

Fee and other income

507

418

1,101

1,613

Total revenues

14,471

13,867

43,240

42,465

Operating expenses

6,197

6,081

18,265

17,073

Depreciation and amortization

3,067

3,193

9,062

9,244

Total expenses

9,264

9,274

27,327

26,317

Operating income

5,207

4,593

15,913

16,148

Interest and other income, net

68

16

140

49

Interest and debt expense

(2,700
)

(2,787
)

(8,651
)

(8,287
)
Unrealized gain on interest rate
swaps

-

1,722

1,896

2,556

Net income
$
2,575

$
3,544

$
9,298

$
10,466

6.	~~Real Estate Fund Investments~~

Intangible Assets and Liabilities

~~Unconsolidated Real Estate Funds~~

We manage four Property Funds comprised of (i) Paramount Group Real Estate Fund II, L.P. (“Fund II”), (ii) Paramount Group Real Estate Fund III, L.P. (“Fund III”), (iii) Paramount Group Real Estate Fund VII, L.P. (“Fund VII”) and (iv) Paramount Group Real Estate Fund VII-H, L.P. (“Fund VII-H”). We also manage Paramount Group Real Estate Fund VIII L.P. (“Fund VIII”), our Alternative Investment Fund, which invests in mortgage and mezzanine loans and preferred equity investments.

As of December 31, 2016, Fund II and Fund III collectively owned a 62.3% interest in 60 Wall Street, a 1.6 million square foot office tower in Manhattan. On January 24, 2017, Fund II and Fund III, together with the other investors that owned the remaining 37.7% interest, sold their interests in 60 Wall Street to a newly formed joint venture, in which we have a 5.0% ownership interest. Accordingly, beginning on January 24, 2017, we began accounting for our investment in 60 Wall Street under the equity method. See Note 5, ~~Investments in Unconsolidated Joint Ventures~~.

We own a 7.2% interest in Fund VII and Fund VII-H that, prior to July 17, 2017, owned 42.8% of 50 Beale. On July 17, 2017, Fund VII and Fund VII-H completed the sale of their interests to us and a new joint venture, in which we have a 36.6% ownership interest (see Note 3, ~~Acquisitions~~).

The following tables summarize our investments in these unconsolidated real estate funds as of September 30, 2017 and December 31, 2016, and income or loss recognized from these investments for the three and nine months ended September 30, 2017 and 2016.

As of

(Amounts in thousands)
September 30, 2017

December 31, 2016

Our Share of Investments:

Property funds
$
2,673

$
22,811

Alternative investment fund

5,473

5,362

Investments in unconsolidated real estate funds
$
8,146

$
28,173

For the Three Months Ended

For the Nine Months Ended

(Amounts in thousands)

September 30,

September 30,

Our Share of Net Loss:

2017

2016

2017

2016

Net investment income (loss)

$
104

$
170

$
228

$
(437
)
Net realized loss

(839
)

-

(665
)

-

Net unrealized gain (loss)

202

(361
)

(26
)

(2,939
)
Carried interest

(3,397
)

(1,063
)

(5,590
)

836

Loss from unconsolidated real estate funds ⁽¹⁾
$
(3,930
)

$
(1,254
)

$
(6,053
)

$
(2,540
)

⁽¹⁾

~~Excludes asset management and other fee income from real estate funds, which is included as a component of “fee and other income” in our consolidated statements of income.~~

~~PARAMOUNT GROUP, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

As of September 30, 2017, we own a 10.0% interest in Fund II, a 3.1% interest in Fund III, and a 7.5% interest in Fund VII, all of which are accounted for under the equity method. The following tables provide summarized financial information for Fund II, Fund III and Fund VII as of the dates and for the periods set forth below.

(Amounts in thousands)
As of September 30, 2017

As of December 31, 2016

Balance Sheets:
Fund II

Fund III

Fund VII

Fund II

Fund III

Fund VII

Real estate investments
$
51

$
15,701

$
33,259

$
64,989

$
39,376

$
165,556

⁽¹⁾
Cash and cash equivalents

826

2,305

762

1,297

2,221

741

Other assets

115

-

2

127

-

-

Total assets
$
992

$
18,006

$
34,023

$
66,413

$
41,597

$
166,297

Other liabilities
$
45

$
29

$
618

$
60

$
49

$
1,483

Total liabilities

45

29

618

60

49

1,483

Equity

947

17,977

33,405

66,353

41,548

164,814

Total liabilities and equity
$
992

$
18,006

$
34,023

$
66,413

$
41,597

$
166,297

⁽¹⁾	~~Includes $123,105 attributable to 50 Beale that was sold July 17, 2017.~~

For the Three Months Ended September 30,

(Amounts in thousands)
2017

2016

Income Statements:
Fund II

Fund III

Fund VII

Fund II

Fund III

Fund VII

Investment income
$
2

$
303

$
479

$
1,389

$
480

$
1,233

Investment expenses

13

54

120

668

55

501

Net investment (loss) income

(11
)

249

359

721

425

732

Net realized losses

(5,020
)

(1,735
)

(3,809
)

-

-

-

Net unrealized gains (losses)

5,031

1,607

(4,871
)

(40
)

177

(4,815
)
Income (loss) from real estate
fund investments
$
-

$
121

$
(8,321
)

$
681

$
602

$
(4,083
)

For the Nine Months Ended September 30,

(Amounts in thousands)
2017

2016

Income Statements:
Fund II

Fund III

Fund VII

Fund II

Fund III

Fund VII

Investment income
$
3

$
1,444

$
1,441

$
1,391

$
480

$
1,233

Investment expenses

291

171

1,156

2,051

193

1,512

Net investment (loss) income

(288
)

1,273

285

(660
)

287

(279
)
Net realized losses

(20,221
)

(6,988
)

(3,875
)

-

-

-

Net unrealized gains (losses)

51

(1,411
)

(9,192
)

(31,918
)

(10,551
)

7,929

(Loss) income from real estate
fund investments
$
(20,458
)

$
(7,126
)

$
(12,782
)

$
(32,578
)

$
(10,264
)

$
7,650

~~PARAMOUNT GROUP, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

7.	~~Preferred Equity Investments~~

As of September 30, 2017, we own a 24.4% interest in PGRESS Equity Holdings L.P., an entity that owns certain preferred equity investments that are consolidated into our consolidated financial statements and summarized in the table below.

Preferred equity investments are recorded at cost. We evaluate the collectability of preferred equity investments each quarter in determining whether they are impaired. Preferred equity investments are impaired when changes in events or circumstances, including delinquencies, loss experience and collateral quality, indicate that it is probable we will be unable to collect all amounts due under the contractual terms. If a preferred equity investment is considered impaired, an impairment loss is measured based on the excess of the carrying amount of the investment over the net realizable value of the collateral. On April 11, 2017, the partnership that owns 2 Herald Square defaulted on the obligation to extend the maturity date or redeem the preferred equity investment, together with accrued and unpaid dividends. We believe, based on current facts and circumstances, that the redemption of our preferred equity investment, is not probable. Accordingly, we have recorded a $19,588,000 valuation allowance, which is included in “interest and other (loss) income” on our consolidated statements of income for the three and nine months ended September 30, 2017.

~~The following is a summary of the preferred equity investments.~~

(Amounts in thousands, except square feet)

Paramount

Dividend

Initial

As of

Preferred Equity Investment

Ownership

Rate

Maturity

September 30, 2017

December 31, 2016

470 Vanderbilt Avenue ⁽¹⁾

24.4%

10.3%

Feb-2019

$
35,763

$
35,613

2 Herald Square⁽²⁾

24.4%

10.3%

Apr-2017

19,588

19,438

55,351

55,051

Less: valuation allowance ⁽²⁾

(19,588
)

-

Preferred equity investments, net

$
35,763

$
55,051

⁽¹⁾

Represents a $33,750 preferred equity investment in a partnership that owns 470 Vanderbilt Avenue, a 650,000 square foot office building in Brooklyn, New York. The preferred equity has a dividend rate of 10.3%, of which 8.0% was paid in cash through February 2016 and the unpaid portion accreted to the balance of the investment. Subsequent to February 2016, the entire 10.3% dividend is being paid in cash.

⁽²⁾

Represents a $17,500 preferred equity investment in a partnership that owns 2 Herald Square, a 369,000 square foot office and retail property in Manhattan. The preferred equity investment had a dividend rate of 10.3%, of which 7.0% was paid in cash and the remainder accreted to the balance of the investment. The preferred equity investment had two one-year extension options.

~~PARAMOUNT GROUP, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

8.	~~Intangible Assets and Liabilities~~

~~The following table summarizes~~ our intangible assets (acquired above-market leases and acquired in-place leases) and intangible liabilities (acquired below-market leases) and the related amortization as of ~~September 30, 2017~~the dates thereof and ~~December 31, 2016.~~for the periods set forth below.


	As of
(Amounts in thousands)	June 30, 2023			December 31, 2022
Intangible assets:
Gross amount	$	268,681		$	337,104
Accumulated amortization		(189,123	)		(246,723	)
	$	79,558		$	90,381
Intangible liabilities:
Gross amount	$	138,353		$	138,726
Accumulated amortization		(106,393	)		(102,533	)
	$	31,960		$	36,193


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
(Amounts in thousands)	2023		2022		2023		2022
Amortization of above and below-market leases, net (component of "rental revenue")	$	1,448	$	315	$	2,484	$	673
Amortization of acquired in-place leases (component of "depreciation and amortization")		4,262		5,412		9,071		10,943

As of

(Amounts in thousands)
September 30, 2017

December 31, 2016

Intangible assets:

Gross amount
$
562,262

$
579,066

Accumulated amortization

(189,209
)

(166,841
)

$
373,053

$
412,225

Intangible liabilities:

Gross amount
$
210,016

$
208,367

Accumulated amortization

(71,453
)

(55,349
)

$
138,563

$
153,018

~~Amortization~~The following table sets forth amortization of acquired above and below-market leases, net ~~of acquired above-market leases, resulted in an increase to “rental income” of $3,175,000~~ and $3,112,000 for the three months ended September 30, 2017 and 2016, respectively, and $14,164,000 and $6,593,000 for the nine months ended September 30, 2017 and 2016, respectively. The three and nine months ended September 30, 2016 included $1,743,000 and $11,577,000 of expense, respectively, from the write-off of above-market lease assets in connection with lease terminations. Estimated annual amortization of acquired ~~below-market~~in-place leases ~~net of acquired above-market leases,~~ for the six-month period from July 1, 2023 through December 31, 2023, and each of the five succeeding years commencing from January 1, ~~2018 is as follows.~~2024.

(Amounts in thousands)

2018

$
16,281

2019

14,355

2020

8,750

2021

4,491

2022

1,091


(Amounts in thousands)	Above and Below-Market Leases, Net		In-Place Leases
2023	$	2,893	$	8,499
2024		5,862		14,340
2025		4,541		10,504
2026		2,711		7,895
2027		2,398		7,251
2028		2,317		6,979

(Amounts in thousands)

2018

$
60,896

2019

54,639

2020

42,316

2021

30,123

2022

24,009

Debt

~~Debt~~

The following table summarizes our consolidated outstanding debt.



			Interest Rate
	Maturity	Fixed/	as of			As of
(Amounts in thousands)	Date	Variable Rate	June 30, 2023			June 30, 2023			December 31, 2022
Notes and mortgages payable:
1633 Broadway (1)	Dec-2029	Fixed		2.99	%	$	1,250,000		$	1,250,000

One Market Plaza (1)	Feb-2024 (2)	Fixed		4.03	%		975,000			975,000

1301 Avenue of the Americas
	Aug-2026	Fixed (3)		2.46	%		500,000			500,000
	Aug-2026	LIBOR + 356 bps (4)		5.56	%		360,000			360,000
				3.76	%		860,000			860,000

31 West 52nd Street	Jun-2026	Fixed		3.80	%		500,000			500,000

300 Mission Street (1)	Oct-2023 (2)	Fixed		3.65	%		273,000			273,000

Total notes and mortgages payable				3.58	%		3,858,000			3,858,000
Less: unamortized deferred financing costs							(15,331	)		(17,682	)
Total notes and mortgages payable, net						$	3,842,669		$	3,840,318

$750 Million Revolving Credit Facility	Mar-2026	SOFR + 115 bps	n/a			$	-		$	-

~~On January 19, 2017, we completed a $975,000,000 refinancing of~~

(1)

Our ownership interests in 1633 Broadway, One Market Plaza ~~a 1.6 million square foot Class A office~~ and ~~retail property~~300 Mission Street are 90.0%, 49.0% and 31.1%, respectively.

(2)

We are currently exploring various alternatives to refinance these loans and believe it is probable that we will be successful in ~~San Francisco, California. The new seven-year interest-only loan matures in February 2024~~refinancing them prior to their maturity.

(3)

Represents variable rate loans that have been fixed by interest rate swaps through August 2024. See Note 8, Derivative Instruments and Hedging Activities. On June 16, 2023, we amended the loans to replace LIBOR with SOFR, effective July 7, 2023.

(4)

Represents variable rate loans, where LIBOR has ~~a fixed rate of 4.03%~~been capped at 2.00% through August 2023. See Note 8, Derivative Instruments and Hedging Activities. ~~In connection therewith,~~On June 16, 2023, we ~~incurred $2,715,000 of prepayment costs, which is included in “loss on early extinguishment of debt” on our consolidated statements of income for~~amended the ~~nine months ended September 30, 2017.~~loans to replace LIBOR with SOFR, effective July 7, 2023.

Maturity

Fixed/

Interest Rate as of

As of

(Amounts in thousands)
Date

Variable Rate

September 30, 2017

September 30, 2017

December 31, 2016

Notes and mortgages payable:

1633 Broadway

Dec-2022

Fixed ⁽¹⁾

3.54
%

$
1,000,000

$
1,000,000

Dec-2022

L + 175 bps

3.00
%

30,100

⁽²⁾

13,544

⁽²⁾

3.52
%

1,030,100

1,013,544

One Market Plaza (49.0%
interest)

Feb-2024

Fixed

4.03
%

975,000

860,546

n/a

n/a

n/a

-

12,414

4.03
%

975,000

872,960

1301 Avenue of the Americas

Nov-2021

Fixed

3.05
%

500,000

500,000

Nov-2021

L + 180 bps

3.05
%

350,000

350,000

3.05
%

850,000

850,000

31 West 52nd Street
May-2026

Fixed

3.80
%

500,000

500,000

50 Beale (31.1% interest) ⁽³⁾
Oct-2021

Fixed

3.65
%

228,000

-

1899 Pennsylvania Avenue ⁽⁴⁾
n/a

n/a

n/a

-

87,675

Liberty Place ⁽⁴⁾
n/a

n/a

n/a

-

84,000

Total notes and mortgages payable

3.60
%

3,583,100

3,408,179

Less: deferred financing costs

(44,029
)

(43,281
)

Total notes and mortgages payable, net

$
3,539,071

$
3,364,898

Revolving Credit Facility
Nov-2018

L + 125 bps

n/a

$
-

$
230,000

⁽¹⁾	~~Represents loans with variable interest rates that have been fixed by interest rate swaps. See Note 10,~~ ~~Derivative Instruments and Hedging Activities~~.

⁽²⁾	~~Represents amounts outstanding under an option to increase the loan balance up to $250,000, at LIBOR plus 175 basis points, if certain performance hurdles relating to the property are satisfied.~~

⁽³⁾	~~Assumed in connection with the acquisition of 50 Beale on July 17, 2017. See Note 3,~~ ~~Acquisitions~~.

⁽⁴⁾	These loans were repaid on May 3, 2017. In connection with the repayment, we incurred an aggregate of $5,162 of prepayment costs, which are included in “loss on early extinguishment of debt” on our consolidated statement of income for the nine months ended September 30, 2017.

~~10.~~

~~Derivative Instruments and Hedging Activities~~

Derivative Instruments and Hedging Activities

~~We manage our market risk on variable rate debt by entering~~On July 29, 2021, in connection with the $860,000,000 refinancing of 1301 Avenue of the Americas, we had entered into interest rate ~~swaps~~swap agreements with an aggregate notional amount of $500,000,000 to fix LIBOR at 0.46% through August 2024. We also entered into interest rate cap agreements with an aggregate notional amount of $360,000,000 to cap LIBOR at 2.00% through August 2023. On June 16, 2023, we amended the ~~rate on all or a portion of the debt for varying periods through maturity.~~swap agreements to replace LIBOR with SOFR, effective July 7, 2023. These interest rate swaps and interest rate caps are ~~accounted~~designated as cash flow hedges and therefore changes in their fair values are recognized in other comprehensive income or loss (outside of earnings). We recognized other comprehensive loss of $3,135,000 and $11,525,000 for ~~as derivative instruments~~the three and ~~pursuant to ASC Topic 815, are recorded on our consolidated balance sheets at fair value. Changes~~six months ended June 30, 2023, respectively, and comprehensive income of $6,109,000 and $24,654,000 for the three and six months ended June 30, 2022, respectively, from the changes in the fair value of these derivative financial instruments. See Note 10, Accumulated Other Comprehensive Income. During the next twelve months, we estimate that $25,069,000 of the amounts to be recognized in accumulated other comprehensive income will be reclassified as a decrease to interest expense.

The tables below provide additional details on our interest rate swaps and interest rate caps that are ~~accounted for based on the hedging relationship and their designation and qualification.~~ designated as cash flow hedges.

Notional

Effective

Maturity

Benchmark

Strike

Fair Value as of

Property

Amount

Date

Rate

June 30, 2023

December 31, 2022

(Amounts in thousands)

1301 Avenue of the Americas

500,000

Jul-2021

Aug-2024

LIBOR

0.46

26,010

32,681

Total interest rate swap assets designated as cash flow hedges (included in "other assets")

26,010

32,681

Notional

Effective

Maturity

Benchmark

Strike

Fair Value as of

Property

Amount

Date

Rate

June 30, 2023

December 31, 2022

(Amounts in thousands)

1301 Avenue of the Americas

360,000

Jul-2021

Aug-2023

LIBOR

2.00

1,187

6,123

Total interest rate cap assets designated as cash flow hedges (included in "other assets")

1,187

6,123

We have agreements with various derivative counterparties that contain provisions wherein a default on our indebtedness could be deemed a default on our derivative obligations, which would require us to ~~either post collateral up to the fair value of~~settle our derivative ~~obligations or settle the~~ obligations for cash. As of ~~September~~June 30, ~~2017, the fair value of the derivative obligations with such provisions aggregated $1,138,000.~~

~~Interest Rate Swaps – Designated as Cash Flow Hedges~~

As of September 30, 2017, we have interest rate swaps with an aggregate notional amount of $1.0 billion that are designated as cash flow hedges. We also have entered into a forward starting interest rate swaps with an aggregate notional amount of $400,000,000 to extend the maturity of certain swaps for an additional year. Changes in the fair value of interest rate swaps that are designated as cash flow hedges are recognized in “other comprehensive income (loss)” (outside of earnings). We recognized other comprehensive income of $738,000 and $7,802,000 for the three months ended September 30, 2017 and 2016, respectively and other comprehensive income of $729,000 and other comprehensive loss of $33,812,000 for the nine months ended September 30, 2017 and 2016, respectively, from the changes in the fair value of these interest rate swaps. During the next twelve months, we estimate that $3,315,000 of the amounts recognized in accumulated other comprehensive income will be reclassified as an increase to interest expense. The tables below provide additional details on our interest rate swaps that are designated as cash flow hedges.

Notional

Strike

Fair Value as of

Property

Amount

Effective Date

Maturity Date

Rate

September 30, 2017

(Amounts in thousands)

1633 Broadway

$
400,000

Dec-2015

Dec-2020

1.65
%

$
1,233

1633 Broadway

300,000

Dec-2015

Dec-2021

1.82
%

142

Total interest rate swap assets designated as cash flow hedges (included in "other assets")

$
1,375

1633 Broadway

$
400,000

Dec-2020

Dec-2021

2.35
%

$
921

1633 Broadway

300,000

Dec-2015

Dec-2022

1.95
%

805

Total interest rate swap liabilities designated as cash flow hedges (included in "other liabilities")
$
1,726

Notional

Strike

Fair Value as of

Property

Amount

Effective Date

Maturity Date

Rate

December 31, 2016

(Amounts in thousands)

1633 Broadway

$
400,000

Dec-2020

Dec-2021

2.35
%

$
139

Total interest rate swap assets designated as cash flow hedges (included in "other assets")

$
139

1633 Broadway

$
300,000

Dec-2015

Dec-2022

1.95
%

$
828

1633 Broadway

300,000

Dec-2015

Dec-2021

1.82
%

379

1633 Broadway

400,000

Dec-2015

Dec-2020

1.65
%

12

Total interest rate swap liabilities designated as cash flow hedges (included in "other liabilities")
$
1,219

~~Interest Rate Swaps – Non-designated Hedges~~

~~As of September 30, 2017,~~2023, we did not have any obligations relating to our interest rate swaps or interest rate caps that ~~were not designated as hedges.~~contained such provisions.

Equity

Stock Repurchase Program

On November 5, 2019, we received authorization from our Board of Directors to repurchase up to $200,000,000 of our common stock, from time to time, in the open market or in privately negotiated transactions. As of December 31, ~~2016,~~2022, we had ~~interest rate swap liabilities that had~~repurchased a ~~fair value~~total of ~~$21,227,000, which were terminated on January 19, 2017 in connection with the refinancing~~24,183,768 common shares at a weighted average price of ~~One Market Plaza. See Note 9,~~ ~~Debt~~ ~~for additional details. Changes~~$7.65 per share, or $185,000,000 in the ~~fair value~~aggregate. As of ~~interest rate swaps that are not designated as hedges are recognized in earnings. We recognized unrealized gains~~June 30, 2023, we have $15,000,000 available for future repurchases under the existing program. The amount and timing of ~~$1,802,000 for~~future repurchases, if any, will depend on a number of factors, including, the ~~nine months ended September 30, 2017~~price and ~~$12,728,000~~availability of our shares, trading volume, general market conditions and ~~$29,661,000 for the three and nine months ended September 30, 2016, respectively, from the changes in the fair value of these interest rate swaps.~~available funding. The stock repurchase program may be suspended or discontinued at any time.

10.

Accumulated Other Comprehensive Income

~~11.~~

~~Accumulated Other Comprehensive Income~~

The following table sets forth changes in accumulated other comprehensive income by component for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016.~~2022, respectively, including amounts attributable to noncontrolling interests in the Operating Partnership.


	For the Three Months Ended June 30,						For the Six Months Ended June 30,
(Amounts in thousands)	2023			2022			2023			2022
Amount of income related to the cash flow hedges recognized in other comprehensive (loss) income (1)	$	5,489		$	6,479		$	4,450		$	24,652
Amounts reclassified from accumulated other comprehensive income (decreasing) increasing interest and debt expense (1)		(8,624	)		(370	)		(15,975	)		2
Amount of income related to unconsolidated joint ventures recognized in other comprehensive (loss) income (2)		3,714			2,401			3,141			11,896
Amounts reclassified from accumulated other comprehensive income (decreasing) increasing loss from unconsolidated joint ventures (2)		(2,320	)		548			(4,310	)		1,506

For the Three Months Ended

For the Nine Months Ended

September 30,

September 30,

(Amounts in thousands)

2017

2016

2017

2016

Amount of (loss) income related to the effective portion of cash
   flow hedges recognized in other comprehensive income  ⁽¹⁾

$
(630
)

$
3,727

$
(4,669
)

$
(35,554
)
Amounts reclassified from accumulated other
   comprehensive income into interest expense ⁽¹⁾

1,297

2,747

5,269

8,323

Amount of income (loss) related to unconsolidated joint
   ventures recognized in other comprehensive income ^{(1) (2)}

204

(68
)

42

(18
)
Amount of gain (loss) related to the ineffective portion of cash
   flow hedges and amount excluded from effectiveness testing

-

-

-

-

(1)

Represents amounts related to interest rate swaps with an aggregate notional value of $500,000 and interest rate caps with an aggregate notional value of $360,000, which were designated as cash flow hedges.

(2)

Primarily represents amounts related to an interest rate swap with a notional value of $402,000, which was designated as a cash flow hedge.

⁽¹⁾	~~Net of amount attributable to the noncontrolling interests in the Operating Partnership.~~

11.

Noncontrolling Interests

⁽²⁾

Balance held in accumulated other comprehensive income relates to foreign currency translation adjustments. No amounts were reclassified from accumulated other comprehensive income during any of the periods set forth above.

~~12.~~

~~Noncontrolling Interests~~

Consolidated Joint Ventures

Noncontrolling interests in consolidated joint ventures consist of equity interests held by third parties in 1633 Broadway, One Market Plaza ~~50 Beale~~ and ~~PGRESS Equity Holdings L.P.~~300 Mission Street. As of ~~September~~June 30, ~~2017~~2023 and December 31, ~~2016,~~2022, noncontrolling interests in our consolidated joint ventures aggregated ~~$408,035,000~~$407,647,000 and ~~$253,788,000,~~$402,118,000, respectively.

Consolidated Real Estate ~~Fund~~Related Funds

Noncontrolling interests in our consolidated real estate ~~fund consists~~related funds consist of equity interests held by third parties in ~~RDF.~~our Residential Development Fund and Fund X. As of ~~September~~June 30, ~~2017~~2023 and December 31, ~~2016,~~2022, the noncontrolling ~~interest~~interests in our consolidated real estate ~~fund~~related funds aggregated ~~$14,947,000~~$183,988,000 and ~~$64,793,000,~~$173,375,000, respectively.

Operating Partnership

Noncontrolling interests in the Operating Partnership represent common units of the Operating Partnership that are held by third parties, including management, and units issued to management under equity incentive plans. Common units of the Operating Partnership may be tendered for redemption to the Operating Partnership for cash. We, at our option, may assume that obligation and pay the holder either cash or common shares on a one-for-one basis. Since the number of common shares outstanding is equal to the number of common units owned by us, the redemption value of each common unit is equal to the market value of each common share and distributions paid to each common unitholder is equivalent to dividends paid to common stockholders. As of ~~September~~June 30, ~~2017~~2023 and December 31, ~~2016,~~2022, noncontrolling interests in the Operating Partnership on our consolidated balance sheets had a carrying amount of ~~$433,554,000~~$248,898,000 and ~~$577,361,000,~~$242,982,000, respectively, and a redemption value of ~~$399,644,000~~$68,074,000 and ~~$551,834,000, respectively.~~$86,644,000, respectively, based on the closing share price of our common stock on the New York Stock Exchange at the end of each period.

2118

PARAMOUNT GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

12.

Variable Interest Entities (“VIEs”)

~~13.~~

~~Variable Interest Entities (“VIEs”)~~

In the normal course of business, we are the general partner of various types of investment vehicles, which may be considered VIEs. We may, from time to time, own equity or debt securities through vehicles, each of which are considered variable interests. Our involvement in financing the operations of the VIEs is generally limited to our investments in the entity. We consolidate these entities when we are ~~determined~~deemed to be the primary beneficiary.

Consolidated VIEs

We are the sole general partner of, and ~~own~~owned approximately ~~90.6%~~93.4% of, the Operating Partnership as of ~~September~~June 30, ~~2017.~~2023. The Operating Partnership is considered a VIE and is consolidated in our consolidated financial statements. Since we conduct our business through and substantially all of our interests are held by the Operating Partnership, the assets and liabilities on our consolidated financial statements represent the assets and liabilities of the Operating Partnership. As of ~~September~~June 30, ~~2017~~2023 and December 31, ~~2016,~~2022, the Operating Partnership held ~~variable~~ interests in ~~the entities~~consolidated VIEs owning properties aand real estate ~~fund and preferred equity investments~~related funds that were determined to be VIEs. The Operating Partnership is required to consolidate its interest in these entities because it is deemed to be the primary beneficiary and has the power to direct the activities of these entities that most significantly affect economic performance and the obligation to absorb losses and rights to receive benefits that could potentially be significant to the entity. The assets of these consolidated VIEs may only be used to settle the obligations of the entities and such obligations are secured only by the assets of the entities and are non-recourse to the Operating Partnership or us. The following table ~~below~~ summarizes the assets and liabilities of consolidated VIEs of the Operating Partnership.


	As of				As of
(Amounts in thousands)	September 30, 2017		December 31, 2016		June 30, 2023		December 31, 2022
Real estate, net	$	1,733,361	$	1,336,810	$	3,325,697	$	3,364,482
Cash and restricted cash		60,725		17,054
Investments in unconsolidated joint venture		16,077		-
Preferred equity investments		35,763		55,051
Cash and cash equivalents and restricted cash						182,501		144,446
Accounts and other receivables		2,208		5,966		5,326		13,647
Real estate related fund investments						66,606		105,369
Investments in unconsolidated joint ventures						115,902		77,961
Deferred rent receivable		42,533		32,103		204,890		197,658
Deferred charges, net		7,569		695		46,399		49,485
Intangible assets, net		71,316		52,139		45,376		50,553
Other assets		597		14,474		11,268		9,860
Total VIE assets	$	1,970,149	$	1,514,292	$	4,003,965	$	4,013,461

Notes and mortgages payable, net	$	1,196,348	$	872,960	$	2,490,920	$	2,489,902
Accounts payable and other accrued expenses		26,095		21,077
Accounts payable and accrued expenses						54,775		61,492
Intangible liabilities, net		50,289		48,654		19,558		21,936
Other liabilities		175		27,782		4,751		6,051
Total VIE liabilities	$	1,272,907	$	970,473	$	2,570,004	$	2,579,381

Unconsolidated VIEs

As of ~~September~~June 30, ~~2017,~~2023, the Operating Partnership held variable interests in entities that own ~~certain~~our unconsolidated real estate related funds that were deemed to be VIEs. The following table ~~below~~ summarizes our investments in these unconsolidated real estate ~~funds.~~ related funds and the maximum risk of loss from these investments.

	As of September 30, 2017
			Asset Management Fees		Maximum		As of
(Amounts in thousands)	Investments		and Other Receivables		Risk of Loss		June 30, 2023		December 31, 2022
Unconsolidated real estate funds	$	8,146	$	617	$	8,763
Investments							$	5,270	$	3,411
Asset management fees and other receivables								-		21
Maximum risk of loss							$	5,270	$	3,432

2219

PARAMOUNT GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

~~14.~~

~~Fair Value Measurements~~

~~ASC Topic 820,~~

13.

Fair Value ~~Measurement and Disclosures,~~ ~~defines fair value and establishes a framework for measuring fair value.~~ Measurements

Financial Assets Measured at Fair Value

The objective of fair value is to determine the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). ASC Topic 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels: Level 1 – quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities; Level 2 – observable prices that are based on inputs not quoted in active markets, but corroborated by market data; and Level 3 – unobservable inputs that are used when little or no market data is available. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as consider counterparty credit risk in our assessment of fair value. Considerable judgment is necessary to interpret Level 2 and 3 inputs in determiningfollowing table summarizes the fair value of our financial ~~and non-financial~~ assets and liabilities. Accordingly, our fair value estimates, which are made at the end of each reporting period, may be different than the amounts that may ultimately be realized upon sale or disposition of these assets or settlement of these liabilities.

~~Financial Assets and Liabilities Measured at Fair Value~~

~~Financial assets and liabilities~~ that are measured at fair value on our consolidated balance sheets consist of marketable securities (which represent the assets in our deferred compensation plan, for which there is a corresponding liability on our consolidated balance sheets) and interest rate swaps. The tables below aggregate the fair values of these financial assets and liabilities as of ~~September 30, 2017 and December 31, 2016,~~the dates set forth below, based on their levels in the fair value hierarchy.


	As of September 30, 2017								As of June 30, 2023
(Amounts in thousands)	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Marketable securities	$	27,867	$	27,867	$	-	$	-
Real estate related fund investments									$	66,606	$	-	$	-	$	66,606
Interest rate swap assets (included in "other assets")		1,375		-		1,375		-		26,010		-		26,010		-
Interest rate cap assets (included in "other assets")										1,187		-		1,187		-
Total assets	$	29,242	$	27,867	$	1,375	$	-	$	93,803	$	-	$	27,197	$	66,606

Interest rate swap liabilities (included in "other liabilities")	$	1,726	$	-	$	1,726	$	-
Total liabilities	$	1,726	$	-	$	1,726	$	-


	As of December 31, 2022
(Amounts in thousands)	Total		Level 1		Level 2		Level 3
Real estate related fund investments	$	105,369	$	-	$	-	$	105,369
Interest rate swap assets (included in "other assets")		32,681		-		32,681		-
Interest rate cap assets (included in "other assets")		6,123		-		6,123		-
Total assets	$	144,173	$	-	$	38,804	$	105,369

As of December 31, 2016

(Amounts in thousands)
Total

Level 1

Level 2

Level 3

Marketable securities
$
22,393

$
22,393

$
-

$
-

Interest rate swap assets (included in "other assets")

139

-

139

-

Total assets
$
22,532

$
22,393

$
139

$
-

Interest rate swap liabilities (included in "other liabilities")
$
22,446

$
-

$
22,446

$
-

Total liabilities
$
22,446

$
-

$
22,446

$
-

~~Interest Rate Swaps~~Real Estate Related Fund Investments

~~Interest rate swaps~~As of June 30, 2023, real estate related fund investments were comprised of investments in two mezzanine loans made by Fund X. These investments are ~~valued by a third-party specialist. The valuation of these interest rate swaps is determined using widely accepted valuation techniques, including discounted cash flow analysis~~measured at fair value on ~~the expected cash flows of each derivative. This analysis reflects the contractual terms of the interest rate swaps~~our consolidated balance sheet and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. Interest rate swaps are classified as Level 2.3. The primary unobservable input used in determining the fair value of one mezzanine loan is the credit spread over the base rate, which was 10.00% as of June 30, 2023. A significant increase or decrease in the credit spread would result in a significantly lower or higher fair value, respectively. The fair value of the other mezzanine loan investment is based on a negotiated transaction price.

The table below summarizes the changes in the fair value of real estate related fund investments that are classified as Level 3 for the three and six months ended June 30, 2023.


	For the Three Months Ended			For the Six Months Ended
(Amounts in thousands)	June 30, 2023			June 30, 2023
Beginning balance	$	108,176		$	105,369
Additional investments		4,122			8,040
Net realized losses		(1,224	)		(1,224	)
Net unrealized losses (1)		(44,468	)		(45,579	)
Ending balance	$	66,606		$	66,606

~~PARAMOUNT GROUP, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

(1)

Primarily represents an unrealized loss on a mezzanine loan investment based on a negotiated transaction price.

~~(UNAUDITED)~~

Financial ~~Assets and~~ Liabilities Not Measured at Fair Value

Financial ~~assets~~liabilities not measured at fair value on our consolidated balance sheets ~~consists~~consist of preferred equity investments. Estimates of the fair value of these investments are determined by the standard practice of modeling the contractual cash flows required under the investment and discounting it back to its present value at the appropriate current risk adjusted interest rate. The preferred equity investments are classified as Level 3. Financial liabilities not measured at fair value include notes and mortgages payable, and the revolving credit facility. Estimates of the fair value of these instruments are determined by the standard practice of modeling the contractual cash flows required under the instrument and discounting them back to their present value at the appropriate current risk adjusted interest rate, which is provided by a third-party specialist. For floating rate debt, we use forward rates derived from observable market yield curves to project the expected cash payments we would be required to make under the instrument. These instruments would be classified as Level 2.

The following ~~is a summary of~~table summarizes the carrying amounts and fair value of these financial instruments as of ~~September~~the dates set forth below.


	As of June 30, 2023				As of December 31, 2022
(Amounts in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Notes and mortgages payable	$	3,858,000	$	3,527,140	$	3,858,000	$	3,566,096
Revolving credit facility		-		-		-		-
Total liabilities	$	3,858,000	$	3,527,140	$	3,858,000	$	3,566,096

14.

Leases

We lease office, retail and storage space to tenants, primarily under non-cancellable operating leases which generally have terms ranging from five to fifteen years. Most of our leases provide tenants with extension options at either fixed or market rates and few of our leases provide tenants with options to early terminate, but such options generally impose an economic penalty on the tenant upon exercising. Rental revenue is recognized in accordance with ASC Topic 842, Leases, and includes (i) fixed payments of cash rents, which represents revenue each tenant pays in accordance with the terms of its respective lease and that is recognized on a straight-line basis over the non-cancellable term of the lease, and includes the effects of rent steps and rent abatements under the leases, (ii) variable payments of tenant reimbursements, which are recoveries of all or a portion of the operating expenses and real estate taxes of the property and is recognized in the same period as the expenses are incurred, (iii) amortization of acquired above and below-market leases, net and (iv) lease termination income.

The following table sets forth the details of our rental revenue.


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
(Amounts in thousands)	2023		2022		2023		2022
Rental revenue:
Fixed	$	148,961	$	163,545	$	314,824	$	318,322
Variable		16,545		13,698		32,395		28,843
Total rental revenue	$	165,506	$	177,243	$	347,219	$	347,165

The following table is a schedule of future undiscounted cash flows under non-cancellable operating leases in effect as of June 30, ~~2017 and~~2023, for the six-month period from July 1, 2023 through December 31, ~~2016.~~2023, and each of the five succeeding years and thereafter commencing January 1, 2024.


(Amounts in thousands)
2023	$	315,265
2024		621,616
2025		573,439
2026		490,657
2027		428,889
2028		426,382
Thereafter		1,885,995
Total	$	4,742,243

As of September 30, 2017

As of December 31, 2016

(Amounts in thousands)
Carrying Amount

Fair Value

Carrying Amount

Fair Value

Preferred equity investments
$
35,763

$
36,048

$
55,051

$
55,300

Total assets
$
35,763

$
36,048

$
55,051

$
55,300

As of September 30, 2017

As of December 31, 2016

(Amounts in thousands)
Carrying Amount

Fair Value

Carrying Amount

Fair Value

Notes and mortgages payable
$
3,583,100

$
3,575,843

$
3,408,179

$
3,371,262

Revolving credit facility

-

-

230,000

230,018

Total liabilities
$
3,583,100

$
3,575,843

$
3,638,179

$
3,601,280

15.

Fee and Other Income

~~15.~~

~~Fee and Other Income~~

The following table sets forth the details of our fee and other income.


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
(Amounts in thousands)	2023		2022		2023		2022
Fee income:
Asset management	$	2,326	$	3,087	$	4,501	$	5,972
Property management		1,831		2,103		3,693		4,322
Acquisition, disposition, leasing and other		819		784		1,339		7,668
Total fee income		4,976		5,974		9,533		17,962
Other income (1)		2,180		2,300		4,384		4,075
Total fee and other income	$	7,156	$	8,274	$	13,917	$	22,037

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

(Amounts in thousands)

2017

2016

2017

2016

Fee income

Property management

$
1,673

$
1,404

$
4,815

$
4,464

Asset management

1,997

2,003

6,622

5,500

Acquisition and disposition

1,475

187

7,045

777

Other

689

382

1,356

827

Total fee income

5,834

3,976

19,838

11,568

Lease termination income

954

3,460

1,915

14,508

⁽¹⁾
Other income ⁽²⁾

2,545

2,885

8,235

11,910

Total fee and other income

$
9,333

$
10,321

$
29,988

$
37,986

(1)

Primarily comprised of (i) tenant requested services, including cleaning, overtime heating and cooling and (ii) parking income.

⁽¹⁾

~~Includes $10,861 from the termination of a lease with a tenant at 1633 Broadway.~~

⁽²⁾

~~Primarily comprised of income from tenant requested services, including overtime heating and cooling.~~

~~16.~~

~~Interest and Other (Loss) Income, net~~

16.

Interest and Debt Expense

~~The following table sets forth the details of interest and other (loss) income.~~

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

(Amounts in thousands)

2017

2016

2017

2016

Valuation allowance on preferred equity
investment ⁽¹⁾

$
(19,588
)

$
-

$
(19,588
)

$
-

Preferred equity investment income⁽²⁾

961

1,460

3,327

4,299

Interest and other income

147

103

743

533

Mark-to-market of investments in our
deferred compensation plans ⁽³⁾

812

736

3,536

197

Total interest and other (loss) income, net

$
(17,668
)

$
2,299

$
(11,982
)

$
5,029

⁽¹⁾

Represents the valuation allowance on 2 Herald Square, our preferred equity investment in PGRESS Equity Holdings L.P., of which our 24.4% share is $4,780 and $14,808 was attributable to the noncontrolling interests.

⁽²⁾

Represents income from our preferred equity investments in PGRESS Equity Holdings L.P., of which our 24.4% share is $243 and $355 for the three months ended September 30, 2017 and 2016, respectively, and $819 and $1,047 for the nine months ended September 30, 2017 and 2016, respectively. See Note 7, ~~Preferred Equity Investments~~

⁽³⁾

The change resulting from the mark-to-market of the deferred compensation plan assets is entirely offset by the change in the deferred compensation plan liabilities, which is included in “general and administrative” expenses.

~~17.~~

~~Interest and Debt Expense~~

The following table sets forth the details of interest and debt expense.



	For the Three Months Ended June 30,				For the Six Months Ended June 30,
(Amounts in thousands)	2023		2022		2023		2022
Interest expense	$	35,340	$	34,039	$	70,261	$	66,778
Amortization of deferred financing costs		1,539		1,539		3,077		3,077
Total interest and debt expense	$	36,879	$	35,578	$	73,338	$	69,855

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

(Amounts in thousands)

2017

2016

2017

2016

Interest expense

$
32,914

$
36,820

$
99,201

$
109,285

Amortization of deferred financing costs

2,819

1,458

8,367

4,121

Total interest and debt expense

$
35,733

$
38,278

$
107,568

$
113,406

17.

Incentive Compensation

~~PARAMOUNT GROUP, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

~~18.~~

~~Incentive Compensation~~

Stock-Based Compensation

Our Amended and Restated 2014 Equity Incentive Plan provides for grants of equity awards to our executive officers, non-employee directors and employees in order to attract and motivate talent for which we compete. In addition, equity awards are an effective management retention tool as they vest over multiple years based on continued employment. Equity awards are granted in the form of (i) restricted stock and (ii) long-term incentive plan (“LTIP”) units, which represent a class of partnership interests in our Operating Partnership and are typically comprised of performance-based LTIP units, time-based LTIP units and time-based appreciation only LTIP (“AOLTIP”) units. We account for all stock-based compensation in accordance with ASC ~~Topic~~ 718, Compensation – Stock Compensation. As of September 30, 2017, we have 10,369,943 shares available for future grants under the 2014 Equity Incentive Plan (“Plan”), if all awards granted are full value awards, as defined in the Plan. Stock-basedWe recognized stock-based compensation expense ~~was $3,825,000~~of $4,214,000 and ~~$2,583,000~~$4,142,000 for the three months ended ~~September~~June 30, ~~2017~~2023 and ~~2016,~~2022, respectively, and ~~$11,692,000~~$9,331,000 and ~~$8,766,000~~$10,704,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016, respectively. Stock-based compensation expense for the nine months ended September 30, 2016 includes $1,855,000 of expense~~2022, respectively, related to awards granted in prior periods, including the ~~acceleration of vesting of stock~~equity awards ~~in connection with a separation agreement.~~granted on January 25, 2023 (“2023 Equity Grants”) described below.

2023 Equity Grants

~~2017~~

2023 Performance-Based Awards Program (“2023 Performance Program”)

On January ~~30, 2017,~~25, 2023, the Compensation Committee of our Board of Directors (the “Compensation Committee”) approved the ~~2017~~2023 Performance Program, a ~~multiyear~~multi-year performance-based long-term ~~equity (“LTE”)~~incentive compensation program. The purpose of the 2017 Performance Program is to further align the interests of our stockholders with that of management by encouraging our senior officers to create stockholder value in a “pay for performance” structure. Under the ~~2017~~2023 Performance Program, participants may earn awards in the form of ~~Long Term Incentive Plan~~LTIP units based on our achievement of rigorous Net Operating Income (“~~LTIP”~~NOI”) goals over a three-year performance measurement period beginning on January 1, 2023 and continuing through December 31, 2025. The amount of LTIP units otherwise earned based on the achievement of ~~our Operating Partnership~~the NOI goals would then be increased or decreased based on our Total Shareholder Return (“TSR”) versus that of our New York City office REIT peers (comprised of Vornado Realty Trust, SL Green Realty Corp. and Empire State Realty Trust) but the modifier will not result in a total payout exceeding 100% of the units granted. Additionally, if our TSR is negative over athe three-year performance measurement period, ~~beginning on January 1, 2017 and continuing through December 31, 2019, on both an absolute basis and relative basis. 25.0% of~~then the award is earned if we outperform a predetermined absolute TSR and the remaining 75.0% is earned if we outperform a predetermined relative TSR. Specifically, participants begin to earn awards under the 2017 Performance Program if our TSR for the performance measurement period equals or exceeds 18.0% on an absolute basis and is in the 30th percentile of the performance of the SNL Office REIT Index constituents on a relative basis, and awards will be fully earned if our TSR for the performance measurement period equals or exceeds 30.0% on an absolute basis and exceeds the 80^th percentile of the performance of the SNL Office REIT Index constituents on a relative basis. Participants will not earn any awards under the 2017 Performance Program if our TSR during the performance measurement period does not meet either of these minimum thresholds. The number of LTIP units that are earned ~~if performance is above~~under the ~~minimum thresholds, but below the maximum thresholds,~~2023 Performance Program will be determined based on linear interpolation between the percentages earned at the minimum and maximum thresholds. During the performance measurement period, participants will receive per unit distributions equal to one-tenthreduced by 30.0% of the ~~per share dividends~~number of such awards that otherwise payable to our common stockholders with respect to their LTIP units. If the LTIP units are ultimately earned based on the achievement of the designated performance objectives, participants will receive cash or additional LTIP units based on the additional amount the participants would have received if per unit distributions during the performance measurement periods for the earned LTIP units had equaled per share dividends paid to our common stockholders less the amount of distributions participants actually received during the performance measurement period.

~~If the designated performance objectives are achieved,~~been earned. Furthermore, awards earned under the ~~2017~~2023 Performance Program ~~will also be~~are subject to vesting based on continued employment with us through December 31, ~~2020,~~2026, with ~~50.0%~~50.0% of each award vesting ~~following~~upon the conclusion of the performance measurement period, and the remaining ~~50.0%~~50.0% vesting on December 31, ~~2020. The Company’s named executive officers, as defined,~~2026. Our Named Executive Officers are required to hold earned awards for an additional ~~one-year~~year following vesting. ~~The~~Awards granted under the 2023 Performance Program had a fair value of ~~the awards granted under the 2017 Performance Program~~$7,067,000 on the date of the grant, ~~was $10,520,000 and~~which is being amortized into expense over the four-year vesting period using a graded vesting attribution method.

Time-Based Unit Awards Program (LTIP Units, AOLTIP Units and Restricted Stock)

26On January 25, 2023, we also granted an aggregate of 796,349 LTIP units, 2,054,270 AOLTIP units and 81,531 shares of Restricted Stock to our executive officers and employees that will vest over a period of three to four years. The fair value of LTIP units, AOLTIP units and restricted stock on the date of the grant were $4,528,000, $3,752,000, and $503,000, respectively, and these awards are being amortized into expense on a straight-line basis over the vesting period.

PARAMOUNT GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Completion of the 2020 Performance-Based Awards Program (“2020 Performance Program”)

The three-year performance measurement period with respect to our 2020 Performance Program ended on December 31, 2022. On January 25, 2023, the Compensation Committee determined that (i) our TSR ranked in the 75th percentile amongst the TSR of our New York City office REIT peers and (ii) our TSR ranked in the 37th percentile amongst the performance of the SNL U.S. Office REIT Index constituents, resulting in a payout of approximately 59.7% of the LTIP units granted. Additionally, in accordance with the 2020 Performance Program, the final payout was reduced by 30.0% since our TSR was negative over the three-year performance measurement period. Accordingly, of the 1,068,693 LTIP units that were granted under the 2020 Performance Program, 443,713 LTIP units were earned. Of the LTIP units that were earned, 221,850 LTIP units vested immediately on January 25, 2023 and the remaining 221,863 LTIP units will vest on December 31, 2023. This award had a grant date fair value of $7,488,000 and a remaining unrecognized compensation cost of $409,000 as of June 30, 2023, which will be amortized into expense over a weighted-average period of 0.5 years.

~~19.~~

~~Earnings Per Share~~

18.

Earnings Per Share

The following table ~~provides a summary of~~summarizes our net (loss) income ~~(loss)~~ and the number of common shares used in the computation of basic and diluted income ~~(loss)~~ per common share, which includes the weighted average number of common shares outstanding and the effect of dilutive potential common shares, if any.


	For the Three Months Ended June 30,						For the Six Months Ended June 30,
(Amounts in thousands, except per share amounts)	2023			2022			2023			2022
Numerator:
Net (loss) income attributable to common stockholders	$	(47,538	)	$	(360	)	$	(45,809	)	$	3,011
Earnings allocated to unvested participating securities		(10	)		(22	)		(30	)		(43	)
Numerator for (loss) income per common share - basic and diluted	$	(47,548	)	$	(382	)	$	(45,839	)	$	2,968
Denominator:
Denominator for basic (loss) income per common share - weighted average shares		217,004			222,972			216,785			220,889
Effect of dilutive stock-based compensation plans (1)		-			-			-			41
Denominator for diluted (loss) income per common share - weighted average shares		217,004			222,972			216,785			220,930

(Loss) income per common share - basic and diluted	$	(0.22	)	$	(0.00	)	$	(0.21	)	$	0.01

For the Three Months Ended

For the Nine Months Ended

September 30,

September 30,

(Amounts in thousands, except per share amounts)

2017

2016

2017

2016

Numerator:

Net (loss) income attributable to common stockholders

$
(10,214
)

$
(139
)

$
93,174

$
(3,445
)
Earnings allocated to unvested participating securities

(13
)

(9
)

(86
)

(28
)
Numerator for (loss) income per common share - basic
   and diluted

$
(10,227
)

$
(148
)

$
93,088

$
(3,473
)
Denominator:

Denominator for basic (loss) income per common share -
   weighted average shares

239,446

219,394

235,151

216,318

Effect of dilutive employee stock options and
   restricted share awards ⁽¹⁾

-

-

27

-

Denominator for diluted (loss) income per common
   share - weighted average shares

239,446

219,394

235,178

216,318

(Loss) income per common share - basic and diluted

$
(0.04
)

$
(0.00
)

$
0.40

$
(0.02
)

(1)

⁽¹⁾

~~The effect of dilutive securities for the three months ended September 30, 2017 and 2016 excludes 27,911 and 46,930 weighted average share equivalents, respectively, and 32,036 and 49,854~~The effect of dilutive securities excludes 17,517and 20,354 weighted average share equivalents for ~~the nine months ended September 30, 2017 and 2016, respectively, as their effect was anti-dilutive.~~

~~20.~~

~~Related Party~~

~~Due to Affiliates~~

As of September 30, 2017 and December 31, 2016, we had an aggregate of $27,299,000 of liabilities that were due to affiliates. These liabilities were comprised of a $24,500,000 note payable to CNBB-RDF Holdings, LP, which is an entity partially owned by Katharina Otto-Bernstein ~~(a member of our Board of Directors)~~, and a $2,799,000 note payable to a different entity owned by members of the Otto Family, both of which were made in lieu of certain cash distributions prior to the completion of our initial public offering. The notes, which bore interest at a fixed rate of 0.50%, were due in October 2017. We amended the agreements to extend the maturity of these notes to November 2018. The notes bear interest at a fixed rate of 1.40% during the extended term. For the three months ended ~~September~~June 30, ~~2017~~2023 and ~~2016, we recognized $34,000~~2022, respectively, and ~~$43,000, respectively, of interest expense~~17,427 and22,347 weighted average share equivalents for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016, we recognized $103,000 and $112,000,~~2022, respectively, ~~of interest expense in connection with these notes.~~as their effect was anti-dilutive.

19.

Related Parties

Management Agreements

We provide property management, leasing and other related services to certain properties owned by members of the Otto Family. We recognized ~~an aggregate~~fee income of ~~$207,000~~$266,000 and ~~$195,000~~$260,000 for the three months ended ~~September~~June 30, ~~2017~~2023 and ~~2016,~~2022, respectively, and ~~$619,000~~$529,000 and ~~$594,000,~~$749,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016,~~2022, respectively, ~~of fee income,~~ in connection with these agreements, which is included as a component of “fee and other income” on our consolidated statements of income. As of ~~September~~June 30, ~~2017, there were no~~2023 and December 31, 2022, amounts owed to us under these ~~agreements.~~agreements aggregated $44,000 and $52,000, respectively, which are included as a component of “accounts and other receivables” on our consolidated balance sheets.

~~PARAMOUNT GROUP, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

We also provide ~~property~~asset management, ~~asset~~property management, leasing and other related services to our unconsolidated joint ventures and real estate related funds. ~~For~~We recognized fee income of $4,050,000 and $5,015,000 for the three months ended ~~September~~June 30, ~~2017~~2023 and ~~2016, we recognized $4,616,000 and $3,227,000,~~2022, respectively, and $7,703,000 and $15,798,000for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016, we recognized $16,391,000 and $7,826,000,~~2022, respectively, ~~of fee income~~ in connection with these ~~agreements.~~agreements, which is included as a component of “fee and other income” on our consolidated statements of income. As of ~~September~~June 30, ~~2017,~~2023 and December 31, 2022, amounts owed to us under these agreements aggregated ~~$1,815,000,~~$2,111,000 and $3,032,000, respectively, which are included as a component of ~~“accounts~~“accounts and other ~~receivables, net”~~receivables” on our consolidated balance ~~sheet.~~sheets.

~~Hamburg Trust~~HT Consulting ~~GMBH (“HTC”)~~GmbH

We have an agreement with ~~HTC,~~HT Consulting GmbH (“HTC”), a licensed broker in Germany, to supervise selling efforts for our joint ventures and private equity real estate related funds (or investments in feeder vehicles for these funds) to investors in Germany, including distribution of securitized notes of a feeder ~~vehicle~~vehicles for Fund ~~VIII.~~X. Pursuant to this agreement, we have agreed to pay HTC for the costs incurred ~~to sell investments in this feeder vehicle, which primarily consist of commissions paid to third party agents, and other incremental costs incurred by HTC as a result of the engagement,~~ plus ~~in each case,~~ a mark-up of ~~10%~~10%. HTC is ~~100%~~100% owned by Albert Behler, our Chairman, Chief Executive Officer and President. ~~For~~We incurred costs aggregating $63,000 and $124,000 for the three months ended ~~September~~June 30, ~~2017~~2023 and ~~2016, we incurred $50,000 and $137,000 of expense,~~2022, respectively, and ~~$220,000~~$191,000 and ~~$694,000, respectively,~~$513,000 for the ~~nine~~six months ended ~~in September~~June 30, ~~2017~~2023 and ~~2016,~~2022, respectively, in connection with ~~these agreements, which is included as a component of “transaction related costs” on our consolidated statements of income.~~this agreement. As of ~~September~~June 30, ~~2017,~~2023 and December 31, 2022, we owed ~~$95,000~~$102,000 and $119,000, respectively, to HTC under this agreement, which isare included as a component of “accounts payable and ~~other~~ accrued expenses” on our consolidated balance ~~sheet.~~sheets.

~~Mannheim Trust~~ParkProperty Capital, LP

~~Dr. Martin Bussmann~~ParkProperty Capital, LP (“ParkProperty”), an entity partially owned by Katharina Otto-Bernstein (a member of our Board of Directors) ~~is also~~, leased 3,330 square feet at 1633 Broadway (“1633 Lease”). In December 2022, upon expiration of the 1633 Lease, ParkProperty entered into a ~~trustee~~five-year lease for 4,233 square feet at 1325 Avenue of the Americas. We recognized rental revenue of $69,000 and ~~a director~~$54,000 for the three months ended June 30, 2023 and 2022, respectively, and $138,000 and $108,000 for the six months ended June 30, 2023 and 2022, respectively, pursuant to these leases.

Mannheim Trust

A subsidiary of Mannheim Trust ~~a subsidiary~~leases 3,127 square feet of ~~which leases~~ office space at 712 Fifth Avenue, our ~~50.0%~~50.0% owned unconsolidated joint ~~venture.~~venture, pursuant to a lease agreement which expires in June 2025. The Mannheim Trust is for the benefit of the children of Dr. ~~Bussmann’s children. Prior to December 5, 2016, the Mannheim Trust leased 6,790 square feet. On December 5, 2016, the joint venture entered into~~Martin Bussmann, who is a ~~new lease agreement~~member of our Board of Directors. We recognized $31,000 and $91,000 for ~~5,593 square feet, which became effective in January 2017. The new lease expires in April 2023. For~~ the three months ended ~~September~~June 30, ~~2017~~2023 and ~~2016, we recognized $96,000 and $101,000,~~2022, respectively, and ~~$274,000~~$124,000 and ~~$305,000~~$182,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016,~~2022, respectively, for our share of rental income ~~from~~pursuant to this lease.

~~Acquisitions from Unconsolidated Real Estate Funds~~Other

~~On January 24, 2017, Fund II~~We have entered into an agreement with Kramer Design Services (“Kramer Design”) to develop branding and ~~Fund III sold their 62.3% interest~~signage for the amenity center at 1301 Avenue of the Americas. Kramer Design is 100% owned by the spouse of Albert Behler, our Chairman, Chief Executive Officer and President. During the three and six months ended June 30, 2023, we incurred and paid Kramer Design $84,000 in ~~60 Wall Street~~connection with services rendered pursuant to ~~a newly formed joint venture, in which we have a 5.0% ownership interest. See Note 5,~~ ~~Investments in Unconsolidated Joint Ventures~~.this agreement.

20.

Commitments and Contingencies

~~21.~~

~~Commitments and Contingencies~~

Insurance

~~Insurance~~

We carry commercial general liability coverage on our properties, with limits of liability customary within the industry. Similarly, we are insured against the risk of direct and indirect physical damage to our properties including coverage for the perils such as floods, earthquakes and windstorms. Our policies also cover the loss of rental income during an estimated reconstruction period. Our policies reflect limits and deductibles customary in the industry and specific to the buildings and portfolio. We also obtain title insurance policies when acquiring new properties. We currently have coverage for losses incurred in connection with both domestic and foreign terrorist-related activities. While we do carry commercial general liability insurance, property insurance and terrorism insurance with respect to our properties, these policies include limits and terms we consider commercially reasonable. In addition, there are certain losses (including, but not limited to, losses arising from known environmental conditions or acts of war) that are not insured, in full or in part, because they are either uninsurable or the cost of insurance makes it, in our belief, economically impractical to maintain such coverage. Should an uninsured loss arise against us, we would be required to use our own funds to resolve the issue, including litigation costs. We believe the policy specifications and insured limits are adequate given the relative risk of loss, the cost of the coverage and industry practice and, in consultation with our insurance advisors, we believe the properties in our portfolio are adequately insured.

Other Commitments and Contingencies

We are a party to various claims and routine litigation arising in the ordinary course of business. Some of these claims or others to which we may be subject from time to time, including claims arising specifically from the formation transactions, in connection with our initial public offering, may result in defense costs, settlements, fines or judgments against us, some of which are not, or cannot be, covered by insurance. Payment of any such costs, settlements, fines or judgments that are not insured could have an adverse impact on our financial position and results of operations. Should any litigation arise in connection with the formation transactions, we would contest it vigorously. In addition, certain litigation or the resolution of certain litigation may affect the availability or cost of some of our insurance coverage, which could adversely impact our results of operations and cash flow, expose us to increased risks that would be uninsured, and/or adversely impact our ability to attract officers and directors.

The terms of our consolidated mortgage debt ~~and certain side letters~~agreements in place include certain restrictions and covenants which may limit, among other things, certain investments, the incurrence of additional indebtedness and liens and the disposition or other transfer of assets and interests in the borrower and other credit parties, and require compliance with certain debt yield, debt service coverage and loan to value ratios. In addition, our revolving credit facility contains representations, warranties, covenants, other agreements and events of default customary for agreements of this type with comparable companies. As of ~~September~~June 30, ~~2017,~~2023, we believe we are in compliance with all of our covenants.

~~718 Fifth Avenue - Put Right~~Transfer Tax Assessments

~~Prior to~~During 2017, the formation transactions, an affiliate of our predecessor owned a 25.0% interest in 718 Fifth Avenue, a five-story building containing 19,050 square feet of prime retail space that is located on the southwest corner of 56th Street and Fifth Avenue in New York ~~(based on its 50.0%~~City Department of Finance issued Notices of Determination (“Notices”) assessing additional transfer taxes (including interest and penalties) in a joint venture that held a 50.0% tenancy-in-common interest in the property). Prior to the completion of the formation transactions, this interest was sold to its partner in the 718 Fifth Avenue joint venture, who is also our partner in the joint venture that owns 712 Fifth Avenue, New York, New York. In connection with the transfer of interests in certain properties during our 2014 initial public offering. We believe, after consultation with legal counsel that the likelihood of loss is reasonably possible, and while it is not possible to predict the outcome of these Notices, we estimate the range of loss could be between $0 and $59,000,000. Since no amount in this ~~sale,~~range is a better estimate than any other amount within the range, we ~~granted~~have not accrued any liability arising from potential losses relating to these Notices in our joint venture partner a put right, pursuant to which the 712 Fifth Avenue joint venture would be required to purchase the entire direct or indirect interests held by our joint venture partner or its affiliates in 718 Fifth Avenue at a purchase price equal to the fair market value of such interests. The put right may be exercised at any time after September 10, 2018 with 12 months written notice and the actual purchase occurring no earlier than September 10, 2019. If the put right is exercised and the 712 Fifth Avenue joint venture acquires the 50.0% tenancy-in-common interest in the property that will be held by our joint venture partner following the sale of its interest to our joint venture partner, we will own a 25.0% interest in 718 Fifth Avenue.consolidated financial statements.

21.

Segments

~~22.~~

~~Segments~~

Our reportable segments are separated by region, based on the ~~three~~two regions in which we conduct our business: New York ~~Washington, D.C.~~ and San Francisco. Our determination of segments is aligned with our method of internal reporting and the way our Chief Executive Officer, who is also our Chief Operating Decision Maker, makes key operating decisions, evaluates financial results and manages our business.

The following tables provide ~~NOI~~Net Operating Income (“NOI”) for each reportable segment for the ~~three~~periods set forth below.


	For the Three Months Ended June 30, 2023
(Amounts in thousands)	Total			New York			San Francisco			Other
Property-related revenues	$	167,686		$	106,837		$	61,010		$	(161	)
Property-related operating expenses		(71,078	)		(48,685	)		(21,814	)		(579	)
NOI from unconsolidated joint ventures (excluding One Steuart Lane)		10,720			3,404			7,256			60
NOI (1)	$	107,328		$	61,556		$	46,452		$	(680	)

	For the Three Months Ended June 30, 2022
(Amounts in thousands)	Total			New York			San Francisco			Other
Property-related revenues	$	179,543		$	116,300		$	64,042		$	(799	)
Property-related operating expenses		(67,814	)		(48,147	)		(18,581	)		(1,086	)
NOI from unconsolidated joint ventures (excluding One Steuart Lane)		11,585			3,528			7,971			86
NOI (1)	$	123,314		$	71,681		$	53,432		$	(1,799	)

	For the Six Months Ended June 30, 2023
(Amounts in thousands)	Total			New York			San Francisco			Other
Property-related revenues	$	351,603		$	224,063		$	128,312		$	(772	)
Property-related operating expenses		(141,387	)		(98,206	)		(42,082	)		(1,099	)
NOI from unconsolidated joint ventures (excluding One Steuart Lane)		21,101			6,767			14,275			59
NOI (1)	$	231,317		$	132,624		$	100,505		$	(1,812	)

	For the Six Months Ended June 30, 2022
(Amounts in thousands)	Total			New York			San Francisco			Other
Property-related revenues	$	351,240		$	231,705		$	121,131		$	(1,596	)
Property-related operating expenses		(134,475	)		(96,358	)		(35,873	)		(2,244	)
NOI from unconsolidated joint ventures (excluding One Steuart Lane)		22,819			6,346			16,325			148
NOI (1)	$	239,584		$	141,693		$	101,583		$	(3,692	)

(1)

NOI is used to measure the operating performance of our properties. NOI consists of rental revenue (which includes property rentals, tenant reimbursements and ~~nine months ended September 30, 2017~~lease termination income) and ~~2016.~~certain other property-related revenue less operating expenses (which includes property-related expenses such as cleaning, security, repairs and maintenance, utilities, property administration and real estate taxes). We use NOI internally as a performance measure and believe it provides useful information to investors regarding our financial condition and results of operations because it reflects only those income and expense items that are incurred at the property level. Other real estate companies may use different methodologies for calculating NOI and, accordingly, our presentation of NOI may not be comparable to other real estate companies.

For the Three Months Ended September 30, 2017

(Amounts in thousands)

Total

New York

Washington, D.C.

San Francisco

Other

Property-related revenues

$
173,936

$
109,493

$
14,986

$
49,758

$
(301
)
Property-related operating expenses

(68,264
)

(46,609
)

(5,887
)

(14,164
)

(1,604
)
NOI from unconsolidated joint ventures

4,993

4,815

-

-

178

NOI⁽¹⁾

$
110,665

$
67,699

$
9,099

$
35,594

$
(1,727
)

For the Three Months Ended September 30, 2016

(Amounts in thousands)

Total

New York

Washington, D.C.

San Francisco

Other

Property-related revenues

$
167,342

$
113,029

$
22,229

$
31,441

$
643

Property-related operating expenses

(64,025
)

(45,748
)

(8,322
)

(7,994
)

(1,961
)
NOI from unconsolidated joint ventures

3,974

3,893

-

-

81

NOI⁽¹⁾

$
107,291

$
71,174

$
13,907

$
23,447

$
(1,237
)

For the Nine Months Ended September 30, 2017

(Amounts in thousands)

Total

New York

Washington, D.C.

San Francisco

Other

Property-related revenues

$
518,872

$
321,419

$
56,911

$
139,898

$
644

Property-related operating expenses

(197,696
)

(134,657
)

(21,376
)

(35,889
)

(5,774
)
NOI from unconsolidated joint ventures

14,774

14,406

-

-

368

NOI⁽¹⁾

$
335,950

$
201,168

$
35,535

$
104,009

$
(4,762
)

For the Nine Months Ended September 30, 2016

(Amounts in thousands)

Total

New York

Washington, D.C.

San Francisco

Other

Property-related revenues

$
504,971

$
346,683

$
63,689

$
92,762

$
1,837

Property-related operating expenses

(186,964
)

(132,428
)

(24,691
)

(22,426
)

(7,419
)
NOI from unconsolidated joint ventures

12,938

12,696

-

-

242

NOI⁽¹⁾

$
330,945

$
226,951

$
38,998

$
70,336

$
(5,340
)

⁽¹⁾

Net Operating Income (“NOI”) is used to measure the operating performance of our properties. NOI consists of property-related revenue (which includes rental income, 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 use NOI internally as a performance measure and believe it provides useful information to investors regarding our financial condition and results of operations because it reflects only those income and expense items that are incurred at the property level. Other real estate companies may use different methodologies for calculating NOI and, accordingly, our presentation of NOI may not be comparable to other real estate companies.

3026

PARAMOUNT GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The following table provides a reconciliation of NOI to net (loss) income attributable to common stockholders for the ~~three and nine months ended September 30, 2017 and 2016.~~periods set forth below.


	For the Three Months Ended June 30,						For the Six Months Ended June 30,
(Amounts in thousands)	2023			2022			2023			2022
NOI	$	107,328		$	123,314		$	231,317		$	239,584
Add (subtract) adjustments to arrive to net income:
Fee income		4,976			5,974			9,533			17,962
Depreciation and amortization expense		(62,627	)		(57,398	)		(121,515	)		(113,022	)
General and administrative expenses		(16,224	)		(16,706	)		(30,847	)		(32,351	)
Loss from real estate related fund investments		(42,644	)		-			(39,094	)		-
NOI from unconsolidated joint ventures (excluding One Steuart Lane)		(10,720	)		(11,585	)		(21,101	)		(22,819	)
Loss from unconsolidated joint ventures		(28,402	)		(4,416	)		(34,164	)		(9,529	)
Interest and other income, net		2,967			796			5,892			1,027
Interest and debt expense		(36,879	)		(35,578	)		(73,338	)		(69,855	)
Other, net		(31	)		(4	)		(337	)		49
(Loss) income before income taxes		(82,256	)		4,397			(73,654	)		11,046
Income tax expense		(573	)		(359	)		(861	)		(886	)
Net (loss) income		(82,829	)		4,038			(74,515	)		10,160
Less net (income) loss attributable to noncontrolling interests in:
Consolidated joint ventures		(5,351	)		(4,779	)		(10,992	)		(8,204	)
Consolidated real estate related funds		37,301			352			36,478			1,368
Operating Partnership		3,341			29			3,220			(313	)
Net (loss) income attributable to common stockholders	$	(47,538	)	$	(360	)	$	(45,809	)	$	3,011

For the Three Months Ended

For the Nine Months Ended

September 30,

September 30,

(Amounts in thousands)

2017

2016

2017

2016

NOI

$
110,665

$
107,291

$
335,950

$
330,945

Add (subtract) adjustments to arrive to net (loss) income:

Fee income

5,834

3,976

19,838

11,568

Depreciation and amortization expense

(66,515
)

(66,376
)

(198,143
)

(208,475
)
General and administrative expenses

(14,470
)

(13,235
)

(44,624
)

(39,335
)
Transaction related costs

(274
)

(282
)

(1,051
)

(1,725
)
NOI from unconsolidated joint ventures

(4,993
)

(3,974
)

(14,774
)

(12,938
)
Income from unconsolidated joint ventures

671

1,792

19,143

5,291

Loss from unconsolidated real estate funds

(3,930
)

(1,254
)

(6,053
)

(2,540
)
Interest and other (loss) income, net

(17,668
)

2,299

(11,982
)

5,029

Interest and debt expense

(35,733
)

(38,278
)

(107,568
)

(113,406
)
Loss on early extinguishment of debt

-

-

(7,877
)

-

Gain on sale of real estate

-

-

133,989

-

Unrealized gain on interest rate swaps

-

12,728

1,802

29,661

Net (loss) income before income taxes

(26,413
)

4,687

118,650

4,075

Income tax benefit (expense)

1,010

(218
)

(4,242
)

817

Net (loss) income

(25,403
)

4,469

114,408

4,892

Less: net (income) loss attributable to
noncontrolling interests in:

Consolidated joint ventures

14,217

(4,703
)

11,029

(10,062
)
Consolidated real estate fund

(114
)

67

(20,195
)

819

Operating Partnership

1,086

28

(12,068
)

906

Net (loss) income attributable to common stockholders

$
(10,214
)

$
(139
)

$
93,174

$
(3,445
)

The following table provides the ~~selected balance sheet data~~total assets for each of our reportable segments as of ~~September 30, 2017.~~the dates set forth below.

(Amounts in thousands)

As of September 30, 2017

Balance Sheet Data:

Total

New York

Washington, D.C.

San Francisco

Other

Total assets

$
8,924,008

$
5,557,850

$
701,624

$
2,438,720

$
225,814

Total liabilities

3,881,852

2,445,559

26,829

1,289,218

120,246

Total equity

5,042,156

3,112,291

674,795

1,149,502

105,568


(Amounts in thousands)
Total Assets as of:	Total		New York		San Francisco		Other
June 30, 2023	$	8,367,979	$	5,234,190	$	2,615,147	$	518,642
December 31, 2022		8,453,254		5,311,636		2,631,265		510,353

~~ITEM 2.~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS~~ ~~OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

risks associated with the market for our common stock;

•

Eight wholly and partially owned ~~a 3.1% economic interest in 50 Beale Street, a 660,625 square foot~~ Class A properties aggregating 8.7 million square feet in New York, comprised of 8.2 million square feet of office ~~building~~space and 0.5 million square feet of retail, theater and amenity space;

•

Six wholly and partially owned Class A properties aggregating 4.3 million square feet in San Francisco, ~~California (“50 Beale”) through two~~comprised of 4.1 million square feet of office space and 0.2 million square feet of retail space; and

•

Four managed properties aggregating 0.8 million square feet in New York and Washington, D.C.

Three Months Ended September 30, 2017
Total

New York

Washington, D.C.

San Francisco

Total square feet leased

369,136

305,351

7,070

56,715

Pro rata share of total square feet leased:

356,413

294,377

7,070

54,966

Initial rent ⁽¹⁾
$
80.98

$
82.84

$
74.53

$
71.70

Weighted average lease term (in years)

10.8

11.7

5.5

7.1

Tenant improvements and leasing commissions:

Per square foot
$
105.94

$
109.68

$
26.26

$
96.02

Per square foot per annum
$
9.77

$
9.40

$
4.78

$
13.53

Percentage of initial rent

12.1
%

11.4
%

6.4
%

18.9
%

Rent concessions:

Average free rent period (in months)

9.4

10.6

6.0

3.0

Average free rent period per annum (in months)

0.9

0.9

1.1

0.4

Second generation space: ⁽²⁾

Square feet

163,298

109,008

-

54,290

GAAP basis:

Straight-line rent
$
81.33

$
85.02

$
-

$
73.92

Prior straight-line rent
$
74.30

$
75.51

$
-

$
71.87

Percentage increase

9.5
%

12.6
%

-

2.8
%

Cash basis:

Initial rent ⁽¹⁾
$
83.68

$
89.65

$
-

$
71.70

Prior escalated rent ⁽³⁾
$
76.25

$
88.53

$
-

$
51.59

Percentage increase

9.8
%

1.3
%

-

39.0
%
(1)

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

(2)

Represents space leased in the current period (i) prior to its scheduled expiration, or (ii) that has been vacant for less than twelve months.

(3)

Represents the weighted average cash basis rents (including reimbursements) per square foot at expiration.

⁽¹⁾	~~Represents the weighted average cash basis starting rent per square foot and does not include free rent of periodic step-ups in rent.~~

(1)

Represents percentage of square feet that is leased, including signed leases not yet commenced, for properties that were owned by us in a similar manner during both the current and prior reporting periods.

⁽²⁾	~~Represents space leased that has been vacant for less than twelve months.~~

⁽³⁾	~~Represents the weighted average cash basis rents (including reimbursements) per square foot at expiration.~~

Leasing Results - ~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2023

In the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2023, we leased ~~946,880~~267,481 square feet, of which our share was ~~859,432~~227,737 square feet that was leased at a weighted average initial rent of ~~$78.50~~$81.18 per square foot. ~~Notwithstanding this~~This leasing activity, ~~our~~offset by the lease expirations in the six months, decreased leased occupancy decreased by 40 basis points in the nine months to 92.3% at September 30, 2017 from 92.7% at December 31, 2016. This decrease was primarily attributable to our acquisition of 50 Beale in July 2017 (a 78.2% leased asset) and ~~the sale of Waterview in May 2017 (a 98.7% leased asset). Our~~ same store leased occupancy ~~(which excludes 50 Beale and Waterview) increased~~(properties owned by 20us in a similar manner during both reporting periods) by 170 basis points to ~~92.5%~~89.6% at June 30, 2023 from ~~92.3%~~91.3% at December 31, ~~2016.~~ 2022. The 170 basis point decrease in leased occupancy was driven primarily by the scheduled expiration of Credit Agricole’s 305,132 square foot lease in February 2023, partially offset by O’Melveny & Myers’ 160,708 square foot lease; both of which were at 1301 Avenue of the Americas in our New York portfolio.

Of the ~~946,880~~267,481 square feet leased in the ~~nine~~six months ~~594,418~~ended June 30, 2023, 178,396 square feet represented our share of second generation space (space leased in the current period (i) prior to its originally scheduled expiration, or (ii) that has been vacant for less than twelve months) for which ~~we achieved~~ rental ~~rate increases of 11.3%~~rates increased by 1.4% on a GAAP basis and ~~16.1%~~decreased by 2.1% on a cash basis. The weighted average lease term for leases signed during the ~~nine~~six months was ~~9.4~~12.4 years and weighted average tenant improvements and leasing commissions on these leases were ~~$9.23~~$12.64 per square foot per annum, or ~~11.8%~~15.6% of initial rent.

New ~~York:~~York

In the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2023, we leased ~~524,378~~178,748 square feet in our New York portfolio, of which our share was ~~498,610~~172,054 square feet that was leased at a weighted average initial rent of ~~$80.77~~$78.82 per square foot. This leasing activity, offset by lease expirations ~~during~~in the ~~nine~~six months, ~~increased our~~decreased leased occupancy ~~by 20 basis points to 90.9% at September 30, 2017 from 90.7% at December 31, 2016. Our~~and same store leased occupancy ~~increased~~ by 10160 basis points to ~~90.8%~~90.5% at June 30, 2023 from ~~90.7%~~92.1% at December 31, ~~2016.~~ 2022. The 160 basis point decrease in leased occupancy was driven primarily by scheduled expiration of Credit Agricole’s 305,132 square foot lease in February 2023, partially offset by O’Melveny & Myers’ 160,708 square foot lease; both of which were at 1301 Avenue of the Americas.

Of the ~~524,378~~178,748 square feet leased in the ~~nine~~six months ~~257,631~~ended June 30, 2023, 122,713 square feet represented ~~our share of~~ second generation space for which rental rates increased by ~~4.9%~~6.9% on a GAAP basis and decreased by ~~0.5%~~4.1% on a cash basis. The weighted average lease term for leases signed during the ~~nine~~six months was ~~10.5~~14.9 years and weighted average tenant improvements and leasing commissions on these leases were ~~$9.59~~$11.92 per square foot per annum, or ~~11.9%~~15.1% of initial rent.

~~Washington, D.C.:~~San Francisco

In the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2023, we leased 19,602 square feet of previously vacant space in our Washington, D.C. portfolio, at a weighted average initial rent of $70.95 per square foot. Notwithstanding this leasing activity, our leased occupancy remained unchanged at 95.5% at September 30, 2017 from December 31, 2016 due to the sale of Waterview (a 98.7% leased asset) in May 2017. Same store leased occupancy, which excludes Waterview, increased by 220 basis points to 95.5% from 93.3% at December 31, 2016. The weighted average lease term for leases signed during the nine months was 8.3 years and weighted average tenant improvements and leasing commissions on these leases were $7.85 per square foot per annum, or 11.1% of initial rent.

~~San Francisco:~~

~~In the nine months ended September 30, 2017, we leased 402,900~~88,733 square feet in our San Francisco portfolio, of which our share was ~~341,220~~55,683 square feet that was leased at a weighted average initial rent of ~~$75.62~~$88.49 per square foot. ~~Notwithstanding this~~This leasing activity, ~~our~~offset by lease expirations in the six months, decreased leased occupancy ~~decreased by 290 basis points to 96.1% at September 30, 2017 from 99.0% at December 31, 2016 due to expiration of leases during the nine months~~ and ~~the acquisition of 50 Beale in July 2017 (a 78.2% leased asset). Excluding 50 Beale,~~ same store leased occupancy ~~decreased~~ by 40170 basis points to ~~98.6%~~87.2% at June 30, 2023 from ~~99.0%~~88.9% at December 31, ~~2016.~~2022. The 170 basis point decrease in leased occupancy and same store leased occupancy was driven primarily by the surrendered JPMorgan space at One Front Street. Of the ~~402,900~~88,733 square feet leased ~~during~~in the ~~year, 336,787~~six months ended June 30, 2023, 55,683 square feet represented our share of second generation space for which ~~we achieved~~ rental ~~rate increases of 17.1%~~rates decreased by 8.4% on a GAAP basis and ~~34.6%~~increased by 2.1% on a cash basis. The weighted average lease term for leases signed during the ~~year~~six months was ~~7.9~~4.7 years and weighted average tenant improvements and leasing commissions on these leases were ~~$8.61~~$19.71 per square foot per annum, or ~~11.4%~~22.3% of initial rent.

The following ~~is a tabular disclosure of leasing statistics for~~table presents additional details on the leases signed during the ~~nine~~six months ended ~~September~~June 30, ~~2017.~~2023. It is not intended to coincide with the commencement of rental revenue in accordance with GAAP. The leasing statistics, except for square feet leased, represent office space only.


Six Months Ended June 30, 2023				Total			New York			San Francisco
	Total square feet leased				267,481			178,748			88,733
	Pro rata share of total square feet leased:				227,737			172,054			55,683
		Initial rent (1)		$	81.18		$	78.82		$	88.49
		Weighted average lease term (in years)			12.4			14.9			4.7

		Tenant improvements and leasing commissions:
			Per square foot	$	156.83		$	177.62		$	92.58
			Per square foot per annum	$	12.64		$	11.92		$	19.71
			Percentage of initial rent		15.6	%		15.1	%		22.3	%

		Rent concessions:
			Average free rent period (in months)		14.0			16.1			7.5
			Average free rent period per annum (in months)		1.1			1.1			1.6

		Second generation space: (2)
		Square feet			178,396			122,713			55,683
		Cash basis:
			Initial rent (1)	$	82.48		$	79.76		$	88.49
			Prior escalated rent (3)	$	84.27		$	83.17		$	86.70
			Percentage (decrease) increase		(2.1	%)		(4.1	%)		2.1	%
		GAAP basis:
			Straight-line rent	$	79.60		$	78.55		$	81.89
			Prior straight-line rent	$	78.47		$	73.50		$	89.43
			Percentage increase (decrease)		1.4	%		6.9	%		(8.4	%)

Nine Months Ended September 30, 2017
Total

New York

Washington, D.C.

San Francisco

Total square feet leased

946,880

524,378

19,602

402,900

Pro rata share of total square feet leased:

859,432

498,610

19,602

341,220

Initial rent ⁽¹⁾
$
78.50

$
80.77

$
70.95

$
75.62

Weighted average lease term (in years)

9.4

10.5

8.3

7.9

Tenant improvements and leasing commissions:

Per square foot
$
86.74

$
100.27

$
65.22

$
68.17

Per square foot per annum
$
9.23

$
9.59

$
7.85

$
8.61

Percentage of initial rent

11.8
%

11.9
%

11.1
%

11.4
%

Rent concessions:

Average free rent period (in months)

6.9

9.4

8.8

3.1

Average free rent period per annum (in months)

0.7

0.9

1.1

0.4

Second generation space: ⁽²⁾

Square feet

594,418

257,631

-

336,787

GAAP basis:

Straight-line rent
$
76.31

$
79.64

$
-

$
73.86

Prior straight-line rent
$
68.54

$
75.92

$
-

$
63.09

Percentage increase

11.3
%

4.9
%

-

17.1
%

Cash basis:

Initial rent ⁽¹⁾
$
79.24

$
84.16

$
-

$
75.62

Prior escalated rent ⁽³⁾
$
68.23

$
84.59

$
-

$
56.17

Percentage increase (decrease)

16.1
%

(0.5
%)

-

34.6
%
(1)

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

(2)

Represents space leased in the current period (i) prior to its scheduled expiration, or (ii) that has been vacant for less than twelve months.

(3)

Represents the weighted average cash basis rents (including reimbursements) per square foot at expiration.

The following table presents same store leased occupancy as of the dates set forth below.


Same Store Leased Occupancy (1)		Total	New York	San Francisco
	As of June 30, 2023	89.6%	90.5%	87.2%
	As of December 31, 2022	91.3%	92.1%	88.9%

⁽¹⁾	~~Represents the weighted average cash basis starting rent per square foot and does not include free rent of periodic step-ups in rent.~~

(1)

⁽²⁾	~~Represents space leased that has been vacant for less than twelve months.~~

⁽³⁾	~~Represents the weighted average cash basis rents (including reimbursements) per square foot at expiration.~~

Financial Results - Three Months Ended ~~September~~June 30, ~~2017~~2023 and ~~2016~~2022

Net ~~Loss,~~Income, FFO and Core FFO

Net loss attributable to common stockholders was ~~$10,214,000,~~$47,538,000, or ~~$0.04~~$0.22 per diluted share, for the three months ended ~~September~~June 30, ~~2017,~~2023, compared to ~~$139,000,~~$360,000, or $0.00 per diluted share, for the three months ended ~~September~~June 30, ~~2016.~~ 2022. Net loss attributable to common stockholders for the three months ended June 30, 2023, includes (i) $23,110,000, or $0.11 per diluted share, for our share of a non-cash real estate impairment loss related to an unconsolidated joint venture, and (ii) non-cash straight-line rent receivable write-offs aggregating $12,993,000, or $0.06 per diluted share, related to the terminated SVB Securities lease and the surrendered JPMorgan space.

Funds from Operations (“FFO”) attributable to common stockholders was ~~$43,530,000,~~$34,017,000, or ~~$0.18~~$0.16 per diluted share, for the three months ended ~~September~~June 30, ~~2017,~~2023, compared to ~~$50,615,000,~~$53,322,000, or ~~$0.23~~$0.24 per diluted share, for the three months ended ~~September~~June 30, ~~2016.~~2022. FFO attributable to common stockholders for the three months ended ~~September~~June 30, ~~2017~~2023 includes non-cash straight-line rent receivable write-offs aggregating $12,993,000, or $0.06 per diluted share, related to the terminated SVB Securities lease and ~~2016~~the surrendered JPMorgan space. FFO attributable to common stockholders for the three months ended June 30, 2023 and 2022 also includes the impact of non-core items, which are listed in the table on page ~~63.~~55. The aggregate of ~~these~~the non-core items, net of amounts attributable to noncontrolling interests, decreased FFO attributable to common stockholders for the three months ended ~~September~~June 30, ~~2017~~2023 and 2022 by ~~$8,839,000,~~ $4,649,000 and $311,000, or ~~$0.04~~$0.02 and $0.00 per diluted share, ~~and increased FFO attributable to common stockholders for the three months ended September 30, 2016 by $5,379,000, or $0.02~~ ~~per diluted share.~~ respectively.

Core Funds from Operations (“Core FFO”) attributable to common stockholders, which excludes the impact of the non-core items listed on page ~~63,~~55, was ~~$52,369,000 and $45,236,000,~~$38,666,000, or ~~$0.22 and $0.21~~$0.18 per diluted share, for the three months ended ~~September~~June 30, ~~2017~~2023, compared to $53,633,000, or $0.24 per diluted share, for the three months ended June 30, 2022.

Same Store Results

The table below summarizes the percentage (decrease) increase in our share of Same Store NOI and ~~2016, respectively~~. Same Store Cash NOI, by segment, for the three months ended June 30, 2023 versus June 30, 2022.


	Total			New York			San Francisco
Same Store NOI		(5.0	%)		(7.4	%)		(0.2	%)
Same Store Cash NOI		(4.7	%)		(9.5	%)		6.3	%

See ~~page 63 “Non-GAAP~~pages 48-56 “Non-GAAP Financial Measures ~~– FFO and Core FFO”~~” for a reconciliation of these measures to ~~net income in accordance with~~the most directly comparable GAAP measure and the reasons why we believe these non-GAAP measures are useful.

Financial Results - Six Months Ended June 30, 2023 and 2022

Net Income, FFO and Core FFO

Net loss attributable to common stockholders was $45,809,000, or $0.21 per diluted share, for the six months ended June 30, 2023, compared to net income attributable to common stockholders of $3,011,000, or $0.01 per diluted share, for the six months ended June 30, 2022. Net loss attributable to the common stockholders for the six months ended June 30, 2023 includes (i) $23,110,000, or $0.11 per diluted share, for our share of a non-cash real estate impairment loss related to an unconsolidated joint venture, and (ii) non-cash straight-line rent receivable write-offs aggregating $12,993,000, or $0.06 per diluted share, related to the terminated SVB Securities lease and the surrendered JPMorgan space.

FFO attributable to common stockholders was $90,796,000, or $0.42 per diluted share, for the six months ended June 30, 2023, compared to $108,195,000, or $0.49 per diluted share, for the six months ended June 30, 2022. FFO attributable to common stockholders for the six months ended June 30, 2023 includes non-cash straight-line rent receivable write-offs aggregating $12,993,000, or $0.06 per diluted share, related to the terminated SVB Securities lease and the surrendered JPMorgan space. FFO attributable to common stockholders for the six months ended June 30, 2023 and 2022 also includes the impact of non-core items, which are listed in the table on page 55. The aggregate of the non-core items, net of amounts attributable to noncontrolling interests, decreased FFO attributable to common stockholders for the six months ended June 30, 2023 by $4,044,000, or $0.02 per diluted share, and did not meaningfully impact FFO attributable to common stockholders for the six months ended June 30, 2022.

Core FFO attributable to common stockholders, which excludes the impact of the non-core items listed on page 55, was $94,840,000, or $0.44 per diluted share, for the six months ended June 30, 2023, compared to $108,211,000, or $0.49 per diluted share, for the six months ended June 30, 2022.

Same Store ~~NOI~~Results

The table below summarizes the percentage increase (decrease) in our share of Same Store NOI and Same Store Cash NOI, by segment, for the ~~three~~six months ended ~~September~~June 30, ~~2017~~2023 versus ~~September~~June 30, ~~2016.~~2022.


	Total	New York	San Francisco
Same Store NOI	0.9%	(1.2%)	5.1%
Same Store Cash NOI	(2.3%)	(5.1%)	4.0%

(Amounts in thousands)

Total

New York

Washington, D.C.

San Francisco

Same Store NOI

0.2
%

(2.2
%)

19.2
%

2.1
%
Same Store Cash NOI

21.3
%

17.4
%

54.3
%

18.8
%

See ~~page 56 “Non-GAAP~~pages 48-56 “Non-GAAP Financial Measures ~~– NOI” and page 60 “Non-GAAP Financial Measures – Same Store NOI”~~” for a reconciliation of these measures to ~~net income in accordance with~~the most directly comparable GAAP measure and the reasons why we believe these non-GAAP measures are useful.

~~Financial Results - Nine Months Ended September 30, 2017 and 2016~~

~~Net Income (Loss), FFO and Core FFO~~

Net income attributable to common stockholders was $93,174,000, or $0.40 per diluted share, for the nine months ended September 30, 2017, compared to a net loss of $3,445,000, or $0.02 per diluted share, for the nine months ended September 30, 2016. ~~FFO attributable~~ to common stockholders was $157,437,000, or $0.67 per diluted share, for the nine months ended September 30, 2017, compared to $154,106,000, or $0.71 per diluted share, for the nine months ended September 30, 2016. FFO attributable to common stockholders for the nine months ended September 30, 2017 and 2016 includes the impact of non-core items, which are listed in the table on page 63. The aggregate of these items, net of amounts attributable to noncontrolling interests, decreased FFO attributable to common stockholders for the nine months ended September 30, 2017 by $1,002,000, or $0.00 per diluted ~~share, and increased FFO attributable to common stockholders for the nine months ended September 30, 2016 by $9,557,000, or $0.04 per diluted share.~~ ~~Core FFO attributable~~ to common stockholders, which excludes the impact of the non-core items listed on page 63, was $158,439,000 and $144,549,000, or $0.67 and $0.67 per diluted share, for the nine months ended September 30, 2017 and 2016, respectively.

~~See page 63 “Non-GAAP Financial Measures – FFO and Core FFO” for a reconciliation to net income in accordance with GAAP and the reasons why we believe these non-GAAP measures are useful.~~

~~Same Store NOI~~

The table below summarizes the percentage (decrease) increase in our share of Same Store NOI and Same Store Cash NOI, by segment, for the nine months ended September 30, 2017 versus September 30, 2016.

(Amounts in thousands)

Total

New York

Washington, D.C.

San Francisco

Same Store NOI

(3.3
%)

(8.0
%)

23.9
%

2.4
%
Same Store Cash NOI

9.2
%

4.3
%

41.1
%

8.6
%

See page 56 “Non-GAAP Financial Measures – NOI” and page 60 “Non-GAAP Financial Measures – Same Store NOI” for a reconciliation to net income in accordance with GAAP and the reasons why we believe these non-GAAP measures are useful.

Results of Operations - Three Months Ended ~~September~~June 30, ~~2017~~2023 and 2022

The following pages summarize our consolidated results of operations for the three months ended ~~September~~June 30, ~~2017~~2023 and ~~2016.~~2022.

For the Three Months Ended September 30,

(Amounts in thousands)
2017

2016

Change

REVENUES:

Rental income
$
156,384

$
149,019

$
7,365

Tenant reimbursement income

14,053

11,978

2,075

Fee and other income

9,333

10,321

(988
)

Total revenues

179,770

171,318

8,452

EXPENSES:

Operating

68,264

64,025

4,239

Depreciation and amortization

66,515

66,376

139

General and administrative

14,470

13,235

1,235

Transaction related costs

274

282

(8
)

Total expenses

149,523

143,918

5,605

Operating income

30,247

27,400

2,847

Income from unconsolidated joint ventures

671

1,792

(1,121
)

Loss from unconsolidated real estate funds

(3,930
)

(1,254
)

(2,676
)

Interest and other (loss) income, net

(17,668
)

2,299

(19,967
)

Interest and debt expense

(35,733
)

(38,278
)

2,545

Unrealized gain on interest rate swaps

-

12,728

(12,728
)
Net (loss) income before income taxes

(26,413
)

4,687

(31,100
)

Income tax benefit (expense)

1,010

(218
)

1,228

Net (loss) income

(25,403
)

4,469

(29,872
)
Less net (income) loss attributable to noncontrolling interests in:

Consolidated joint ventures

14,217

(4,703
)

18,920

Consolidated real estate fund

(114
)

67

(181
)

Operating Partnership

1,086

28

1,058

Net loss attributable to common stockholders
$
(10,214
)

$
(139
)

$
(10,075
)


			For the Three Months Ended June 30,
(Amounts in thousands)			2023			2022			Change
Revenues:
	Rental revenue		$	165,506		$	177,243		$	(11,737	)
	Fee and other income			7,156			8,274			(1,118	)
		Total revenues		172,662			185,517			(12,855	)
Expenses:
	Operating			71,078			67,814			3,264
	Depreciation and amortization			62,627			57,398			5,229
	General and administrative			16,224			16,706			(482	)
	Transaction related costs			63			159			(96	)
		Total expenses		149,992			142,077			7,915
Other income (expense):
	Loss from real estate related fund investments			(42,644	)		-			(42,644	)
	Income from unconsolidated real estate related funds			32			155			(123	)
	Loss from unconsolidated joint ventures			(28,402	)		(4,416	)		(23,986	)
	Interest and other income, net			2,967			796			2,171
	Interest and debt expense			(36,879	)		(35,578	)		(1,301	)
(Loss) income before income taxes				(82,256	)		4,397			(86,653	)
	Income tax expense			(573	)		(359	)		(214	)
Net (loss) income				(82,829	)		4,038			(86,867	)
Less net (income) loss attributable to noncontrolling
	interests in:
	Consolidated joint ventures			(5,351	)		(4,779	)		(572	)
	Consolidated real estate related funds			37,301			352			36,949
	Operating Partnership			3,341			29			3,312
Net loss attributable to common stockholders			$	(47,538	)	$	(360	)	$	(47,178	)

~~Revenues~~37

Revenues

Our revenues, which consist ~~primarily~~ of rental ~~income, tenant reimbursement income,~~revenue and fee and other income, were ~~$179,770,000~~$172,662,000 for the three months ended ~~September~~June 30, ~~2017,~~2023, compared to ~~$171,318,000~~$185,517,000 for the three months ended ~~September~~June 30, ~~2016, an increase~~2022, a decrease of ~~$8,452,000.~~$12,855,000. Below are the details of the increase ~~(decrease)~~or decrease by segment.


(Amounts in thousands)	Total			New York				San Francisco				Other
Rental revenue
Same store operations	$	95		$	(5,074	)	(1)	$	5,169		(2)	$	-
Non-cash write-offs of straight-line rent receivables		(13,906	)		(6,563	)	(3)		(7,343	)	(3)		-
Other, net		2,074			2,127		(4)		(691	)			638
(Decrease) increase in rental revenue	$	(11,737	)	$	(9,510	)		$	(2,865	)		$	638

Fee and other income
Fee income
Asset management	$	(761	)	$	-			$	-			$	(761	)
Property management		(272	)		-				-				(272	)
Acquisition, disposition, leasing and other		35			-				-				35
Decrease in fee income		(998	)		-				-				(998	)
Other income
Same store operations		(120	)		47				(167	)			-
(Decrease) increase in other income		(120	)		47				(167	)			-
(Decrease) increase in fee and other income	$	(1,118	)	$	47			$	(167	)		$	(998	)

Total decrease in revenues	$	(12,855	)	$	(9,463	)		$	(3,032	)		$	(360	)

(Amounts in thousands)

Total

New York

Washington, D.C.

San Francisco

Other

Rental income

Acquisitions ⁽¹⁾

$
15,574

$
-

$
-

$
15,574

$
-

Dispositions ⁽²⁾

(8,325
)

-

(8,325
)

-

-

Same store operations

(188
)

(765
)

901

537

(861
)

Other, net

304

175

-

129

-

Increase (decrease) in rental income

$
7,365

$
(590
)

$
(7,424
)

$
16,240

$
(861
)

Tenant reimbursement income

Acquisitions ⁽¹⁾

$
1,769

$
-

$
-

$
1,769

$
-

Dispositions ⁽²⁾

(646
)

-

(646
)

-

-

Same store operations

952

182

1,003

(233
)

-

Increase in tenant

reimbursement income

$
2,075

$
182

$
357

$
1,536

$
-

Fee and other income

Property management

$
269

$
-

$
-

$
-

$
269

Asset management

(6
)

-

-

-

(6
)
Acquisition and disposition

1,288

-

-

-

1,288

Other

307

-

-

-

307

Increase in fee income

1,858

-

-

-

1,858

Acquisitions ⁽¹⁾

241

-

-

241

-

Dispositions ⁽²⁾

(84
)

-

(84
)

-

-

Lease termination income

(2,506
)

(2,782
)

-

276

-

Other income

(497
)

(346
)

(92
)

24

(83
)

(Decrease) increase in other income

(2,846
)

(3,128
)

(176
)

541

(83
)

(Decrease) increase in fee and
other income

$
(988
)

$
(3,128
)

$
(176
)

$
541

$
1,775

Total increase (decrease) in
revenues

$
8,452

$
(3,536
)

$
(7,243
)

$
18,317

$
914

(1)

Primarily due to lower average occupancy at 1301 Avenue of the Americas in the current year.

⁽¹⁾	~~Represents revenues for the three months ended September 30, 2017 from One Front Street and 50 Beale, which were acquired in December 2016 and July 2017, respectively.~~

(2)

Primarily due to higher average occupancy at One Market Plaza in the current year and higher expense reimbursements from increased operating expenses (See note 1 on page 39).

⁽²⁾	~~Represents revenues for the three months ended September 30, 2016 from Waterview, which was sold in May 2017.~~

(3)

Represents write-offs in the current year related to the terminated SVB Securities lease at 1301 Avenue of the Americas in our New York portfolio and the surrendered JPMorgan space at One Front Street in our San Francisco portfolio.

(4)

Primarily due to income of $2,284 in the current year, in connection with a tenant’s lease termination at 1633 Broadway.

~~Expenses~~

Expenses

Our expenses, which consist ~~primarily~~ of operating, depreciation and amortization, general and administrative and transaction related costs, were ~~$149,523,000~~$149,992,000 for the three months ended ~~September~~June 30, ~~2017,~~2023, compared to ~~$143,918,000~~$142,077,000 for the three months ended ~~September~~June 30, ~~2016,~~2022, an increase of ~~$5,605,000.~~$7,915,000. Below are the details of the increase ~~(decrease)~~or decrease by segment.



(Amounts in thousands)	Total			New York			San Francisco			Other
Operating
Same store operations	$	3,772		$	538		$	3,234	(1)	$	-
Other, net		(508	)		-			-			(508	)
Increase (decrease) in operating	$	3,264		$	538		$	3,234		$	(508	)

Depreciation and amortization
Operations	$	5,229		$	(390	)	$	5,293	(2)	$	326
Increase (decrease) in depreciation and amortization	$	5,229		$	(390	)	$	5,293		$	326

General and administrative
Operations	$	(482	)	$	-		$	-		$	(482	)
Decrease in general and administrative	$	(482	)	$	-		$	-		$	(482	)

Decrease in transaction related costs	$	(96	)	$	-		$	-		$	(96	)

Total increase (decrease) in expenses	$	7,915		$	148		$	8,527		$	(760	)

(Amounts in thousands)

Total

New York

Washington, D.C.

San Francisco

Other

Operating

Acquisitions ⁽¹⁾

$
6,352

$
-

$
-

$
6,352

$
-

Dispositions ⁽²⁾

(2,778
)

-

(2,778
)

-

-

Same store operations

493

685

347

(182
)

(357
)

Bad debt expense

172

176

(4
)

-

-

Increase (decrease) in operating

$
4,239

$
861

$
(2,435
)

$
6,170

$
(357
)

Depreciation and amortization

Acquisitions ⁽¹⁾

$
10,391

$
-

$
-

$
10,391

$
-

Dispositions ⁽²⁾

(2,604
)

-

(2,604
)

-

-

Operations

(7,648
)

(6,918
)

95

(776
)

(49
)

Increase (decrease) in depreciation

and amortization

$
139

$
(6,918
)

$
(2,509
)

$
9,615

$
(49
)

General and administrative

Operations

$
(83
)

$
-

$
-

$
-

$
(83
)
Stock-based compensation

1,242

-

-

-

1,242

Mark-to-market of investments

in our deferred compensation plan

76

-

-

-

76

⁽³⁾
Increase in general

and administrative

$
1,235

$
-

$
-

$
-

$
1,235

Decrease in transaction related costs

$
(8
)

$
-

$
-

$
-

$
(8
)

Total increase (decrease) in expenses

$
5,605

$
(6,057
)

$
(4,944
)

$
15,785

$
821

(1)

Primarily due to higher operating expenses driven by higher average occupancy at One Market Plaza in the current year (see note 2 on page 38).

⁽¹⁾

~~Represents expenses for the three months ended September 30, 2017 from One Front Street and 50 Beale, which were acquired in December 2016 and July 2017, respectively.~~

(2)

Primarily due to write-off of deferred leasing commissions in connection with the surrendered JPMorgan space at One Front Street.

⁽²⁾

~~Represents expenses for the three months ended September 30, 2016 from Waterview, which was sold in May 2017.~~

⁽³⁾

Represents the change in the mark-to-market of investments in our deferred compensation plan liabilities. This change is entirely offset by the change in plan assets which is included in “interest and other (loss) income, net”.

Loss from Real Estate Related Fund Investments

Loss from real estate related fund investments was $42,644,000 for the three months ended June 30, 2023, and represented loss attributable to Paramount Group Real Estate Fund X, LP (“Fund X”), which we began consolidating into our consolidated financial statements effective December 12, 2022, and in which we have a 13.0% ownership interest. The loss resulted primarily from a $45,658,000 unrealized loss on a mezzanine loan investment based on a negotiated transaction price.

Income from Unconsolidated Real Estate Related Funds

Income from unconsolidated real estate related funds was $32,000 for the three months ended June 30, 2023, which represented our share of income from Paramount Group Real Estate Fund VIII, LP (“Fund VIII”). Income from unconsolidated real estate related funds was $155,000 for the three months ended June 30, 2022, which represented our share of income from Fund VIII and Fund X.

Loss from Unconsolidated Joint Ventures

~~Income~~Loss from unconsolidated joint ventures was ~~$671,000~~$28,402,000 for the three months ended ~~September~~June 30, ~~2017,~~2023, compared to ~~$1,792,000~~$4,416,000 for the three months ended ~~September~~June 30, ~~2016,~~2022, an increase in loss of $23,986,000. This increase in loss resulted primarily from a ~~decrease of $1,121,000. This decrease resulted from:~~

(Amounts in thousands)

712 Fifth Avenue ($596 in 2017, compared to $1,772 in 2016)

$
(1,176
)
⁽¹⁾
60 Wall Street (acquired in January 2017)

(45
)

75 Howard (acquired in May 2017)

100

⁽²⁾
Oder-Center, Germany ($20 in 2017 and 2016)

-

Total decrease

$
(1,121
)

⁽¹⁾

Prior to June 30, 2017, the basis of our investment in the property was $4,928. On June 30, 2017, we received a $20,000 distribution for our 50.0% share of net proceeds from refinancing the property. Because the distributions resulted in our basis becoming negative and because we have no further obligation to fund additional capital to the venture, in accordance with GAAP, we can no longer recognize our proportionate share of earnings from the venture until our basis is above zero. Accordingly, we are only recognizing income to the extent we receive cash distributions from the venture.

⁽²⁾

~~Represents RDF’s 20% share of income from the property, of which our 7.4% share is $7.~~

~~Loss from Unconsolidated Real Estate Funds~~

~~Loss from unconsolidated~~$24,734,000 non-cash real estate ~~funds~~impairment loss on 60 Wall Street in the current year.

Interest and Other Income, net

Interest and other income was ~~$3,930,000~~$2,967,000 for the three months ended ~~September~~June 30, ~~2017,~~2023, compared to ~~$1,254,000~~$796,000 for the three months ended ~~September~~June 30, ~~2016,~~2022, an increase in ~~loss~~income of ~~$2,676,000.~~$2,171,000. This increase resulted primarily from ~~a decrease~~higher yields on short-term investments in ~~carried interest of $2,334,000.~~the current year.

Interest and ~~Other (Loss) Income, net~~Debt Expense

Interest and ~~other loss~~debt expense was ~~$17,668,000~~$36,879,000 for the three months ended ~~September~~June 30, ~~2017,~~2023, compared to ~~income of $2,299,000~~$35,578,000 for the three months ended ~~September~~June 30, ~~2016, a decrease~~2022, an increase of $1,301,000. This increase resulted primarily from higher interest on the variable rate portion of our debt at 1301 Avenue of the Americas due to an increase in ~~income of $19,967,000. This decrease resulted from:~~average LIBOR rates in the current year’s three months compared to the prior year.

(Amounts in thousands)

Valuation allowance on preferred equity investment in 2017⁽¹⁾

$
(19,588
)
Decrease in preferred equity investment income ($961 in 2017, compared
to $1,460 in 2016) ⁽²⁾

(499
)
Increase in the value of investments in our deferred compensation plan (which
is offset by an increase in “general and administrative”)

76

Other, net

44

Total decrease

$
(19,967
)

⁽¹⁾

Represents a valuation allowance on 2 Herald Square, our preferred equity investment in PGRESS Equity Holdings L.P., of which our 24.4% share is $4,780 and $14,808 was attributable to noncontrolling interests.

⁽²⁾

~~Represents income from our preferred equity investments in PGRESS Equity Holdings L.P., of which our 24.4% share is $243 and $355 for the three months ended September 30, 2017 and 2016, respectively.~~

~~Interest and Debt~~Income Tax Expense

~~Interest and debt~~Income tax expense was ~~$35,733,000~~$573,000 for the three months ended ~~September~~June 30, ~~2017,~~2023, compared to ~~$38,278,000~~$359,000 for the three months ended ~~September~~June 30, ~~2016, a decrease~~2022, an increase of ~~$2,545,000.~~$214,000. This ~~decrease~~increase resulted ~~from:~~

(Amounts in thousands)

$445 million of debt repayments ($274 million at 900 Third Avenue in
   October 2016 and $171 million at 1899 Pennsylvania Avenue and
   Liberty Place in May 2017)

$
(4,921
)
$975 million refinancing of One Market Plaza in January 2017

(4,020
)
$210 million defeasance of Waterview in October 2016

(3,131
)
$850 million financing of 1301 Avenue of the Americas in October 2016

6,541

$228 million assumption of existing debt at 50 Beale upon acquisition in
   July 2017

1,723

Amortization of deferred financing costs

1,361

Other, net

(98
)
Total decrease

$
(2,545
)

~~Unrealized Gain on Interest Rate Swaps~~

Unrealized gain on interest rate swaps was $12,728,000 for the three months ended September 30, 2016 and was comprised of (i) $10,678,000 of unrealized gains in 2016 relating to swaps aggregating $840,000,000 on One Market Plaza that were settled upon the refinancing in January 2017 and (ii) $2,050,000 of unrealized gains in 2016 relating to swaps aggregating $162,000,000 on 900 Third Avenue that were settled upon the repayment in October 2016.

~~Income Tax Benefit (Expense)~~

Income tax benefit was $1,010,000 for the three months ended September 30, 2017, compared to an expense of $218,000 for the three months ended September 30, 2016, a decrease in expense of $1,228,000. The decrease in expense was primarily ~~due to lower~~from higher taxable income onattributable to our taxable REIT ~~subsidiaries.~~subsidiaries in the current year.

Net ~~(Loss)~~ Income Attributable to Noncontrolling Interests in Consolidated Joint Ventures

Net income attributable to noncontrolling interests in consolidated joint ventures was $5,351,000 for the three months ended June 30, 2023, compared to $4,779,000 for the three months ended June 30, 2022, a $572,000 increase in net income attributable to noncontrolling interests in consolidated joint ventures. This increase was primarily due to higher net income attributable to One Market Plaza, resulting from higher average occupancy in the current year.

Net Loss Attributable to Noncontrolling Interests in Consolidated Real Estate Related Funds

Net loss attributable to noncontrolling interest in consolidated ~~joint ventures~~real estate related funds was ~~$14,217,000~~$37,301,000 for the three months ended ~~September~~June 30, ~~2017,~~2023, compared to ~~income of $4,703,000~~$352,000 for the three months ended ~~September~~June 30, ~~2016, a decrease in income allocated to noncontrolling interests in consolidated joint ventures of $18,920,000.~~ ~~This decrease resulted from:~~

(Amounts in thousands)

Valuation allowance on preferred equity investment in 2017

$
(14,808
)
Lower preferred equity investment income ($718 in 2017,
compared to $1,105 in 2016)

(387
)
Lower income attributable to One Market Plaza
($853 in 2017, compared to $3,598 in 2016)

(2,745
)

Loss attributable to 50 Beale Street (acquired in July 2017)

(980
)
Total decrease

$
(18,920
)

~~Net Income (Loss) Attributable to Noncontrolling Interests in Consolidated Real Estate Fund~~

Net income attributable to noncontrolling interests in consolidated real estate fund was $114,000 for the three months ended September 30, 2017, compared to a loss of $67,000 for the three months ended September 30, 2016,2022, an increase in ~~income attributable~~loss of $36,949,000. This increase was primarily due to the noncontrolling ~~interests~~interests' share of ~~$181,000. This increase resulted from~~the $45,658,000 unrealized loss on an investment in a ~~higher net income subject to allocation to the noncontrolling interests for the three months ended September 30, 2017.~~ mezzanine loan.

Net Loss Attributable to Noncontrolling Interests in Operating Partnership

Net loss attributable to noncontrolling interests in the Operating Partnership was ~~$1,086,000~~$3,341,000 for the three months ended ~~September~~June 30, ~~2017,~~2023, compared to ~~$28,000~~$29,000 for the three months ended ~~September~~June 30, ~~2016,~~2022, an increase in net loss ~~attributable~~allocated to noncontrolling interests of ~~$1,058,000.~~$3,312,000. This increase in loss resulted from a higher net loss subject to allocation to the unitholders of the Operating Partnership ~~for~~in the ~~three months ended September 30, 2017.~~current year.

Results of Operations - ~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2023 and 2022

The following pages summarize our consolidated results of operations for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016.~~2022.

For the Nine Months Ended September 30,

(Amounts in thousands)
2017

2016

Change

REVENUES:

Rental income
$
469,961

$
445,452

$
24,509

Tenant reimbursement income

38,761

33,101

5,660

Fee and other income

29,988

37,986

(7,998
)

Total revenues

538,710

516,539

22,171

EXPENSES:

Operating

197,696

186,964

10,732

Depreciation and amortization

198,143

208,475

(10,332
)

General and administrative

44,624

39,335

5,289

Transaction related costs

1,051

1,725

(674
)

Total expenses

441,514

436,499

5,015

Operating income

97,196

80,040

17,156

Income from unconsolidated joint ventures

19,143

5,291

13,852

Loss from unconsolidated real estate funds

(6,053
)

(2,540
)

(3,513
)

Interest and other (loss) income, net

(11,982
)

5,029

(17,011
)

Interest and debt expense

(107,568
)

(113,406
)

5,838

Loss on early extinguishment of debt

(7,877
)

-

(7,877
)

Gain on sale of real estate

133,989

-

133,989

Unrealized gain on interest rate swaps

1,802

29,661

(27,859
)
Net income before income taxes

118,650

4,075

114,575

Income tax (expense) benefit

(4,242
)

817

(5,059
)
Net income

114,408

4,892

109,516

Less net (income) loss attributable to noncontrolling interests in:

Consolidated joint ventures

11,029

(10,062
)

21,091

Consolidated real estate fund

(20,195
)

819

(21,014
)

Operating Partnership

(12,068
)

906

(12,974
)
Net income (loss) attributable to common stockholders
$
93,174

$
(3,445
)

$
96,619


			For the Six Months Ended June 30,
(Amounts in thousands)			2023			2022			Change
Revenues:
	Rental revenue		$	347,219		$	347,165		$	54
	Fee and other income			13,917			22,037			(8,120	)
		Total revenues		361,136			369,202			(8,066	)
Expenses:
	Operating			141,387			134,475			6,912
	Depreciation and amortization			121,515			113,022			8,493
	General and administrative			30,847			32,351			(1,504	)
	Transaction related costs			191			276			(85	)
		Total expenses		293,940			280,124			13,816
Other income (expense):
	Loss from real estate related fund investments			(39,094	)		-			(39,094	)
	(Loss) income from unconsolidated real estate funds			(146	)		325			(471	)
	Loss from unconsolidated joint ventures			(34,164	)		(9,529	)		(24,635	)
	Interest and other income, net			5,892			1,027			4,865
	Interest and debt expense			(73,338	)		(69,855	)		(3,483	)
(Loss) income before income taxes				(73,654	)		11,046			(84,700	)
	Income tax expense			(861	)		(886	)		25
Net (loss) income				(74,515	)		10,160			(84,675	)
Less net (income) loss attributable to noncontrolling
	interests in:
	Consolidated joint ventures			(10,992	)		(8,204	)		(2,788	)
	Consolidated real estate fund			36,478			1,368			35,110
	Operating Partnership			3,220			(313	)		3,533
Net (loss) income attributable to common stockholders			$	(45,809	)	$	3,011		$	(48,820	)

~~Revenues~~

Revenues

Our revenues, which consist ~~primarily~~ of rental ~~income, tenant reimbursement income,~~revenue and fee and other income, were ~~$538,710,000~~$361,136,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2023, compared to ~~$516,539,000~~$369,202,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2016, an increase~~2022, a decrease of ~~$22,171,000.~~$8,066,000. Below are the details of the increase ~~(decrease)~~or decrease by segment.


(Amounts in thousands)	Total			New York				San Francisco				Other
Rental revenue
Same store operations	$	13,470		$	(1,977	)	(1)	$	15,447		(2)	$	-
Non-cash write-offs of straight-line rent receivables		(13,578	)		(6,235	)	(3)		(7,343	)	(4)		-
Other, net		162			28		(5)		(692	)			826
Increase (decrease) in rental revenue	$	54		$	(8,184	)		$	7,412			$	826

Fee and other income
Fee income
Asset management	$	(1,471	)	$	-			$	-			$	(1,471	)
Property management		(629	)		-				-				(629	)
Acquisition, disposition, leasing and other		(6,329	)		-				-				(6,329	)	(6)
Decrease in fee income		(8,429	)		-				-				(8,429	)
Other income
Same store operations		309			542				(231	)			(2	)
Increase (decrease) in other income		309			542				(231	)			(2	)
(Decrease) increase in fee and other income	$	(8,120	)	$	542			$	(231	)		$	(8,431	)

Total (decrease) increase in revenues	$	(8,066	)	$	(7,642	)		$	7,181			$	(7,605	)

(Amounts in thousands)

Total

New York

Washington, D.C.

San Francisco

Other

Rental income

Acquisitions ⁽¹⁾

$
38,709

$
-

$
-

$
38,709

$
-

Dispositions ⁽²⁾

(13,637
)

-

(13,637
)

-

-

Same store operations

(3,434
)

(10,014
)
⁽³⁾

4,187

3,630

(1,237
)

Other, net

2,871

2,742

⁽⁴⁾

-

129

-

Increase (decrease) in rental income

$
24,509

$
(7,272
)

$
(9,450
)

$
42,468

$
(1,237
)

Tenant reimbursement income

Acquisitions ⁽¹⁾

$
4,652

$
-

$
-

$
4,652

$
-

Dispositions ⁽²⁾

(1,031
)

-

(1,031
)

-

-

Same store operations

2,039

(1,011
)
⁽⁴⁾

3,083

(33
)

-

Increase (decrease) in tenant

reimbursement income

$
5,660

$
(1,011
)

$
2,052

$
4,619

$
-

Fee and other income

Property management

$
351

$
-

$
-

$
-

$
351

Asset management

1,122

-

-

-

1,122

Acquisition and disposition

6,268

-

-

-

6,268

Other

529

-

-

-

529

Increase in fee income

8,270

-

-

-

8,270

Acquisitions ⁽¹⁾

1,351

-

-

1,351

-

Dispositions ⁽²⁾

(119
)

-

(119
)

-

-

Lease termination income

(13,459
)

(13,605
)
⁽⁵⁾

-

146

-

Other income

(4,041
)

(3,376
)

739

(1,448
)

44

(Decrease) increase in other income

(16,268
)

(16,981
)

620

49

44

(Decrease) increase in fee

and other income

$
(7,998
)

$
(16,981
)

$
620

$
49

$
8,314

Total increase (decrease) in revenues

$
22,171

$
(25,264
)

$
(6,778
)

$
47,136

$
7,077

(1)

Primarily due to lower average occupancy at 1301 Avenue of the Americas in the current year.

⁽¹⁾	~~Represents revenues for the nine months ended September 30, 2017 from One Front Street and 50 Beale, which were acquired in December 2016 and July 2017, respectively.~~

(2)

Primarily due to higher average occupancy in the current year and higher expense reimbursements from increased operating expenses (See note 1 on page 43).

⁽²⁾	~~Represents 2016 revenues from Waterview, which was sold in May 2017, for the months in which it was not owned in both reporting periods.~~

(3)

Primarily due to a write-off of $6,563 in the current year related to the terminated SVB Securities lease at 1301 Avenue of the Americas.

⁽³⁾	~~Primarily due to a decrease in occupancy at 31 West 52nd Street and 1325 Avenue of the Americas.~~

(4)

Represents a write-off in the current year related to the surrendered JPMorgan space at One Front Street.

⁽⁴⁾

Primarily due to an $11,800 of non-cash write-off, in the nine months ended September 30, 2016, related to the termination of a tenant’s above-market lease at 1633 Broadway, partially offset by $10,315 of income, in the nine months ended September 30, 2016, from the accelerated amortization of a below-market lease liability in connection with a tenant’s lease modification.

(5)

Primarily due to income of $2,284 in the current year, in connection with a tenant's lease termination at 1633 Broadway, partially offset by lease termination income of $2,056 in the prior year.

⁽⁵⁾	~~Decrease primarily due to $10,861 of income for the nine months ended September 30, 2016, in connection with a tenant's lease termination at 1633 Broadway.~~

(6)

Primarily due to fee income earned in connection with the acquisition of 1600 Broadway in the prior year.

~~Expenses~~

Expenses

Our expenses, which consist ~~primarily~~ of operating, depreciation and amortization, general and administrative and transaction related costs, were ~~$441,514,000~~$293,940,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2023, compared to ~~$436,499,000~~$280,124,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2022, an increase of ~~$5,015,000.~~$13,816,000. Below are the details of the increase ~~(decrease)~~or decrease by segment.


(Amounts in thousands)	Total			New York		San Francisco			Other
Operating
Same store operations	$	8,058		$	1,848	$	6,210	(1)	$	-
Other, net		(1,146	)		-		-			(1,146	)
Increase in operating	$	6,912		$	1,848	$	6,210		$	(1,146	)

Depreciation and amortization
Operations	$	8,493		$	1,164	$	6,710	(2)	$	619
Increase in depreciation and amortization	$	8,493		$	1,164	$	6,710		$	619

General and administrative
Operations	$	(1,504	)	$	-	$	-		$	(1,504	)
Decrease in general and administrative	$	(1,504	)	$	-	$	-		$	(1,504	)

Decrease in transaction related costs	$	(85	)	$	-	$	-		$	(85	)

Total increase (decrease) in expenses	$	13,816		$	3,012	$	12,920		$	(2,116	)

(Amounts in thousands)

Total

New York

Washington, D.C.

San Francisco

Other

Operating

Acquisitions ⁽¹⁾

$
13,091

$
-

$
-

$
13,091

$
-

Dispositions ⁽²⁾

(4,459
)

-

(4,459
)

-

-

Same store operations

2,371

2,496

1,148

372

(1,645
)
Bad debt expense

(271
)

(267
)

(4
)

-

-

Increase (decrease) in operating

$
10,732

$
2,229

$
(3,315
)

$
13,463

$
(1,645
)

Depreciation and amortization

Acquisitions ⁽¹⁾

$
30,129

$
-

$
-

$
30,129

$
-

Dispositions ⁽²⁾

(4,256
)

-

(4,256
)

-

-

Operations

(36,205
)

(29,294
)
⁽³⁾

(3,250
)

(3,904
)

243

(Decrease) increase in depreciation

and amortization

$
(10,332
)

$
(29,294
)

$
(7,506
)

$
26,225

$
243

General and administrative

Operations

$
43

$
-

$
-

$
-

$
43

Stock-based Compensation

4,781

-

-

-

4,781

Mark-to-market of investments

in our deferred compensation plan

3,339

-

-

-

3,339

⁽⁴⁾
Severance costs

(2,874
)

-

-

-

(2,874
)
⁽⁵⁾
Increase in general

and administrative

$
5,289

$
-

$
-

$
-

$
5,289

Decrease in transaction related
costs

$
(674
)

$
-

$
-

$
-

$
(674
)

Total increase (decrease) in
expenses

$
5,015

$
(27,065
)

$
(10,821
)

$
39,688

$
3,213

(1)

Primarily due to higher operating expenses driven by higher average occupancy at One Market Plaza in the current year (see note 2 on page 42)

⁽¹⁾

~~Represents expenses for the nine months ended September 30, 2017 from One Front Street and 50 Beale, which were acquired in December 2016 and July 2017, respectively.~~

(2)

Primarily due to a write-off of deferred leasing commissions in the current year in connection with the surrendered JPMorgan space at One Front Street.

⁽²⁾

~~Represents expenses for Waterview, which was sold in May 2017, for the months in which it was not owned in both reporting periods.~~

⁽³⁾

Decrease primarily due to lower amortization of in-place lease assets due to the expiration of such leases and acceleration of amortization of tenant improvements and in-place lease assets in the nine months ended September 30, 2016, in connection with a tenant’s lease modification.

⁽⁴⁾

⁽⁵⁾

~~Represents severance costs in the nine months ended September 30, 2016 in connection with a separation agreement.~~

Loss from Real Estate Related Fund Investments

Loss from real estate related fund investments was $39,094,000 for the six months ended June 30, 2023, and represented loss attributable to Fund X, which we began consolidating into our consolidated financial statements effective December 12, 2022, and in which we have a 13.0% ownership interest. The loss resulted primarily from a $45,658,000 unrealized loss on a mezzanine loan investment based on a negotiated transaction price.

(Loss) Income from Unconsolidated Real Estate Related Funds

Loss from unconsolidated real estate related funds was $146,000 for the six months ended June 30, 2023, which represented our share of loss from Fund VIII. Income from unconsolidated real estate related funds was $325,000 for the six months ended June 30, 2022, which represented our share of income from Fund VIII and Fund X.

Loss from Unconsolidated Joint Ventures

~~Income~~Loss from unconsolidated joint ventures was ~~$19,143,000~~$34,164,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2023, compared to ~~$5,291,000~~$9,529,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2016, an increase of $13,852,000. This increase resulted from:~~

(Amounts in thousands)

712 Fifth Avenue ($19,030 in 2017, compared to $5,233 in 2016)

$
13,797

⁽¹⁾
60 Wall Street (acquired in January 2017)

(81
)

75 Howard (acquired in May 2017)

133

⁽²⁾
Oder-Center, Germany ($61 in 2017, compared to $58 in 2016)

3

Total increase

$
13,852

⁽¹⁾

Prior to June 30, 2017, the basis of our investment in the property was $4,928. On June 30, 2017, we received a $20,000 distribution for our 50.0% share of net proceeds from refinancing the property. Because the distributions resulted in our basis becoming negative and because we have no further obligation to fund additional capital to the venture, in accordance with GAAP, we can no longer recognize our proportionate share of earnings from the venture until our basis is above zero. Accordingly, we are only recognizing income to the extent we receive cash distributions from the venture.

⁽²⁾

~~Represents RDF’s 20% share of income from the property, of which our 7.4% share is $9.~~

~~Loss from Unconsolidated Real Estate Funds~~

~~Loss from unconsolidated real estate funds was $6,053,000 for the nine months ended September 30, 2017, compared to $2,540,000 for the nine months ended September 30, 2016,~~2022, an increase in loss of ~~$3,513,000.~~$24,635,000. This increase in loss resulted primarily from a $24,734,000 non-cash real estate impairment loss on 60 Wall Street in the current year.

Interest and Other Income, net

Interest and other income was $5,892,000 for the six months ended June 30, 2023, compared to $1,027,000 for the six months ended June 30, 2022, an increase in income of $4,865,000. This increase resulted primarily from ~~a decrease~~higher yields on short-term investments in ~~carried interest of $6,426,000, partially offset by a decrease in unrealized loss of $2,913,000.~~the current year.

~~Interest and Other (Loss) Income, net~~

Interest and other loss was $11,982,000 for the nine months ended September 30, 2017, compared to income of $5,029,000 for the nine months ended September 30, 2016, a decrease in income of $17,011,000. This decrease resulted from:

(Amounts in thousands)

Valuation allowance on preferred equity investment in 2017⁽¹⁾

$
(19,588
)
Decrease in preferred equity investment income ($3,327 in 2017, compared
to $4,299 in 2016) ⁽²⁾

(972
)
Increase in the value of investments in our deferred compensation plan (which
is offset by an increase in “general and administrative”)

3,339

Other, net

210

Total decrease

$
(17,011
)

⁽¹⁾

⁽²⁾

~~Represents income from our preferred equity investments in PGRESS Equity Holdings L.P., of which our 24.4% share is $819 and $1,047 for the nine months ended September 30, 2017 and 2016, respectively.~~

Interest and Debt Expense

Interest and debt expense was ~~$107,568,000~~$73,338,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2023, compared to ~~$113,406,000~~$69,855,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2016, a decrease~~2022, an increase of ~~$5,838,000.~~$3,483,000. This ~~decrease~~increase resulted ~~from:~~

(Amounts in thousands)

$445 million of debt repayments ($274 million at 900 Third Avenue in
   October 2016 and $171 million at 1899 Pennsylvania Avenue and
   Liberty Place in May 2017)

$
(12,150
)
$975 million refinancing of One Market Plaza in January 2017

(11,123
)
$210 million defeasance of Waterview in October 2016

(9,246
)
$850 million financing of 1301 Avenue of the Americas in October 2016

19,127

$228 million assumption of existing debt at 50 Beale upon acquisition in
   July 2017

1,723

Amortization of deferred financing costs

4,246

Other, net

1,585

Total decrease

$
(5,838
)

~~Loss~~primarily from higher interest on ~~Early Extinguishment~~the variable rate portion of ~~Debt~~

~~In the nine months ended September 30, 2017, we incurred $7,877,000 of costs in connection with the early refinancing of One Market Plaza and the early repayment of~~our debt at ~~1899 Pennsylvania~~1301 Avenue ~~and Liberty Place~~of the Americas due to an increase in ~~May 2017.~~

~~Gain on Sale of Real Estate~~

Inaverage LIBOR rates in the ~~nine~~current year’s six months ended September 30, 2017, we recognized $133,989,000 of gains on sale of real estate, comprised of a $110,583,000 net gain on sale of Waterview in May 2017 and a $23,406,000 net gain on sale of an 80.0% equity interest in 75 Howard in May 2017.

~~Unrealized Gain on Interest Rate Swaps~~

~~Unrealized gain on interest rate swaps was $1,802,000 for the nine months ended September 30, 2017,~~ compared to ~~an unrealized gain of $29,661,000 for~~ the nine months ended September 30, 2016, a decrease of $27,859,000. This decrease was primarily due to (i) $22,219,000 of lower unrealized gains in 2017 relating to swaps aggregating $840,000,000 on One Market Plaza that were settled upon the refinancing in January 2017, (ii) $4,020,000 of unrealized gains in 2016 relating to swaps aggregating $162,000,000 on 900 Third Avenue that were settled upon the repayment in October 2016 and (iii) $1,620,000 of unrealized gains in 2016 relating to swaps aggregating $237,600,000 on 31 West 52nd Street that were settled upon the refinancing in May 2016.prior year.

Income Tax ~~(Expense) Benefit~~Expense

Income tax expense was ~~$4,242,000~~$861,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2023, compared to ~~a benefit of $817,000~~$886,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2016, an increase in expense~~2022, a decrease of ~~$5,059,000. This increase in expense was primarily due to higher fee income on our taxable REIT subsidiaries and $1,838,000 of tax on the gain on the sale of an 80.0% equity interest in 75 Howard.~~$25,000.

Net ~~(Loss)~~ Income Attributable to Noncontrolling Interests in Consolidated Joint Ventures

Net loss attributable to noncontrolling interest in consolidated joint ventures was $11,029,000 for the nine months ended September 30, 2017, compared to income of $10,062,000 for the nine months ended September 30, 2016, a decrease in income attributable to noncontrolling interests in consolidated joint ventures ~~of $21,091,000.~~ was $10,992,000 for the six months ended June 30, 2023, compared to $8,204,000 for the six months ended June 30, 2022, a $2,788,000 increase in net income attributable to noncontrolling interests in consolidated joint ventures. This ~~decrease resulted from:~~increase was primarily due to higher net income attributable to One Market Plaza, resulting from higher average occupancy in the current year.

(Amounts in thousands)

Valuation allowance on preferred equity investment in 2017

$
(14,808
)
Lower preferred equity investment income ($2,508 in 2017,
compared to income of $3,252 in 2016)

(744
)
Lower income attributable to One Market Plaza
($2,251 in 2017, compared to $6,810 in 2016)

(4,559
)

Loss attributable to 50 Beale Street (acquired in July 2017)

(980
)
Total decrease

$
(21,091
)

Net ~~Income (Loss)~~Loss Attributable to Noncontrolling Interests in Consolidated Real Estate ~~Fund~~Related Funds

Net loss attributable to noncontrolling interest in consolidated real estate related funds was $36,478,000 for the six months ended June 30, 2023, compared to $1,368,000 for the six months ended June 30, 2022, an increase in loss of $35,110,000. This increase was primarily due to the noncontrolling interests' share of the $45,658,000 unrealized loss on an investment in a mezzanine loan.

Net Loss (Income) Attributable to Noncontrolling Interests in Operating Partnership

Net loss attributable to noncontrolling interests in the Operating Partnership was $3,220,000 for the six months ended June 30, 2023, compared to a net income attributable to noncontrolling interests in ~~consolidated real estate fund was $20,195,000~~the Operating Partnership of $313,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2017, compared to a loss of $819,000 for the nine months ended September 30, 2016,~~2022, an increase in ~~income attributable to the noncontrolling interests of $21,014,000. This increase was primarily due to noncontrolling interests share of the gain on the sale of an 80.0% equity interest in 75 Howard.~~

~~Net Income (Loss) Attributable to Noncontrolling Interests in Operating Partnership~~

~~Net income attributable to noncontrolling interests in Operating Partnership was $12,068,000 for the nine months ended September 30, 2017, compared to a~~net loss ~~of $906,000 for the nine months ended September 30, 2016, an increase in income attributable~~allocated to noncontrolling interests of ~~$12,974,000.~~$3,533,000. This increase in loss resulted from higher ~~income~~net loss subject to allocation to the unitholders of the Operating Partnership ~~for~~in the ~~nine months ended September 30, 2017.~~current year.

Liquidity and Capital Resources

Liquidity

Our primary sources of liquidity include existing cash balances, cash flow from operations and borrowings available under our revolving credit facility. As of June 30, 2023, we had $1.26 billion of liquidity comprised of $434,751,000 of cash and cash equivalents, $72,680,000 of restricted cash and $750,000,000 of borrowing capacity under our revolving credit facility.

We expect that these sources will provide adequate liquidity over the next 12 months for all anticipated needs, including scheduled principal and interest payments on our outstanding indebtedness, existing and anticipated capital improvements, the cost of securing new and renewal leases, dividends to stockholders and distributions to unitholders, and all other capital needs related to the operations of our business.

We anticipate that our long-term needs including debt maturities and ~~the acquisition of additional properties~~potential acquisitions will be funded by operating cash flow, third-party joint venture capital, mortgage financings and/or re-financings, and the issuance of long-term debt or equity and cash on hand.

Although we may be able to anticipate and plan for certain of our liquidity needs, unexpected increases in uses of cash that are beyond our control and which affect our financial condition and results of operations may arise, or our sources of liquidity may be fewer than, and the funds available from such sources may be less than, anticipated or required.

Consolidated Debt

As of ~~September~~June 30, 2017, we had $1.017 billion of liquidity comprised of $185,028,000 of cash and cash equivalents, $32,320,000 of restricted cash and $800,000,000 of borrowing capacity under our revolving credit facility. As of September 30, 2017,2023, our outstanding consolidated debt ~~(including~~aggregated $3.86 billion. We had no amounts outstanding under our revolving credit ~~facility) aggregated $3.583 billion. None of our debt matures until 2021.~~facility. In October 2023, the $273,000,000 mortgage loan at 300 Mission Street is scheduled to mature and in February 2024, the $975,000,000 mortgage loan at One Market Plaza is also scheduled to mature. We are exploring various alternatives to refinance these loans. We may refinance these debts or any of our maturing debt when it comes due ~~or refinance~~ or repay it early depending on prevailing market conditions, liquidity requirements and other factors. The amounts involved in connection with these transactions could be material to our consolidated financial statements.

Revolving Credit Facility

Our $750,000,000 revolving credit facility matures in March 2026 and has two six-month extension options. The interest rate on the facility is 115 basis points over the Secured Overnight Financing Rate (“SOFR”) with adjustments based on the terms of advances, plus a facility fee of 20 basis points. The facility also features a sustainability-linked pricing component such that if we meet certain sustainability performance targets, the applicable per annum interest rate will be reduced by one basis point. The facility contains certain restrictions and covenants that require us to maintain, on an ongoing basis, (i) a leverage ratio not to exceed 60%, which may be increased to 65% for any fiscal quarter in which an acquisition of real estate is completed, and for up to the next three subsequent consecutive fiscal quarters, (ii) a secured leverage ratio not to exceed 50%, (iii) a fixed coverage ratio of at least 1.50, (iv) an unsecured leverage ratio to not to exceed 60%, which may be increased to 65% for any fiscal quarter in which an acquisition of real estate is completed, and for up to the next three subsequent consecutive fiscal quarters and (v) an unencumbered interest coverage ratio of at least 1.75. The facility also contains customary representations and warranties, limitations on permitted investments and other covenants.

Dividend Policy

On ~~September~~June 15, ~~2017,~~2023, we declared a ~~regular~~ quarterly cash dividend of ~~$0.095~~$0.035 per share of common stock for the ~~third~~second quarter ~~ending September~~ended June 30, ~~2017,~~2023, which was paid on ~~October 13, 2017~~July 14, 2023 to stockholders of record as of the close of business on ~~September 29, 2017.~~June 30, 2023. This dividend policy, if continued, would require us to pay out approximately ~~$25,211,000~~$8,200,000 each quarter to common stockholders and unitholders.

Off Balance Sheet Arrangements

As of ~~September~~June 30, ~~2017,~~2023, our unconsolidated joint ventures had ~~$897,535,000~~$1.74 billion of outstanding indebtedness, of which our share was ~~$180,949,000.~~$625,530,000. In May 2023, the joint venture that owns 60 Wall Street defaulted on the $575,000,000 non-recourse mortgage loan securing the property. The joint venture is currently in negotiations with the lender to modify the loan. We do not guarantee the indebtedness of our unconsolidated joint ventures other than providing customary environmental indemnities and guarantees of ~~specified~~ non-recourse ~~carveouts relating to specified covenants and representations;~~carve-outs; however, we may elect to fund additional capital to a joint venture through equity contributions (generally on a basis proportionate to our ownership interests), advances or partner loans in order to enable the joint venture to repay this indebtedness upon maturity.

Stock Repurchase Program

On ~~August 1, 2017,~~November 5, 2019, we received authorization from our Board of Directors ~~approved the~~to repurchase of up to $200,000,000 of our common stock, from time to time, in the open market or in privately negotiated transactions. As of December 31, 2022, we had repurchased a total of 24,183,768 common shares at a weighted average price of $7.65 per share, or $185,000,000 in the aggregate. As of June 30, 2023, we have $15,000,000 available for future repurchases under the existing program. The amount and ~~the~~ timing of future repurchases, if any, will depend on a number of factors, including, the price and availability of our shares, trading volume, ~~and~~ general market ~~conditions.~~conditions and available funding. The stock repurchase program may be suspended or discontinued at any time.

~~Insurance~~

Insurance

Other Commitments and Contingencies

~~Inflation~~Transfer Tax Assessments

During 2017, the New York City Department of Finance issued Notices of Determination (“Notices”) assessing additional transfer taxes (including interest and penalties) in connection with the transfer of interests in certain properties during our 2014 initial public offering. We believe, after consultation with legal counsel that the likelihood of loss is reasonably possible, and while it is not possible to predict the outcome of these Notices, we estimate the range of loss could be between $0 and $59,000,000. Since no amount in this range is a better estimate than any other amount within the range, we have not accrued any liability arising from potential losses relating to these Notices in our consolidated financial statements.

Inflation

Substantially all of our leases provide for separate real estate tax and operating expense escalations. In addition, many of the leases provide for fixed base rent increases. We believe inflationary increases in expenses may be at least partially offset by the contractual rent increases and expense escalations described above. We do not believe inflation has had a material impact on our historical financial position or results of operations.

Cash Flows

Cash and cash equivalents and restricted cash were ~~$185,028,000~~$507,431,000 and ~~$162,965,000~~$449,817,000 as of ~~September~~June 30, ~~2017~~2023 and December 31, ~~2016,~~2022, respectively, and $531,867,000 and $529,666,000 as of June 30, 2022 and December 31, 2021, respectively. Cash and cash equivalents and restricted cash increased by $57,614,000 and $2,201,000 for the six months ended June 30, 2023 and 2022, respectively. The following table sets forth the changes in cash flow.

For the Nine Months Ended September 30,

(Amounts in thousands)
2017

2016

Net cash provided by (used in):

Operating activities
$
105,071

$
70,148

Investing activities

315,843

(147,149
)
Financing activities

(398,851
)

24,385


	For the Six Months Ended June 30,
(Amounts in thousands)	2023			2022
Net cash provided by (used in):
Operating activities	$	138,056		$	131,102
Investing activities		(83,882	)		(68,101	)
Financing activities		3,440			(60,800	)

Operating Activities

~~Nine~~Six months ended ~~September~~June 30, ~~2017~~2023 –We generated ~~$105,071,000~~$138,056,000 of cash from operating activities for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2023, primarily from (i) ~~$150,698,000~~$138,252,000 of net income (before ~~$170,279,000~~$212,767,000 of ~~noncash adjustments and $133,989,000 of gain on sale of real estate)~~non-cash adjustments) and (ii) ~~$3,655,000~~$280,000 of distributions from unconsolidated joint ventures and real estate related funds, partially offset by (iii) ~~$49,282,000~~$476,000 of net changes in operating assets and ~~liabilities Noncash~~liabilities. Non-cash adjustments of ~~$170,279,000~~$212,767,000 were primarily comprised of depreciation and amortization, ~~income~~realized and unrealized losses on real estate related fund investments, loss from unconsolidated joint ventures, straight-lining of rental ~~income,~~revenue, amortization of above and ~~below market~~below-market leases, ~~impairment loss on preferred equity investment~~net and amortization of ~~stock based~~stock-based compensation. ~~The changes in operating assets and liabilities were primarily due to prepaid real estate taxes and additions to deferred charges.~~

~~Nine~~Six months ended ~~September~~June 30, ~~2016~~2022 –We generated ~~$70,148,000~~$131,102,000 of cash from operating activities for the ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2022, primarily from (i) ~~$121,046,000~~$142,053,000 of net income (before ~~$116,154,000~~$131,893,000 of ~~noncash~~non-cash adjustments) and (ii) ~~$6,132,000~~$338,000 of distributions from unconsolidated joint ventures and real estate related funds, partially offset by (iii) ~~$57,030,000~~$11,289,000 of net changes in operating assets and liabilities. ~~Noncash~~Non-cash adjustments of ~~$116,154,000~~$131,893,000 were primarily comprised of depreciation and amortization, straight-lining of rental ~~income~~revenue, amortization of above and ~~unrealized gain on interest rate swaps. The~~below-market leases, net ~~changes in operating assets~~ and ~~liabilities were primarily due to prepaid real estate taxes and additions to deferred charges.~~amortization of stock-based compensation.

Investing Activities

~~Nine~~Six months ended ~~September~~June 30, ~~2017~~2023 – We generated $315,843,000 of cash from investing activities for the nine months ended September 30, 2017, primarily from (i) $540,333,000 of proceeds from the sales of real estate and (ii) $33,849,000 of distributions from unconsolidated joint ventures and real estate funds, partially offset by (iii) $161,184,000 for acquisition of real estate; (iv) $59,255,000 for additions to real estate, which was comprised of spending for tenant improvements and other building improvements, (v) $28,886,000 for the investments in unconsolidated joint ventures and (vi) $8,224,000 increase in restricted cash.

~~Nine months ended September 30, 2016 –~~ We used ~~$147,149,000~~$83,882,000 of cash for investing activities for the ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2023, primarily ~~due to~~ (i) ~~$107,445,000 of~~$44,310,000 for additions to ~~rental properties,~~real estate, which ~~was~~were comprised of spending for tenant improvements and other building improvements, (ii) ~~$50,000,000 deposit on rental property,~~$40,715,000 for contributions to an unconsolidated joint venture, (iii) ~~$1,084,000~~$35,715,000 for advances to a partner in One Steuart Lane and (iv) $2,077,000 for contributions of capital to Fund VIII, partially offset by (v) $38,935,000 from repayment of advances by a partner in One Steuart Lane.

Six months ended June 30, 2022 – We used $68,101,000 of cash for investing activities for the six months ended June 30, 2022, primarily (i) $54,136,000 for additions to real estate, which were comprised of spending for tenant improvements and other building improvements, (ii) $11,252,000 for our investment in 1600 Broadway, and (iii) $2,713,000 for contributions of capital to unconsolidated real estate related funds, net of distributions received.

Financing Activities

Six months ended June 30, 2023 – We generated $3,440,000 of cash from financing activities for the six months ended June 30, 2023, primarily from (i) $53,354,000 of contributions from noncontrolling interests in consolidated real estate related funds, partially offset by (ii) $36,136,000 for payment of dividends and distributions to common stockholders and unitholders, (iii) $5,463,000 for distributions to noncontrolling interests in 300 Mission Street and 1633 Broadway, (iv) ~~$11,380,000 decrease~~$6,263,000 for distributions to noncontrolling interests in ~~restricted cash.~~Fund X, (v) $1,847,000 for the settlement of accounts payable in connection with repurchases of common shares in 2022 and (vi) $205,000 for the repurchase of shares related to stock compensation agreements and related tax withholdings.

~~Financing Activities~~

~~Nine~~Six months ended ~~September~~June 30, ~~2017~~ 2022 – We used ~~$398,851,000~~$60,800,000 of cash for financing activities for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2022, primarily ~~due~~(i) $35,672,000 for dividends and distributions to ~~(i) $1,044,821,000 for repayments of notes~~common stockholders and ~~mortgages payable and $7,877,000 for loss on early extinguishment of debt, primarily for the early repayments of One Market Plaza, 1899 Pennsylvania Avenue and Liberty Place loans,~~unitholders, (ii) ~~$290,000,000 for repayments of the amounts borrowed under the revolving credit facility, (iii) $115,549,000~~$24,848,000 for distributions to noncontrolling interests ~~(iv) 75,569,000 for dividends and distributions paid to~~common stockholders and unitholders, (v) $19,425,000 for the settlement of swap liabilities, and (vi) $7,344,000 for the payment of debt issuance costs, partially offset by (vii) $991,556,000 of proceeds from notes and mortgages payable, primarily from the refinancing ofin One Market Plaza, ~~(viii) $100,777,000 of contributions from noncontrolling interests, primarily from the acquisition of 50 Beale, (ix) $60,000,000 of borrowings under the revolving credit facility~~300 Mission Street and ~~(x) $9,555,000 from the refund of transfer taxes.~~

~~Nine months ended September 30, 2016 –~~ ~~We generated $24,385,000 of cash from financing activities~~1633 Broadway and (iii) $280,000 for the ~~nine months ended September 30, 2016, primarily from (i) $509,578,000~~repurchases of ~~proceeds from notes~~shares related to stock compensation agreements and mortgages payable, primarily from the refinancing of 31 West 52nd Street and (ii) $110,000,000 of borrowings under the revolving credit facility, partially offset by (iii) $414,564,000 of repayments of notes and mortgages payable, primarily for the repayment of 31 West 52nd Street loan, (iv) $80,000,000 of repayments of the amounts borrowed under the revolving credit facility, (v) $75,365,000 of dividends and distributions paid to common stockholders and unitholders, (vi) $16,040,000 for the settlement of swap liabilities and (vii) $6,532,000 for the payment of debt issuance costs.
related tax withholdings.

Non-GAAP Financial Measures

We use and present NOI, ~~Cash~~Same Store NOI, FFO and Core FFO, as supplemental measures of our performance. The summary below describes our use of these measures, provides information regarding why we believe these measures are meaningful supplemental measures of our performance and reconciles these measures from net income or loss, the most directly comparable GAAP measure. Other real estate companies may use different methodologies for calculating these measures, and accordingly, our presentation of these measures may not be comparable to other real estate companies. These non-GAAP measures should not be considered a substitute for, and should only be considered together with and as a supplement to, financial information presented in accordance with GAAP.

~~NOI~~

Net Operating Income (“NOI”)

We use NOI to measure the operating performance of our properties. NOI consists of ~~property-related~~rental revenue (which includes ~~rental income,~~property rentals, tenant ~~reimbursement income~~reimbursements and lease termination income) and certain other ~~income)~~property-related revenue less operating expenses (which includes ~~building~~property-related expenses such as cleaning, security, repairs and maintenance, utilities, property administration and real estate taxes). We also present Cash NOI, which deducts from NOI, straight-line rent adjustments and the amortization of above and below-market leases, including our share of such adjustments of unconsolidated joint ventures. In addition, we present ~~our~~Paramount’s share of NOI and Cash NOI, which represents our share of NOI and Cash NOI of consolidated and unconsolidated joint ventures, based on our percentage ownership in the underlying assets. We use ~~these metrics~~NOI and Cash NOI internally as performance measures and believe they provide useful information to investors regarding our financial condition and results of operations because they reflect only those income and expense items that are incurred at the property level. 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.

The following tables present reconciliations of our net ~~(loss)~~ income or loss to NOI and Cash NOI for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016.~~2022.

For the Three Months Ended September 30, 2017

(Amounts in thousands)
Total

New York

Washington, D.C.

San Francisco

Other

Reconciliation of net (loss) income to NOI and Cash NOI:

Net (loss) income
$
(25,403
)
$
2,870

$
3,698

$
1,114

$
(33,085
)
Add (subtract) adjustments to arrive at NOI
   and Cash NOI:

Depreciation and amortization

66,515

38,040

5,417

22,586

472

General and administrative

14,470

-

-

-

14,470

Interest and debt expense

35,733

22,562

-

12,026

1,145

Transaction related costs

274

-

-

-

274

Income tax (benefit) expense

(1,010
)

-

-

1

(1,011
)
NOI from unconsolidated joint ventures

4,993

4,815

-

-

178

Income from unconsolidated joint ventures

(671
)

(551
)

-

-

(120
)
Loss from unconsolidated real estate funds

3,930

-

-

-

3,930

Fee income

(5,834
)

-

-

-

(5,834
)
Interest and other loss (income), net

17,668

(37
)

(16
)

(133
)

17,854

NOI

110,665

67,699

9,099

35,594

(1,727
)
Less NOI attributable to noncontrolling interests in:

Consolidated joint ventures

(15,307
)

-

-

(15,307
)

-

Consolidated real estate fund

(21
)

-

-

-

(21
)
Paramount's share of NOI
$
95,337

$
67,699

$
9,099

$
20,287

$
(1,748
)

NOI
$
110,665

$
67,699

$
9,099

$
35,594

$
(1,727
)
Less:

Straight-line rent adjustments (including our

share of unconsolidated joint ventures)

(11,402
)

(8,455
)

106

(3,025
)

(28
)
Amortization of above and below-market leases,
   net (including our share of unconsolidated
   joint ventures)

(3,017
)

1,060

(547
)

(3,530
)

-

Cash NOI

96,246

60,304

8,658

29,039

(1,755
)
Less Cash NOI attributable to noncontrolling
   interests in:

Consolidated joint ventures

(12,412
)

-

-

(12,412
)

-

Consolidated real estate fund

(21
)

-

-

-

(21
)
Paramount's share of Cash NOI
$
83,813

$
60,304

$
8,658

$
16,627

$
(1,776
)

For the Three Months Ended September 30, 2016

(Amounts in thousands)
Total

New York

Washington, D.C.

San Francisco

Other

Reconciliation of net income (loss) to

NOI and Cash NOI:

Net income (loss)
$
4,469

$
8,562

$
797

$
7,091

$
(11,981
)
Add (subtract) adjustments to arrive at NOI
and Cash NOI:

Depreciation and amortization

66,376

44,959

7,925

12,971

521

General and administrative

13,235

-

-

-

13,235

Interest and debt expense

38,278

17,630

5,198

14,064

1,386

Transaction related costs

282

-

-

-

282

Income tax expense (benefit)

218

-

(1
)

4

215

NOI from unconsolidated joint ventures

3,974

3,893

-

-

81

Income from unconsolidated joint ventures

(1,792
)

(1,772
)

-

-

(20
)
Loss from unconsolidated real estate funds

1,254

-

-

-

1,254

Fee income

(3,976
)

-

-

-

(3,976
)
Interest and other income, net

(2,299
)

(48
)

(12
)

(5
)

(2,234
)
Unrealized gain on interest rate swaps

(12,728
)

(2,050
)

-

(10,678
)

-

NOI

107,291

71,174

13,907

23,447

(1,237
)
Less NOI attributable to noncontrolling interests in:

Consolidated joint ventures

(11,819
)

-

-

(11,819
)

-

Consolidated real estate fund

(157
)

-

-

-

(157
)
Paramount's share of NOI
$
95,315

$
71,174

$
13,907

$
11,628

$
(1,394
)

NOI
$
107,291

$
71,174

$
13,907

$
23,447

$
(1,237
)
Less:

Straight-line rent adjustments (including our

share of unconsolidated joint ventures)

(23,234
)

(18,754
)

(1,425
)

(3,027
)

(28
)
Amortization of above and below-market leases, net

(3,112
)

1,201

(549
)

(3,764
)

-

Cash NOI

80,945

53,621

11,933

16,656

(1,265
)
Less Cash NOI attributable to noncontrolling
interests in:

Consolidated joint ventures

(8,356
)

-

-

(8,356
)

-

Consolidated real estate fund

(157
)

-

-

-

(157
)
Paramount's share of Cash NOI
$
72,432

$
53,621

$
11,933

$
8,300

$
(1,422
)

For the Nine Months Ended September 30, 2017

(Amounts in thousands)
Total

New York

Washington, D.C.

San Francisco

Other

Reconciliation of net income (loss) to

NOI and Cash NOI:

Net income (loss)
$
114,408

$
23,921

$
122,237

$
4,942

$
(36,692
)
Add (subtract) adjustments to arrive at NOI
   and Cash NOI:

Depreciation and amortization

198,143

115,134

16,031

65,364

1,614

General and administrative

44,624

-

-

-

44,624

Interest and debt expense

107,568

66,754

2,724

32,983

5,107

Loss on early extinguishment of debt

7,877

-

5,162

2,715

-

Transaction related costs

1,051

-

-

-

1,051

Income tax expense

4,242

-

-

9

4,233

NOI from unconsolidated joint ventures

14,774

14,406

-

-

368

Income from unconsolidated joint ventures

(19,143
)

(18,949
)

-

-

(194
)
Loss from unconsolidated real estate funds

6,053

-

-

-

6,053

Fee income

(19,838
)

-

-

-

(19,838
)
Interest and other loss (income), net

11,982

(98
)

(36
)

(202
)

12,318

Gain on sale of real estate

(133,989
)

-

(110,583
)

-

(23,406
)
Unrealized gain on interest rate swaps

(1,802
)

-

-

(1,802
)

-

NOI

335,950

201,168

35,535

104,009

(4,762
)
Less NOI attributable to noncontrolling interests in:

Consolidated joint ventures

(39,536
)

-

-

(39,536
)

-

Consolidated real estate fund

(507
)

-

-

-

(507
)
Paramount's share of NOI
$
295,907

$
201,168

$
35,535

$
64,473

$
(5,269
)

NOI
$
335,950

$
201,168

$
35,535

$
104,009

$
(4,762
)
Less:

Straight-line rent adjustments (including our

share of unconsolidated joint ventures)

(44,121
)

(29,968
)

(1,290
)

(12,868
)

5

Amortization of above and below-market leases,
   net (including our share of unconsolidated
   joint ventures)

(13,716
)

4,017

(1,644
)

(16,089
)

-

Cash NOI

278,113

175,217

32,601

75,052

(4,757
)
Less Cash NOI attributable to noncontrolling
   interests in:

Consolidated joint ventures

(29,240
)

-

-

(29,240
)

-

Consolidated real estate fund

(507
)

-

-

-

(507
)
Paramount's share of Cash NOI
$
248,366

$
175,217

$
32,601

$
45,812

$
(5,264
)


	For the Three Months Ended June 30, 2023
(Amounts in thousands)	Total			New York			San Francisco			Other
Reconciliation of net (loss) income to NOI and Cash NOI:
Net (loss) income	$	(82,829	)	$	(28,032	)	$	653		$	(55,450	)
Add (subtract) adjustments to arrive at NOI and Cash NOI:
Depreciation and amortization		62,627			38,281			23,092			1,254
General and administrative		16,224			-			-			16,224
Interest and debt expense		36,879			23,436			12,684			759
Income tax expense (benefit)		573			5			(101	)		669
Loss from real estate related fund investments		42,644			-			-			42,644
NOI from unconsolidated joint ventures (excluding One Steuart Lane)		10,720			3,404			7,256			60
Loss from unconsolidated joint ventures		28,402			24,981			3,078			343
Fee income		(4,976	)		-			-			(4,976	)
Interest and other income, net		(2,967	)		(519	)		(210	)		(2,238	)
Other, net		31			-			-			31
NOI		107,328			61,556			46,452			(680	)
Less NOI attributable to noncontrolling interests in:
Consolidated joint ventures		(22,564	)		(2,743	)		(19,821	)		-
Paramount's share of NOI	$	84,764		$	58,813		$	26,631		$	(680	)

NOI	$	107,328		$	61,556		$	46,452		$	(680	)
Less:
Straight-line rent adjustments (including our share
of unconsolidated joint ventures)		7,515			5,110			2,667			(262	)
Amortization of above and below-market leases, net (including our share of unconsolidated joint ventures)		(2,239	)		(730	)		(1,509	)		-
Cash NOI		112,604			65,936			47,610			(942	)
Less Cash NOI attributable to noncontrolling interests in:
Consolidated joint ventures		(19,707	)		(2,880	)		(16,827	)		-
Paramount's share of Cash NOI	$	92,897		$	63,056		$	30,783		$	(942	)

For the Nine Months Ended September 30, 2016

(Amounts in thousands)
Total

New York

Washington, D.C.

San Francisco

Other

Reconciliation of net income (loss) to

NOI and Cash NOI:

Net income (loss)
$
4,892

$
28,679

$
2,582

$
13,508

$
(39,877
)
Add (subtract) adjustments to arrive at NOI
and Cash NOI:

Depreciation and amortization

208,475

144,429

23,536

39,139

1,371

General and administrative

39,335

-

-

-

39,335

Interest and debt expense

113,406

52,186

15,460

41,693

4,067

Transaction related costs

1,725

-

-

-

1,725

Income tax (benefit) expense

(817
)

-

(2,537
)

37

1,683

NOI from unconsolidated joint ventures

12,938

12,696

-

-

242

Income from unconsolidated joint ventures

(5,291
)

(5,233
)

-

-

(58
)
Loss from unconsolidated real estate funds

2,540

-

-

-

2,540

Fee income

(11,568
)

-

-

-

(11,568
)
Interest and other income, net

(5,029
)

(166
)

(43
)

(20
)

(4,800
)
Unrealized gain on interest rate swaps

(29,661
)

(5,640
)

-

(24,021
)

-

NOI

330,945

226,951

38,998

70,336

(5,340
)
Less NOI attributable to noncontrolling interests in:

Consolidated joint ventures

(35,436
)

-

-

(35,436
)

-

Consolidated real estate fund

146

-

-

-

146

Paramount's share of NOI
$
295,655

$
226,951

$
38,998

$
34,900

$
(5,194
)

NOI
$
330,945

$
226,951

$
38,998

$
70,336

$
(5,340
)
Less:

Straight-line rent adjustments (including our

share of unconsolidated joint ventures)

(67,968
)

(54,723
)

(3,839
)

(9,409
)

3

Amortization of above and below-market leases, net

(6,593
)

6,889

(1,655
)

(11,827
)

-

Cash NOI

256,384

179,117

33,504

49,100

(5,337
)
Less Cash NOI attributable to noncontrolling
interests in:

Consolidated joint ventures

(24,606
)

-

-

(24,606
)

-

Consolidated real estate fund

146

-

-

-

146

Paramount's share of Cash NOI
$
231,924

$
179,117

$
33,504

$
24,494

$
(5,191
)


	For the Three Months Ended June 30, 2022
(Amounts in thousands)	Total			New York			San Francisco			Other
Reconciliation of net income (loss) to NOI and Cash NOI:
Net income (loss)	$	4,038		$	7,427		$	11,069		$	(14,458	)
Add (subtract) adjustments to arrive at NOI and Cash NOI:
Depreciation and amortization		57,398			38,671			17,799			928
General and administrative		16,706			-			-			16,706
Interest and debt expense		35,578			22,136			12,684			758
Income tax expense		359			1			-			358
NOI from unconsolidated joint ventures (excluding One Steuart Lane)		11,585			3,528			7,971			86
Loss (income) from unconsolidated joint ventures		4,416			(33	)		3,960			489
Fee income		(5,974	)		-			-			(5,974	)
Interest and other income, net		(796	)		(49	)		(51	)		(696	)
Other, net		4			-			-			4
NOI		123,314			71,681			53,432			(1,799	)
Less NOI attributable to noncontrolling interests in:
Consolidated joint ventures		(21,796	)		(2,616	)		(19,180	)		-
Paramount's share of NOI	$	101,518		$	69,065		$	34,252		$	(1,799	)

NOI	$	123,314		$	71,681		$	53,432		$	(1,799	)
Less:
Straight-line rent adjustments (including our share
of unconsolidated joint ventures)		(5,977	)		(1,180	)		(4,767	)		(30	)
Amortization of above and below-market leases, net (including our share of unconsolidated joint ventures)		(1,128	)		422			(1,550	)		-
Cash NOI		116,209			70,923			47,115			(1,829	)
Less Cash NOI attributable to noncontrolling interests in:
Consolidated joint ventures		(20,693	)		(2,769	)		(17,924	)		-
Paramount's share of Cash NOI	$	95,516		$	68,154		$	29,191		$	(1,829	)


	For the Six Months Ended June 30, 2023
(Amounts in thousands)	Total			New York			San Francisco			Other
Reconciliation of net (loss) income to NOI and Cash NOI:
Net (loss) income	$	(74,515	)	$	(22,194	)	$	13,740		$	(66,061	)
Add (subtract) adjustments to arrive at NOI and Cash NOI:
Depreciation and amortization		121,515			77,448			41,574			2,493
General and administrative		30,847			-			-			30,847
Interest and debt expense		73,338			46,558			25,266			1,514
Income tax expense (benefit)		861			5			(78	)		934
Loss from real estate related fund investments		39,094			-			-			39,094
NOI from unconsolidated joint ventures (excluding One Steuart Lane)		21,101			6,767			14,275			59
Loss from unconsolidated joint ventures		34,164			25,001			6,372			2,791
Fee income		(9,533	)		-			-			(9,533	)
Interest and other income, net		(5,892	)		(961	)		(644	)		(4,287	)
Other, net		337			-			-			337
NOI		231,317			132,624			100,505			(1,812	)
Less NOI attributable to noncontrolling interests in:
Consolidated joint ventures		(45,276	)		(5,366	)		(39,910	)		-
Paramount's share of NOI	$	186,041		$	127,258		$	60,595		$	(1,812	)

NOI	$	231,317		$	132,624		$	100,505		$	(1,812	)
Less:
Straight-line rent adjustments (including our share
of unconsolidated joint ventures)		(176	)		2,086			(2,322	)		60
Amortization of above and below-market leases, net (including our share of unconsolidated joint ventures)		(4,077	)		(1,050	)		(3,027	)		-
Cash NOI		227,064			133,660			95,156			(1,752	)
Less Cash NOI attributable to noncontrolling interests in:
Consolidated joint ventures		(39,552	)		(5,658	)		(33,894	)		-
Paramount's share of Cash NOI	$	187,512		$	128,002		$	61,262		$	(1,752	)


	For the Six Months Ended June 30, 2022
(Amounts in thousands)	Total			New York			San Francisco			Other
Reconciliation of net income (loss) to NOI and Cash NOI:
Net income (loss)	$	10,160		$	16,031		$	17,429		$	(23,300	)
Add (subtract) adjustments to arrive at NOI and Cash NOI:
Depreciation and amortization		113,022			76,284			34,864			1,874
General and administrative		32,351			-			-			32,351
Interest and debt expense		69,855			43,073			25,260			1,522
Income tax expense		886			2			4			880
NOI from unconsolidated joint ventures (excluding One Steuart Lane)		22,819			6,346			16,325			148
Loss from unconsolidated joint ventures		9,529			3			7,780			1,746
Fee income		(17,962	)		-			-			(17,962	)
Interest and other income, net		(1,027	)		(46	)		(79	)		(902	)
Other, net		(49	)		-			-			(49	)
NOI		239,584			141,693			101,583			(3,692	)
Less NOI attributable to noncontrolling interests in:
Consolidated joint ventures		(42,118	)		(5,425	)		(36,693	)		-
Paramount's share of NOI	$	197,466		$	136,268		$	64,890		$	(3,692	)

NOI	$	239,584		$	141,693		$	101,583		$	(3,692	)
Less:
Straight-line rent adjustments (including our share
of unconsolidated joint ventures)		(4,319	)		(631	)		(3,748	)		60
Amortization of above and below-market leases, net (including our share of unconsolidated joint ventures)		(2,325	)		889			(3,214	)		-
Cash NOI		232,940			141,951			94,621			(3,632	)
Less Cash NOI attributable to noncontrolling interests in:
Consolidated joint ventures		(41,206	)		(5,684	)		(35,522	)		-
Paramount's share of Cash NOI	$	191,734		$	136,267		$	59,099		$	(3,632	)

Same Store NOI

The tables below set forth the reconciliations of our share of NOI to our share of Same Store NOI and Same Store Cash NOI for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016.~~2022. These metrics are used to measure the operating performance of our properties that were owned by us in a similar manner during both the current and prior reporting periods, and ~~represents~~represent our share of Same Store NOI and Same Store Cash NOI from consolidated and unconsolidated joint ventures based on our percentage ownership in the underlying assets. Same Store NOI also excludes lease termination income, impairment of receivables arising from operating leases and certain other items that vary from period to period. Same Store Cash NOI excludes the effect of non-cash items such as the ~~straight-lining of rental revenue~~straight-line rent adjustments and the amortization of above and below-market leases.


	For the Three Months Ended June 30, 2023
(Amounts in thousands)	Total			New York				San Francisco				Other
Paramount's share of NOI for the three months ended
June 30, 2023 (1)	$	84,764		$	58,813			$	26,631			$	(680	)
Lease termination income		(2,055	)		(2,055	)			-				-
Non-cash write-offs of straight-line receivables		13,906			6,563		(2)		7,343		(2)		-
Acquisitions / Redevelopment and other, net		686			6		(3)		-				680
Paramount's share of Same Store NOI for the
three months ended June 30, 2023	$	97,301		$	63,327			$	33,974			$	-

	For the Three Months Ended June 30, 2022
(Amounts in thousands)	Total			New York				San Francisco				Other
Paramount's share of NOI for the three months ended
June 30, 2022 (1)	$	101,518		$	69,065			$	34,252			$	(1,799	)
Lease termination income		(157	)		(157	)			-				-
Acquisitions / Redevelopment and other, net		1,057			(521	)	(3)		(221	)			1,799
Paramount's share of Same Store NOI for the
three months ended June 30, 2022	$	102,418		$	68,387			$	34,031			$	-

Decrease in Same Store NOI	$	(5,117	)	$	(5,060	)		$	(57	)		$	-
% Decrease		(5.0	%)		(7.4	%)			(0.2	%)

For the Three Months Ended September 30, 2017

(Amounts in thousands)

Total

New York

Washington, D.C.

San Francisco

Other

Paramount's share of NOI for the three

months ended September 30, 2017⁽¹⁾

$
95,337

$
67,699

$
9,099

$
20,287

$
(1,748
)

Acquisitions ⁽²⁾

(8,916
)

(678
)

-

(8,238
)

-

Dispositions

-

-

-

-

-

Lease termination income (including our

share of unconsolidated joint ventures)

(886
)

(665
)

-

(221
)

-

Other, net

241

208

-

39

(6
)

Paramount's share of Same Store NOI for

the three months ended September 30, 2017

$
85,776

$
66,564

$
9,099

$
11,867

$
(1,754
)

For the Three Months Ended September 30, 2016

(Amounts in thousands)

Total

New York

Washington, D.C.

San Francisco

Other

Paramount's share of NOI for the three

months ended September 30, 2016 ⁽¹⁾

$
95,315

$
71,174

$
13,907

$
11,628

$
(1,394
)

Acquisitions

-

-

-

-

-

Dispositions ⁽³⁾

(6,277
)

-

(6,277
)

-

-

Lease termination income (including our
share of unconsolidated joint ventures)

(3,433
)

(3,348
)

-

(85
)

-

Other, net

(18
)

207

4

78

(307
)

Paramount's share of Same Store NOI for

the three months ended September 30, 2016

$
85,587

$
68,033

$
7,634

$
11,621

$
(1,701
)

Increase (decrease) in Same Store NOI

$
189

$
(1,469
)

$
1,465

$
246

$
(53
)

% Increase (decrease)

0.2
%

(2.2
%)

19.2
%

2.1
%

(1)

See page 48 “Non-GAAP Financial Measures – NOI” for a reconciliation to net income or loss in accordance with GAAP and the reasons why we believe these non-GAAP measures are useful.

(2)

Represents write-offs related to the terminated SVB Securities lease at 1301 Avenue of the Americas in our New York portfolio and the surrendered JPMorgan space at One Front Street in our San Francisco portfolio.

(3)

Includes our share of NOI attributable to 60 Wall Street which was taken “out-of-service” for redevelopment.


	For the Three Months Ended June 30, 2023
(Amounts in thousands)	Total			New York				San Francisco			Other
Paramount's share of Cash NOI for the three months
ended June 30, 2023 (1)	$	92,897		$	63,056			$	30,783		$	(942	)
Lease termination income		(2,055	)		(2,055	)			-			-
Acquisitions / Redevelopment and other, net		948			6		(2)		-			942
Paramount's share of Same Store Cash NOI for the
three months ended June 30, 2023	$	91,790		$	61,007			$	30,783		$	-

	For the Three Months Ended June 30, 2022
(Amounts in thousands)	Total			New York				San Francisco			Other
Paramount's share of Cash NOI for the three months
ended June 30, 2022 (1)	$	95,516		$	68,154			$	29,191		$	(1,829	)
Lease termination income		(157	)		(157	)			-			-
Acquisitions / Redevelopment and other, net		989			(619	)	(2)		(221	)		1,829
Paramount's share of Same Store Cash NOI for the
three months ended June 30, 2022	$	96,348		$	67,378			$	28,970		$	-

(Decrease) increase in Same Store Cash NOI	$	(4,558	)	$	(6,371	)		$	1,813		$	-
% (Decrease) increase		(4.7	%)		(9.5	%)			6.3	%

⁽¹⁾

~~See page 56 “Non-GAAP Financial Measures – NOI” for a reconciliation to net income in accordance with GAAP and the reasons why we believe these non-GAAP measures are useful.~~

(1)

See page 48 “Non-GAAP Financial Measures – NOI” for a reconciliation to net income or loss in accordance with GAAP and the reasons why we believe these non-GAAP measures are useful.

⁽²⁾

Represents our share of NOI for the three months ended September 30, 2017 attributable to (i) 60 Wall Street, in New York, which was acquired in January 2017 and (ii) One Front Street and 50 Beale in San Francisco, which were acquired in December 2016 and July 2017, respectively.

(2)

Includes our share of Cash NOI attributable to 60 Wall Street which was taken “out-of-service” for redevelopment.


	For the Six Months Ended June 30, 2023
(Amounts in thousands)	Total			New York				San Francisco				Other
Paramount's share of NOI for the six months ended
June 30, 2023 (1)	$	186,041		$	127,258			$	60,595			$	(1,812	)
Lease termination income		(2,055	)		(2,055	)			-				-
Non-cash write-offs of straight-line rent receivables		13,906			6,563		(2)		7,343		(2)		-
Acquisitions / Redevelopment and other, net		1,765			(47	)	(3)		-				1,812
Paramount's share of Same Store NOI for the
six months ended June 30, 2023	$	199,657		$	131,719			$	67,938			$	-

	For the Six Months Ended June 30, 2022
(Amounts in thousands)	Total			New York				San Francisco				Other
Paramount's share of NOI for the six months ended
June 30, 2022 (1)	$	197,466		$	136,268			$	64,890			$	(3,692	)
Lease termination income		(1,875	)		(1,875	)			-				-
Non-cash write-offs of straight-line rent receivables		306			306				-				-
Acquisitions / Redevelopment and other, net		2,065			(1,406	)	(3)		(221	)			3,692
Paramount's share of Same Store NOI for the
six months ended June 30, 2022	$	197,962		$	133,293			$	64,669			$	-

Increase (decrease) in Same Store NOI	$	1,695		$	(1,574	)		$	3,269			$	-
% Increase (decrease)		0.9	%		(1.2	%)			5.1	%

(1)

See page 48 “Non-GAAP Financial Measures – NOI” for a reconciliation to net income or loss in accordance with GAAP and the reasons why we believe these non-GAAP measures are useful.

⁽³⁾

~~Represents our share of NOI for the three months ended September 30, 2016 attributable to Waterview, which was sold in May 2017.~~

(2)

(3)

Includes our share of NOI attributable to 60 Wall Street which was taken “out-of-service” for redevelopment.


	For the Six Months Ended June 30, 2023
(Amounts in thousands)	Total			New York				San Francisco			Other
Paramount's share of Cash NOI for the six months
ended June 30, 2023 (1)	$	187,512		$	128,002			$	61,262		$	(1,752	)
Lease termination income		(2,055	)		(2,055	)			-			-
Acquisitions / Redevelopment and other, net		1,701			(51	)	(2)		-			1,752
Paramount's share of Same Store Cash NOI for the
six months ended June 30, 2023	$	187,158		$	125,896			$	61,262		$	-

	For the Six Months Ended June 30, 2022
(Amounts in thousands)	Total			New York				San Francisco			Other
Paramount's share of Cash NOI for the six months
ended June 30, 2022 (1)	$	191,734		$	136,267			$	59,099		$	(3,632	)
Lease termination income		(1,875	)		(1,875	)			-			-
Acquisitions / Redevelopment and other, net		1,738			(1,673	)	(2)		(221	)		3,632
Paramount's share of Same Store Cash NOI for the
six months ended June 30, 2022	$	191,597		$	132,719			$	58,878		$	-

(Decrease) increase in Same Store Cash NOI	$	(4,439	)	$	(6,823	)		$	2,384		$	-
% (Decrease) increase		(2.3	%)		(5.1	%)			4.0	%

(1)

See page 48 “Non-GAAP Financial Measures – NOI” for a reconciliation to net income or loss in accordance with GAAP and the reasons why we believe these non-GAAP measures are useful.

(2)

Includes our share of Cash NOI attributable to 60 Wall Street which was taken “out-of-service” for redevelopment.

For the Three Months Ended September 30, 2017

(Amounts in thousands)

Total

New York

Washington, D.C.

San Francisco

Other

Paramount's share of Cash NOI for the three

months ended September 30, 2017 ⁽¹⁾

$
83,813

$
60,304

$
8,658

$
16,627

$
(1,776
)

Acquisitions ⁽²⁾

(7,510
)

(842
)

-

(6,668
)

-

Dispositions

-

-

-

-

-

Lease termination income (including our

share of unconsolidated joint ventures)

(886
)

(665
)

-

(221
)

-

Other, net

32

14

-

24

(6
)

Paramount's share of Same Store Cash NOI

for the three months ended September 30, 2017

$
75,449

$
58,811

$
8,658

$
9,762

$
(1,782
)

For the Three Months Ended September 30, 2016

(Amounts in thousands)

Total

New York

Washington, D.C.

San Francisco

Other

Paramount's share of Cash NOI for the three

months ended September 30, 2016 ⁽¹⁾

$
72,432

$
53,621

$
11,933

$
8,300

$
(1,422
)

Acquisitions

-

-

-

-

-

Dispositions ⁽³⁾

(6,327
)

-

(6,327
)

-

-

Lease termination income (including our

share of unconsolidated joint ventures)

(3,433
)

(3,348
)

-

(85
)

-

Other, net

(465
)

(162
)

4

-

(307
)

Paramount's share of Same Store Cash NOI

for the three months ended September 30, 2016

$
62,207

$
50,111

$
5,610

$
8,215

$
(1,729
)

Increase (decrease) in Same Store Cash NOI

$
13,242

$
8,700

$
3,048

$
1,547

$
(53
)

% Increase

21.3
%

17.4
%

54.3
%

18.8
%

⁽¹⁾

~~See page 56 “Non-GAAP Financial Measures – NOI” for a reconciliation to net income in accordance with GAAP and the reasons why we believe these non-GAAP measures are useful.~~

⁽²⁾

Represents our share of Cash NOI for the three months ended September 30, 2017 attributable to (i) 60 Wall Street, in New York, which was acquired in January 2017 and (ii) One Front Street and 50 Beale in San Francisco, which were acquired in December 2016 and July 2017, respectively.

⁽³⁾

~~Represents our share of Cash NOI for the three months ended September 30, 2016 attributable to Waterview, which was sold in May 2017.~~

For the Nine Months Ended September 30, 2017

(Amounts in thousands)

Total

New York

Washington, D.C.

San Francisco

Other

Paramount's share of NOI for the nine months

ended September 30, 2017⁽¹⁾

$
295,907

$
201,168

$
35,535

$
64,473

$
(5,269
)

Acquisitions ⁽²⁾

(28,981
)

(1,918
)

-

(27,063
)

-

Dispositions

-

-

-

-

-

Lease termination income (including our

share of unconsolidated joint ventures)

(1,993
)

(906
)

-

(1,087
)

-

Other, net

(544
)

238

-

(659
)

(123
)

Paramount's share of Same Store NOI for

the nine months ended September 30, 2017

$
264,389

$
198,582

$
35,535

$
35,664

$
(5,392
)

For the Nine Months Ended September 30, 2016

(Amounts in thousands)

Total

New York

Washington, D.C.

San Francisco

Other

Paramount's share of NOI for the nine months

ended September 30, 2016 ⁽¹⁾

$
295,655

$
226,951

$
38,998

$
34,900

$
(5,194
)

Acquisitions

-

-

-

-

-

Dispositions ⁽³⁾

(10,328
)

-

(10,328
)

-

-

Lease termination income (including our
share of unconsolidated joint ventures)

(14,571
)

(14,422
)
⁽⁴⁾

-

(149
)

-

Other, net

2,721

3,247

⁽⁵⁾

4

78

(608
)

Paramount's share of Same Store NOI for

the nine months ended September 30, 2016

$
273,477

$
215,776

$
28,674

$
34,829

$
(5,802
)

(Decrease) increase in Same Store NOI

$
(9,088
)

$
(17,194
)

$
6,861

$
835

$
410

% (Decrease) increase

(3.3
%)

(8.0
%)

23.9
%

2.4
%

⁽¹⁾	~~See page 56 “Non-GAAP Financial Measures – NOI” for a reconciliation to net income in accordance with GAAP and the reasons why we believe these non-GAAP measures are useful.~~

⁽²⁾	Represents our share of NOI for the nine months ended September 30, 2017 attributable to (i) 60 Wall Street, in New York, which was acquired in January 2017 and (ii) One Front Street and 50 Beale in San Francisco, which were acquired in December 2016 and July 2017, respectively.

⁽³⁾	~~Represents our share of NOI attributable to Waterview, which was sold in May 2017.~~

⁽⁴⁾	~~Includes $10,861 from the termination of a tenant’s lease at 1633 Broadway.~~

⁽⁵⁾

Includes an aggregate of $11,800 of non-cash write-offs primarily related to above-market lease asset from the termination of a tenant’s lease at 1633 Broadway, partially offset by $10,315 of income from the accelerated amortization of a below-market lease liability in connection with a tenant’s lease modification.

For the Nine Months Ended September 30, 2017

(Amounts in thousands)

Total

New York

Washington, D.C.

San Francisco

Other

Paramount's share of Cash NOI for the nine

months ended September 30, 2017 ⁽¹⁾

$
248,366

$
175,217

$
32,601

$
45,812

$
(5,264
)

Acquisitions ⁽²⁾

(20,561
)

(2,260
)

-

(18,301
)

-

Dispositions

-

-

-

-

-

Lease termination income (including our

share of unconsolidated joint ventures)

(1,993
)

(906
)

-

(1,087
)

-

Other, net

(55
)

44

-

24

(123
)

Paramount's share of Same Store Cash NOI

for the nine months ended September 30, 2017

$
225,757

$
172,095

$
32,601

$
26,448

$
(5,387
)

For the Nine Months Ended September 30, 2016

(Amounts in thousands)

Total

New York

Washington, D.C.

San Francisco

Other

Paramount's share of Cash NOI for the nine

months ended September 30, 2016 ⁽¹⁾

$
231,924

$
179,117

$
33,504

$
24,494

$
(5,191
)

Acquisitions

-

-

-

-

-

Dispositions ⁽³⁾

(10,408
)

-

(10,408
)

-

-

Lease termination income (including our

share of unconsolidated joint ventures)

(14,571
)

(14,422
)
⁽⁴⁾

-

(149
)

-

Other, net

(293
)

311

4

-

(608
)

Paramount's share of Same Store Cash NOI

for the nine months ended September 30, 2016

$
206,652

$
165,006

$
23,100

$
24,345

$
(5,799
)

Increase in Same Store Cash NOI

$
19,105

$
7,089

$
9,501

$
2,103

$
412

% Increase

9.2
%

4.3
%

41.1
%

8.6
%

⁽¹⁾	~~See page 56 “Non-GAAP Financial Measures – NOI” for a reconciliation to net income in accordance with GAAP and the reasons why we believe these non-GAAP measures are useful.~~

⁽²⁾	Represents our share of Cash NOI for the nine months ended September 30, 2017 attributable to (i) 60 Wall Street, in New York, which was acquired in January 2017 and (ii) One Front Street and 50 Beale in San Francisco, which were acquired in December 2016 and July 2017, respectively.

⁽³⁾	~~Represents our share of Cash NOI attributable to Waterview, which was sold in May 2017.~~

⁽⁴⁾	~~Includes $10,861 from the termination of a tenant’s lease at 1633 Broadway.~~

~~FFO~~Funds from Operations (“FFO”) and Core ~~FFO~~Funds from Operations (“Core FFO”)

FFO is a supplemental measure of our performance. We present FFO in accordance with the definition adopted by the National Association of Real Estate Investment Trusts (“~~NAREIT”~~Nareit”). ~~NAREIT~~Nareit defines FFO as ~~GAAP~~ net income or loss, calculated in accordance with GAAP, adjusted to exclude ~~net gains~~depreciation and amortization from ~~sales of depreciated~~ real estate assets, impairment losses on ~~depreciable~~certain real estate assets and ~~depreciation and amortization expense~~gains or losses from the sale of certain real estate assets or from change in control of certain real estate assets, including our share of such adjustments of unconsolidated joint ventures. FFO is commonly used in the real estate industry to assist investors and analysts in comparing results of real estate companies because it excludes the effect of real estate depreciation and amortization and net gains on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions. In addition, we present Core FFO as an alternative measure of our operating performance, which adjusts FFO for certain other items that we believe enhance the comparability of our FFO across periods. Core FFO, when applicable, excludes the impact of certain items, including, transaction related costs and adjustments, realized and unrealized ~~gain~~gains or losses on real estate related fund investments, unrealized gains or losses on interest rate swaps, severance costs and ~~loss~~gains or losses on early extinguishment of debt, in order to reflect the Core FFO of our real estate portfolio and operations. In future periods, we may also exclude other items from Core FFO that we believe may help investors compare our results.

FFO and Core FFO are presented as supplemental financial measures and do not fully represent our operating performance. 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 consolidated financial statements, prepared in accordance with GAAP, for purposes of evaluating our financial condition, results of operations and cash flows.

The following table presents a reconciliation of net (loss) income to FFO and Core ~~FFO.~~FFO for the periods set forth below.


				For the Three Months Ended						For the Nine Months Ended						For the Three Months Ended						For the Six Months Ended
				September 30,						September 30,						June 30,						June 30,
(Amounts in thousands, except share and per share amounts)	(Amounts in thousands, except share and per share amounts)			2017			2016			2017			2016			2023			2022			2023			2022
Reconciliation of net (loss) income to FFO and Core FFO:	Reconciliation of net (loss) income to FFO and Core FFO:
Net (loss) income																$	(82,829	)	$	4,038		$	(74,515	)	$	10,160
Real estate depreciation and amortization (including our
share of unconsolidated joint ventures)																	72,096			67,235			140,527			133,060
Our share of non-cash real estate impairment loss related to an unconsolidated joint venture																	24,734			-			24,734			-
FFO																	14,001			71,273			90,746			143,220
Less FFO attributable to noncontrolling interests in:
Consolidated joint ventures																	(14,889	)		(13,945	)		(30,064	)		(26,460	)
Consolidated real estate related funds																	37,295			346			36,465			1,355
Operating Partnership																	(2,390	)		(4,352	)		(6,351	)		(9,920	)
FFO attributable to common stockholders																$	34,017		$	53,322		$	90,796		$	108,195
Per diluted share																$	0.16		$	0.24		$	0.42		$	0.49
	Net (loss) income			$	(25,403	)	$	4,469		$	114,408		$	4,892
	Real estate depreciation and amortization (including our share
		of unconsolidated joint ventures)			68,523			68,008			204,023			213,202
	Gain on sale of Waterview				-			-			(110,583	)		-
	FFO				43,120			72,477			207,848			218,094
	Less FFO attributable to noncontrolling interests in:
		Consolidated joint ventures			5,152			(11,319	)		(9,783	)		(30,026	)
		Consolidated real estate fund			(114	)		(157	)		(20,530	)		147
		Operating Partnership			(4,628	)		(10,386	)		(20,098	)		(34,109	)
	FFO attributable to common stockholders			$	43,530		$	50,615		$	157,437		$	154,106
	Per diluted share			$	0.18		$	0.23		$	0.67		$	0.71

	FFO			$	43,120		$	72,477		$	207,848		$	218,094
	Non-core items:
		Valuation allowance on preferred equity investment			19,588			-			19,588			-
		Realized and unrealized loss from unconsolidated real estate funds			4,034			1,379			6,281			2,518
		Our share of earnings from 712 Fifth Avenue in excess of distributions received and (distributions in excess of basis)			691			-			(14,381	)		-
		Transaction related costs			274			282			1,051			1,725
		After-tax net gain on sale of residential condominium land parcel			-			-			(21,568	)		-
		Loss on early extinguishment of debt			-			-			7,877			-
		Unrealized gain on interest rate swaps (including our
			share of unconsolidated joint ventures)		-			(13,589	)		(2,750	)		(30,939	)
		Severance costs			-			-			-			2,874
	Core FFO				67,707			60,549			203,946			194,272
	Less Core FFO attributable to noncontrolling interests in:
		Consolidated joint ventures			(9,656	)		(5,874	)		(25,057	)		(17,776	)
		Consolidated real estate fund			(114	)		(157	)		(242	)		147
		Operating Partnership			(5,568	)		(9,282	)		(20,208	)		(32,094	)
	Core FFO attributable to common stockholders			$	52,369		$	45,236		$	158,439		$	144,549
	Per diluted share			$	0.22		$	0.21		$	0.67		$	0.67
FFO																$	14,001		$	71,273		$	90,746		$	143,220
Non-core items:
Adjustments to equity in earnings for contributions to (distributions from) unconsolidated joint ventures																	(1,301	)		168			(2,623	)		(415	)
Adjustment for realized and unrealized losses from consolidated and unconsolidated real estate related fund investments																	45,686			(29	)		47,021			18
Other, net (including after-tax net gains or losses on sale of residential condominium units at One Steuart Lane)																	659			671			3,196			2,050
Core FFO																	59,045			72,083			138,340			144,873
Less Core FFO attributable to noncontrolling interests in:
Consolidated joint ventures																	(14,889	)		(13,945	)		(30,064	)		(26,460	)
Consolidated real estate related funds																	(2,773	)		(128	)		(6,800	)		(287	)
Operating Partnership																	(2,717	)		(4,377	)		(6,636	)		(9,915	)
Core FFO attributable to common stockholders																$	38,666		$	53,633		$	94,840		$	108,211
Per diluted share																$	0.18		$	0.24		$	0.44		$	0.49

Reconciliation of weighted average shares outstanding:	Reconciliation of weighted average shares outstanding:
	Weighted average shares outstanding				239,445,810			219,394,245			235,151,398			216,317,746
	Effect of dilutive securities				24,653			24,385			26,285			-
	Denominator for FFO and Core FFO per diluted share				239,470,463			219,418,630			235,177,683			216,317,746
Weighted average shares outstanding																	217,003,931			222,971,886			216,784,737			220,888,664
Effect of dilutive securities																	11,089			26,594			31,669			41,355
Denominator for FFO and Core FFO per diluted share																	217,015,020			222,998,480			216,816,406			220,930,019

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the risk of loss from adverse changes in market prices and interest rates. Our future earnings, cash flows and fair values relevant to financial instruments are dependent upon prevalent market interest rates. Our primary market risk results from our indebtedness, which bears interest at both fixed and variable rates. We manage our market risk on variable rate debt by entering into interest rate swap agreements to fix the rate or interest rate cap agreements to limit exposure to increases in rates, on all or a portion of the debt for varying periods through maturity. This in turn, reduces the risks of variability of cash flows created by variable rate debt and mitigates the risk of increases in interest rates. Our objective when undertaking such arrangements is to reduce our floating rate exposure and we do not enter into hedging arrangements for speculative purposes. Subject to maintaining our status as a REIT for Federal income tax purposes, we may utilize swap arrangements in the future.

The following table summarizes our consolidated debt, the weighted average interest rates and the fair value as of ~~September~~June 30, ~~2017.~~2023.


Property		Rate	2023		2024		2025		2026		2027		Thereafter		Total		Fair Value
(Amounts in thousands)
Fixed Rate Debt:
	300 Mission Street (1)	3.65%	$	273,000	$	-	$	-	$	-	$	-	$	-	$	273,000	$	270,309
	One Market Plaza	4.03%		-		975,000		-		-		-		-		975,000		955,729
	31 West 52nd Street	3.80%		-		-		-		500,000		-		-		500,000		455,842
	1301 Avenue of the Americas (2)	2.46%		-		-		-		500,000		-		-		500,000		500,077
	1633 Broadway	2.99%		-		-		-		-		-		1,250,000		1,250,000		985,127
Total Fixed Rate Debt		3.37%	$	273,000	$	975,000	$	-	$	1,000,000	$	-	$	1,250,000	$	3,498,000	$	3,167,084

Variable Rate Debt:
	1301 Avenue of the Americas (3)	5.56%	$	-	$	-	$	-	$	360,000	$	-	$	-	$	360,000	$	360,056
	Revolving Credit Facility	n/a		-		-		-		-		-		-		-		-
Total Variable Rate Debt		5.56%	$	-	$	-	$	-	$	360,000	$	-	$	-	$	360,000	$	360,056

Total Consolidated Debt		3.58%	$	273,000	$	975,000	$	-	$	1,360,000	$	-	$	1,250,000	$	3,858,000	$	3,527,140

Property

Rate

2017

2018

2019

2020

2021

Thereafter

Total

Fair Value

(Amounts in thousands)

Fixed Rate Debt:

1633 Broadway⁽¹⁾

3.54%

$
-

$
-

$
-

$
-

$
-

$
1,000,000

$
1,000,000

$
1,001,383

1301 Avenue of the Americas

3.05%

-

-

-

-

500,000

-

500,000

488,411

31 West 52nd Street

3.80%

-

-

-

-

-

500,000

500,000

486,606

One Market Plaza

4.03%

-

-

-

-

-

975,000

975,000

989,941

50 Beale

3.65%

-

-

-

-

228,000

-

228,000

228,073

Total Fixed Rate Debt

3.66%

$
-

$
-

$
-

$
-

$
728,000

$
2,475,000

$
3,203,000

$
3,194,414

Variable Rate Debt:

1633 Broadway

2.99%

$
-

$
-

$
-

$
-

$
-

$
30,100

$
30,100

$
30,142

1301 Avenue of the Americas

3.05%

-

-

-

-

350,000

-

350,000

351,287

Revolving Credit Facility

n/a

-

-

-

-

-

-

-

-

Total Variable Rate Debt

3.05%

$
-

$
-

$
-

$
-

$
350,000

$
30,100

$
380,100

$
381,429

Total Consolidated Debt

3.60%

$
-

$
-

$
-

$
-

$
1,078,000

$
2,505,100

$
3,583,100

$
3,575,843

(1)

Matures in October 2023.

(2)

Represents variable rate loans that have been fixed by interest rate swaps through August 2024. See table below. On June 16, 2023, we amended the loans to replace LIBOR with SOFR, effective July 7, 2023.

(3)

Represents variable rate loans, where LIBOR has been capped at 2.00% through August 2023. See table below. On June 16, 2023, we amended the loans to replace LIBOR with SOFR, effective July 7, 2023.

⁽¹⁾	~~This debt has been swapped from floating rate debt to fixed rate debt. See table below.~~

In addition to the above, our unconsolidated joint ventures had ~~$897,535,000~~$1.74 billion of outstanding indebtedness as of ~~September~~June 30, ~~2017,~~2023, of which our share was ~~$180,949,000.~~$625,530,000.

The ~~following table summarized~~tables below provide additional details on our ~~fixed~~interest rate ~~debt that has been swapped from floating~~swaps and interest rate ~~to fixed~~caps as of ~~September~~June 30, ~~2017.~~2023.

Notional

Strike

Fair Value as of

Property

Amount

Effective Date

Maturity Date

Rate

September 30, 2017

(Amounts in thousands)

1633 Broadway  ⁽¹⁾

$
400,000

Dec-2015

Dec-2020

1.65
%

$
1,233

1633 Broadway  ⁽¹⁾

300,000

Dec-2015

Dec-2021

1.82
%

142

Total interest rate swap assets designated as cash flow hedges (included in "other assets")

$
1,375

1633 Broadway  ⁽¹⁾

$
400,000

Dec-2020

Dec-2021

2.35
%

$
921

1633 Broadway  ⁽¹⁾

300,000

Dec-2015

Dec-2022

1.95
%

805

Total interest rate swap liabilities designated as cash flow hedges (included in "other liabilities")
$
1,726

⁽¹⁾	~~Represents interest rate swaps designated as cash flow hedges. Changes in the fair value of these hedges are recognized in “other comprehensive income (loss)” (outside of earnings).~~

Notional

Effective

Maturity

Benchmark

Strike

Fair Value as of

Property

Amount

Date

Rate

June 30, 2023

December 31, 2022

(Amounts in thousands)

1301 Avenue of the Americas

500,000

Jul-2021

Aug-2024

LIBOR

0.46

26,010

32,681

Total interest rate swap assets designated as cash flow hedges (included in "other assets")

26,010

32,681

Notional

Effective

Maturity

Benchmark

Strike

Fair Value as of

Property

Amount

Date

Rate

June 30, 2023

December 31, 2022

(Amounts in thousands)

1301 Avenue of the Americas

360,000

Jul-2021

Aug-2023

LIBOR

2.00

1,187

6,123

Total interest rate cap assets designated as cash flow hedges (included in "other assets")

1,187

6,123

The following table summarizes our share of total indebtedness and the effect to interest expense of a 100 basis point increase in ~~LIBOR.~~variable rates.


	As of June 30, 2023								As of December 31, 2022
(Amounts in thousands, except per share amount)	Balance		Weighted Average Interest Rate			Effect of 1% Increase in Base Rates			Balance		Weighted Average Interest Rate
Paramount's share of consolidated debt:
Variable rate	$	360,000		5.56	%	$	3,600		$	360,000		5.56	%
Fixed Rate (1)		2,687,665		3.25	%		-			2,687,665		3.25	%
	$	3,047,665		3.52	%	$	3,600		$	3,047,665		3.52	%

Paramount's share of debt of non-consolidated
entities (non-recourse):
Variable rate	$	114,505		7.34	%	$	1,145		$	113,739		6.12	%
Fixed rate		511,025		3.32	%		-			511,025		3.30	%
	$	625,530		4.06	%	$	1,145		$	624,764		3.82	%

Noncontrolling interests' share of above						$	(312	)
Total change in annual net income						$	4,433
Per diluted share						$	0.02

September 30, 2017

December 31, 2016

(Amounts in thousands, except per share amount)

Balance

Weighted Average Interest Rate

Effect of 1% Increase in Base Rates

Balance

Weighted Average Interest Rate

Paramount's share of consolidated debt:

Variable rate

$
380,100

3.05
%

$
3,801

$
599,627

2.29
%
Fixed rate ⁽¹⁾

2,548,658

3.59
%

-

2,593,343

3.99
%

$
2,928,758

3.52
%

$
3,801

$
3,192,970

3.67
%

Paramount's share of debt of non-consolidated entities
(non-recourse):

Variable rate

$
28,808

3.69
%

$
288

$
55,750

2.72
%
Fixed rate ⁽¹⁾

152,141

3.41
%

-

69,692

5.74
%

$
180,949

3.45
%

$
288

$
125,442

4.40
%

Noncontrolling interests' in the Operating Partnership share of above

$
(393
)

Total change in annual net income

$
3,696

Per diluted share

$
0.02

(1)

Our fixed rate debt includes floating rate debt that has been swapped to fixed. See page 57.

⁽¹⁾	~~Our fixed rate debt includes floating rate debt that has been swapped to fixed. See table above.~~

ITEM 4.CONTROLS ANDAND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is processed, recorded, summarized and reported within the time periods specified in the SEC’s rules and ~~regulations.~~regulations, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control ~~objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.~~objectives.

As of ~~September~~June 30, ~~2017,~~2023, the end of the period covered by this Quarterly Report on Form 10-Q, we carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, regarding the effectiveness of our disclosure controls and ~~procedures at~~procedures. Based on the foregoing evaluation, as of the end of the period covered by this ~~Report. Based on the foregoing,~~Quarterly Report, our Chief Executive Officer and Chief Financial Officer concluded ~~as of that time,~~ that our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in reports filed or submitted under the Exchange Act is processed, recorded, summarized and reported within the time periods specified in the SEC’s rules and ~~forms.~~forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes to our internal control over financial reporting in connection with the evaluation referenced above that occurred during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

~~ITEM 1.~~

~~LEGAL PROCEEDINGS~~

ITEM 1. LEGAL PROCEEDINGS

From time to time, we are a party to various claims and routine litigation arising in the ordinary course of business. As of ~~September~~June 30, ~~2017,~~2023, we do not believe that the results of any such claims or litigation, individually or in the aggregate, will have a material adverse effect on our business, financial position, results of operations or cash flows.

~~ITEM 1A.~~

~~RISK FACTORS~~

ITEM 1A. RISK FACTORS

Except to the extent updated below or to the extent additional factual information disclosed elsewhere in this Quarterly Report on Form 10-Q relates to such risk factors (including, without limitation, the matters discussed in Part I, “Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations”), there were no material changes to the risk factors disclosed in Part I, ~~“Item~~“Item 1A. Risk ~~Factors”~~Factors” of our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2022 or in Part II, “Item 1A. Risk Factors” of our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2023.

IT~~EM 2.~~

~~UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS~~

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Recent Sales of Unregistered Securities

None.

Recent Purchases of Equity Securities

On ~~August 1, 2017,~~November 5, 2019, we received authorization from our Board of Directors to repurchase up to $200,000,000 of our common stock, from time to time, in the open market or in privately negotiated transactions. As of December 31, 2022, we had repurchased a total of 24,183,768 common shares at a weighted average price of $7.65 per share, or $185,000,000 in the aggregate. We did not repurchase any shares in the three and six months ended June 30, 2023 under our stock repurchase program. As of June 30, 2023, we have $15,000,000 available for future repurchases under the existing program. The amount ofand timing of future repurchases, if any, will depend on a number of factors, including, the price and availability of our shares, trading volume, ~~and~~ general market ~~conditions.~~conditions and available funding. The stock repurchase program may be suspended or discontinued at any time.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

Rule 10b5-1 Trading Arrangement

During the three months ended ~~September~~June 30, ~~2017, we did not repurchase any~~2023, none of our ~~common stock.~~directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934) adopted, terminated or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K).

IT~~EM 3.~~

~~DEFAULTS UPON SENIOR SECURITIES~~

~~None.~~60

~~ITEM 4.~~

~~MINE SAFETY DISCLOSURES~~

ITEM 6. EXHIBITS

~~None.~~

I~~TEM 5.~~

~~OTHER INFORMATION~~

~~None.~~

~~ITEM 6.~~

~~EXHIBITS~~

Exhibits required by Item 601 of Regulation S-K are filed, or furnished as indicated, herewith or incorporated herein by reference and are listed in the following Exhibit Index:

EXHIBIT INDEX


Exhibit Number	Exhibit Description

31.1*


31.1*		Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*	Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**	Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**	Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.SCH*
101.INS*	~~XBRL Instance Document.~~

101.SCH*	Inline XBRL Taxonomy Extension Schema.

101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase.

101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase.

101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase.

101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase.

104	~~Filed herewith~~Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101.)
	_______________________________
**	~~Furnished~~Filed herewith

**	Furnished herewith

~~SIGNATURES~~

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Paramount Group, Inc.
Date:	July 31, 2023	By:	/s/ Wilbur Paes
~~Date: November 6, 2017~~			~~By:~~	~~/s/ Wilbur Paes~~
				~~Wilbur Paes~~
				~~Executive Vice President,~~Chief Operating Officer, Chief Financial Officer and Treasurer
			Wilbur Paes		(duly authorized officer and principal financial officer)


Date:	July 31, 2023	By:	/s/ Ermelinda Berberi		Senior Vice President, Chief Accounting Officer
			Ermelinda Berberi		(duly authorized officer and principal accounting officer)

7062


Title of each Class	Trading Symbol	Name of each exchange on which registered
Common stock of Paramount Group, Inc., $0.01 par value per share	PGRE	New York Stock Exchange


Item		Page Number
Part I.	Financial Information

Item 1.	Consolidated Financial Statements	3

	Consolidated Balance Sheets (Unaudited) as of ~~September~~June 30, ~~2017~~2023 and December 31, ~~2016~~2022	3

	Consolidated Statements of Income (Unaudited) for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016~~2022	4

	Consolidated Statements of Comprehensive Income (Unaudited) for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016~~2022	5

	Consolidated Statements of Changes in Equity (Unaudited) for the ~~nine~~three and six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016~~2022	6

	Consolidated Statements of Cash Flows (Unaudited) for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016~~2022	78

	Notes to Consolidated Financial Statements (Unaudited)	910

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3228

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	6557

Item 4.	Controls and Procedures	6759

Part II.	Other Information

Item 1.	Legal Proceedings	6860

Item 1A.	RiskFactors	6860

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	6860

Item 3.	Defaults Upon Senior Securities	6860

Item 4.	Mine Safety Disclosures	6860

Item 5.	Other Information	6860

Item 6.	Exhibits	6861

Signatures		6962


										Accumulated			Noncontrolling Interests in
					Additional		Earnings			Other			Consolidated			Consolidated
(Amounts in thousands, except per share	Common Shares				Paid-in-		Less than			Comprehensive			Joint			Real Estate			Operating			Total
and unit amounts)	Shares		Amount		Capital		Distributions			Income			Ventures			Related Funds			Partnership			Equity
Balance as of March 31, 2023		217,212	$	2,171	$	4,181,983	$	(659,641	)	$	38,058		$	403,902		$	220,206		$	250,401		$	4,437,080
Net (loss) income		-		-		-		(47,538	)		-			5,351			(37,301	)		(3,341	)		(82,829	)
Common shares issued upon redemption of common units		39		1		648		-			-			-			-			(649	)		-
Common shares issued under Omnibus share plan, net of shares withheld for taxes		55		-		-		-			-			-			-			-			-
Dividends and distributions ($0.035 per share and unit)		-		-		-		(7,606	)		-			-			-			(582	)		(8,188	)
Contributions from noncontrolling interests		-		-		-		-			-			-			3,606			-			3,606
Distributions to noncontrolling interests		-		-		-		-			-			(1,606	)		(2,523	)		-			(4,129	)
Change in value of interest rate swaps and interest rate caps		-		-		-		-			(2,929	)		-			-			(206	)		(3,135	)
Pro rata share of other comprehensive income of unconsolidated joint ventures		-		-		-		-			1,302			-			-			92			1,394
Amortization of equity awards		-		-		300		-			-			-			-			3,914			4,214
Reallocation of noncontrolling interest		-		-		731		-			-			-			-			(731	)		-
Balance as of June 30, 2023		217,306	$	2,172	$	4,183,662	$	(714,785	)	$	36,431		$	407,647		$	183,988		$	248,898		$	4,348,013

Balance as of March 31, 2022		219,077	$	2,190	$	4,120,077	$	(552,732	)	$	28,466		$	417,577		$	80,909		$	366,536		$	4,463,023
Net (loss) income		-		-		-		(360	)		-			4,779			(352	)		(29	)		4,038
Common shares issued upon redemption of common units		6,530		65		107,147		-			-			-			-			(107,212	)		-
Common shares issued under Omnibus share plan, net of shares withheld for taxes		18		-		-		-			-			-			-			-			-
Dividends and distributions ($0.0775 per share and unit)		-		-		-		(17,485	)		-			-			-			(1,302	)		(18,787	)
Distributions to noncontrolling interests		-		-		-		-			-			(10,167	)		-			-			(10,167	)
Change in value of interest rate swaps and interest rate caps		-		-		-		-			5,648			-			-			461			6,109
Pro rata share of other comprehensive income of unconsolidated joint ventures		-		-		-		-			2,726			-			-			223			2,949
Amortization of equity awards		-		-		317		-			-			-			-			3,872			4,189
Reallocation of noncontrolling interest		-		-		1,133		-			-			-			-			(1,133	)		-
Balance as of June 30, 2022		225,625	$	2,255	$	4,228,674	$	(570,577	)	$	36,840		$	412,189		$	80,557		$	261,416		$	4,451,354


											Accumulated			Noncontrolling Interests in
					Additional			Earnings			Other			Consolidated			Consolidated
(Amounts in thousands, except per share	Common Shares				Paid-in-			Less than			Comprehensive			Joint			Real Estate			Operating			Total
and unit amounts)	Shares		Amount		Capital			Distributions			Income			Ventures			Related Funds			Partnership			Equity
Balance as of December 31, 2022		216,559	$	2,165	$	4,186,161		$	(644,331	)	$	48,296		$	402,118		$	173,375		$	242,982		$	4,410,766
Net (loss) income		-		-		-			(45,809	)		-			10,992			(36,478	)		(3,220	)		(74,515	)
Common shares issued upon redemption of common units		653		7		10,870			-			-			-			-			(10,877	)		-
Common shares issued under Omnibus share plan, net of shares withheld for taxes		94		-		-			(205	)		-			-			-			-			(205	)
Dividends and distributions ($0.1125 per share and unit)		-		-		-			(24,440	)		-			-			-			(1,858	)		(26,298	)
Contributions from noncontrolling interests		-		-		-			-			-			-			53,354			-			53,354
Distributions to noncontrolling interests		-		-		-			-			-			(5,463	)		(6,263	)		-			(11,726	)
Change in value of interest rate swaps and interest rate caps		-		-		-			-			(10,771	)		-			-			(754	)		(11,525	)
Pro rata share of other comprehensive loss of unconsolidated joint ventures		-		-		-			-			(1,094	)		-			-			(75	)		(1,169	)
Amortization of equity awards		-		-		624			-			-			-			-			8,707			9,331
Reallocation of noncontrolling interest		-		-		(13,993	)		-			-			-			-			13,993			-
Balance as of June 30, 2023		217,306	$	2,172	$	4,183,662		$	(714,785	)	$	36,431		$	407,647		$	183,988		$	248,898		$	4,348,013

Balance as of December 31, 2021		218,992	$	2,190	$	4,122,680		$	(538,845	)	$	2,138		$	428,833		$	81,925		$	356,111		$	4,455,032
Net income (loss)		-		-		-			3,011			-			8,204			(1,368	)		313			10,160
Common shares issued upon redemption of common units		6,530		65		107,147			-			-			-			-			(107,212	)		-
Common shares issued under Omnibus share plan, net of shares withheld for taxes		103		-		-			(280	)		-			-			-			-			(280	)
Dividends and distributions ($0.155 per share and unit)		-		-		-			(34,463	)		-			-			-			(3,101	)		(37,564	)
Distributions to noncontrolling interests		-		-		-			-			-			(24,848	)		-			-			(24,848	)
Change in value of interest rate swaps and interest rate caps		-		-		-			-			22,485			-			-			2,169			24,654
Pro rata share of other comprehensive income of unconsolidated joint ventures		-		-		-			-			12,217			-			-			1,185			13,402
Amortization of equity awards		-		-		639			-			-			-			-			10,159			10,798
Reallocation of noncontrolling interest		-		-		(1,792	)		-			-			-			-			1,792			-
Balance as of June 30, 2022		225,625	$	2,255	$	4,228,674		$	(570,577	)	$	36,840		$	412,189		$	80,557		$	261,416		$	4,451,354


	For the Six Months Ended June 30,
(Amounts in thousands)	2023			2022
Cash Flows from Financing Activities:
Contributions from noncontrolling interests in consolidated real estate related funds	$	53,354		$	-
Distributions to noncontrolling interests in consolidated real estate related funds		(6,263	)		-
Dividends paid to common stockholders		(33,660	)		(32,307	)
Distributions paid to common unitholders		(2,476	)		(3,365	)
Distributions to noncontrolling interests in consolidated joint ventures		(5,463	)		(24,848	)
Settlement of accounts payable in connection with repurchases of common shares		(1,847	)		-
Repurchase of shares related to stock compensation agreements and related tax withholdings		(205	)		(280	)
Net cash provided by (used in) financing activities		3,440			(60,800	)

Net increase in cash and cash equivalents and restricted cash		57,614			2,201
Cash and cash equivalents and restricted cash at beginning of period		449,817			529,666
Cash and cash equivalents and restricted cash at end of period	$	507,431		$	531,867


Reconciliation of Cash and Cash Equivalents and Restricted Cash:
Cash and cash equivalents at beginning of period	$	408,905		$	524,900
Restricted cash at beginning of period		40,912			4,766
Cash and cash equivalents and restricted cash at beginning of period	$	449,817		$	529,666

Cash and cash equivalents at end of period	$	434,751		$	506,933
Restricted cash at end of period		72,680			24,934
Cash and cash equivalents and restricted cash at end of period	$	507,431		$	531,867

Supplemental Disclosure of Cash Flow Information:
Cash payments for interest	$	68,892		$	67,332
Cash payments for income taxes, net of refunds		598			1,941

Non-Cash Transactions:
Common shares issued upon redemption of common units		10,877			107,212
Dividends and distributions declared but not yet paid		8,188			18,787
Change in value of interest rate swaps and interest rate caps		(11,525	)		24,654
Write-off of fully amortized and/or depreciated assets		20,229			8,617
Additions to real estate included in accounts payable and accrued expenses		12,715			7,212
Transfer of deposit to investment in unconsolidated joint ventures		-			6,230

(Amounts in thousands, except share, unit and per share amounts)
ASSETS	September 30, 2017			December 31, 2016
Real estate, at cost
Land	$	2,209,506		$	2,091,535
Buildings and improvements		6,097,220			5,757,558
		8,306,726			7,849,093
Accumulated depreciation and amortization		(443,555	)		(318,161	)
Real estate, net		7,863,171			7,530,932
Cash and cash equivalents		185,028			162,965
Restricted cash		32,320			29,374
Investments in unconsolidated joint ventures		46,014			6,411
Investments in unconsolidated real estate funds		8,146			28,173
Preferred equity investments, net of allowance of $19,588 and $0		35,763			55,051
Marketable securities		27,867			22,393
Accounts and other receivables, net of allowance of $324 and $202		13,822			15,251
Deferred rent receivable		209,226			163,695
Deferred charges, net of accumulated amortization of $16,628 and $9,832		88,846			71,184
Intangible assets, net of accumulated amortization of $189,209 and $166,841		373,053			412,225
Assets held for sale		-			346,685
Other assets		40,752			22,829
Total assets ⁽¹⁾	$	8,924,008		$	8,867,168

LIABILITIES AND EQUITY
Notes and mortgages payable, net of deferred financing costs of $44,029 and $43,281	$	3,539,071		$	3,364,898
Revolving credit facility		-			230,000
Due to affiliates		27,299			27,299
Accounts payable and accrued expenses		97,679			103,896
Dividends and distributions payable		25,211			25,151
Intangible liabilities, net of accumulated amortization of $71,453 and $55,349		138,563			153,018
Other liabilities		54,029			76,959
Total liabilities ⁽¹⁾		3,881,852			3,981,221
Commitments and contingencies
Paramount Group, Inc. equity:
Common stock $0.01 par value per share; authorized 900,000,000 shares; issued and outstanding 240,073,742 and 230,015,356 shares in 2017 and 2016, respectively		2,400			2,300
Additional paid-in-capital		4,286,265			4,116,987
Earnings less than distributions		(104,059	)		(129,654	)
Accumulated other comprehensive income		1,014			372
Paramount Group, Inc. equity		4,185,620			3,990,005
Noncontrolling interests in:
Consolidated joint ventures		408,035			253,788
Consolidated real estate fund		14,947			64,793
Operating Partnership (24,977,743 and 34,511,214 units outstanding)		433,554			577,361
Total equity		5,042,156			4,885,947
Total liabilities and equity	$	8,924,008		$	8,867,168

	For the Nine Months Ended September 30,
(Amounts in thousands)	2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	114,408		$	4,892
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		198,143			208,475
Amortization of deferred financing costs		8,367			4,121
Gain on sale of real estate		(133,989	)		-
Straight-lining of rental income		(43,529	)		(67,843	)
Amortization of above and below-market leases, net		(14,164	)		(6,593	)
Loss on early extinguishment of debt		7,877			-
Unrealized gain on interest rate swaps		(1,802	)		(29,661	)
Realized and unrealized gains on marketable securities		(3,198	)		(341	)
Valuation allowance on preferred equity investment		19,588			-
Income from unconsolidated joint ventures		(19,143	)		(5,291	)
Distributions of earnings from unconsolidated joint ventures		3,380			5,824
Loss from unconsolidated real estate funds		6,053			2,540
Distributions of earnings from unconsolidated real estate funds		275			308
Amortization of stock-based compensation expense		11,692			8,766
Other non-cash adjustments		395			1,981
Changes in operating assets and liabilities:
Accounts and other receivables		2,260			(1,455	)
Deferred charges		(25,429	)		(11,266	)
Other assets		(18,094	)		(39,338	)
Accounts payable and accrued expenses		(10,710	)		(3,335	)
Deferred income taxes		(1,499	)		(2,979	)
Other liabilities		4,190			1,343
Net cash provided by operating activities		105,071			70,148

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of real estate		540,333			-	��
Acquisitions of real estate		(161,184	)		-
Additions to real estate		(59,255	)		(107,445	)
Investments in unconsolidated joint ventures		(28,886	)		-
Distributions of capital from unconsolidated joint ventures		20,000			-
Deposits on real estate		-			(50,000	)
Changes in restricted cash		(8,224	)		11,380
Distributions of capital from unconsolidated real estate funds		13,849			-
Contributions of capital to unconsolidated real estate funds		(790	)		(1,084	)
Net cash provided by (used in) investing activities		315,843			(147,149	)

(Amounts in thousands)
Purchase price allocation:
Land	$	141,097
Building and improvements		343,819
In-place lease intangible assets		27,965
Above-market lease intangible assets		2,976
Accounts receivable and other assets		1,338
Below-market lease intangible liabilities		(11,472	)
Accounts payable and other liabilities		(6,532	)
Notes and mortgages payable		(228,000	)
Net assets acquired	$	271,191

(Amounts in thousands)
Land	$	78,300
Building and improvements, net		251,671
Deferred charges		14,512
Deferred rent receivable		2,202
Assets held for sale	$	346,685

(Amounts in thousands)	As of September 30, 2017						As of December 31, 2016
Balance Sheets:	Fund II		Fund III		Fund VII		Fund II		Fund III		Fund VII
Real estate investments	$	51	$	15,701	$	33,259	$	64,989	$	39,376	$	165,556	⁽¹⁾
Cash and cash equivalents		826		2,305		762		1,297		2,221		741
Other assets		115		-		2		127		-		-
Total assets	$	992	$	18,006	$	34,023	$	66,413	$	41,597	$	166,297

Other liabilities	$	45	$	29	$	618	$	60	$	49	$	1,483
Total liabilities		45		29		618		60		49		1,483
Equity		947		17,977		33,405		66,353		41,548		164,814
Total liabilities and equity	$	992	$	18,006	$	34,023	$	66,413	$	41,597	$	166,297

(Amounts in thousands, except square feet)	Paramount		Dividend		Initial	As of
Preferred Equity Investment	Ownership		Rate		Maturity	September 30, 2017			December 31, 2016
470 Vanderbilt Avenue ⁽¹⁾		24.4%		10.3%	Feb-2019	$	35,763		$	35,613
2 Herald Square⁽²⁾		24.4%		10.3%	Apr-2017		19,588			19,438
							55,351			55,051
Less: valuation allowance ⁽²⁾							(19,588	)		-
Preferred equity investments, net						$	35,763		$	55,051

(Amounts in thousands)
2018	$	16,281
2019		14,355
2020		8,750
2021		4,491
2022		1,091

(Amounts in thousands)
2018	$	60,896
2019		54,639
2020		42,316
2021		30,123
2022		24,009

	Maturity	Fixed/	Interest Rate as of			As of
(Amounts in thousands)	Date	Variable Rate	September 30, 2017			September 30, 2017				December 31, 2016
Notes and mortgages payable:
1633 Broadway
	Dec-2022	Fixed ⁽¹⁾		3.54	%	$	1,000,000			$	1,000,000
	Dec-2022	L + 175 bps		3.00	%		30,100		⁽²⁾		13,544		⁽²⁾
				3.52	%		1,030,100				1,013,544
One Market Plaza (49.0% interest)
	Feb-2024	Fixed		4.03	%		975,000				860,546
	n/a	n/a	n/a				-				12,414
				4.03	%		975,000				872,960
1301 Avenue of the Americas
	Nov-2021	Fixed		3.05	%		500,000				500,000
	Nov-2021	L + 180 bps		3.05	%		350,000				350,000
				3.05	%		850,000				850,000

31 West 52nd Street	May-2026	Fixed		3.80	%		500,000				500,000
50 Beale (31.1% interest) ⁽³⁾	Oct-2021	Fixed		3.65	%		228,000				-
1899 Pennsylvania Avenue ⁽⁴⁾	n/a	n/a	n/a				-				87,675
Liberty Place ⁽⁴⁾	n/a	n/a	n/a				-				84,000
Total notes and mortgages payable				3.60	%		3,583,100				3,408,179
Less: deferred financing costs							(44,029	)			(43,281	)
Total notes and mortgages payable, net						$	3,539,071			$	3,364,898

Revolving Credit Facility	Nov-2018	L + 125 bps	n/a			$	-			$	230,000

(Amounts in thousands)	As of September 30, 2017
Balance Sheet Data:	Total		New York		Washington, D.C.		San Francisco		Other
Total assets	$	8,924,008	$	5,557,850	$	701,624	$	2,438,720	$	225,814
Total liabilities		3,881,852		2,445,559		26,829		1,289,218		120,246
Total equity		5,042,156		3,112,291		674,795		1,149,502		105,568

Three Months Ended September 30, 2017				Total			New York			Washington, D.C.			San Francisco
	Total square feet leased				369,136			305,351			7,070			56,715
	Pro rata share of total square feet leased:				356,413			294,377			7,070			54,966
		Initial rent ⁽¹⁾		$	80.98		$	82.84		$	74.53		$	71.70
		Weighted average lease term (in years)			10.8			11.7			5.5			7.1

		Tenant improvements and leasing commissions:
			Per square foot	$	105.94		$	109.68		$	26.26		$	96.02
			Per square foot per annum	$	9.77		$	9.40		$	4.78		$	13.53
			Percentage of initial rent		12.1	%		11.4	%		6.4	%		18.9	%

		Rent concessions:
			Average free rent period (in months)		9.4			10.6			6.0			3.0
			Average free rent period per annum (in months)		0.9			0.9			1.1			0.4

		Second generation space: ⁽²⁾
		Square feet			163,298			109,008			-			54,290
		GAAP basis:
			Straight-line rent	$	81.33		$	85.02		$	-		$	73.92
			Prior straight-line rent	$	74.30		$	75.51		$	-		$	71.87
			Percentage increase		9.5	%		12.6	%		-			2.8	%
		Cash basis:
			Initial rent ⁽¹⁾	$	83.68		$	89.65		$	-		$	71.70
			Prior escalated rent ⁽³⁾	$	76.25		$	88.53		$	-		$	51.59
			Percentage increase		9.8	%		1.3	%		-			39.0	%

Nine Months Ended September 30, 2017				Total			New York			Washington, D.C.			San Francisco
	Total square feet leased				946,880			524,378			19,602			402,900
	Pro rata share of total square feet leased:				859,432			498,610			19,602			341,220
		Initial rent ⁽¹⁾		$	78.50		$	80.77		$	70.95		$	75.62
		Weighted average lease term (in years)			9.4			10.5			8.3			7.9

		Tenant improvements and leasing commissions:
			Per square foot	$	86.74		$	100.27		$	65.22		$	68.17
			Per square foot per annum	$	9.23		$	9.59		$	7.85		$	8.61
			Percentage of initial rent		11.8	%		11.9	%		11.1	%		11.4	%

		Rent concessions:
			Average free rent period (in months)		6.9			9.4			8.8			3.1
			Average free rent period per annum (in months)		0.7			0.9			1.1			0.4

		Second generation space: ⁽²⁾
		Square feet			594,418			257,631			-			336,787
		GAAP basis:
			Straight-line rent	$	76.31		$	79.64		$	-		$	73.86
			Prior straight-line rent	$	68.54		$	75.92		$	-		$	63.09
			Percentage increase		11.3	%		4.9	%		-			17.1	%
		Cash basis:
			Initial rent ⁽¹⁾	$	79.24		$	84.16		$	-		$	75.62
			Prior escalated rent ⁽³⁾	$	68.23		$	84.59		$	-		$	56.17
			Percentage increase (decrease)		16.1	%		(0.5	%)		-			34.6	%

(Amounts in thousands)
712 Fifth Avenue ($596 in 2017, compared to $1,772 in 2016)	$	(1,176	)	⁽¹⁾
60 Wall Street (acquired in January 2017)		(45	)
75 Howard (acquired in May 2017)		100		⁽²⁾
Oder-Center, Germany ($20 in 2017 and 2016)		-
Total decrease	$	(1,121	)

(Amounts in thousands)
$445 million of debt repayments ($274 million at 900 Third Avenue in October 2016 and $171 million at 1899 Pennsylvania Avenue and Liberty Place in May 2017)	$	(4,921	)
$975 million refinancing of One Market Plaza in January 2017		(4,020	)
$210 million defeasance of Waterview in October 2016		(3,131	)
$850 million financing of 1301 Avenue of the Americas in October 2016		6,541
$228 million assumption of existing debt at 50 Beale upon acquisition in July 2017		1,723
Amortization of deferred financing costs		1,361
Other, net		(98	)
Total decrease	$	(2,545	)

(Amounts in thousands)
Valuation allowance on preferred equity investment in 2017	$	(14,808	)
Lower preferred equity investment income ($718 in 2017, compared to $1,105 in 2016)		(387	)
Lower income attributable to One Market Plaza ($853 in 2017, compared to $3,598 in 2016)		(2,745	)
Loss attributable to 50 Beale Street (acquired in July 2017)		(980	)
Total decrease	$	(18,920	)

(Amounts in thousands)
712 Fifth Avenue ($19,030 in 2017, compared to $5,233 in 2016)	$	13,797		⁽¹⁾
60 Wall Street (acquired in January 2017)		(81	)
75 Howard (acquired in May 2017)		133		⁽²⁾
Oder-Center, Germany ($61 in 2017, compared to $58 in 2016)		3
Total increase	$	13,852

(Amounts in thousands)
$445 million of debt repayments ($274 million at 900 Third Avenue in October 2016 and $171 million at 1899 Pennsylvania Avenue and Liberty Place in May 2017)	$	(12,150	)
$975 million refinancing of One Market Plaza in January 2017		(11,123	)
$210 million defeasance of Waterview in October 2016		(9,246	)
$850 million financing of 1301 Avenue of the Americas in October 2016		19,127
$228 million assumption of existing debt at 50 Beale upon acquisition in July 2017		1,723
Amortization of deferred financing costs		4,246
Other, net		1,585
Total decrease	$	(5,838	)