Executive Summary

Core FFO per share of $0.17 beat Street by roughly $0.03; revenue materially topped consensus, while GAAP EPS was a slight miss. Management raised full-year Core FFO, leasing volume, and year-end occupancy guidance, citing better portfolio operations and lower G&A .
Same-store leased occupancy fell 80 bps sequentially to 85.4%, driven by Google’s scheduled move-out at One Market Plaza; mark-to-market on second-gen space was +2.6% GAAP but -5.4% cash, reflecting elevated concessions to secure long-term tenancies .
Liquidity remains strong ($535M PGRE share of cash/restricted), with no core maturities until 2026; refinancing of the $860M 1301 Avenue of the Americas loan is underway, supported by >97% leased occupancy and functioning debt markets .
Strategic alternatives review remains active; management declined further commentary and said the ongoing SEC inquiry (historical disclosures) is not expected to impact timing .
Near-term stock catalysts: guidance raise and leasing momentum in NYC, signs of stabilization and AI-driven demand in SF, plus potential update on 1301 refinancing next quarter .

What Went Well and What Went Wrong

What Went Well
- “We delivered a strong second quarter with a core FFO of $0.17 per share, exceeding consensus by $0.03,” supported by robust leasing and operational discipline .
- Raised FY25 Core FFO ($0.55–$0.59), leasing (1.2–1.4M sf), and YE same-store leased % (86.9–88.9%), reflecting better-than-expected operations and lower G&A .
- Balanced leasing across markets (404,710 sf; 52% NY/48% SF) with initial rent >$90/sf and 12.9-year terms; pipeline >275K sf in active stages .
What Went Wrong
- Same-store leased occupancy declined 80 bps q/q to 85.4% on Google’s move-out; SF same-store leased fell 720 bps q/q to 75.1% .
- Cash mark-to-market on second-gen space was -5.4%, indicating net effective rent pressure amid concessions to secure long-term deals, particularly in SF .
- GAAP net loss widened to $19.8M (-$0.09/share), including $7.5M severance/accelerated equity awards; net loss per share guidance moved lower (more negative) given non-core items and slightly higher interest expense .

Financial Results

Metric	Q2 2024	Q1 2025	Q2 2025
Total revenues ($USD thousands)	$187,408	$187,019	$177,045
Net (loss) income to common ($USD thousands)	$(7,819)	$(10,026)	$(19,785)
Diluted EPS ($USD)	$(0.04)	$(0.05)	$(0.09)
FFO per diluted share ($USD)	$0.20	$0.17	$0.12
Core FFO per diluted share ($USD)	$0.20	$0.17	$0.17
Same Store Cash NOI – PGRE share ($USD thousands)	$84,168	$84,121	$84,616
Same Store NOI – PGRE share ($USD thousands)	$88,306	$92,369	$84,266
Same-store leased occupancy (weighted avg, at share)	86.3%	86.2%	85.4%

Segment breakdown (NOI and Cash NOI)

Segment Metric ($USD thousands)	Q2 2024	Q2 2025
PGRE share of NOI – New York	$63,396	$58,023
PGRE share of NOI – San Francisco	$28,158	$26,102
PGRE share of Cash NOI – New York	$58,084	$56,584
PGRE share of Cash NOI – San Francisco	$29,554	$27,891

KPIs and leasing

KPI	Q1 2025	Q2 2025
Total square feet leased	283,874	404,710
PGRE share of leased sf	186,447	255,621
Initial rent ($/sf)	$76.52	$91.93
Weighted avg lease term (years)	12.9	12.9
TI + commissions ($/sf per annum)	$13.74	$15.61
Second-gen mark-to-market (GAAP)	+7.1%	+2.6%
Second-gen mark-to-market (cash)	-1.5%	-5.4%
Same-store leased occupancy (at share)	86.2%	85.4%

Vs. Wall Street consensus (Q2 2025)

Metric	Consensus	Actual	Surprise
Revenue ($USD millions)	162.165*	177.045	+14.880 (+9.2%)*
EPS (GAAP) ($)	-0.08*	-0.09	-0.01*
FFO / Share (REIT) ($)	0.138*	0.12	-0.018*

*Values retrieved from S&P Global.

Management additionally highlighted Core FFO/share of $0.17 beat consensus by ~$0.03, consistent with commentary on the call .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Core FFO per share	FY 2025	$0.51 – $0.57	$0.55 – $0.59	Raised
Net loss per share (GAAP)	FY 2025	$(0.36) – $(0.30)	$(0.37) – $(0.33)	Lowered (more negative)
Leasing activity	FY 2025	0.9M – 1.1M sf	1.2M – 1.4M sf	Raised
YE same-store leased % (at share)	FY 2025	84.4% – 86.4%	86.9% – 88.9%	Raised
Same-store Cash NOI change	FY 2025	(11%) – (7%)	(10%) – (6%)	Improved
Same-store NOI change (GAAP)	FY 2025	(13%) – (9%)	(12%) – (8%)	Improved
General & administrative ($000)	FY 2025	$67,000 – $64,000	$62,500 – $60,500	Lowered
Interest & debt expense ($000)	FY 2025	$145,000 – $142,000	$145,500 – $143,500	Slightly higher
Fee & other income ($000)	FY 2025	$(28,000) – $(30,000)	$(30,500) – $(31,500)	Higher
NOI ($000)	FY 2025	$304,000 – $311,000	$306,500 – $311,500	Slightly higher
Cash NOI ($000)	FY 2025	$296,000 – $301,000	$300,000 – $304,000	Higher

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24, Q1’25)	Current Period (Q2’25)	Trend
Flight to quality (NYC)	Paramount Club cited as differentiator; rising demand in Midtown core submarkets	NYC same-store leased up 70 bps q/q to 88.1%; pricing power on upper floors; concessions stabilizing	Improving
SF market stabilization & AI demand	AI-led activity, tours up; planning amenities at 1 Market/1 Front; significant 2025 expirations (Google/JPM)	193K sf leased in SF; tours accelerating; multiple leases out; occupancy down on Google move-out	Gradual recovery, still mixed
Concessions & net effective rents	Q4 spike driven by turnkey lease; expectation of stabilization; free rent elevated near-term	TI % of initial rent eased vs prior quarters; concessions stable; expecting net effective rent uplift in NYC	Stabilizing
Balance sheet & liquidity	JV sale of 900 Third; credit facility modifications; strong cash	~$535M cash/restricted (PGRE share); no core maturities until 2026; 1301 refi in process	Strong/liquid
Strategic alternatives & SEC inquiry	Not discussed in Q4’24; initial FY25 guidance provided	Review active; SEC inquiry on historical disclosures not expected to affect timing	Ongoing
Leasing pipeline	~350K sf leases out post-Q4; robust NYC pipeline	>275K sf active; mix of vacant and upcoming expirations; balanced between NY and SF	Robust

Management Commentary

“We delivered a strong second quarter with a core FFO of $0.17 per share, exceeding consensus by $0.03…driven by robust leasing activity, continued operational discipline, and a focused approach to capital allocation” — Albert Behler, CEO .
“Our New York portfolio is now 88.1% leased…we are exercising pricing power…starting to push rents…concessions have remained fairly flat” — Peter Brindley, EVP Real Estate .
“We ended the quarter with approximately $534 million in cash and restricted cash…no core debt maturities until 2026…on track to refinance 1301 Avenue of the Americas” — Ermelinda Berberi, CFO .
“The Board’s review of strategic alternatives remains active…we will not be commenting further…[the SEC inquiry] is reviewing certain historical disclosures…I don’t expect…any significant impact to the strategic review.” — Tom Hennessy & Albert Behler .

Q&A Highlights

1633 Broadway leasing and rents: asking rents $70–$90/sf; active paper on Showtime block; amenities and retail performing well (Din Tai Fung cited) .
Concessions: NYC concessions stabilized; anticipate free rent to normalize and TI to trend down as market tightens; SF TIs elevated in select long-term deals to stoke momentum .
SF demand: increased tours and proposals; AI tenants and professional services contributing; backfill plans for Google and JPMorgan underway with leases out .
Financing: 1301 Avenue of the Americas expected to refinance smoothly given asset profile and leasing success; debt markets functioning .
Strategic review and SEC: active process; SEC inquiry on historical disclosures not expected to affect timing .

Estimates Context

Revenue beat: Actual $177.0M vs consensus $162.2M; beat of ~$14.9M (+9.2%)* .
EPS (GAAP): Actual -$0.09 vs consensus -$0.08; miss of $0.01*.
FFO/share (NAREIT): Actual $0.12 vs consensus $0.138; miss of $0.018*.
Management highlighted Core FFO/share beat: $0.17 exceeded consensus by ~$0.03 .
*Values retrieved from S&P Global.

Consensus forward (for context): FFO/share ~0.116 (Q3–Q4’25), GAAP EPS (-$0.08 to -$0.09), revenue ~$168–169M next quarters*.

Key Takeaways for Investors

Core FFO/share beat and FY25 guidance raise are positive catalysts; management cites stronger operations and lower G&A as drivers .
Revenue outperformance vs consensus underscores leasing momentum and fee/other income strength; monitor sustainability amid SF occupancy headwinds .
NYC continues to tighten in prime submarkets; upper floors scarce, enabling rent pushes; watch net effective rent trajectory as concessions stabilize .
SF is recalibrating; near-term occupancy risk from expirations (Google/JPM), but AI/professional services demand and amenity upgrades support gradual recovery .
Balance sheet/liquidity provide flexibility (PGRE share cash/restricted ~$535M); no core maturities until 2026; upcoming 1301 refinancing a potential de-risking update .
Strategic alternatives review ongoing; while timing/terms are unknown, process could surface value realization or portfolio actions .
Non-core items (severance/equity acceleration) impacted GAAP loss; Core FFO remains the key REIT earnings lens; track non-core expense normalization and interest expense trajectory .

Appendix: Additional Portfolio and Operations Data

Same-store Cash NOI change: +0.5% y/y in Q2; -1.8% ytd; Same-store NOI (GAAP) -4.6% y/y in Q2; -5.0% ytd .
YTD leasing through June: 688,584 sf (PGRE share 442,068) at $85.43 initial rent; GAAP MTM +3.7%, cash MTM -4.5% .
Transactions: sold 25% interest in One Front Street at $255M gross valuation; $40.5M seller financing; $11.5M net proceeds; credit facility terminated post-sale .

Paramount Group, Inc. (PGRE)·Q2 2025 Earnings Summary