Executive Summary

Q4 2024 Core FFO was $0.19 per share and came in $0.01 above consensus, while total revenues declined year over year; management issued a materially lower 2025 Core FFO guidance of $0.51–$0.57 per share driven by large San Francisco expirations (JPMorgan, Google) .
Same Store Cash NOI was essentially flat year over year in Q4 (-0.1%) and sequentially improved from Q3; same-store leased occupancy was 84.8% at share, reflecting ongoing flight-to-quality dynamics and pipeline momentum in New York .
Post-quarter, PGRE sold a 45% stake in 900 Third Avenue for ~$94–95M net proceeds and modified its revolver to permit the sale, highlighting balance-sheet discipline and asset-light capital allocation .
Management guided 2025 leasing activity to 800K–1,000K sq ft with year-end same-store occupancy ~84–86% at share, and expects negative same-store NOI growth given known expirations; Q&A emphasized robust NYC pipeline and early signs of SF demand recovery (AI startups, return-to-office) .
Catalysts include execution on the NYC pipeline (Sixth Avenue, Paramount Club-driven pricing power), SF backfills for One Market Plaza and One Front Street, and further asset-level transactions to surface value vs public NAV .

What Went Well and What Went Wrong

What Went Well

Core FFO beat: Q4 Core FFO of $0.19 per share was $0.01 ahead of consensus; full-year Core FFO landed at $0.80, the high end of guidance .
NYC leasing momentum and pricing power: Management highlighted pricing power on upper floors and the Paramount Club amenity as a differentiator; NYC pipeline has ~350K sq ft of leases out plus >200K sq ft in advanced proposals .
Capital recycling and balance-sheet optionality: Closed sale of 45% of 900 Third Avenue (~$94–95M net proceeds), improved revolver covenants, and maintained liquidity to pursue asset-light partnerships and potential buybacks/dividends when prudent .

Quotes:

“We reported core FFO of $0.19 per share…$0.01 ahead of consensus estimates” .
“We will have pricing power in the year ahead, particularly for higher floors…upper floors are increasingly scarce” .
“We closed the sale of a 45% interest in 900 Third Avenue…net proceeds of approximately $95 million” .

What Went Wrong

2025 guide reset lower: Midpoint of 2025 Core FFO guidance ($0.54) is ~$0.26 below 2024 actual due to expected SF expirations (JPMorgan, Google), lower straight-line rents, and reduced fee/other income .
Leasing slip in Q4: Quarterly leasing missed internal targets after a near-signed deal fell through; mark-to-market on Q4 second-generation leases was negative (cash -11.1%, GAAP -7.2%) .
San Francisco headwinds: 2025 guided same-store declines (Cash NOI -7% to -11%; GAAP -9% to -13%) and occupancy deterioration in SF from large tenant move-outs; 29% of SF expirations in 2025 .

Financial Results

Quarterly comparison (sequential)

Metric	Q2 2024	Q3 2024	Q4 2024
Total Revenues ($USD Thousands)	$187,408	$194,899	$186,267
Net Loss Per Diluted Share ($)	$(0.04)	$(0.04)	$(0.18)
FFO Per Diluted Share ($)	$0.20	$0.18	$0.17
Core FFO Per Diluted Share ($)	$0.20	$0.19	$0.19
Same Store Cash NOI ($USD Thousands)	$86,990	$85,235	$87,326
Same-Store Leased % (at share)	86.3%	84.7%	84.8%

Year-over-year (Q4)

Metric	Q4 2023	Q4 2024
Total Revenues ($USD Thousands)	$192,471	$186,267
Net Loss Per Diluted Share ($)	$(0.95)	$(0.18)
FFO Per Diluted Share ($)	$0.19	$0.17
Core FFO Per Diluted Share ($)	$0.22	$0.19
Same Store Cash NOI ($USD Thousands)	$87,430	$87,326

Segment breakdown (Q4 2024)

Metric	New York	San Francisco	Other
PGRE’s Share of Cash NOI ($USD Thousands)	$58,816	$28,398	$(1,075)
Same-Store Leased % (at share)	85.0%	83.8%	n/a

KPIs

KPI	Q2 2024	Q3 2024	Q4 2024
Total Sq Ft Leased (period)	198,505	179,403	108,824
PGRE Share Sq Ft Leased	158,592	115,026	75,821
Weighted Avg Initial Rent ($/sq ft)	$74.55	$84.55	$85.65
Weighted Avg Lease Term (years)	8.6	8.1	11.1
Second-Gen Mark-to-Market (Cash/GAAP)	+1.0% / (3.4%)	(10.4%) / (4.2%)	(11.1%) / (7.2%)
Same-Store Leased Occupancy (at share)	86.3%	84.7%	84.8%

Notes: Q3 negative mark-to-market on a GAAP basis was partly influenced by prior below-market lease accounting; in Q2/Q3 disclosures management provided context on GAAP vs cash deltas .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Core FFO Per Share ($)	FY 2025	n/a	$0.51–$0.57	Initiated
Core FFO Midpoint vs 2024	FY 2025 vs FY 2024	2024 actual $0.80	Midpoint $0.54 (−$0.26 YoY)	Lower
Same-Store Cash NOI (YoY %)	FY 2025	n/a	(11%) to (7%)	Initiated
Same-Store NOI (GAAP, YoY %)	FY 2025	n/a	(13%) to (9%)	Initiated
Year-end Same-Store Leased % (at share)	FY 2025	n/a	83.9%–85.9%	Initiated
Leasing Activity (sq ft)	FY 2025	n/a	800,000–1,000,000	Initiated
Interest & Debt Expense ($mm)	FY 2025	n/a	~$146.5–$143.5	Initiated
G&A Expense ($mm)	FY 2025	n/a	~$65.5–$62.5	Initiated
Fee & Other Income ($mm)	FY 2025	n/a	$(28.0) to $(30.0)	Initiated
Dividend	Ongoing	Regular dividend suspended since Sept 2024	No change disclosed in Q4	Maintained suspension

Drivers of 2025 decrement (per share): Cash NOI −$0.17, straight-line rent −$0.04, 900 Third Avenue partial disposition −$0.02, fee/other income −$0.02, lease terminations −$0.01, interest expense +$0.01, offset by lower G&A −$0.01 .

Earnings Call Themes & Trends

Topic	Q2 2024 (Prior)	Q3 2024 (Prior)	Q4 2024 (Current)	Trend
NYC leasing momentum & Sixth Ave	Occupancy fell from 90.1% to 86.3% on Clifford Chance expiration; pipeline building	Raised 2024 Core FFO guidance; same-store leased 84.7%; flight-to-quality emerging	350K sq ft leases out; >200K sq ft advanced proposals; Paramount Club driving pricing power	Improving
SF demand & AI startups	RTO policies evolving; expirations ahead (JPMorgan, Google)	Continued SF headwinds but incremental interest	86 AI leases (>1M sq ft in 2024); venture funding strong; tours up; early re-engagement by larger tech	Gradual recovery
Capital allocation & transactions	Modified 111 Sutter loan; One Market Plaza refinancing completed	Guidance raised; balance-sheet discipline reiterated	Sold 45% of 900 Third Avenue; revolver consent and covenant changes; asset-light strategy reiterated	Active/recycling
ESG leadership	—	—	Achieved GRESB 5-star; sector leader; A for disclosure	Leading
2025 outlook & expirations	—	—	Negative same-store growth guided; year-end occupancy ~84–86%; SF deterioration expected from large move-outs	Headwinds quantified

Management Commentary

Strategy & Outlook: “We initiated 2025 core FFO per share guidance with a range between $0.51 and $0.57…along with 2025 leasing guidance between 800,000 and 1 million square feet” .
NYC value proposition: “We are seeing strong interest…particularly in the financial services and legal sectors…flight to quality remains a consistent theme” .
SF recovery indicators: “AI-based companies accounted for 86 leases totaling more than 1 million square feet in 2024…tour activity…has increasingly led to proposals” .
Capital recycling: “We closed the sale of a 45% interest in 900 Third Avenue…net proceeds of approximately $95 million…strengthens our balance sheet” .
ESG emphasis: “Paramount achieved…5-star rating for the sixth consecutive year…sector leader status…A rating for public disclosure” .

Q&A Highlights

Leasing target scrutiny: Analysts questioned the 900K sq ft midpoint; management cited 350K sq ft leases out, >200K sq ft advanced proposals, and the 131K sq ft Q1 lease already signed reducing “speculative” needs .
Concessions and TI/LC trends: Q4’s elevated leasing CapEx was driven by a turnkey deal on lower floors; management expects pricing power for upper floors and stabilizing free rent; TI levels may start to ease as Midtown tightens .
2026 expirations: Showtime likely to vacate at 1633 Broadway; in SF, Visa and KPMG are known move-outs; negotiations underway for others .
SF backfill plan: Active tours and multiple leases out for One Market Plaza and One Front Street; amenity upgrades leveraging Paramount Club model .
Non-core assets & debt: Market Center sale process awarded; resolution expected as early as Q2; 111 Sutter extended to Dec 2025 with no balance-sheet recourse to PGRE .

Estimates Context

Core FFO beat: Management stated Q4 Core FFO of $0.19 was $0.01 ahead of Street consensus .
Consensus detail: Retrieval of S&P Global consensus EPS/revenue data was unavailable due to system limits; we therefore reference management’s disclosed beat and cannot present SPGI figures in tables.

Key Takeaways for Investors

2025 reset quantifies SF headwinds; the guide embeds conservative assumptions on move-outs and limited backfill timing, setting a lower bar for execution-driven upside if NYC pipeline and SF tours convert .
NYC should be the near-term earnings driver: scarcity of high-quality upper-floor space, Paramount Club amenity, and robust legal/FS demand support better net effective rents and velocity vs 2024 .
Balance-sheet flexibility is improving: 900 Third proceeds, revolver consent/covenant modifications, and asset-light JV approach provide optionality across acquisitions, partnerships, and potential buybacks when conditions allow .
Watch SF execution: Backfilling One Market Plaza and One Front Street is pivotal; amenity investments may accelerate leasing to AI/tech and professional services tenants as RTO momentum builds .
ESG leadership aids tenant attraction: GRESB 5-star/sector leader credentials align with evolving tenant priorities and can differentiate PGRE in competitive bid processes .
Near-term trading lens: Q4 beat vs consensus, but 2025 guide-down likely tempers sentiment; stock reaction should track updates on NYC lease conversions, SF backfills, and additional asset monetizations at premiums to public-implied NAV .
Risk checks: Large known expirations in SF and 2026 NYC (Showtime) underscore reliance on pipeline conversion and amenity-driven pricing power; monitor concessions and TI trends quarter by quarter .

Appendix: Non-GAAP adjustments and impacts

Q4 2024 net loss includes $30.9M of PGRE’s share of non-cash real estate impairments in unconsolidated JVs; Core FFO excludes non-core items and better reflects portfolio operations .
Q4 second-gen leasing mark-to-market was negative on cash and GAAP bases; GAAP can be influenced by prior below-market lease accounting; management provided context across Q2–Q3 .

Paramount Group, Inc. (PGRE)·Q4 2024 Earnings Summary