Paramount Group (PGRE) Q3 2024 earnings summary

Executive summary

• Core FFO for Q3 2024 was $40.5M ($0.19 per share), down from $47.6M ($0.22 per share) in Q3 2023, but exceeded consensus by $0.01.

• Net loss attributable to common stockholders was $9.7M ($0.04 per share) for Q3 2024, compared to $8.4M ($0.04 per share) in Q3 2023.

• 179,403 sq ft leased in Q3 2024, totaling 655,000 sq ft year-to-date, with strong momentum in New York and AI-driven demand in San Francisco.

• Portfolio-wide leased occupancy at share was 84.7% at Q3 2024, down from 86.3% at June 30, 2024, due to known move-outs.

• Owns and operates 13.8 million sq ft of Class A office properties in New York and San Francisco, with $8.1B in AUM as of September 30, 2024.

Financial highlights

• Q3 2024 net loss of $9.7M ($0.04/share); Core FFO of $40.5M ($0.19/share); FFO of $40.1M ($0.18/share).

• Q3 2024 total revenues were $194.9M, up $5.7M year-over-year; operating expenses were $80.3M.

• Same-store growth: down 2.9% on a cash basis, up 1.8% on a GAAP basis, with San Francisco up 8.6% and New York down 1.0%.

• 12 leases executed in Q3 totaling 179,403 sq ft at $84.55 per sq ft, average lease term 8.1 years.

• Mark-to-market on second-generation space: -10.4% cash, -4.2% GAAP for Q3 2024.

Outlook and guidance

• Raised Core FFO guidance by $0.01 to $0.78–$0.80 per share for 2024.

• Improved same-store cash and GAAP NOI growth outlook by 100 bps and 50 bps, respectively.

• Increased leasing guidance to 825,000–925,000 sq ft for the year.

• Estimated 2024 net loss expected between $0.09 and $0.07 per share, improved from prior guidance.

• Dividend suspended in September 2024 to retain cash and enhance financial flexibility.