39 slides from Paramount Corp. Bhd's earnings presentation, May 2024
Slide 1: Investor Presentation May 2024
INVESTOR PRESENTATION MAY 2024
Slide 2: Cautionary Note on Forward-Looking Statements
This presentation contains forward-looking statements within the meaning of the federal securities laws. You can identify these statements by our use of the words “assumes,” “believes,” “estimates,” “expects,” “guidance,” “intends,” “plans,” “projects” and similar expressions that do not relate to h
Slide 3: Table of Contents
Table of Contents 1 Introduction to Paramount 2 Business Update 3 Balance Sheet & Capital Structure 4 Portfolio Composition 5 Paramount Club 6 ESG Strategy 7 Appendix 3
Slide 4: Paramount at a Glance
Paramount at a Glance Paramount prides itself on being a best-in-class owner and operator of high- quality, Class A office properties in New York and San Francisco. Ticker: PGRE 1978 13.8 MM SQUARE FEET NYSE-LISTED COMPANY FOUNDED IN (across 18 assets) (1) ~$8.2 B (2) $334 MM (3) 89.1% TOTAL AUM CAS
Slide 5: Office Centric Business with High-quality Properties, Commanding Premium Rents
Office Centric Business with High-quality Properties, Commanding Premium Rents 95% Exposure to Trophy and Class A office rent revenues with limited retail exposure 6.4 years Average lease term for office leases New York – 7.2 years San Francisco – 3.7 years $89/sqft Annualized rent 5
Slide 6: High Credit Quality Tenant Base
High Credit Quality Tenant Base PGRE's Share of Square Feet % of Ann. Top 10 Tenants Expiration Date Occupied (1) Rent(2) (3) (3) 1. Various 344,010 4.7% Industr y Diversification – % 2. 6/2024 (4) 328,543 (4) 4.5% o f A n n u a l i z e d R e n t (2) Other Professional 3. 1/2031 288,823 4.4% Service
Slide 7: Experienced and Diverse Management Team
Experienced and Diverse Management Team Executive Management ALBERT BEHLER WILBUR PAES PETER BRINDLEY GAGE JOHNSON ERMELINDA BERBERI Chairman, Chief Executive Chief Operating Officer, Chief Head of Real Estate General Counsel Chief Accounting Officer Officer & President Financial Officer & Treasurer
Slide 8: Introduction to Paramount
1 Introduction to Paramount 2 Business Update 3 Balance Sheet & Capital Structure 4 Portfolio Composition 5 Paramount Club 6 ESG Strategy 7 Appendix 8
Slide 9: 1Q24 Results and 2024 Guidance Update
1Q24 Results and 2024 Guidance Update 1Q24 2024 Original 2024 Revised Results Guidance Guidance LEASING 277,000 775,000 812,500 ACTIVITY square feet square feet(1) square feet(2) SAME STORE Cash – (1.5%) Cash – (5.0%)(1) Cash – (4.5%)(2) NOI GAAP – (3.5%) GAAP – (3.5%)(1) GAAP – (3.0%)(2) SAME STORE
Slide 10: Lease Expirations – Total Portfolio
Lease Expirations – Total Portfolio PGRE's Share of Sq. Ft. of Expiring Leases – Total Portfolio 5000 4,598ksf 4500 4000 3500 3000 2500 59.7% 2000 5-Year Average: 655ksf or 8.5% per annum 1500 1,028ksf 1,018ksf 1000 562ksf 500 13.3% 13.2% 239ksf 265ksf 7.3% 3.1% 3.4% 0 2024 2025 2026 2027 2028 There
Slide 11: Lease Expirations – by Business Segment
Lease Expirations – by Business Segment 4,500 PGRE's Share of Sq. Ft. of Expiring Leases - New York 4,090ksf Key Upcoming Roll 4,000 (> 50k square feet at PGRE share) 3,500 3,000 2024 Clifford Chance (329ksf)(1) 2,500 Leerink Partners (70ksf) 69.9% 2,000 1,500 5-Year Average: 368ksf or 6.3% per annu
Slide 12: Business Update
1 Introduction to Paramount 2 Business Update 3 Balance Sheet & Capital Structure 4 Portfolio Composition 5 Paramount Club 6 ESG Strategy 7 Appendix 12
Slide 13: Capital Structure Overview
Capital Structure Overview Liquidity ($ in Millions) (4) Capital Structure (in thousands, except per share amounts) $1,162.5 At Green Street $412.5 (1) NAV Stock Price $7.00 Common Shares 217,329 $750.0 Operating Partnership Units 20,035 Total Shares / Units Outstanding 237,365 Equity Market Capital
Slide 14: Debt Maturity Schedule – As of 3/31/2024 (at share)
Debt Maturity Schedule – As of 3/31/2024 (at share) $1,600 $1,514.9MM Weighted Average Maturity – 3.3 years Weighted Average Maturity (excl. non-core assets) – 3.6 years $1,400 $1,200 $1,162.8MM $1,000 $800 $566.5MM $600 $400 Market Center $277.6 $200 111 Sutter $80.5 $1.1MM $0 2024 2025 2026 2027 2
Slide 15: Balance Sheet & Capital Structure
1 Introduction to Paramount 2 Business Update 3 Balance Sheet & Capital Structure 4 Portfolio Composition 5 Paramount Club 6 ESG Strategy 7 Appendix 15
Slide 16: Irreplaceable Portfolio of Class A/Trophy Assets – New York
Irreplaceable Portfolio of Class A/Trophy Assets – New York 4 1 1633 5 900 Third 1 2 6 Broadway Avenue 3 8 2.5MM 0.6MM 5 sq. ft. sq. ft. 96.4% 69.0% leased leased New York 25% of G A V (2) 4% of G A V (2) 2 1301 Avenue of 6 712 Fifth 8.7MM Square Feet the Americas Avenue 1.8MM 0.6M
Slide 17: Irreplaceable Portfolio of Class A/Trophy Assets – San Francisco
Irreplaceable Portfolio of Class A/Trophy Assets – San Francisco 1 One Market 3 300 Mission Plaza Street San Francisco 1.6MM sq. ft. 0.7MM sq. ft. 91.5% 81.4% leased leased 4.3MM Square Feet 11% of G A V (2) 2% of G A V (2) 85.5% SS Leased (1)(3) 2 One Front 4 55 Second 29% of GAV
Slide 18: Fund & Managed Assets
Fund & Managed Assets 1 718 Fifth 4 CNBB Fund & Managed Avenue 19K sq. ft. 225K sq. ft. Assets New York Washington, D.C. 0.8MM Square Feet 2 745 Fifth Avenue 535K sq. ft. New York 3 700 Eighth Avenue 26K sq. ft. New York 18
Slide 19: Portfolio Composition
1 Introduction to Paramount 2 Business Update 3 Balance Sheet & Capital Structure 4 Portfolio Composition 5 Paramount Club 6 ESG Strategy 7 Appendix 19
Slide 20: Introducing Paramount Club
Introducing Paramount Club PA R A M O U N T C LU B Welcome to a new era of business. One where the bounda ries between work a nd inspiration blur. W here innovation is met with integ rity a nd a mbitions a re ignited. W here intellectua l excha nge is the cur rency a nd ca ma raderie is the dividend
Slide 21: Paramount Club Transcends Traditional Amenities
Paramount Club Transcends Traditional Amenities C O N C E N T R AT E & C O L L A B O R AT E Pr ior iti ze productivity a nd forge mea ni ng fu l connections. We ha ve a ra nge of flexible options to su it you r i nd ividua l schedu le a nd style of work: AU D I TORIUM B US INESS LOUNGE TR A I NI NG
Slide 22: Excellence Has an Address
Excellence Has an Address DESTINATI ON COMMUNITY Pa ra mount C lub is a destination that Pa ra mount C lub is a dy na mic brings together a dy na mic community of community of a ccomplished a ccomplished professiona ls. professiona ls who pursue excellence in a ll dimensions. 22
Slide 23: Paramount Club in Depth
Paramount Club in Depth Paramount Club is a dynamic community of accomplished professionals. Loca ted in the hea r t of M idtown M a nha tta n, a t 6th Ave a nd 52nd S treet, we offer 32,0 0 0S F of exper tly a ppointed dining, wellness, conferencing, a nd enter ta inment exper iences to su it their
Slide 24: Paramount Club
1 Introduction to Paramount 2 Business Update 3 Balance Sheet & Capital Structure 4 Portfolio Composition 5 Paramount Club 6 ESG Strategy 7 Appendix 24
Slide 25: ESG Commitment
ESG Commitment • Paramount continues to be an industry leader in ESG initiatives. Success in this space has helped us: • Manage operating costs, • Attract and retain premium tenants, and ultimately • Enhance portfolio value. • Pursuing ESG strategies has positioned us, our partners, and our investor
Slide 26: ESG Oversight & Integration
ESG Oversight & Integration • Our Board of Directors vested the Audit Committee with oversight over Environmental and Social matters. Oversight for Governance resides with the Nominating & Corporate Governance Committee. • Sustainability Committee has been created to implement the Company’s ESG goal
Slide 27: Sustainability from Coast to Coast
Sustainability from Coast to Coast Note: Square footages are based of year-end 2023 figures. 27
Slide 28: ESG Highlights
ESG Highlights Note: Slide reflects Office REIT Portfolio. 28
Slide 29: ESG Frameworks – History of Improvements
ESG Frameworks – History of Improvements Framework 0-10; lower Scoring A-F Y/N 1-5 Stars AAA-CCC Y/N Y/N 1-100 Y/N is better E=10 No 2018 N 4 Stars N/A S=10 N N N/A N Response G=7 E=4 No 2019 N 5 Stars BB S=1 Y N 9 N Response G=7 E=4 2020 C N 5 Stars BB S=2 Y N 12 N G=8 E=2 2021 B- Y 5 Stars BB S=1
Slide 30: Corporate Reduction Goals
Corporate Reduction Goals • Paramount has set ambitious reduction targets for energy, emissions, water, and waste that we are on track to achieve by 2025. • These targets encourage innovation, garner Executive Management and Board-level attention, and galvanize reduction efforts across the entire or
Slide 31: Pathway to Decarbonization
Pathway to Decarbonization 1. Interim Targets 4. On-site Renewable Power Setting an interim emission reduction target to drive action Evaluate feasibility of on-site renewable installations 2. On-site Efficiency Improvements 5. Off-site Renewable Power Lowering the on-site energy consumption of our
Slide 32: Diversity, Equity & Inclusion (DE&I) Strategy
Diversity, Equity & Inclusion (DE&I) Strategy We are committed to expand our DE&I initiatives, which include additional disclosures on these issues. • Oversight of DE&I aspects by two committees of the Board (Audit, NCGC) • Increase the consideration of diverse candidates for Board-level positions •
Slide 33: Appendix
1 Introduction to Paramount 2 Business Update 3 Balance Sheet & Capital Structure 4 Portfolio Composition 5 Paramount Club 6 ESG Strategy 7 Appendix 33
Slide 34: Reconciliation of Non-GAAP Measures – FFO
Reconciliation of Non-GAAP Measures FFO (unaudited and in thousands, except share and per share amounts) Three Months Ended March 31, 2024 March 31, 2023 December 31, 2023 Reconciliation of net income (loss) to FFO and Core FFO: Net income (loss) $ 16,731 $ 8,314 $ (271,727) Real estate depreciation
Slide 35: Reconciliation of Non-GAAP Measures – NOI
Reconciliation of Non-GAAP Measures NOI (unaudited and in thousands) Three Months Ended March 31, 2024 March 31, 2023 December 31, 2023 Reconciliation of net income (loss) to NOI and Cash NOI: Net income (loss) $ 16,731 $ 8,314 $ (271,727) Adjustments to arrive at NOI: Fee income (6,248) (4,557) (7,
Slide 36: Reconciliation of Non-GAAP Measures – Same Store Results - Cash NOI
Reconciliation of Non-GAAP Measures SAME STORE RESULTS - CASH NOI (unaudited and in thousands) SAME STORE CASH NOI (1) Three Months Ended March 31, 2024 Total New York San Francisco Other PGRE's share of Cash NOI for the three months ended March 31, 2024 $ 88,977 $ 63,733 $ 26,164 $ (920) Non-same s
Slide 37: Reconciliation of Non-GAAP Measures – Same Store Results - NOI
Reconciliation of Non-GAAP Measures SAME STORE RESULTS - NOI (unaudited and in thousands) SAME STORE NOI (1) Three Months Ended March 31, 2024 Total New York San Francisco Other PGRE's share of NOI for the three months ended March 31, 2024 $ 93,583 $ 68,369 $ 26,240 $ (1,026) Non-same store adjustme
Slide 38: Appendix: Definitions
Appendix: Definitions Annualized Rent represents the end of period monthly base rent plus escalations in accordance with the lease terms, multiplied by 12. Funds from Operations (“FFO”) is a supplemental measure of our performance. FFO is presented in accordance with the definition adopted by the Na
Slide 39: Appendix: Definitions (Cont’d)
Appendix: Definitions (Cont’d) Adjusted EBITDAre is a supplemental measure that is calculated by adjusting EBITDAre to eliminate the impact of the performance of our real estate related funds, unrealized gains or losses on interest rate swaps, transaction related costs, gains or losses on early exti