Paramount Group (PGRE) Q4 2023 earnings summary

Executive summary

• Portfolio comprised 18 assets and 13.8M sq. ft.; total AUM was ~$8.4B, leased occupancy 87.7%, and 2024 Cash NOI guidance midpoint $330M.

• FY 2023 Core FFO was $0.87 per diluted share; 2024 guidance is $0.73–$0.79 per share, midpoint $0.76.

• Q4 Core FFO was $46.1M, or $0.21/share, versus $54.4M, or $0.25/share, a year earlier; same-store cash NOI fell 8.0%.

Financial highlights

• FY revenue was $742.8M versus $740.4M in 2022; FY Core FFO was $188.8M versus $216.8M.

• Q4 revenue was $192.5M versus $184.0M year over year; net loss attributable to common stockholders was $205.6M, or $0.95/diluted share.

• Q4 net loss included $185.0M of non-cash impairment losses from unconsolidated JVs and $7.3M of fund investment losses; FY JV impairment losses were $208.1M.

• FY share of Cash NOI was $369.5M versus $383.2M in 2022; share of NOI was $374.6M versus $397.1M.

Outlook and guidance

• FY 2024 Core FFO guidance is $0.73–$0.79 per share, midpoint $0.76; Cash NOI midpoint is $330M.

• 2024 leasing guidance is 650,000–900,000 sq. ft.; year-end same-store leased guidance midpoint is 87.1%, versus adjusted 2023 year-end occupancy of 90.1%.

• 2024 same-store NOI guidance is down 6.0%–4.0% on a Cash basis and down 4.5%–2.5% on a GAAP basis.

• Core FFO bridge includes a $0.20/share headwind from significant expirations, partly offset by $0.08 from free-rent burn-off/rent steps and $0.08 from straight-line rent and FAS 141 adjustments.