In This Article:
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Core FFO: $0.19 per share for Q4 2024; $0.80 per share for the full year 2024.
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2025 Core FFO Guidance: Range between $0.51 and $0.57 per share.
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Leasing Activity: 109,000 square feet leased in Q4 2024; 763,500 square feet leased for the full year 2024.
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Same Store Lease Occupancy Rate: 84.8% at the end of Q4 2024, up 10 basis points from the previous quarter.
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Cash and Restricted Cash: Approximately $461.4 million at year-end 2024, adjusted to $546.5 million after the sale of 903rd Avenue.
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Real Estate Impairment Loss: $87.2 million non-cash impairment loss recorded for 55 2nd Street joint venture in Q4 2024.
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2025 Leasing Guidance: Expected leasing between 800,000 and 1 million square feet.
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Same Store Cash NOI Growth: 0.1% for Q4 2024; negative 1.1% for the full year 2024.
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Sale of 903rd Avenue: 45% interest sold, raising approximately $95 million in net proceeds.
Release Date: February 28, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Paramount Group Inc (NYSE:PGRE) reported core FFO of $0.19 per share for Q4 2024, exceeding consensus estimates by $0.01.
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The company achieved a full-year leasing volume of 763,500 square feet, which is 3% ahead of the previous year.
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Paramount Group Inc (NYSE:PGRE) closed the sale of a 45% interest in 903rd Avenue, raising approximately $95 million in net proceeds.
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The company ended the year with approximately $546.5 million in cash and restricted cash, providing enhanced financial flexibility.
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Paramount Group Inc (NYSE:PGRE) received a 5-star rating for the sixth consecutive year in 2024, earning sector leader status in the Office America category for its commitment to environmental stewardship.
Negative Points
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The company missed its revised leasing targets for Q4 2024 in New York, with leasing activity trailing the revised target from November.
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Paramount Group Inc (NYSE:PGRE) reported a negative same-store cash NOI growth of 1.1% for the full year 2024.
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The 55 2nd Street joint venture recorded an $87.2 million non-cash real estate impairment loss, impacting the company's financials.
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The 2025 core FFO guidance is projected to decrease by $0.26 per share compared to 2024, primarily due to scheduled lease expirations.
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San Francisco's market conditions remain challenging, with a significant portion of the company's lease expirations in 2025 attributed to major tenants like Google and JPMorgan.
Q & A Highlights
Q: Could you explain why a significant lease fell through at the last minute? Was it due to location, tenant hesitation, or rental disagreements? A: Peter Brindley, Executive Vice President - Head of Real Estate, explained that the exact reason is unknown, but it is highly unusual for a lease to be pulled at the execution stage. The team is now focusing on other interested tenants for the same space, which is in a prime location atop the Paramount Club. Albert Behler, CEO, added that the new leases being negotiated are at higher rents, indicating positive momentum.