Leasing activity totaled approximately 405,000 square feet in Q2, the highest quarterly total since 2019, with a year-to-date total of about 690,000 square feet.
Mark-to-market on 205,000 square feet of second-generation space was down 5.4% on a cash basis and up 2.6% on a GAAP basis.
New York portfolio leased occupancy increased to 88.1%, the highest since early 2022, while San Francisco's occupancy was 75.1%, down due to the Google lease expiration.
Paramount Group delivered a strong second quarter with core FFO of $0.17 per share, exceeding consensus by $0.03.
The company ended the quarter with over $534 million in cash and restricted cash, and total debt of $3.2 billion with a weighted average interest rate of 4.3%.
Adjusted EBITDA was nearly $17 million with a 13% margin, expanding 723 basis points year-over-year, driven by lower personnel costs and disciplined spending.
Adjusted gross profit increased 23% year-over-year to $78 million with a margin of 61.1%, down from 63.5% due to business mix and FX losses.
GAAP net loss improved by $1.6 million year-over-year to $12 million, with a higher tax provision impacting the quarter.
Q2 2025 revenue less ancillary services was $127.5 million, representing 25% FX-neutral growth, exceeding guidance.
Sertifi contributed $12 million in Q2, adding approximately 12 points of growth.
Share repurchases totaled approximately $5 million in Q2, and the revolving credit facility was expanded to $300 million.
Average deposits declined just over 1%, with non-interest bearing deposits stable at 38%.
Average loans grew almost 1% for the quarter and period-end loans increased approximately 3%.
Capitalization remained strong with an estimated CET1 ratio of 11.94%, well above the 10% strategic target.
Net charge-offs were 22 basis points, at the low end of the normal range and flat quarter-over-quarter.
Net interest income remained stable at $575 million for the third consecutive quarter.
Non-interest expenses decreased $23 million due to lower litigation expenses and salaries, with some offsetting increases in advertising and outside processing.
Non-interest income increased $20 million driven by higher loan volumes, capital markets income, and seasonal benefits.
Reported earnings per share of $1.42, a nearly 14% increase over the prior quarter.
Returned $193 million to shareholders through dividends and share repurchases, including $100 million in share repurchases in Q2.
Strategic Development of 343 Madison Avenue with Anchor Tenant and Capital Structure
Proceeding with full vertical construction for late 2029 delivery, with site prep and foundation work underway since October 2024.
Executed a letter of intent with a prestigious investment-grade financial institution for approximately 30% of the building.
Plan to buy out the 45% joint venture partner for about $44 million, citing partner’s shift in investment focus.
Projected stabilized cash yield of 7.5% to 8%, with potential for high single-digit IRR on levered basis, depending on exit cap and sale timing.
Estimated total development cost of just under $2 billion, with strong pre-leasing activity and high demand for premier office space in Midtown Manhattan.
Dafinchi