Paramount Group, Inc. Reports Third Quarter 2025 Results and Provides Update on Proposed Merger with Rithm Capital Corp.
Paramount Group, Inc. (NYSE: PGRE) (“Paramount” or the “Company”) today announced financial results for the quarter ended September 30, 2025, and filed its Quarterly Report on Form 10-Q with the U.S. Securities and Exchange Commission. The Company also provided an update on its previously announced proposed merger with Rithm Capital Corp. (“Rithm”).
Proposed Merger with Rithm Capital Corp.
On September 17, 2025, Paramount entered into a definitive agreement to be acquired by Rithm Capital Corp. in an all-cash transaction valued at approximately $1.6 billion. Under the terms of the agreement, Rithm will acquire all outstanding shares of Paramount’s common stock for $6.60 per fully diluted share.
The merger agreement has been approved by the Boards of Directors of both companies. Completion of the transaction remains subject to customary closing conditions, including the approval of Paramount’s common stockholders. The merger is expected to close during the fourth quarter of 2025, although the Company cautions that there can be no assurances as to whether or when the transaction will be completed.
Third Quarter 2025 Highlights
Results of Operations
- Net Loss: Paramount reported a net loss attributable to common stockholders of $28.9 million, or $0.13 per share, for the third quarter of 2025. This compares to a net loss of $9.7 million, or $0.04 per share, for the same period in 2024. The 2025 results include $9.0 million, or $0.04 per share, of transaction-related costs associated with the proposed merger with Rithm.
- Core Funds From Operations (Core FFO): Core FFO attributable to common stockholders was $31.5 million, or $0.14 per share, compared to $40.5 million, or $0.19 per share, for the third quarter of 2024.
- Same Store Performance: Same Store Cash Net Operating Income (“NOI”) decreased by 8.0%, while Same Store NOI declined by 12.0% compared to the prior-year quarter.
Leasing Activity
During the third quarter of 2025, Paramount leased a total of 547,812 square feet, of which the Company’s ownership share was 481,246 square feet. Leases were executed at a weighted average initial rent of $82.45 per square foot.
Of the total leased space, 130,756 square feet represented second-generation leases—defined as space that had been vacant for less than twelve months or re-leased ahead of its scheduled expiration. These leases achieved mark-to-market rent increases of 13.9% on a GAAP basis and 6.4% on a cash basis.
Capital Markets Activity
On August 5, 2025, Paramount successfully completed the $900 million refinancing of its property at 1301 Avenue of the Americas. The new five-year, interest-only loan carries a fixed rate of 6.39% and matures in August 2030.
Proceeds from the refinancing were used to repay the existing $860 million loan, which bore interest at SOFR plus 277 basis points and was scheduled to mature in August 2026. After repayment and closing costs, the Company retained approximately $26 million in net proceeds.
This refinancing transaction strengthened Paramount’s balance sheet, extended its debt maturity profile, and demonstrated the continued lender confidence in its high-quality asset portfolio.
Detailed Financial Results
Quarter Ended September 30, 2025
For the third quarter of 2025, Paramount reported a net loss attributable to common stockholders of $28.9 million, or $0.13 per share, compared to a net loss of $9.7 million, or $0.04 per share, for the third quarter of 2024.
Funds From Operations (“FFO”) attributable to common stockholders was $17.1 million, or $0.08 per share, compared to $40.1 million, or $0.18 per share, for the same quarter last year. The decline primarily reflects transaction-related costs of $9.0 million and the impact of various non-core items.
Core FFO, which excludes the impact of these non-core items, totaled $31.5 million, or $0.14 per share, compared to $40.5 million, or $0.19 per share, in the prior-year quarter.
Non-core items, net of noncontrolling interests, decreased FFO attributable to common stockholders by $14.4 million, or $0.06 per share, in the third quarter of 2025 compared to a $0.4 million reduction, or $0.01 per share, in 2024.
Nine Months Ended September 30, 2025
For the nine months ended September 30, 2025, Paramount reported a net loss attributable to common stockholders of $58.8 million, or $0.27 per share, compared to a net loss of $7.6 million, or $0.04 per share, for the same period in 2024.
The 2025 results include:
- $9.6 million (or $0.04 per share) in transaction-related costs tied to the proposed merger; and
- $7.5 million (or $0.03 per share) related to accelerated equity awards and severance payments.
By contrast, 2024 results included a non-cash gain of $14.1 million, or $0.07 per share, from the extinguishment of a tax liability linked to Paramount’s initial public offering.
FFO attributable to common stockholders for the nine months ended September 30, 2025 was $81.0 million, or $0.37 per share, compared to $142.6 million, or $0.66 per share, for the same period in 2024.
After excluding non-core items, Core FFO totaled $106.3 million, or $0.48 per share, versus $131.9 million, or $0.61 per share, in 2024.
The aggregate effect of non-core items, net of noncontrolling interests, decreased FFO by $25.3 million, or $0.11 per share, in 2025, while increasing FFO by $10.7 million, or $0.05 per share, in 2024.
Portfolio Operations
Quarter Ended September 30, 2025
During the third quarter, Same Store Cash NOI declined 8.0% year-over-year to $74.9 million, from $81.4 million in 2024. Same Store NOI decreased 12.0%, totaling $76.9 million, compared to $87.4 million in the prior-year quarter.
Paramount executed 547,812 square feet of leases during the quarter, with its share being 481,246 square feet at a weighted average initial rent of $82.45 per square foot. This robust leasing performance helped boost same-store leased occupancy by 430 basis points, rising from 85.4% at June 30, 2025 to 89.7% at September 30, 2025.
Among these leases, 130,756 square feet were second-generation renewals or re-leases, achieving 13.9% rent increases on a GAAP basis and 6.4% increases on a cash basis. The weighted average lease term for agreements signed in the third quarter was 13.2 years, with tenant improvements and leasing commissions averaging $13.13 per square foot per annum, or 15.9% of initial rent.
Nine Months Ended September 30, 2025
For the first nine months of 2025, Same Store Cash NOI decreased 3.8% to $243.6 million, compared with $253.3 million in the prior-year period. Same Store NOI decreased 7.3%, totaling $248.5 million, down from $268.0 million in 2024.
The Company leased 1,236,396 square feet year-to-date, representing its share of 923,314 square feet, at a weighted average initial rent of $83.87 per square foot. Leasing activity, partially offset by scheduled lease expirations—including Google’s lease expiration in April 2025 at One Market Plaza in San Francisco—drove a 490-basis-point increase in same-store leased occupancy, improving from 84.8% at year-end 2024 to 89.7% at September 30, 2025.
Of the total leased space, 417,702 square feet represented second-generation leases, which achieved 6.6% mark-to-market gains on a GAAP basis and a slight 1.4% decline on a cash basis. The average lease term for 2025 signings was 13.1 years, with tenant improvements and leasing commissions averaging $13.93 per square foot per annum, or 16.6% of initial rent.
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