Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements, including the related notes included therein.

Forward-Looking Statements

We make statements in this Quarterly Report on Form 10-Q that are considered "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which are usually identified by the use of words such as "anticipates," "believes," "estimates," "expects," "intends," "may," "plans," "projects," "seeks," "should," "will," and variations of such words or similar expressions. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and are including this statement for purposes of complying with those safe harbor provisions. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. All forward-looking statements are made only as of the date of this Quarterly Report on Form 10-Q. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control including, without limitation:

Accordingly, there is no assurance that our expectations will be realized. Except as otherwise required by the U.S. federal securities laws, we disclaim any obligations or undertaking to publicly release any updates or revisions to any forward-looking statement contained herein (or elsewhere) to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. A reader should review carefully our consolidated financial statements and the notes thereto as well as Item 1A entitled "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024.

Proposed Mergers

On September 17, 2025, we and the Operating Partnership (collectively, the "Company Parties"), Rithm Capital Corp., a Delaware corporation ("Parent"), Panorama REIT Merger Sub, Inc., a Maryland corporation and a wholly owned subsidiary of Parent ("REIT Merger Sub"), and Panorama Operating Merger Sub LP, a Delaware limited partnership and a wholly owned subsidiary of Parent ("Operating Merger Sub" and, collectively with REIT Merger Sub and Parent, the "Parent Parties"), entered into an Agreement and Plan of Merger (the " Original Merger Agreement"). On October 8, 2025, the Company Parties and the Parent Parties entered into Amendment No. 1 to the Merger Agreement (the "Amendment," and the Original Merger Agreement as amended by the Amendment, the "Merger Agreement").

The Merger Agreement provides that, upon the terms and subject to the conditions set forth therein, (i) Operating Merger Sub will be merged with and into the Operating Partnership, with the Operating Partnership surviving the merger (the "Partnership Merger") and (ii) immediately following the consummation of the Partnership Merger, the Company will be merged with and into REIT Merger Sub with REIT Merger Sub surviving the merger (the "Surviving Entity" and such merger, the "Company Merger" and, together with the Partnership Merger, the "Mergers"). Upon completion of the Mergers, the Operating Partnership and the Surviving Entity will be indirectly controlled by Parent. The Mergers and the other transactions contemplated by the Merger Agreement were approved and declared advisable by the board of directors of the Company.

Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Partnership Merger (the "Partnership Merger Effective Time"), each Common Unit of the Operating Partnership (each, an "Operating Partnership Common Unit") that is issued and outstanding immediately prior to the Partnership Merger Effective Time will be automatically cancelled and converted into the right to receive an amount in cash equal to the product of (i) the Conversion Factor (as defined in the Second Amended and Restated Limited Partnership Agreement of the Operating Partnership, dated as of October 26, 2020, by and between the Company and the limited partners party thereto) in effect on such date with respect to such Operating Partnership Common Units multiplied by (ii) $6.60, without interest (the "Partnership Merger Consideration"). The Partnership Merger Consideration is subject to decrease in the event the Operating Partnership declares and pays any additional dividends in cash or property other than stock, which dividends are necessary to maintain the Company's tax status as a REIT.

At the effective time of the Company Merger (the "Company Merger Effective Time"), each share of common stock of the Company, par value $0.01 per share, that is issued and outstanding immediately prior to the Company Merger Effective Time will be automatically cancelled and converted into the right to receive an amount in cash equal to $6.60 per share, without interest (the "Company Merger Consideration"). The Company Merger Consideration is subject to decrease in the event the Company declares and pays any additional dividends, which dividends are necessary to maintain its tax status as a REIT.

The Merger Agreement contains customary termination rights, including, but not limited to, the right of either party to terminate the Merger Agreement (i) if the Mergers have not occurred on or before 11:59 p.m. (Eastern time) on March 17, 2026, (ii) if any governmental authority of competent jurisdiction has issued a final, non-appealable order permanently restraining or otherwise prohibiting the transactions contemplated by the Merger Agreement, or (iii) if stockholder approval has not been obtained upon a vote taken at the special meeting of the Company's stockholders or any postponement or adjournment thereof, at which a vote on the approval of the Company Merger was taken.

In certain specified circumstances further described in the Merger Agreement, in connection with the termination of the Merger Agreement, the Company will be required to pay Parent a termination payment of $59.7 million. Pursuant to the Amendment, the definition of "Company Termination Payment" in the Original Merger Agreement was modified to provide that, notwithstanding the foregoing, the Company will instead be required to pay Parent a termination payment of $47.7 million if the Company enters into an alternative acquisition agreement providing for a Superior Proposal (as defined in the Merger Agreement) with certain persons.

The Parent Parties have represented in the Merger Agreement that Parent had, as of the date of the Merger Agreement, and the Parent Parties will have available, as of the Company Merger Effective Time, sufficient funds or other sources of immediately available funds to pay all amounts required to be paid in connection with the Mergers.

Critical Accounting Estimates

There are no material changes to our critical accounting estimates disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.

Recently Issued Accounting Literature

A summary of our recently issued accounting literature and their potential impact on our consolidated financial statements, if any, are included in Note 2, Basis of Presentation and Significant Accounting Policies, to our consolidated financial statements in this Quarterly Report on Form 10-Q.

Business Overview

We are a fully-integrated REIT focused on owning, operating, managing, acquiring and redeveloping high-quality, Class A office properties in select central business district submarkets of New York City and San Francisco. We conduct our business through, and substantially all of our interests in properties and investments are held by, Paramount Group Operating Partnership LP, a Delaware limited partnership (the "Operating Partnership"). We are the sole general partner of, and owned approximately 93.2% of, the Operating Partnership as of September 30, 2025.

As of September 30, 2025, we own and/or manage a portfolio of 17 properties aggregating 13.1 million square feet comprised of:

Additionally, we have an investment management business where we serve as the general partner of several real estate related funds for institutional investors and high net-worth individuals.

Dispositions

900 Third Avenue

On January 17, 2025, we sold a 45.0% equity interest in 900 Third Avenue, a 600,000 square foot Class A office building located in New York, at a gross asset valuation of $210,000,000. We realized net proceeds of $94,000,000 from the sale after transaction costs, of which $9,450,000 was received in December 2024 upon execution of the contract.

One Front Street

On May 5, 2025, we sold a 25.0% equity interest in One Front Street, a 649,000 square foot Class A office building located in San Francisco, at a gross asset valuation of $255,000,000. As part of the transaction, we have provided $40,545,000 of seller financing for a two-year term at a fixed rate of 5.50%. We realized net proceeds of $11,500,000 from the sale, after transaction and other costs.

Financings

Revolving Credit Facility

On May 5, 2025, we terminated our revolving credit facility following the sale of a 25.0% equity interest in One Front Street, which was one of the two remaining properties supporting our credit facility. There was no outstanding balance on the facility at the time of termination.

1301 Avenue of the Americas

On August 5, 2025, we completed a $900,000,000 refinancing of 1301 Avenue of the Americas, a 1.8 million square-foot Class A office building in New York City. The new five-year interest-only loan has a fixed rate of 6.39% and matures in August 2030. The proceeds from the refinancing were used to repay the existing $860,000,000 loan that bore interest at a weighted average rate of SOFR plus 277 basis points and was scheduled to mature in August 2026. We retained net proceeds of approximately $26,000,000 after the repayment of the existing loan and closing costs.

Other

In August 2024, the joint venture that owned Market Center, in which we had a 67.0% ownership interest, ceased making debt service payments on the non-recourse mortgage loan due to insufficient property cash flows. In January 2025, the joint venture defaulted on the $416,544,000 mortgage loan, as it was not repaid at maturity. Subsequently, on May 30, 2025, the lenders completed the sale of Market Center through a deed-in-lieu of foreclosure.

Stock Repurchase Program

We currently have $15,000,000 of capacity under a $200,000,000 stock repurchase program which was approved by our board of directors in November 2019, and allows us to repurchase shares of our common stock from time to time, in the open market or in privately negotiated transactions. We did not repurchase any shares in the nine months ended September 30, 2025. Under the terms of the Merger Agreement, subject to the restrictions set forth therein, we may not repurchase any shares of our common stock without the prior written consent of Parent.

Leasing Results - Three Months Ended September 30, 2025

The following table presents the details on the leases signed during the three months ended September 30, 2025. It is not intended to coincide with the commencement of rental revenue in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The leasing statistics, except for square feet leased, represent office space only.

The following table presents same store leased occupancy (at share) as of the dates set forth below.

Leasing Results - Three Months Ended September 30, 2025

In the three months ended September 30, 2025, we leased 547,812 square feet, of which our share was 481,246 square feet that was leased at a weighted average initial rent of $82.45 per square foot. This leasing activity, partially offset by lease expirations in the three months, increased same store leased occupancy by 430 basis points to 89.7% at September 30, 2025 from 85.4% at June 30, 2025.

Of the 547,812 square feet leased in the three months, 130,756 square feet represented our share of second generation space for which rental rates increased by 13.9% on a GAAP basis and 6.4% on a cash basis. The weighted average lease term for leases signed during the three months was 13.2 years and weighted average tenant improvements and leasing commissions on these leases were $13.13 per square foot per annum, or 15.9% of initial rent.

New York

In the three months ended September 30, 2025, we leased 463,575 square feet in our New York portfolio, of which our share was 440,567 square feet that was leased at a weighted average initial rent of $81.08 per square foot. This leasing activity, partially offset by lease expirations in the three months, increased same store leased occupancy by 570 basis points to 93.8% at September 30, 2025 from 88.1% at June 30, 2025.

Of the 463,575 square feet leased in the three months, 98,896 square feet represented our share of second generation space for which rental rates increased by 15.8% on a GAAP basis and 12.5% on a cash basis. The weighted average lease term for leases signed during the three months was 13.8 years and weighted average tenant improvements and leasing commissions on these leases were $13.21 per square foot per annum, or 16.3% of initial rent.

San Francisco

In the three months ended September 30, 2025, we leased 84,237 square feet in our San Francisco portfolio, of which our share was 40,679 square feet that was leased at a weighted average initial rent of $97.20 per square foot. This leasing activity, offset by lease expirations in the three months, decreased same store leased occupancy by 70 basis points to 74.4% at September 30, 2025 from 75.1% at June 30, 2025.

Of the 84,237 square feet leased in the three months, 31,860 square feet represented our share of second generation space for which rental rates increased by 9.2% on a GAAP basis and decreased 7.4% on a cash basis. The weighted average lease term for leases signed during the three months was 6.7 years and weighted average tenant improvements and leasing commissions on these leases were $11.46 per square foot per annum, or 11.8% of initial rent.

Leasing Results - Nine Months Ended September 30, 2025

The following table presents the details on the leases signed during the nine months ended September 30, 2025. It is not intended to coincide with the commencement of rental revenue in accordance with GAAP. The leasing statistics, except for square feet leased, represent office space only.

The following table presents same store leased occupancy (at share) as of the dates set forth below.

Leasing Results - Nine Months Ended September 30, 2025

In the nine months ended September 30, 2025, we leased 1,236,396 square feet, of which our share was 923,314 square feet that was leased at a weighted average initial rent of $83.87 per square foot. This leasing activity, partially offset by lease expirations in the nine months, including the scheduled expiration of Google's lease in April 2025 at One Market Plaza in our San Francisco portfolio, increased same store leased occupancy by 490 basis points to 89.7% at September 30, 2025 from 84.8% at December 31, 2024.

Of the 1,236,396 square feet leased in the nine months, 417,702 square feet represented our share of second generation space for which rental rates increased by 6.6% on a GAAP basis and decreased by 1.4% on a cash basis. The weighted average lease term for leases signed during the nine months was 13.1 years and weighted average tenant improvements and leasing commissions on these leases were $13.93 per square foot per annum, or 16.6% of initial rent.

New York

In the nine months ended September 30, 2025, we leased 953,065 square feet in our New York portfolio, of which our share was 779,992 square feet that was leased at a weighted average initial rent of $81.95 per square foot. This leasing activity, partially offset by lease expirations in the nine months, increased same store leased occupancy by 880 basis points to 93.8% at September 30, 2025 from 85.0% at December 31, 2024.

Of the 953,065 square feet leased in the nine months, 319,147 square feet represented our share of second generation space for which rental rates increased by 6.7% on a GAAP basis and 2.5% on a cash basis. The weighted average lease term for leases signed during the nine months was 13.8 years and weighted average tenant improvements and leasing commissions on these leases were $13.32 per square foot per annum, or 16.2% of initial rent.

San Francisco

In the nine months ended September 30, 2025, we leased 283,331 square feet in our San Francisco portfolio, of which our share was 143,322 square feet that was leased at a weighted average initial rent of $94.34 per square foot. This leasing activity, offset by lease expirations in the nine months, including the scheduled expiration of Google's lease in April 2025 at One Market Plaza, decreased same store leased occupancy by 940 basis points to 74.4% at September 30, 2025 from 83.8% at December 31, 2024. The decrease in same store leased occupancy was driven primarily by the scheduled expiration of Google's lease in April 2025 at One Market Plaza.

Of the 283,331 square feet leased in the nine months, 98,555 square feet represented our share of second generation space for which rental rates increased by 6.2% on a GAAP basis and decreased by 11.4% on a cash basis. The weighted average lease term for leases signed during the nine months was 9.1 years and weighted average tenant improvements and leasing commissions on these leases were $18.99 per square foot per annum, or 20.1% of initial rent.

Financial Results - Three Months Ended September 30, 2025 and 2024

Net Income, FFO and Core FFO

Net loss attributable to common stockholders was $28,947,000, or $0.13 per diluted share, for the three months ended September 30, 2025, compared to $9,688,000, or $0.04 per diluted share, for the three months ended September 30, 2024. Net loss attributable to common stockholders for the three months ended September 30, 2025 includes $9,043,000, or $0.04 per diluted share, of transaction related costs relating to the proposed Mergers.

Funds from Operations ("FFO") attributable to common stockholders was $17,112,000, or $0.08 per diluted share, for the three months ended September 30, 2025, compared to $40,078,000, or $0.18 per diluted share, for the three months ended September 30, 2024. FFO attributable to common stockholders for the three months ended September 30, 2025 includes $9,043,000, or $0.04 per diluted share, of transaction related costs relating to the proposed Mergers. FFO attributable to common stockholders for the three months ended September 30, 2025 and 2024 also includes the impact of non-core items, which are listed in the table on page 57. The aggregate of the non-core items, net of amounts attributable to noncontrolling interests, decreased FFO attributable to common stockholders for the three months ended September 30, 2025 and 2024 by $14,397,000 and $445,000, respectively, or $0.06 and $0.01 per diluted share, respectively.

Core Funds from Operations ("Core FFO") attributable to common stockholders, which excludes the impact of the non-core items listed on page 57, was $31,509,000, or $0.14 per diluted share, for the three months ended September 30, 2025, compared to $40,523,000 or $0.19 per diluted share, for the three months ended September 30, 2024.

Same Store Results

The table below summarizes the percentage increase or decrease in our share of Same Store NOI and Same Store Cash NOI, by segment, for the three months ended September 30, 2025 versus September 30, 2024.

See pages 51-57"Non-GAAP Financial Measures" for a reconciliation of these measures to the most directly comparable GAAP measure and the reasons why we believe these non-GAAP measures are useful.

Financial Results - Nine Months Ended September 30, 2025 and 2024

Net Income, FFO and Core FFO

Net loss attributable to common stockholders was $58,758,000, or $0.27 per diluted share, for the nine months ended September 30, 2025, compared to $7,642,000, or $0.04 per diluted share, for the nine months ended September 30, 2024. Net loss attributable to common stockholders for the nine months ended September 30, 2025 includes (i) $9,608,000, or $0.04 per diluted share, of transaction related costs relating to the proposed Mergers, and (ii) $7,535,000, or $0.03 per diluted share, of expense relating to acceleration of equity awards and severance payments. Net loss attributable to common stockholders for the nine months ended September 30, 2024 includes a $14,148,000, or $0.07 per diluted share, non-cash gain on extinguishment of a tax liability related to our initial public offering.

FFO attributable to common stockholders was $80,982,000, or $0.37 per diluted share, for the nine months ended September 30, 2025, compared to $142,554,000, or $0.66 per diluted share, for the nine months ended September 30, 2024. FFO attributable to common stockholders for the nine months ended September 30, 2025 includes (i) $9,608,000, or $0.04 per diluted share, of transaction related costs relating to the proposed Mergers, and (ii) $7,535,000, or $0.03 per diluted share, of expense relating to acceleration of equity awards and severance payments. FFO attributable to common stockholders for the nine months ended September 30, 2024 includes $14,148,000, or $0.07 per diluted share, of a non-cash gain on extinguishment of a tax liability related to our initial public offering. FFO attributable to common stockholders for the nine months ended September 30, 2025 and 2024 also includes the impact of other non-core items, which are listed in the table on page 57. The aggregate of the non-core items, net of amounts attributable to noncontrolling interests, decreased FFO attributable to common stockholders for the nine months ended September 30, 2025 by $25,345,000, or $0.11 per diluted share, and increased FFO attributable to common stockholders for the nine months ended September 30, 2024 by $10,665,000, or $0.05 per diluted share.

Core FFO attributable to common stockholders, which excludes the impact of the non-core items listed on page 57, was $106,327,000, or $0.48 per diluted share, for the nine months ended September 30, 2025, compared to $131,889,000, or $0.61 per diluted share, for the nine months ended September 30, 2024.

Same Store Results

The table below summarizes the percentage increase or decrease in our share of Same Store NOI and Same Store Cash NOI, by segment, for the nine months ended September 30, 2025 versus September 30, 2024.

See pages 51-57"Non-GAAP Financial Measures" for a reconciliation of these measures to the most directly comparable GAAP measure and the reasons why we believe these non-GAAP measures are useful.

Results of Operations - Three Months Ended September 30, 2025 and 2024

The following pages summarize our consolidated results of operations for the three months ended September 30, 2025 and 2024.

Revenues

Our revenues, which consist of rental revenue and fee and other income, were $172,959,000 for the three months ended September 30, 2025, compared to $194,899,000 for the three months ended September 30, 2024, a decrease of $21,940,000. Below are the details of the increase or decrease by segment.

Expenses

Our expenses, which consist of operating, depreciation and amortization, general and administrative and transaction related costs, were $163,479,000 for the three months ended September 30, 2025, compared to $157,301,000 for the three months ended September 30, 2024, an increase of $6,178,000. Below are the details of the increase or decrease by segment.

Loss from Real Estate Related Fund Investments

Loss from real estate related fund investments was $18,000 for the three months ended September 30, 2025, compared to $22,000 for the three months ended September 30, 2024, a decrease in loss of $4,000.

Income from Unconsolidated Real Estate Related Funds

Income from unconsolidated real estate related funds was $71,000 for the three months ended September 30, 2025, compared to $109,000 for the three months ended September 30, 2024, a decrease in income of $38,000. This decrease resulted primarily from lower investment income in the current year.

Income (Loss) from Unconsolidated Joint Ventures

Income from unconsolidated joint ventures was $661,000 for the three months ended September 30, 2025, compared to loss from unconsolidated joint ventures of $981,000 for the three months ended September 30, 2024, an increase in income of $1,642,000. This increase resulted primarily from Residential Development Fund's ("RDF") share of higher gains on the sale of residential condominium units at One Steuart Lane in the current year.

Interest and Other Income, net

Interest and other income, net was $3,112,000 for the three months ended September 30, 2025, compared to $3,517,000 for the three months ended September 30, 2024, a decrease in income of $405,000. This decrease resulted primarily from lower yields on investments in the current year.

Interest and Debt Expense

Interest and debt expense was $44,419,000 for the three months ended September 30, 2025, compared to $43,805,000 for the three months ended September 30, 2024, an increase of $614,000. This increase resulted primarily from a $2,257,000 write-off of deferred financing costs in connection with the refinancing of 1301 Avenue of the Americas in August 2025, partially offset by amortization of deferred financing costs in the prior year relating to our revolving credit facility which was terminated in May 2025.

Income Tax Benefit (Expense)

Income tax benefit was $831,000 for the three months ended September 30, 2025, compared to income tax expense of $619,000 for the three months ended September 30, 2024, an increase in income tax benefit of $1,450,000. This increase resulted primarily from a true-up of the prior year's tax provision in the current year.

Net Income Attributable to Noncontrolling Interests in Consolidated Joint Ventures

Net income attributable to noncontrolling interests in consolidated joint ventures was $279,000 for the three months ended September 30, 2025, compared to $6,959,000 for the three months ended September 30, 2024, a $6,680,000 decrease in net income attributable to noncontrolling interests in consolidated joint ventures. This decrease in income resulted primarily from lower net income attributable to noncontrolling interests in One Market Plaza and 300 Mission Street.

Net (Income) Loss Attributable to Noncontrolling Interests in Consolidated Real Estate Related Funds

Net income attributable to noncontrolling interests in consolidated real estate related funds was $688,000 for the three months ended September 30, 2025, compared to net loss attributable to noncontrolling interests in consolidated real estate related funds of $581,000 for the three months ended September 30, 2024, an increase in net income attributable to noncontrolling interests in consolidated real estate related funds of $1,269,000. This increase in income resulted primarily from RDF's share of higher gains on the sale of residential condominium units at One Steuart Lane.

Net Loss Attributable to Noncontrolling Interests in Operating Partnership

Net loss attributable to noncontrolling interests in the Operating Partnership was $2,302,000 for the three months ended September 30, 2025, compared to $893,000 for the three months ended September 30, 2024, an increase in net loss allocated to noncontrolling interests of $1,409,000. This increase in loss resulted from higher net loss subject to allocation to the unitholders of the Operating Partnership.

Results of Operations - Nine Months Ended September 30, 2025 and 2024

The following pages summarize our consolidated results of operations for the nine months ended September 30, 2025 and 2024.

Revenues

Our revenues, which consist of rental revenue and fee and other income, were $537,023,000 for the nine months ended September 30, 2025, compared to $571,184,000 for the nine months ended September 30, 2024, a decrease of $34,161,000. Below are the details of the increase or decrease by segment.

Expenses

Our expenses, which consist of operating, depreciation and amortization, general and administrative and transaction related costs, were $477,985,000 for the nine months ended September 30, 2025, compared to $459,949,000 for the nine months ended September 30, 2024, an increase of $18,036,000. Below are the details of the increase or decrease by segment.

Loss from Real Estate Related Fund Investments

Loss from real estate related fund investments was $67,000 for the nine months ended September 30, 2025, compared to $92,000 for the nine months ended September 30, 2024, a decrease in loss of $25,000.

(Loss) Income from Unconsolidated Real Estate Related Funds

Loss from unconsolidated real estate related funds was $79,000 for the nine months ended September 30, 2025, compared to income from unconsolidated real estate related funds of $199,000 for the nine months ended September 30, 2024, a decrease in income of $278,000. This decrease resulted primarily from unrealized losses on mezzanine loan investments and lower investment income in the current year.

Income (Loss) from Unconsolidated Joint Ventures

Income from unconsolidated joint ventures was $2,620,000 for the nine months ended September 30, 2025, compared to loss from unconsolidated joint ventures of $3,098,000 for the nine months ended September 30, 2024, an increase in income of $5,718,000. This increase in income resulted from:

Interest and Other Income, net

Interest and other income, net was $10,953,000 for the nine months ended September 30, 2025, compared to $26,830,000 for the nine months ended September 30, 2024, a decrease in income of $15,877,000. This decrease resulted primarily from a $15,437,000 non-cash gain on extinguishment of a tax liability related to our initial public offering in the prior year and lower yields on investments in the current year.

Interest and Debt Expense

Interest and debt expense was $129,903,000 for the nine months ended September 30, 2025, compared to $124,078,000 for the nine months ended September 30, 2024, an increase of $5,825,000. This increase resulted primarily from (i) the expiration of interest rate swaps on $500,000,000 of our debt at 1301 Avenue of the Americas in August 2024 and (ii) $4,008,000 of write-offs of deferred financing costs in connection with the refinancing of 1301 Avenue of the Americas in August 2025 and the modification and termination of our credit facility in May 2025, partially offset by (iii) lower interest expense on the $360,000,000 variable rate portion of our debt at 1301 Avenue of the Americas and (iv) lower amortization of deferred financing costs in the current year relating to our revolving credit facility.

Income Tax Benefit (Expense)

Income tax benefit was $1,430,000 for the nine months ended September 30, 2025, compared to income tax expense of $1,328,000 for the nine months ended September 30, 2024, an increase in income tax benefit of $2,758,000. This increase resulted primarily from a true-up of the prior year's tax provision in the current year.

Net Income Attributable to Noncontrolling Interests in Consolidated Joint Ventures

Net income attributable to noncontrolling interests in consolidated joint ventures was $5,095,000 for the nine months ended September 30, 2025, compared to $18,434,000 for the nine months ended September 30, 2024, a $13,339,000 decrease in net income attributable to noncontrolling interests in consolidated joint ventures. This decrease in income resulted primarily from lower net income attributable to noncontrolling interests in One Market Plaza and 300 Mission Street in the current year.

Net (Income) Loss Attributable to Noncontrolling Interests in Consolidated Real Estate Related Funds

Net income attributable to noncontrolling interests in consolidated real estate related funds was $2,556,000 for the nine months ended September 30, 2025, compared to net loss attributable to noncontrolling interests in consolidated real estate related funds of $408,000 for the nine months ended September 30, 2024, an increase in net income attributable to noncontrolling interests in consolidated real estate related funds of $2,964,000. This increase in income resulted primarily from RDF's share of higher gains on the sale of residential condominium units at One Steuart Lane in the current year.

Net Loss Attributable to Noncontrolling Interests in Operating Partnership

Net loss attributable to noncontrolling interests in the Operating Partnership was $4,901,000 for the nine months ended September 30, 2025, compared to $716,000 for the nine months ended September 30, 2024, an increase in net loss allocated to noncontrolling interests of $4,185,000. This increase in loss resulted from higher net loss subject to allocation to the unitholders of the Operating Partnership.

Liquidity and Capital Resources

Liquidity

Our primary sources of liquidity include existing cash balances and cash flow from operations. As of September 30, 2025, we had $654,357,000 of liquidity comprised of $330,207,000 of cash and cash equivalents and $324,150,000 of restricted cash.

We expect that these sources will provide adequate liquidity over the next 12 months for all anticipated needs, including scheduled interest payments on our outstanding indebtedness, existing and anticipated capital improvements, the cost of securing new and renewal leases, and all other capital needs related to the operations of our business.

We anticipate that our long-term needs including debt maturities and potential acquisitions will be funded by operating cash flow, third-party joint venture capital, mortgage financings and/or re-financings, and the issuance of long-term debt or equity and cash on hand. Although we may be able to anticipate and plan for certain of our liquidity needs, unexpected increases in uses of cash that are beyond our control and which affect our financial condition and results of operations may arise, or our sources of liquidity may be fewer than, and the funds available from such sources may be less than, anticipated or required.

Consolidated Debt

As of September 30, 2025, our outstanding consolidated debt aggregated $3.73 billion. The $500,000,000 mortgage loan at 31 West 52nd Street is scheduled to mature in June 2026 and the $232,050,000 loan at 300 Mission Street is scheduled to mature in October 2026. Although these loan balances exceed our projected liquidity at the time of their respective maturities, we are currently exploring various refinancing options and believe that, based on each property's operating performance, it is probable that we will be successful in refinancing each loan prior to its maturity. We may refinance these debts or any of our maturing debt when it comes due or repay it early depending on prevailing market conditions, liquidity requirements and other factors. The amounts involved in connection with these transactions could be material to our consolidated financial statements.

Revolving Credit Facility

On May 5, 2025, we terminated our revolving credit facility following the sale of a 25.0% equity interest in One Front Street, which was one of the two remaining properties supporting our credit facility. There was no outstanding balance on the facility at the time of termination.

Dividend Policy

In September 2024, we suspended our regular quarterly dividend. The decision by our board of directors to suspend our regular quarterly dividend aligns with our commitment to fortify our balance sheet and maintain significant financial flexibility. The timing and frequency of future dividends will be authorized by our board of directors, in its sole discretion, depending on a variety of factors, including our financial performance, our debt service requirements, our capital expenditure requirements, the requirements to maintain our qualification as a REIT and other factors that our board of directors may deem relevant from time to time.

Under the terms of the Merger Agreement, subject to the restrictions set forth therein, we may not declare discretionary dividends without the prior written consent of Parent, but we may declare or pay dividends to maintain our qualification as a REIT. The amount in cash payable to our stockholders as the Company Merger Consideration is subject to decrease in the event we declare and pay any such dividends in cash or property other than stock, as more fully described in the Merger Agreement.

Off Balance Sheet Arrangements

As of September 30, 2025, our unconsolidated joint ventures had $1.42 billion of outstanding indebtedness, of which our share was $362,179,000. We do not guarantee the indebtedness of our unconsolidated joint ventures other than providing customary environmental indemnities and guarantees of specified non-recourse carve outs relating to specified covenants and representations; however, we may elect to fund additional capital to a joint venture through equity contributions (generally on a basis proportionate to our ownership interests), advances or partner loans in order to enable the joint venture to repay this indebtedness upon maturity.

Stock Repurchase Program

We currently have $15,000,000 of capacity under a $200,000,000 stock repurchase program which was approved by our board of directors in November 2019, and allows us to repurchase shares of our common stock from time to time, in the open market or in privately negotiated transactions. We did not repurchase any shares in the nine months ended September 30, 2025. Under the terms of the Merger Agreement, subject to the restrictions set forth therein, we may not repurchase any shares of our common stock without the prior written consent of Parent.

Insurance

We carry commercial general liability coverage on our properties, with limits of liability customary within the industry. Similarly, we are insured against the risk of direct and indirect physical damage to our properties including coverage for perils such as floods, earthquakes and windstorms. Our policies also cover the loss of rental income during an estimated reconstruction period. Our policies reflect limits and deductibles customary in the industry and specific to the buildings and portfolio. We also obtain title insurance policies when acquiring new properties. We currently have coverage for losses incurred in connection with both domestic and foreign terrorist-related activities, as well as cybersecurity incidents. While we do carry commercial general liability insurance, property insurance, terrorism insurance and cybersecurity insurance, these policies include limits and terms we consider commercially reasonable. In addition, there are certain losses (including, but not limited to, losses arising from known environmental conditions or acts of war) that are not insured, in full or in part, because they are either uninsurable or the cost of insurance makes it, in our belief, economically impractical to maintain such coverage. Should an uninsured loss arise against us, we would be required to use our own funds to resolve the issue, including litigation costs. We believe the policy specifications and insured limits are adequate given the relative risk of loss, the cost of the coverage and industry practice and, in consultation with our insurance advisors, we believe the properties in our portfolio are adequately insured.

Other Commitments and Contingencies

We are a party to various claims and routine litigation arising in the ordinary course of business. Some of these claims or others to which we may be subject from time to time may result in defense costs, settlements, fines or judgments against us, some of which are not, or cannot be, covered by insurance. Payment of any such costs, settlements, fines or judgments that are not insured could have an adverse impact on our financial position and results of operations. Should any litigation arise, we would contest it vigorously. In addition, certain litigation or the resolution of certain litigation may affect the availability or cost of some of our insurance coverage, which could adversely impact our results of operations and cash flow, expose us to increased risks that would be uninsured, and/or adversely impact our ability to attract officers and directors.

The Division of Enforcement of the SEC is conducting an investigation into the adequacy of our disclosures concerning executive compensation, perquisites, the use of corporate assets, related party transactions, and conflicts of interest. The investigation also covers possible failures of our controls and procedures relating to the topics of those disclosures. We are cooperating with the SEC. We are unable to estimate the likely outcome of this matter, or a reasonably probable range of potential costs or exposure, or the potential duration of the process, at this time.

The terms of our consolidated mortgage debt agreements in place include certain restrictions and covenants which may limit, among other things, certain investments, the incurrence of additional indebtedness and liens and the disposition or other transfer of assets and interests in the borrower and other credit parties, and require compliance with certain debt yield, debt service coverage and loan to value ratios. As of September 30, 2025, we believe we are in compliance with all of our covenants.

On March 29, 2024, the joint venture that owns 60 Wall Street, in which we have a 5.0% ownership interest, modified the existing $575,000,000 non-recourse mortgage loan and extended the maturity to May 2029. In connection with the modification, the joint venture committed to redevelop the property and fund the necessary costs to complete the project. On behalf of the joint venture, we have provided the lender with certain guarantees, including a completion guarantee. We have agreements with our joint venture partners that indemnify us for their share of guarantees we provided. In accordance with GAAP, we recorded a liability equal to the fair value of the obligations undertaken in issuing the guarantees and record an asset equal to the fair value of the indemnification we have received. As of September 30, 2025, we have a $13,314,000 asset and liability, which are included as a component of "other assets" and "other liabilities," on our consolidated balance sheets.

Cash Flows

Cash and cash equivalents and restricted cash were $654,357,000 and $555,447,000 as of September 30, 2025 and December 31, 2024, respectively, and $492,235,000 and $509,599,000 as of September 30, 2024 and December 31, 2023, respectively. Cash and cash equivalents and restricted cash increased by $98,910,000 for the nine months ended September 30, 2025, and decreased by $17,364,000 for the nine months ended September 30, 2024. The following table sets forth the changes in cash flow.

Operating Activities

Nine months ended September 30, 2025 -We generated $83,040,000 of cash from operating activities for the nine months ended September 30, 2025, primarily from (i) $141,989,000 of net income (before $197,997,000 of non-cash adjustments), and (ii) $543,000 of distributions from unconsolidated joint ventures and real estate related funds, partially offset by (iii) $59,492,000 of net changes in operating assets and liabilities. Non-cash adjustments of $197,997,000 were primarily comprised of depreciation and amortization, loss from unconsolidated joint ventures, straight-lining of rental revenue, amortization of above and below-market leases, net and amortization of stock-based compensation.

Nine months ended September 30, 2024 -We generated $176,570,000 of cash from operating activities for the nine months ended September 30, 2024, primarily from (i) $194,611,000 of net income (before $184,943,000 of non-cash adjustments), (ii) $513,000 of distributions from unconsolidated joint ventures and real estate related funds, and (iii) $18,554,000 of net changes in operating assets and liabilities. Non-cash adjustments of $184,943,000 were primarily comprised of depreciation and amortization, non-cash gain on extinguishment of a tax liability related to our initial public offering, loss from unconsolidated joint ventures, straight-lining of rental revenue, amortization of above and below-market leases, net and amortization of stock-based compensation.

Investing Activities

Nine months ended September 30, 2025 - We used $109,165,000 of cash for investing activities for the nine months ended September 30, 2025, for (i) $115,840,000 for additions to real estate, which were comprised of spending for tenant improvements and other building improvements, and (ii) $5,414,000 for contributions of capital to an unconsolidated joint venture, partially offset by (iii) $12,089,000 of a distribution of capital from an unconsolidated joint venture.

Nine months ended September 30, 2024 -We used $75,343,000 of cash for investing activities for the nine months ended September 30, 2024, for (i) $85,231,000 for additions to real estate, which were comprised of spending for tenant improvements and other building improvements and (ii) $1,904,000 for contributions of capital to an unconsolidated joint venture, partially offset by (iii) $10,000,000 of proceeds from the repayment of a mezzanine loan investment, and (iv) $1,792,000 of a distribution of capital from an unconsolidated joint venture.

Financing Activities

Nine months ended September 30, 2025 - We generated $125,035,000 of cash from financing activities for the nine months ended September 30, 2025, from (i) $900,000,000 of proceeds from notes and mortgages payable in connection with the refinancing of the 1301 Avenue of the Americas loan, (ii) $83,307,000 of proceeds received for the sale of a 45.0% equity interest in 900 Third Avenue, (iii) $10,266,000 of proceeds received for the sale of a 25.0% equity interest in One Front Street, (iv) $11,723,000 of contributions from noncontrolling interests in 900 Third Avenue and One Front Street, partially offset by (v) $860,000,000 for repayment of notes and mortgages payable in connection with the refinancing of the 1301 Avenue of the Americas loan and $14,411,000 for payment of the related debt issuance costs, (vi) $5,710,000 distributions to noncontrolling interests in 300 Mission Street and 1633 Broadway, and (vii) $140,000 for the repurchase of shares related to stock compensation agreements and related tax withholdings.

Nine months ended September 30, 2024 - We used $118,591,000 of cash for financing activities for the nine months ended September 30, 2024, primarily for (i) $975,000,000 for repayment of notes and mortgages payable in connection with the modification and extension of the One Market Plaza non-recourse mortgage loan and $10,649,000 for payment of the related debt issuance costs, (ii) $25,118,000 for dividends and distributions to common stockholders and unitholders, (iii) $18,311,000 for distributions to noncontrolling interests in Fund X and RDF, (iv) $2,444,000 for distributions to noncontrolling interests in 1633 Broadway, and (v) $178,000 for the repurchase of shares related to stock compensation agreements and related tax withholdings, partially offset by (vi) $850,000,000 of proceeds from notes and mortgages payable in connection with the modification and extension of the One Market Plaza non-recourse mortgage loan, (vii) $62,220,000 of contributions from noncontrolling interests in One Market Plaza and (viii) $889,000 of contributions from noncontrolling interests in Fund X.

Non-GAAP Financial Measures

We use and present NOI, Same Store NOI, FFO and Core FFO, as supplemental measures of our performance. The summary below describes our use of these measures, provides information regarding why we believe these measures are meaningful supplemental measures of our performance and reconciles these measures from net income or loss, the most directly comparable GAAP measure. Other real estate companies may use different methodologies for calculating these measures, and accordingly, our presentation of these measures may not be comparable to other real estate companies. These non-GAAP measures should not be considered a substitute for and should only be considered together with and as a supplement to, financial information presented in accordance with GAAP.

Net Operating Income ("NOI")

We use NOI to measure the operating performance of our properties. NOI consists of rental revenue (which includes property rentals, tenant reimbursements and lease termination income) and certain other property-related revenue less operating expenses (which include property-related expenses such as cleaning, security, repairs and maintenance, utilities, property administration and real estate taxes). We also use Cash NOI, which deducts from NOI, straight-line rent adjustments and the amortization of above and below-market leases, including our share of such adjustments of unconsolidated joint ventures. In addition, we present Paramount's share of NOI and Cash NOI, which represents our share of NOI and Cash NOI of consolidated and unconsolidated joint ventures, based on our percentage ownership in the underlying assets. We use NOI and Cash NOI internally as performance measures and believe they provide useful information to investors regarding our financial condition and results of operations because they reflect only those income and expense items that are incurred at the property level. The following tables present reconciliations of our net income or loss to Paramount's share of NOI and Cash NOI for the three and nine months ended September 30, 2025 and 2024.