Paramount Group Reports $10 Million Net Loss in Q1 2025 Amid Revenue Decline

Paramount Group, Inc. reported a net loss attributable to common stockholders of $10.0 million, or $0.05 per diluted share, for the first quarter of 2025, a significant decline from a net income of $9.9 million, or $0.05 per diluted share, in the same period of 2024. Total revenues for the quarter were $187.0 million, slightly down from $188.9 million year-over-year. The decrease in revenue was primarily driven by a reduction in rental revenue, which fell to $179.0 million from $179.7 million, and a decline in fee and other income, which decreased to $8.0 million from $9.2 million.

In terms of expenses, Paramount's total costs rose to $154.5 million from $149.7 million in the prior year, largely due to increased operating expenses, which climbed to $78.1 million from $71.7 million. The company also experienced a decrease in depreciation and amortization expenses, which fell to $58.9 million from $61.1 million. The overall increase in expenses, coupled with a notable drop in other income, which fell to $3.8 million from $19.4 million, contributed to the company's net loss for the quarter.

Strategically, Paramount completed the sale of a 45% equity interest in its 900 Third Avenue property for $94 million in net proceeds, which was a significant transaction for the company. This sale was part of a broader strategy to optimize its asset portfolio and enhance liquidity. Additionally, the company entered into a consent agreement with lenders to modify its revolving credit facility, reducing commitments and adjusting leverage ratios to maintain financial flexibility.

Operationally, Paramount managed a portfolio of 18 properties totaling 13.8 million square feet as of March 31, 2025. The company reported leasing activity of 283,874 square feet during the quarter, with a weighted average initial rent of $76.52 per square foot. Same store leased occupancy increased to 86.2%, up from 84.8% at the end of 2024, indicating a positive trend in tenant demand despite the challenging market conditions.

Looking ahead, Paramount Group anticipates that its liquidity, which stood at $814 million as of March 31, 2025, will be sufficient to meet its operational needs over the next year. The company remains focused on maintaining its financial flexibility while navigating the evolving real estate landscape, particularly in its key markets of New York City and San Francisco. However, it acknowledges potential risks, including economic uncertainties and market volatility, which could impact future performance.