Paramount Group Receives Unsolicited Buyout Offer

1633 Broadway. Image via Google Street View

Paramount Group Inc. has received an unsolicited, non-binding proposal from Monarch Alternative Capital LP to acquire all of Paramount’s outstanding common stock for $12.00 per share in cash, the REIT announced Friday.

Paramount’s board has taken the proposal under consideration.

The REIT, according to its prepared statement, “is entering 2022 with significant momentum following a strong 2021 operating performance….”

As part of that, Paramount reportedly executed leases totaling more than 1 million square feet in 2021, which both was a 45 percent increase over 2020 and included leasing about 46 percent of the company’s square footage that had been vacant at the beginning of 2021.

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The fourth quarter saw faster progress, with year-over-year leasing having increased by 137 percent.

BofA Securities is Paramount’s financial advisor, and Goodwin Procter LLP is legal counsel.

Paramount spokespeople declined to provide additional information requested by Commercial Property Executive.

Ups and downs

Paramount Group is based in New York and focuses on Class A office properties in select central business district submarkets of New York City and San Francisco.

Its public REIT assets in New York City include 1633 Broadway, 1301 and 1325 Avenue of the Americas, 712 Fifth Avenue and 60 Wall Street. In San Francisco, they include 111 Sutter St., One Market Plaza, One Front St. and 300 Mission St.

Dow Jones Newswires reported Friday that Paramount shares surged 22 percent on news of the acquisition proposal.

Last fall, a researcher with the Real Estate Client Operations Department of S&P Global Market Intelligence reported that Paramount Group was near the bottom of a list of publicly listed U.S. equity REITs trading at large discounts to consensus net asset value per share, at 47.5 percent. The median discount to NAV estimate for office REITs was 26.6 percent.