Paramount (PGRE) 8-K Paramount Group, Inc. Announces Fourth Quarter 2014 Results

Exhibit 99.2

PARAMOUNT
GROUP, INC.
SUPPLEMENTAL OPERATING AND FINANCIAL DATA FOR THE QUARTER ENDED DECEMBER 31, 2014

SAFE HARBOR

This supplemental package contains forward-looking statements within the meaning of the Federal securities laws. You can identify these statements by our use of the words “assumes,” “believes,” “estimates,” “expects,” “guidance,” “intends,” “plans,” “projects” and similar expressions that do not relate to historical matters. You should exercise caution in interpreting and relying on forward-looking statements because they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and could materially affect actual results, performance or achievements. These factors include, without limitation, the ability to enter into new leases or renew leases on favorable terms, dependence on tenants’ financial condition, the uncertainties of real estate development, acquisition and disposition activity, the ability to effectively integrate acquisitions, the costs and availability of financing, the ability of our joint venture partners to satisfy their obligations, the effects of local, national and international economic and market conditions, the effects of acquisitions, dispositions and possible impairment charges on our operating results, regulatory changes and other risks and uncertainties detailed from time to time in our filings with the Securities and Exchange Commission. We do not undertake a duty to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

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TABLE OF CONTENTS

	Page
Company Profile		4
Research Coverage		5
Selected Financial Information
Financial Highlights		6
Consolidated Balance Sheet		7
Consolidated Statement of Income		8
Funds From Operations (“FFO”)		9
Funds Available for Distribution (“FAD”)		10
Net Operating Income (“NOI”)		11
Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”)		12
Capital Structure		13
Debt Analysis		14
Debt Maturities		15
Selected Property Data
Portfolio Summary		16
Top Tenants and Industry Diversification		17
Leasing Activity		18
Lease Expirations		19
Capital Expenditures - Cash Basis		20
Definitions		21

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COMPANY PROFILE

Paramount Group, Inc., (“Paramount”) is a fully-integrated real estate investment trust that owns, operates and manages high-quality, Class A office properties located in select central business district submarkets of New York City, Washington, D.C. and San Francisco. Paramount is focused on maximizing the value of its portfolio by leveraging the sought-after locations of its assets and its proven property management capabilities to attract and retain high-quality tenants.

EXECUTIVE MANAGEMENT
Albert Behler	Chairman, Chief Executive Officer and President
David Spence	Executive Vice President, Chief Financial Officer and Treasurer
Jolanta Bott	Executive Vice President, Operations and Human Resources
Theodore Koltis	Executive Vice President, Leasing
Daniel Lauer	Executive Vice President, Chief Investment Officer
Ralph DiRuggiero	Senior Vice President, Property Management
Gage Johnson	Senior Vice President, General Counsel and Secretary
Vito Messina	Senior Vice President, Asset Management
Wilbur Paes	Senior Vice President, Chief Accounting Officer
BOARD OF DIRECTORS
Thomas Armbrust	Director
Dan Emmett	Director, Chair of Audit Committee
Lizanne Galbreath	Director, Chair of Compensation Committee
Peter Linneman	Director, Chair of Nominating and Corporate Governance Committee; Lead Independent Director
David O’Connor	Director
Katharina Otto-Bernstein	Director
COMPANY INFORMATION
Corporate Headquarters	Investor Relations	Stock Exchange Listing	Trading Symbol
1633 Broadway, Suite 1801	IR@paramount-group.com	New York Stock Exchange	PGRE
New York, NY 10019	(212) 492-2298
(212) 237-3100

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RESEARCH COVERAGE

James Feldman	Vin Chao	Steve Sakwa
Bank of America Merrill Lynch	Deutsche Bank	Evercore ISI
(646) 855-5808	(212) 250-6799	(212) 446-9462
Brad Burke	Jed Reagan	Vance Edelson
Goldman Sachs	Green Street Advisors	Morgan Stanley
(917) 343-2082	(949) 640-8780	(212) 761-0078
Ross Nussbaum	Brendan Maiorana
UBS	Wells Fargo
(212) 713-2484	(443) 263-6516

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FINANCIAL HIGHLIGHTS

(unaudited and in thousands, except square feet and per share data)

	Period from November 24, 2014 through December 31, 2014
SELECTED ITEMS
Total revenues	$	66,135
Pro rata share of NOI	$	36,330
Pro rata share of Cash NOI	$	31,821
Net income attributable to Paramount Group, Inc.	$	57,308
Per share:
Basic	$	0.27
Diluted	$	0.27
FFO attributable to Paramount Group, Inc.	$	82,425
Per share - diluted	$	0.39
Core FFO attributable to Paramount Group, Inc.	$	16,100
Per share - diluted	$	0.08
FAD attributable to Paramount Group, Inc.	$	7,561

COMMON SHARE DATA

Share Price (November 24, 2014 through December 31, 2014)

High	$	19.68
Low	$	17.65
Closing (end of period)	$	18.59
Outstanding shares (end of period)		212,106,718
Market value of outstanding shares	$	3.9 billion

PORTFOLIO STATISTICS

	Number of Properties		Square Feet		% Leased at December 31, 2014
Region:
New York		6		7,152,207		94.4	%
Washington, D.C.		5		1,602,655		88.8	%
San Francisco		1		1,611,125		96.8	%
		12		10,365,987		93.9	%

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CONSOLIDATED BALANCE SHEET

(unaudited and in thousands)

	December 31, 2014
ASSETS:
Rental Property
Land	$	2,094,461
Buildings and improvements		5,435,778
		7,530,239
Accumulated depreciation and amortization		(81,050	)
Rental Property, net		7,449,189
Real estate fund investments		323,387
Investments in partially owned entities		5,749
Cash and cash equivalents		438,599
Restricted cash		55,728
Marketable securities		20,159
Deferred rent receivable		8,267
Accounts and other receivables, net		7,692
Deferred charges, net		39,165
Intangible assets, net		669,385
Other assets		13,121
Total Assets	$	9,030,441
LIABILITIES:
Mortgages and notes payable	$	2,852,287
Credit facility		—
Due to affiliates		27,299
Loans payable to noncontrolling interests		42,195
Accounts payable and accrued expenses		93,472
Deferred income taxes		2,861
Interest rate swap liabilities		194,196
Intangible liabilities, net		219,228
Other liabilities		43,950
Total Liabilities		3,475,488
EQUITY:
Paramount Group, Inc. stockholders’ equity		3,910,862
Noncontrolling interests in joint ventures and funds		685,888
Noncontrolling interests in Operating Partnership		958,203
Total Equity		5,554,953
TOTAL LIABILITIES AND EQUITY	$	9,030,441

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CONSOLIDATED STATEMENT OF INCOME

(unaudited and in thousands, except share and per share data)

	Period from November 24, 2014 through December 31, 2014
REVENUES:
Property rentals	$	51,345
Straight-line rent adjustments		5,653
Amortization of below-market leases, net		467
Rental income		57,465
Tenant reimbursement income		5,865
Fee income		1,176
Other income		1,629
Total revenues		66,135
EXPENSES:
Operating		26,011
Depreciation and amortization		34,481
General and administrative		2,207
Total expenses		62,699
Operating income		3,436
Income from real estate fund investments		1,412
Income from partially owned entities		938
Unrealized gains on interest rate swaps		15,084
Interest and other income (loss), net		(179	)
Interest and debt expense		(43,743	)
Acquisition, transaction and formation related costs		(143,437	)
Gain on consolidation of a partially owned entity		239,716
Net income before income taxes		73,227
Income tax expense		(505	)
Net income		72,722
Less net income attributable to noncontrolling interests in:
Consolidated joint ventures and funds		(1,488	)
Operating Partnership		(13,926	)
Net income attributable to Paramount Group, Inc.	$	57,308
Weighted average common shares outstanding
Basic		212,106,718
Diluted		212,107,908
Net income per share attributable to Paramount Group, Inc.
Basic	$	0.27
Diluted	$	0.27

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FUNDS FROM OPERATIONS (“FFO”)

(unaudited and in thousands, except share and per share data)

	Period from November 24, 2014 through December 31, 2014
Reconciliation of net income to FFO:
Net income	$	72,722
Real estate depreciation and amortization		34,481
Pro rata share of real estate depreciation and amortization of partially owned entities		605
FFO(1)		107,808
Less FFO attributable to noncontrolling interests in:
Consolidated joint ventures and funds		(5,353	)
Operating Partnership		(20,030	)
FFO attributable to Paramount Group, Inc.(1)	$	82,425
Per diluted share	$	0.39
Reconciliation of FFO to Core FFO:
FFO	$	107,808
Non-core (income) expense:
Acquisition, transaction and formation related costs		143,437
Defeasance and debt breakage costs		25,717
Unrealized gains on interest rate swaps		(15,084	)
Pro rata share of unrealized gains on interest rate swaps of partially owned entities		(643	)
Gain on consolidation of a partially owned entity		(239,716	)
Core FFO(1)		21,519
Less Core FFO attributable to noncontrolling interests in:
Consolidated joint ventures and funds		(1,506	)
Operating Partnership		(3,913	)
Core FFO attributable to Paramount Group, Inc.(1)	$	16,100
Per diluted share	$	0.08
Reconciliation of weighted average shares outstanding:
Weighted average shares outstanding		212,106,718
Effect of dilutive securities		1,190
Denominator for FFO per diluted share		212,107,908

⁽¹⁾  See page 21 for our definition of this measure.

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FUNDS AVAILABLE FOR DISTRIBUTION (“FAD”)

(unaudited and in thousands)

	Period from November 24, 2014 through December 31, 2014
Reconciliation of Core FFO to FAD
Core FFO	$	21,519
Add:
Amortization of non-cash compensation expense		391
Amortization of deferred financing costs		240
Less:
Recurring tenant improvements, leasing commissions and other capital expenditures		(7,315	)
Straight-line rent adjustments		(5,660	)
Amortization of below-market leases, net		(467	)
FAD(1)		8,708
Less FAD attributable to noncontrolling interests in:
Consolidated joint ventures and funds		690
Operating Partnership		(1,837	)
FAD attributable to Paramount Group, Inc.(1)	$	7,561

(1) See page 21 for our definition of this measure.

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NET OPERATING INCOME (“NOI”)

(unaudited and in thousands)

	Period from November 24, 2014 through December 31, 2014
Reconciliation of net income to NOI:
Net income	$	72,722
Add:
Depreciation and amortization		34,481
General and administrative expenses		2,207
Interest and debt expense		43,743
Acquisition, transaction and formation related costs		143,437
Income tax expense		505
NOI from partially owned entities		1,680
Less:
Income from partially owned entities		(938	)
Fee income		(1,176	)
Unrealized gains on interest rate swaps		(15,084	)
Interest and other (income) loss, net		179
Gain on consolidation of a partially owned entity		(239,716	)
NOI(1)		42,040
Less NOI attributable to noncontrolling interests in consolidated joint ventures and funds		(5,710	)
Pro rata share of NOI (1)	$	36,330
Reconciliation of NOI to Cash NOI:
NOI	$	42,040
Less:
Straight-line rent adjustments		(5,660	)
Amortization of below-market leases, net		(467	)
Cash NOI (1)		35,913
Less Cash NOI attributable to noncontrolling interests in consolidated joint ventures and funds		(4,092	)
Pro rata share of Cash NOI(1)	$	31,821

(1) See page 21 for our definition of this measure.

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EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (“EBITDA”)

(unaudited and in thousands)

	Period from November 24, 2014 through December 31, 2014
Reconciliation of net income to EBITDA:
Net income	$	72,722
Add:
Depreciation and amortization		34,481
Interest and debt expense		43,743
Income tax expense		505
Pro rata share of above adjustments of partially owned entities		1,374
EBITDA (1)		152,825
Less EBITDA attributable to noncontrolling interests in consolidated joint ventures and funds		(9,554	)
Pro rata share of EBITDA(1)	$	143,271
Reconciliation of EBITDA to Adjusted EBITDA:
EBITDA	$	152,825
Add:
Acquisition, transaction and formation related costs		143,437
Less:
Unrealized gains on interest rate swaps		(15,084	)
Pro rata share of unrealized gains on interest rate swaps of partially owned entities		(643	)
Gain on consolidation of a partially owned entity		(239,716	)
Adjusted EBITDA(1)		40,819
Less Adjusted EBITDA attributable to noncontrolling interests in consolidated joint ventures and funds		(5,708	)
Pro rata share of Adjusted EBITDA(1)	$	35,111

(1) See page 21 for our definition of this measure.

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CAPITAL STRUCTURE

(unaudited and in thousands, except share and per share data)

	December 31, 2014
Debt:
Consolidated debt:
Mortgages and notes payable	$	2,852,287
$1.0 billion credit facility		—
		2,852,287
Less:
Noncontrolling interests’ share of consolidated debt (One Market Plaza and 31 West 52nd Street)		(583,422	)
Add:
Pro rata share of unconsolidated joint venture debt (712 Fifth Avenue)		123,250
Total debt		2,392,115

	Shares / Units		Share Price at
	Outstanding		December 31, 2014
Equity:
Common stock		212,106,718	$	18.59		3,943,064
Operating Partnership units		51,543,993		18.59		958,203
		263,650,711		18.59		4,901,267
Total Capitalization					$	7,293,382

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DEBT ANALYSIS

(unaudited and in thousands)

	Total Debt						Fixed Rate Debt						Variable Rate Debt
	Amount			Rate			Amount			Rate			Amount			Rate
Consolidated Debt:
1633 Broadway	$	926,260			5.26	%	$	772,100			6.02	%	$	154,160			1.44	%
31 West 52nd Street		413,490			4.99	%		337,500			5.74	%		75,990			1.64	%
900 Third Avenue		274,337			5.08	%		255,000			5.35	%		19,337			1.51	%
Waterview		210,000			5.76	%		210,000			5.76	%		—			—
1899 Pennsylvania Avenue		90,489			4.88	%		90,489			4.88	%		—			—
Liberty Place		84,000			4.50	%		84,000			4.50	%		—			—
One Market Plaza		853,711			6.14	%		840,000			6.16	%		13,711			5.00	%
Total consolidated debt		2,852,287			5.47	%		2,589,089			5.85	%		263,198			1.69	%
Noncontrolling interests’ share		(583,422	)					(549,225	)					(34,197	)
Pro rata share of consolidated debt	$	2,268,865			5.37	%	$	2,039,864			5.80	%	$	229,001			1.59	%
Unconsolidated Joint Venture Debt:
712 Fifth Avenue	$	246,500			5.39	%	$	225,000			5.65	%	$	21,500			2.71	%
Joint venture partners’ share		(123,250	)					(112,500	)					(10,750	)
Pro rata share of unconsolidated debt	$	123,250			5.39	%	$	112,500			5.65	%	$	10,750			2.71	%
Pro Rata Share of Total Debt	$	2,392,115			5.37	%	$	2,152,364			5.79	%	$	239,751			1.64	%

	Required	Actual
Credit Facility Covenants:
Total Debt / Total Assets	Less than 60%		41.2	%
Secured Debt / Total Assets	Less than 50%		37.5	%
Fixed Charge Coverage	Greater than 1.5x		2.0x
Unsecured Debt / Unencumbered Assets	Less than 60%		14.5	%
Unencumbered Interest Coverage	Greater than 1.75x		9.8x

	$		%
Debt Composition:
Fixed rate debt:
Pro rata consolidated fixed rate debt	$	2,039,864
Pro rata unconsolidated fixed rate debt		112,500
Total fixed rate debt		2,152,364		90.0	%
Variable rate debt:
Pro rata consolidated variable rate debt		229,001
Pro rata unconsolidated variable rate debt		10,750
Total variable rate debt		239,751		10.0	%
Pro Rata Share of Total Debt	$	2,392,115		100.0	%

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DEBT MATURITIES

(unaudited and in thousands)

Consolidated Fixed Rate Debt:	2015		2016			2017			2018			2019			Thereafter			Total
1633 Broadway	$	—	$	772,100		$	—		$	—		$	—		$	—		$	772,100
31 West 52nd Street		—		—			337,500			—			—			—			337,500
900 Third Avenue		—		—			255,000			—			—			—			255,000
Waterview		—		—			210,000			—			—			—			210,000
1899 Pennsylvania Avenue		—		—			—			—			—			90,489			90,489
Liberty Place		—		—			—			84,000			—			—			84,000
One Market Plaza		—		—			—			—			840,000			—			840,000
Total consolidated fixed rate debt	$	—	$	772,100		$	802,500		$	84,000		$	840,000		$	90,489		$	2,589,089
Weighted average rate		—		6.02	%		5.62	%		4.50	%		6.16	%		4.88	%		5.85	%
Consolidated Variable Rate Debt:
1633 Broadway	$	—	$	154,160		$	—		$	—		$	—		$	—		$	154,160
31 West 52nd Street		—		—			75,990			—			—			—			75,990
900 Third Avenue		—		—			19,337			—			—			—			19,337
One Market Plaza		—		—			—			—			13,711			—			13,711
Total consolidated variable rate debt	$	—	$	154,160		$	95,327		$	—		$	13,711		$	—		$	263,198
Weighted average rate		—		1.44	%		1.61	%		—			5.00	%		—			1.69	%
Total Consolidated Debt	$	—	$	926,260		$	897,827		$	84,000		$	853,711		$	90,489		$	2,852,287
Weighted Average Rate		—		5.26	%		5.20	%		4.50	%		6.14	%		4.88	%		5.47	%
% of Debt Maturing		—		32.5	%		31.5	%		2.9	%		29.9	%		3.2	%		100.0	%

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PORTFOLIO SUMMARY

(unaudited)

	Submarket	% Ownership			Square Feet(1)		% Leased			Annualized Rent(2)
Property										Amount		Per Square Foot (3)
New York:
1633 Broadway	West Side		100.0	%		2,643,065		97.7	%	$	155,623,000	$	69.68
1301 Avenue of the Americas	Sixth Ave / Rock Center		100.0	%		1,767,992		85.4	%		105,820,000		74.24
1325 Avenue of the Americas	Sixth Ave / Rock Center		100.0	%		814,892		94.6	%		48,162,000		65.96
31 West 52nd Street	Sixth Ave / Rock Center		64.2	%		786,647		100.0	%		57,372,000		75.98
900 Third Avenue	East Side		100.0	%		596,270		94.9	%		40,808,000		73.14
712 Fifth Avenue	Madison/Fifth		50.0	%		543,341		99.0	%		55,266,000		104.91
											��
Subtotal / Weighted Average						7,152,207		94.4	%		463,051,000		74.34
Washington, D.C.:
Waterview	Rosslyn, VA		100.0	%		647,243		98.9	%		31,295,000		49.80
425 Eye Street	East End		100.0	%		380,090		88.9	%		14,861,000		45.79
2099 Pennsylvania Avenue	CBD		100.0	%		208,636		62.0	%		4,865,000		73.17
1899 Pennsylvania Avenue	CBD		100.0	%		192,481		86.5	%		10,785,000		80.59
Liberty Place	East End		100.0	%		174,205		85.2	%		6,354,000		66.43
Subtotal / Weighted Average						1,602,655		88.8	%		68,160,000		54.58
San Francisco:
One Market Plaza	South Financial District		49.0	%		1,611,125		96.8	%		72,569,000		57.74
Total / Weighted Average						10,365,987		93.9	%	$	603,780,000	$	69.13

(1) Represents the remeasured square feet, which includes an aggregate of 203,511 square feet of either REBNY or BOMA remeasurement adjustments that are not reflected in current leases.

(2) See page 21 for our definition of this measure.

(3) Excludes square feet and revenue from parking, storage, theater, signage and roof space.

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TOP TENANTS AND INDUSTRY DIVERSIFICATION

(unaudited)

	Lease			Square Feet			% of Total			Annualized Rent(1)					% of Annualized
	Expiration			Leased			Square Feet			Amount			Per Square Foot		Rent
Top 10 Tenants:
The Corporate Executive Board Company		Jan-2028			625,062			6.0	%	$	31,045,000		$	49.67		5.0	%
Barclays Capital, Inc.		Dec-2020			497,418			4.8	%		28,924,000			58.15		4.7	%
Allianz Global Investors, LP		Jan-2031	(2)		326,457	(2)		3.2	%		26,028,000			79.73		4.2	%
Credit Agricole Corporate & Investment Bank		Feb-2023			313,879			3.0	%		25,219,000			80.35		4.1	%
Clifford Chance, LLP		Jun-2024			328,992			3.2	%		24,760,000			75.26		4.0	%
Commerzbank AG		May-2016			287,535			2.8	%		24,260,000			84.37		3.9	%
Kasowitz Benson Torres & Friedman, LLP		Mar-2037	(3)		302,213	(3)		2.9	%		18,799,000			62.20		3.1	%
Deloitte & Touche, LLP		Mar-2016			212,052			2.1	%		16,619,000			78.37		2.7	%
WMG Acquisition Corp. (Warner Music Group)		Jul-2029			293,487			2.8	%		16,052,000			54.69		2.6	%
Chadbourne & Parke, LLP		Sep-2034			203,102			2.0	%		15,836,000			77.97		2.6	%
	Square Feet			% of Total			Annualized			% of Annualized
	Leased			Square Feet			Rent			Rent
Industry Diversification:
Financial Services		3,973,431			38.3	%		294,258,000			47.8	%
Legal Services		1,755,571			16.9	%		126,338,000			20.5	%
Media		794,301			7.7	%		48,059,000			7.8	%
Government		316,700			3.1	%		14,630,000			2.4	%
Software		168,186			1.6	%		8,952,000			1.5	%
Business Services and Communications		166,291			1.6	%		10,132,000			1.6	%
Retail		144,519			1.4	%		13,119,000			2.1	%
Real Estate		135,850			1.3	%		10,820,000			1.8	%
Other		2,911,138			28.1	%		89,520,000			14.5	%

(1) See page 21 for our definition of this measure.

(2) 5,546 of the square feet leased expires in December 2018.

(3) 100,422 of the square feet leased expires in November 2015.

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LEASING ACTIVITY

(unaudited and square feet in thousands)

	Total			New York			Washington, D.C.			San Francisco
Quarter Ended December 31, 2014
Total square feet leased		537			361			133			43
Pro rata share of square feet leased:		509			355			133			21
Initial rent(1)	$	72.24		$	68.70		$	77.38		$	99.56
Weighted average lease term (years)		9.6			8.7			12.5			6.8
Second generation space:
Square feet		350			283			46			21
Cash basis:
Initial rent(1)	$	72.86		$	69.75		$	79.82		$	99.56
Prior escalated rent	$	72.83		$	73.55		$	63.70		$	82.90
Percentage increase (decrease)		0.0	%		(5.2	%)		25.3	%		20.1	%
GAAP basis:
Straight-line rent	$	73.21		$	69.52		$	81.18		$	105.57
Prior straight-line rent	$	61.30		$	59.48		$	65.70		$	76.20
Percentage increase		19.4	%		16.9	%		23.6	%		38.5	%
Tenant improvements and leasing commissions:
Per square foot	$	85.44		$	59.27		$	157.85		$	70.10
Per square foot per annum	$	8.92		$	6.84		$	12.66		$	10.32
Percentage of initial rent		12.3	%		10.0	%		16.4	%		10.4	%

(1) See page 21 for our definition of this measure.

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LEASE EXPIRATIONS

(unaudited)

Year of Lease Expiration	Square Feet     of Expiring Leases		Annualized Rent(1)				% of
			Amount		Per Square Foot (2)		Annualized Rent
Month to Month		7,089	$	653,000	$	77.15		0.1	%
1Q 2015		72,213		4,563,000		63.44		0.7	%
2Q 2015		134,142		9,103,000		69.72		1.4	%
3Q 2015		246,754		19,435,000		78.87		3.0	%
4Q 2015		212,212		13,725,000		62.39		2.1	%
Total 2015		665,321		46,826,000		70.06		7.2	%
2016		973,905		71,333,000		72.49		11.0	%
2017		433,258		33,986,000		79.02		5.3	%
2018		446,107		33,453,000		75.22		5.2	%
2019		387,441		28,813,000		74.59		4.5	%
2020		1,110,469		67,524,000		63.14		10.4	%
2021		842,543		49,708,000		60.98		7.7	%
2022		295,130		16,668,000		86.46		2.6	%
2023		630,081		52,018,000		82.85		8.0	%
2024		632,281		48,393,000		76.96		7.5	%
Thereafter		3,088,545		197,896,000		63.39		30.6	%

(1) See page 21 for our definition of this measure.

(2) Excludes square feet and revenue from parking, storage, theater, signage and roof space.

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CAPITAL EXPENDITURES - CASH BASIS

(unaudited and in thousands)

	Period from November 24, 2014 through December 31, 2014
Capital expenditures to maintain assets:
Recurring	$	1,385
Non-recurring		—
Total capital expenditures to maintain assets	$	1,385
Tenant improvements:
Recurring	$	2,661
Non-recurring		2,365
Total tenant improvements	$	5,026
Leasing commissions:
Recurring	$	3,269
Non-recurring		1,943
Total leasing commissions	$	5,212
Total capital expenditures, tenant improvements and leasing commissions:
Total recurring	$	7,315
Total non-recurring		4,308
Total capital expenditures, tenant improvements and leasing commissions	$	11,623
Development expenditures	$	10

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DEFINITIONS

Funds from Operations (“FFO”)is calculated in accordance with the definition adopted by National Association of Real Estate Investment Trusts (“NAREIT”). NAREIT defines FFO as GAAP net income or loss adjusted to exclude net gains from sales of depreciated real estate assets, impairment losses on depreciable real estate and depreciation and amortization expense from real estate assets, including our share of such adjustments of unconsolidated joint ventures.

Core Funds from Operations (“Core FFO”)is calculated as FFO plus (i) acquisition, transaction and formation related costs and (ii) defeasance and debt breakage costs less (iii) unrealized gains on interest rate swaps and (iv) the gain on consolidation of a partially owned entity.

Funds Available for Distribution (“FAD”)is calculated as Core FFO less (i) recurring tenant improvements, leasing commissions and other capital expenditures (ii) straight-line rent adjustments and (iii) amortization of above and below-market leases, net, plus (iv) amortization of non-cash compensation expense and (v) amortization of deferred financing costs.

Net Operating Income (“NOI”)is calculated as GAAP net income or loss plus (i) depreciation and amortization (ii) general and administrative expenses (iii) interest and debt expense (iv) acquisition, formation and transaction related costs and (v) income tax expense less (vi) fee income (vii) unrealized gains on interest rate swaps (viii) interest and other income and (ix) the gain on consolidation of a partially owned entity, including our share of such adjustments of unconsolidated joint ventures. We also present Cash NOI which deducts from NOI, straight-line rent adjustments and the amortization of above and below-market leases, net, including our share of such adjustments of unconsolidated joint ventures. In addition, we present our pro rata 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.

Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”)is calculated as GAAP net income or loss plus (i) depreciation and amortization (ii) interest and debt expense and (iii) income tax expense, including our share of such adjustments of unconsolidated joint ventures.

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”)is calculated as EBITDA plus (i) acquisition, transaction and formation related costs less (ii) unrealized gains on interest rate swaps and (iii) the gain on consolidation of a partially owned entity.

Annualized Rentrepresents the end of period monthly base rent plus escalations in accordance with the lease terms, multiplied by 12.

Initial Rentrepresents the weighted average cash basis starting rent per square foot and does not include free rent or periodic step-ups in rent.

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