Paramount Group, Inc. on Wednesday filed a prospectus seeking to trade on the New York Stock Exchange under the symbol PGRE in what could become the largest ever publicly traded REIT initial public offering.
The company, a vertically-integrated real estate company focused on owning, operating and managing Class A office properties in CBD submarkets of New York City, Washington, D.C. and San Francisco, intends to qualify for status as a publicly traded real estate investment trust.
Paramount is one of the largest privately owned real estate companies in the U.S., owning 12 office properties totaling 17 buildings, including Paramount Plaza at 1633 Broadway and 1325 Avenue of the Americas in New York; One Market Plaza at 1 Market St. in San Francisco; and Washington D.C.'s Liberty Place, with a total of 10.4 million rentable square feet that was 90.7% leased to 253 tenants as of June 30.
While the company did not list the number of shares to be sold or a price range for the offering in its filing, investment adviser Renaissance Capital estimated the IPO could raise as much as $2.5 billion, which would eclipse Hilton Worldwide's $2.4 billion in December 2013 as the largest IPO for a publicly traded REIT on record. Paramount filed a confidential registration statement with the U.S. Securities and Exchange Commission in May.
More than 75% of the company's annualized rent comes from its New York City properties, with the Washington, D.C. and San Francisco portfolios accounting for 11.3% and 13.2%, respectively.
In the S-11 filing, Paramount touts its high-quality office portfolio, internal growth prospects, experience in renovating and repositioning real estate assets and its strong base of tenants, including Allianz, Bank of America, Barclays plc, Deloitte & Touche LLP, Showtime Networks Inc., and Warner Music Group, as competitive strengths. BofA Merrill Lynch, Morgan Stanley and Wells Fargo Securities are the joint book runners on the deal.
The company's senior management team, led by Chairman, CEO and President Albert Behler, has been in the commercial real estate industry for an average of 29 years and has worked at Paramount for an average of 14 years. Since 2003, Paramount has sponsored a series of eight investment funds.
German entrepreneur Werner Otto, who founded what became the world's largest mail order business, established Paramount Group in 1978 in invest in U.S. real estate on behalf of his family.