Office landlord Paramount Group said Monday it has hired investment bankers to help evaluate “strategic alternatives.”
Steve Sakwa, a real estate analyst at Evercore ISI, told Crain’s the announcement likely means Paramount is looking to sell “all or some of their assets.” Paramount owns 13 million square feet of office property in Manhattan and San Francisco.
Its stock price jumped by 13%, to $5.40 a share.
In a statement, CEO Albert Behler said the company is focused on closing the “persistent gap” between its market value and management’s assessment of Paramount’s intrinsic value.
The landlord has enlisted Bank of America as a financial adviser and Latham & Watkins to provide legal advice to a “transaction committee” composed of independent board members. There is no timetable for making decisions. Additionally, Paramount appointed a new chief financial officer and new general counsel.
“We are committed to acting in the best interests of our shareholders,” Behler said.
Paramount properties include 1633 Broadway and 1301 Sixth Ave. Buildings such as 31 W. 52nd St. and 712 Fifth Ave. suffer from high vacancy rates, in part because they’re relatively long walks for workers commuting into Grand Central Terminal or Penn Station. Before Monday’s sharp rally, the stock traded for less than $5 a share, or about two-thirds below its prepandemic value.
The landlord recently sold a 25% stake in a San Francisco office tower at a $255 million valuation. In January it sold a 45% stake in 900 Third Ave. at a $210 million valuation, half the amount sought when Paramount put the building on the market in 2019.
Paramount had no additional comment.
