Rithm Capital Corp., a global alternative asset manager, announced its $1.6 billion acquisition of Paramount Group Inc. (NYSE: PGRE), a real estate investment trust focused on Class A office properties in New York City and San Francisco.
The transaction values New York City-based Paramount Group at $6.60 per share. Paramount’s portfolio includes 13 owned and four managed high quality office assets, totaling more than 13.1 million square feet, 85.4% of which is currently leased as of June 30.
“We believe the acquisition of Paramount is a generational opportunity that will serve as a springboard to build out our commercial real estate and asset management platform and expands our owner-operator model,” said Michael Nierenberg, CEO of Rithm. “The Paramount portfolio is situated in cities where we have a strong conviction in the recovery of office market fundamentals, including improving rent rolls, a more favorable interest rate environment, and increasing demand. We believe Rithm’s asset management business is well-positioned to create value in the commercial real estate market, with a growing footprint of high-quality office assets and the expert urban development and complimentary office management capabilities of our GreenBarn team and broader platform.”
“We are incredibly proud of the high-quality portfolio we’ve built and believe strongly in its intrinsic value,” said Martin Bussmann, lead independent director of Paramount. “Together, the board and management team have found an ideal partner in Rithm, which offers the financial scale needed to improve our fundamental operating performance. After an extensive process and evaluation of a range of strategic alternatives, we are pleased to have reached this agreement which will deliver immediate, full and fair value to our shareholders.”
