NEW YORK — Paramount Group Inc. (NYSE: PGRE), which specializes in owning and managing office properties in major markets, has completed its initial public offering of nearly 150.6 million shares of its common stock at a public offering price of $17.50 per share. The IPO has resulted in gross proceeds of $2.6 billion.
The offering is the largest IPO ever for a U.S. real estate investment trust, according to Bloomberg, exceeding Douglas Emmett Inc.’s IPO in 2006, which raised $1.6 billion.
According to Bloomberg, the shares climbed 3.9 percent to $18.18 on their first day of trading (Nov. 19) after the company sold them for $17.50 each.
The IPO includes the full exercise of the underwriters’ option to purchase an additional 19.6 million shares of common stock.
New York-based Paramount intends to use the net proceeds from the offering of $2.6 billion, after deducting underwriting discounts, commissions and offering expenses, to repay outstanding indebtedness and any applicable prepayment costs, exit fees, defeasance costs and settlement of interest rate swap liabilities associated with such repayment, as well as pay cash consideration in connection with its formation transactions.
The company expects to use any remaining net proceeds for general corporate purposes, capital expenditures and potential future acquisitions.
Paramount’s portfolio consists of 12 Class A office buildings, including One Market Plaza in San Francisco and 1301 Avenue of the Americas in New York. The company focuses on owning, operating and managing high-quality Class A office properties in central business district submarkets.
Tenants of Paramount’s buildings include Bank of America Corp. and Barclays PLC and aggregate approximately 10.4 million square feet.
The company has acquired 28 properties with a value of approximately $11.5 billion since 1995, according to Bloomberg.
BofA Merrill Lynch, Morgan Stanley and Wells Fargo Securities acted as active joint book-running managers and Deutsche Bank Securities also acted as a book-running manager of the offering.
Paramount’s stock price closed at $18.56 per share on Monday, Nov. 24.
— Scott Reid