Street Calls of the Week
NEW YORK - Rithm Capital Corp. announced Wednesday it has entered into a definitive agreement to acquire Paramount Group, Inc. (NYSE:PGRE) for approximately $1.6 billion in cash, expanding its commercial real estate portfolio. Paramount’s shares, which have surged nearly 80% over the past six months according to InvestingPro data, currently trade at $7.39.
Under the terms of the agreement, Rithm will pay $6.60 per fully diluted share for all outstanding Paramount common stock. The transaction has been approved by the boards of both companies and is expected to close in late Q4 2025, subject to Paramount stockholder approval and other customary closing conditions. InvestingPro analysis reveals the company’s strong liquidity position, with a current ratio of 1.68, indicating solid short-term financial health.
Paramount’s portfolio includes 13 owned and 4 managed Class A office properties, totaling more than 13.1 million square feet across New York City and San Francisco. The portfolio is currently 85.4% leased as of June 30, 2025. According to InvestingPro data, the company generates annual revenue of $702 million with a healthy gross profit margin of 55.8%. Get access to detailed financial analysis and 7 additional ProTips about Paramount Group through InvestingPro’s comprehensive research reports.
Michael Nierenberg, Chief Executive Officer of Rithm, described the acquisition as "a generational opportunity" that will expand the company’s commercial real estate and asset management platform. Rithm plans to fund the transaction with a combination of cash from its balance sheet and potential co-investor opportunities.
Martin Bussmann, Lead Independent Director of Paramount, stated that after evaluating various strategic alternatives, the board believes the agreement with Rithm "will deliver immediate, full and fair value to our shareholders."
UBS Investment Bank and Citigroup Global Markets Inc. are serving as financial advisors to Rithm, while BofA Securities is acting as exclusive financial advisor to Paramount.
The announcement was made based on a press release statement from Rithm Capital. The transaction represents Rithm’s strategic move to strengthen its position in premium office markets where the company anticipates recovery in office market fundamentals. Investors seeking deeper insights into similar strategic opportunities can access detailed analysis and valuations for over 1,400 US stocks through InvestingPro’s comprehensive research reports.
In other recent news, Paramount Group reported its second-quarter 2025 earnings, highlighting a revenue beat but a miss on earnings per share (EPS). The company achieved actual revenue of $177.05 million, surpassing the forecast of $170.3 million, marking a 3.96% positive surprise. However, EPS fell short of expectations, coming in at -$0.09 compared to the anticipated -$0.05. Additionally, Paramount Group announced that Rithm Capital Corp. will acquire the company in an all-cash transaction valued at approximately $1.6 billion. The deal, which has been approved by the boards of both companies, is expected to close in the fourth quarter of 2025. Furthermore, Paramount Group has advanced to the second round of bidding in its sales process, attracting interest from several major players in the commercial real estate sector. Notable potential acquirers include SL Green, Empire State Realty Trust, Vornado, Blackstone, and DivcoWest in partnership with Dubai-based Saray Capital and Rithm Capital. These developments reflect significant activity and interest in Paramount Group’s business operations.
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