Activist company

Paramount Group investor makes cash offer for company

The 2.3 million square feet of office rentals reported in January was well below the 2019 monthly average of about 3.6 million square feet for commercial buildings in the city, according to data from Colliers.

“We believe your team has built a portfolio of high-quality properties,” Monarch co-founder Adam Sklar wrote in a letter to Behler. “However, we believe these assets have been and will continue to be significantly undervalued in public markets.”

Monarch owns 12 million shares in the real estate company and has said it is ready to pay cash for the remaining Paramount shares. The investor currently has more than $9.5 billion in assets under management, holds 6 million square feet of commercial office space in its portfolio and shelled out $3 billion last year to purchase real estate.

It’s also not the first time hungry investors have bid on Paramount. Activist investor Bow Street made a cash offer in November 2020 of $9.50 to $10 per share. Analysts at the time said the offer was too low, and Paramount quickly rejected it.

“This offer appears to undervalue the company’s trophy assets in New York and San Francisco,” Evercore ISI analyst Steve Sakwa said in a client note.

But Behler said at the time that “Paramount’s board and management team remain open-minded,” meaning a sale could be possible.

Paramount’s New York portfolio includes office, retail and theater space at 1301 Sixth Ave., 1325 Sixth Ave., 900 Third Ave., 31 W. 52nd St., a 90% interest in 1633 Broadway, a 50% interest in 712 Fifth Ave. and a 5% stake in 60 Wall St.

Any deal would likely also encompass the company’s properties in San Francisco. They include 4.3 million square feet of office and retail space.