NEW YORK CITY—Paramount Group Inc., among the largest privately owned commercial landlords in the US, is considering an initial public offering, according to Reuters. The New York City-based Paramount reportedly has retained Bank of America to explore strategic alternatives; GlobeSt.com’s calls to Paramount was not returned by early afternoon Thursday, while a BofA spokesman declined to comment.
Citing sources said to be familiar with the matter, Reuters said a Paramount IPO could raise around $2 billion in proceeds. It would rank second only to Hilton Worldwide Holdings‘ $2.7-billion IPO last year among US real estate offerings. The IPO would value Paramount at between $10 billion and $15 billion, including debt.
Other possible scenarios that Paramount is said to be considering include a reverse merger into a publicly traded REIT. Preparations for the proposed stock offering are still in the early stages and any deal would be several months away, Reuters reported.
Paramount’s 16.5-million-square-foot office portfolio includes 10 properties in New York City, including 1633 Broadway; six in Washington, DC; and one in San Francisco. The latter is the landmark One Market Plaza tower, for which Paramount controls 51% of the equity and the Blackstone Group holds the remainder.
“It’s a good time to be public,” Barry Sternlicht, chairman and CEO of Starwood Capital Group, told Bloomberg Television last fall. Sternlicht’s firm is also reportedly preparing for an IPO, as is Cantor Commercial Real Estate.
Commercial real estate has seen a number of large-scale IPOs come to pass over the past nine months. Along with Hilton Worldwide, Blackstone also took two other lodging companies public in recent months: La Quinta and Extended Stay America.
The private equity giant also launched Brixmor Property Group as a publicly traded company in an $825-million IPO this past October. Merlin Entertainments, the owner of Seaword San Diego and Legoland, raised $1.53 billion in its IPO last fall. In the office sector, the public debut of Empire State Realty Trust, also last fall, brought in north of $1 billion in gross proceeds.