Paramount Group (PGRE) Stock Forecast & Price Target

Paramount Group Inc. has experienced a notable increase in its share price, rising 54.6% since the announcement of a strategic alternatives review on May 19, 2025, which significantly outperformed the broader real estate index by 5,290 basis points. The company is expected to achieve above-average net effective rent growth compared to other office REITs, driven by increased tenant demand in its key markets of New York City and San Francisco. Additionally, strong market trends may lead to higher occupancy rates and accelerated lease-up of expiring leases, further enhancing the company's revenue potential from its high-quality Class A office properties.

Paramount Group's stock is facing significant challenges due to a notable decline in portfolio occupancy, having fallen by 1,670 basis points since the third quarter of 2020, which has coincided with a 68% depreciation in share price from pre-pandemic levels. Factors contributing to the negative outlook include the potential for weaker-than-expected demand from tenants in the technology, advertising, media, and information (TAMI) sectors, along with the adverse impacts of slowing retail sales growth on the demand for vacant retail space. Additionally, the rising interest rates are likely to increase terminal capitalization rates, which would subsequently lower net asset value (NAV) estimates for the company.