(This story has been corrected to clarify details of Paramount Group ownership in last paragraph, and omits paragraph on Albert Behler)
Paramount Group Inc has retained Bank of America Corp (BAC.N) to explore strategic alternatives, including an initial public offering that could value the city office property owner at up to $15 billion, according to people familiar with the matter.
The landmark IPO could raise around $2 billion in proceeds, according to the people, which would make it the second-largest U.S. real estate public offering behind Hilton Worldwide Holdings Inc (HLT.N), which raised $2.7 billion in 2013.
Paramount has an estimated enterprise value of between $10 billion and $15 billion, including debt, the people said this week.
The sources pointed out that Paramount's most comparable peer, Boston Properties Inc (BXP.N), has seen its shares rise 18 percent since the start of the year, compared with a 6.8 percent rise in the S&P 500 Index .INX.
Preparations for the proposed offering are still in early stages and any deal is still several months away, the people said. The company is also entertaining other strategic alternatives, such as a reverse merger into a publicly traded real estate investment trust, some of the people added.
The sources asked not to be identified because the deliberations are private. Representatives for Paramount did not immediately return requests for comment. A Bank of America representative declined to comment.
Paramount is one of the largest privately owned real estate companies in the United States with over 16.5 million square feet of prime office space and 17 buildings in major cities such as New York, Washington and San Francisco.
Among its properties is San Francisco's landmark One Market Plaza building. Paramount owns 51 percent of that building and private equity and real estate firm Blackstone Group LP (BX.N) owns the remainder.
One of Bergdorf Goodman's Fifth Avenue flagship stores is housed in a Paramount building, just south of the GM Building. Other buildings in Paramount's portfolio include the 1633 Broadway building in New York, which German insurer Allianz SE (ALVG.DE) has purchased the naming rights.
Paramount was founded in 1978 by German mail-order entrepreneur Werner Otto. The Otto family remains an investor in Paramount. The Otto Group, another Otto family holding, also owns home furnishings retailer Crate & Barrel and German-based sporting goods retailer SportScheck GmbH as well as other retailers.
(Additional reporting by Jed Horowitz; Editing by Soyoung Kim and Lisa Shumaker)