Paramount Group CEO Albert Behler’s previous business relationships with a member of the company’s board are raising new questions about the independence of the office landlord’s leadership and its decision-making process.
According to Securities and Exchange Commission (SEC) filings reviewed by The Real Deal, Behler provided loans and invested in Boomerang Systems, a now-defunct robotic garage company led by Mark Patterson. Patterson is an independent director on Paramount’s board and formerly chaired its nominating and corporate governance committee.
This development follows earlier disclosures that Paramount made millions of dollars in payments to companies owned by Behler, which were not previously reported. In July, Paramount revealed it was under investigation by the SEC. Additionally, The Real Deal found that Behler had advocated for awarding a no-bid contract to a security firm where his former girlfriend held a senior position.
Behler also serves as chairman of Paramount’s board. His connections with Patterson have drawn attention due to past financial dealings. About ten years ago, Behler agreed to provide at least two loans to Boomerang Systems as it approached bankruptcy. It remains unclear if those debts were repaid.
“It’s not a good look, whether in fact he’s compromised or not; the optics are bad,” said Charles Elson, founding director of the John L. Weinberg Center for Corporate Governance at the University of Delaware.
Paramount declined to comment on these matters. Patterson did not respond to requests for comment.
Public companies rely on independent boards for objective oversight. However, recent revelations about significant payments to Behler’s businesses and his high compensation compared to stock performance have prompted concerns about whether the board is prioritizing shareholders’ interests or those of its CEO. This comes as Paramount is seeking buyers while its share price remains around $7.
Patterson joined Boomerang Systems as CEO in 2010 after working as managing director at Merrill Lynch. The company developed an automated parking system designed to move cars without human operators. In 2012, Boomerang announced that Paramount would use its technology for a large West Coast multifamily project—potentially its biggest installation at that time.
“Having an accomplished and experienced real estate firm like Paramount Group select Boomerang provides great affirmation of our value proposition of enhancing developer’s margins,” said Patterson in a release then.
Boomerang claimed its system would speed up construction and improve project economics but faced problems during implementation. For example, residents at one Miami project reportedly waited hours for their vehicles due to system failures.
SEC filings show that Behler was a major investor in Boomerang and participated in convertible note offerings—debt instruments that can be exchanged for equity stakes in companies. By late 2014, he joined other investors committing up to $400,000 as an “affiliate” lender and controlled more than five percent of Boomerang’s common stock.
Despite these efforts, Boomerang filed for bankruptcy in August 2015; Patterson stepped down as CEO during this process. A bankruptcy judge approved selling the company’s assets for $2.5 million in 2016; equity holders lost their investments when the case closed four years later. It is unclear from available records whether Behler was repaid on his loans since he was not listed as a creditor in bankruptcy documents.
Patterson joined Paramount’s board in May 2018, serving both on its corporate governance committee and as lead independent director—a role acting between Chairman Behler and other directors.
Paramount did not disclose any information regarding Behler’s prior ties with Boomerang Systems or related transactions involving Patterson within official SEC filings or proxy statements—a point highlighted by observers concerned about transparency standards set by stock exchanges for independent directors.
Ann Lipton, professor at University of Colorado Law School specializing in business law, described current standards governing board independence as “very loose.”
Questions persist over why Patterson remained on Paramount’s board despite his company’s financial ties with Behler. In 2021 shareholders voted against retaining him—56 percent opposed—in what experts say is rare during uncontested elections.
“It’s very uncommon for shareholders to reject a director that way,” said Michael Levin, founder of consulting firm the Activist Investor.
However, according to reporting from Crain’s Paramount ultimately kept Patterson on its board, stating he brought valuable skills per an SEC filing.
Patterson continues serving on both Paramount’s board and corporate governance committee today.
His participation has drawn scrutiny elsewhere too: At Digital Realty Trust—a data center REIT where fellow Paramount director Greg Wright serves as chief investment officer—Patterson has been involved amid claims questioning objectivity.
Laurence Chapman resigned from Digital Realty’s board last year citing concerns about relationships among directors including personal friendships between Wright (formerly employed by Patterson) and potential impacts on objectivity.
Chapman wrote these relationships could affect “real or perceived objectivity and independence” within Digital Realty’s leadership team.
(Digital Realty stated via SEC filing that Chapman’s resignation letter represented only his own views.)
Chapman further alleged improper lobbying activities by Patterson targeting executive changes among other directors—a practice Chapman called inconsistent with best practices for governance.
“When I tried to discuss my concerns about his approach, Mark told me that in his view, ‘The end justifies the means.’ That principle originated in Machiavelli’s ‘The Prince,’” wrote Chapman.
Chapman added: “Machiavelli’s principles seem to be the polar opposite” when considering good governance traits.
