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Parkway Announces Pending Purchase Of Tampa-Westshore Office Building And Other Investment Activity

ORLANDO, Fla., Oct. 8, 2012 /PRNewswire/ -- Parkway Properties, Inc. (NYSE: PKY) announced today that it is under contract to purchase Westshore Corporate Center in Tampa, Florida for a net purchase price of $22.5 million.  Parkway also announced that it has completed the purchase of a parking garage, a 21,000 square foot office building and a vacant parcel of developable land all adjacent to Parkway's currently owned Hayden Ferry Lakeside I and II assets in Tempe, Arizona for $18.2 million on behalf of Parkway Properties Office Fund II, L.P. ("Fund II") and has completed the sale of 111 Capital Building in Jackson, Mississippi for $8.3 million.

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James R. Heistand, Parkway's President and Chief Executive Officer, stated, "These two off-market acquisitions support our investment strategy of gaining critical mass in key, target submarkets that we believe will outperform their respective overall markets.  Westshore Corporate Center is well located within the Westshore submarket and is one of our third-party managed assets in the former Eola Capital portfolio, allowing Parkway to achieve attractive pricing given the $850,000 credit we will receive at closing.  Additionally, we believe the garage, building, and land we acquired in Tempe complement our assets there and present a great opportunity to add long-term value to the Company.  Once developed, we believe this asset will provide a premier office location that is in close proximity to high-end retail with views overlooking Tempe Town Lake.  This land is permit-ready with the supporting garage already developed, which should give it a competitive advantage over other developable land in the area."

Westshore Corporate Center

As of October 5, 2012, Parkway is under contract to purchase Westshore Corporate Center, a 170,000 square foot office property located in the Westshore submarket of Tampa, Florida, for a net purchase price of $22.5 million.  The property was built in 1988, is currently 77.7% leased, and is expected to generate a 2013 estimated cash net operating income yield of approximately 8.5% based on the net purchase price.  Parkway will own 100% of the asset and plans to assume the in-place first mortgage secured by the property, which has a current outstanding balance of approximately $14.5 million with a fixed interest rate of 5.8% and a maturity date of June 1, 2015. 

Westshore Corporate Center is currently managed by Parkway Realty Services and was formerly part of the Eola Capital LLC ("Eola") portfolio before Eola merged with Parkway in May 2011.  Given the agreement formed between Parkway and the former Eola principals in December 2011, 100% of any proceeds received by the former principals were granted to Parkway, and therefore Parkway will only be required to pay a purchase price of $22.5 million, which is net of an $850,000 credit that would have otherwise been paid to the former Eola principals.  Closing is expected to occur by the end of the fourth quarter 2012 and is subject to lender approval of the assumption of the existing mortgage secured by the property and other customary closing conditions.

Other Investment Activity

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