ORLANDO, Fla., Oct. 31, 2012 /PRNewswire/ -- Parkway Properties, Inc. (NYSE: PKY) announced today that it has entered into a purchase and sale agreement to acquire NASCAR Plaza, a 390,000 square foot office tower located in the central business district (CBD) of Charlotte, North Carolina, from a joint venture between Trinity Capital Advisors and Rubenstein Partners for a purchase price of approximately $100 million. NASCAR Plaza was built in 2009 and is a 20-story, LEED® Silver certified office tower. The building is adjacent to the NASCAR Hall of Fame and is the headquarters for NASCAR, which has leased 139,000 square feet through May 2021. Currently, the building is 88% leased with an average in place rent per square foot of $25.61.
James R. Heistand, Parkway's President and Chief Executive Officer, stated, "The purchase of NASCAR Plaza represents another off-market transaction that enables us to expand in one of our key, target submarkets with a high-quality asset. NASCAR Plaza has a strong tenant base and is the headquarters for several well-known companies, and we expect to create additional value through leasing and rent growth in a submarket that we believe will outperform during a recovery."
NASCAR Plaza is expected to generate a 2013 estimated cash net operating income yield of approximately 7%. Parkway will own 100% of the asset and plans to assume the first mortgage secured by the property, which has a current outstanding balance of approximately $42.3 million with a current interest rate of 4.7% and a maturity date of March 30, 2016; however, Parkway intends to amend and restate the loan upon assumption to current market terms. Closing is expected to occur by the end of the fourth quarter 2012 and is subject to customary closing conditions. Parkway intends to fund its share of equity using excess cash and borrowings from its revolving credit facility.
The Charlotte CBD is a submarket that continues to exhibit improving fundamentals, with positive net absorption of 234,000 square feet in the third quarter and a direct vacancy rate which declined 150 basis points from the prior quarter to 9.8% as of September 30, 2012, according to CBRE.
About Parkway Properties
Parkway Properties, Inc., a member of the S&P Small Cap 600 Index, is a self-administered real estate investment trust specializing in the ownership of quality office properties in higher-growth submarkets in the Sunbelt region of the United States. Parkway owns or has an interest in 39 office properties located in nine states with an aggregate of approximately 10.3 million square feet of leasable space at August 8, 2012. Fee-based real estate services are offered through wholly owned subsidiaries of the Company, which in total manage and/or lease approximately 11.9 million square feet for third-party owners at August 8, 2012.
Parkway Properties, Inc.'s press releases and additional information about the Company are available on the Company's website at www.pky.com.
Forward Looking Statement
Certain statements in this press release that are not in the present or past tense or that discuss the Company's expectations (including any use of the words "anticipate," "assume," "believe," "estimate," "expect," "forecast," "guidance," "intend," "may," "might," "project", "should" or similar expressions) are forward-looking statements within the meaning of the federal securities laws and as such are based upon the Company's current beliefs as to the outcome and timing of future events. There can be no assurance that actual future developments affecting the Company will be those anticipated by the Company. Examples of forward-looking statements include projected net operating income, cap rates, internal rates of return, future dividend payment rates, forecasts of FFO accretion, projected capital improvements, expected sources of financing, expectations as to the timing of closing of acquisitions, dispositions and other potential transactions and descriptions relating to these expectations. These forward-looking statements involve risks and uncertainties (some of which are beyond the control of the Company) and are subject to change based upon various factors, including but not limited to the following risks and uncertainties: changes in the real estate industry and in performance of the financial markets; the demand for and market acceptance of the Company's properties for rental purposes; the ability of the Company to enter into new leases or renew leases on favorable terms; the amount and growth of the Company's expenses; tenant financial difficulties and general economic conditions, including interest rates, as well as economic conditions in those areas where the Company owns properties; risks associated with joint venture partners; risks associated with the ownership and development of real property; termination of property management contracts; the bankruptcy or insolvency of companies for which Parkway provides property management services or the sale of these properties; the outcome of claims and litigation involving or affecting the Company; the ability to satisfy conditions necessary to close pending transactions and the ability to successfully integrate pending transactions; applicable regulatory changes; and other risks and uncertainties detailed from time to time in the Company's SEC filings. Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect, the Company's business, financial condition, liquidity, cash flows and financial results could differ materially from those expressed in the Company's forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for us to predict the occurrence of those matters or the manner in which they may affect us. The Company does not undertake to update forward-looking statements except as may be required by law.
Thomas E. Blalock
Vice President of Investor Relations
SOURCE Parkway Properties, Inc.