Parkway Announces Agreement To Purchase Miami Office Property
ORLANDO, Fla., May 6, 2013 /PRNewswire/ -- Parkway Properties, Inc. (NYSE: PKY) announced today that it has entered into a purchase and sale agreement to acquire Lincoln Place, a 140,000 square foot office and retail building located in the South Beach submarket of Miami, Florida.
James R. Heistand, Parkway's President and Chief Executive Officer, stated, "We are excited for the opportunity to expand into the South Florida area. We believe this market is in the early stages of a recovery and has the potential to improve quickly given the diversity and vibrancy of its economy. Additionally, the South Beach submarket is highly land constrained and boasts a current vacancy rate of only 8.7%. Lincoln Place is a high-quality, core asset located one block away from the world-class retail destination of Lincoln Road. We hope to continue our expansion in the South Florida area with a similar blend of core, core-plus and value-add investments as we have done recently in several of our other markets."
Lincoln Place was built in 2002 and is comprised of 111,000 square feet of office space and 29,000 square feet of retail space on the ground floor. There is a five-story garage with 534 parking spaces adjacent to the property that provides parking for daytime office tenants as well as hourly parking on nights and weekends. The property is currently 100% leased to LNR Corporation through June 2021 with no renewal or early termination options. Parkway is under contract to acquire Lincoln Place in exchange for the assumption of the existing secured first mortgage, which has a current outstanding balance of approximately $49.6 million, a fixed interest rate of 5.9% and matures in June 2016, and the issuance of 900,000 operating partnership units. Based on Parkway's closing stock price of $18.20 on May 3, 2013, the implied purchase price would be approximately $66.0 million, or $472 per square foot. Based on this implied purchase price, the property is expected to generate an initial full-year cash net operating income yield of approximately 6.7%. Closing is expected to occur by the end of the third quarter of 2013, subject to customary closing conditions, the successful assumption of the existing first mortgage and Parkway's satisfactory completion of due diligence.
About Parkway Properties
Parkway Properties, Inc. is a fully integrated, self-administered and self-managed real estate investment trust specializing in the acquisition, ownership and management of quality office properties in higher growth submarkets in the Sunbelt region of the United States. Parkway owns or has an interest in 45 office properties located in eight states with an aggregate of approximately 13.0 million square feet at April 1, 2013. Parkway also offers fee-based real estate services which manage and/or lease approximately 11.8 million square feet for third parties as of April 1, 2013. Additional information about Parkway is 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, estimates of market rental rates, the expected operating performance of anticipated near-term acquisitions 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.