Parkway Announces Agreements To Purchase Office Towers In Houston, Atlanta And Charlotte
ORLANDO, Fla., Dec. 3, 2012 /PRNewswire/ -- Parkway Properties, Inc. (NYSE: PKY) announced today that it has entered into a purchase and sale agreement to acquire Phoenix Tower, a 626,000 square foot office tower located in the Greenway Plaza submarket of Houston, Texas; Tower Place 200, a 260,000 square foot office tower located in the Buckhead submarket of Atlanta, Georgia; and 525 North Tryon, a 406,000 square foot office tower located in the central business district (CBD) of Charlotte, North Carolina. All three acquisitions are subject to customary closing conditions and are expected to close by the end of the fourth quarter of 2012.
James R. Heistand, Parkway's President and Chief Executive Officer, stated, "These three acquisition opportunities fit well within our investment strategy of acquiring high-quality assets in our targeted submarkets. We believe these three investments continue our portfolio transformation, as we strive to become the leading operator of office properties in our Sunbelt markets."
Parkway is under contract to acquire Phoenix Tower for a purchase price of $124.5 million, or $199 per square foot. Phoenix Tower was built in 1984 and fully renovated in 2011. It is a LEED® Gold Certified, 26-story, Class A office tower that sits atop an eight-story parking garage. The building is currently 84.5% leased with an average in place net rent per square foot of $14.03. Phoenix Tower is expected to generate a 2013 estimated cash net operating income yield of approximately 6.0%. Parkway will own 100% of the asset and intends to place a secured first mortgage on the property shortly after closing totaling approximately 65% of the purchase price. Closing is expected to occur by the end of the fourth quarter 2012 and is subject to customary closing conditions.
Tower Place 200
Parkway is under contract to acquire Tower Place 200 for a purchase price of $56.0 million, or $216 per square foot. Tower Place 200 was built in 1998 and is a 13-story, Class A office tower that shares a parking garage with Parkway's neighboring 3344 Peachtree asset. The building is approximately 81.0% leased with an average in place gross rent per square foot of $26.37. Tower Place 200 is expected to generate a 2013 estimated cash net operating income yield of approximately 5.9%. Parkway will own 100% of the asset and does not plan to place secured financing on the property at this time. Closing is expected to occur by the end of the fourth quarter 2012 and is subject to customary closing conditions.
525 North Tryon
Parkway is under contract to acquire 525 North Tryon for a purchase price of $47.4 million, or $117 per square foot. 525 North Tryon was built in 1998 and is a 19-story, Class A office tower with an attached parking garage. The building is currently 69.8% leased with an average in place gross rent per square foot of $19.61. 525 North Tryon is expected to generate a 2013 estimated cash net operating income yield of approximately 4.7%. Parkway will own 100% of the asset and does not plan to place secured financing on the property at this time. Closing is expected to occur by the end of the fourth quarter 2012 and is subject to customary closing conditions.
Other Investment Activity
On November 15, 2012, Parkway completed the previously announced purchase of Westshore Corporate Center, a 170,000 square foot office tower located in the Westshore submarket of Tampa, Florida, for a net purchase price of $22.5 million. Westshore Corporate Center is currently 77.7% leased and is expected to generate a 2013 estimated cash net operating yield of approximately 8.5% based on the net purchase price.
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 38 office properties located in nine states with an aggregate of approximately 10.0 million square feet of leasable space at November 1, 2012. Fee-based real estate services are offered through wholly owned subsidiaries of the Company, which in total manage and/or lease approximately 11.6 million square feet for third-party owners at November 1, 2012.
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.