ORLANDO, Fla., Jan. 27, 2014 /PRNewswire/ -- Parkway Properties, Inc. (NYSE: PKY) announced today that it has completed its acquisition of its co-investor's approximately 17% interest in a joint venture that owns a portfolio of five office properties in Austin, Texas for a purchase price of approximately $41.5 million.
James R. Heistand, Parkway's President and Chief Executive Officer, stated, "This acquisition enables Parkway to continue to add scale in the Austin market, simplify our ownership structure, and gives us greater ownership of assets that have a clear roadmap to value creation for our stockholders."
As a result of its recently completed merger with Thomas Properties Group, Inc. ("TPGI"), Parkway acquired an indirect interest in TPG/CalSTRS Austin, LLC, a joint venture with the California State Teachers' Retirement System ("CalSTRS") that owns Frost Bank Tower, One Congress Plaza, One American Center, 300 West 6th Street and San Jacinto Center in the central business district of Austin, Texas. Parkway's interest in the CalSTRS joint venture was held through a joint venture with Madison International Realty ("Madison"), a New York based private equity firm which provides joint venture equity capital to institutional owners of Class A real estate in the US, UK and Western Europe. As a result of the merger, Madison had the right to require that Parkway purchase its approximately 17% interest in the CalSTRS JV for a purchase price of approximately $41.5 million. Madison exercised this right on December 26, 2013.
On January 24, 2014, Parkway completed the acquisition of Madison's approximately 17% interest in the Austin portfolio for a purchase price of $41.5 million. After giving effect to this acquisition, each of Parkway and CalSTRS has a 50% interest in the CalSTRS JV and Austin properties.
Pursuant to an agreement entered into between Parkway and CalSTRS, CalSTRS has until February 5, 2014 to exercise an option to purchase up to 60% of Madison's former interest on the same terms as Parkway. If CalSTRS exercises its option to purchase a portion of Madison's former interest, Parkway's interest in the CalSTRS JV and the Austin properties will be reduce to 40%, with CalSTRS owning the remaining 60%.
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 50 office properties located in eight states with an aggregate of approximately 17.6 million square feet at January 1, 2014. Parkway also offers fee-based real estate services which manage and/or lease approximately 12.2 million square feet for third parties as of January 1, 2014. Additional information about Parkway is available on the company's website at www.pky.com.
Director of Investor Relations
SOURCE Parkway Properties, Inc.