Parkway Announces Contract To Sell 111 East Wacker

Sep 22, 2011, 19:05 ET from Parkway Properties, Inc.

JACKSON, Miss., Sept. 22, 2011 /PRNewswire/ -- Parkway Properties, Inc. (NYSE: PKY) announced today that it is under contract to sell 111 East Wacker Drive ("111 East Wacker" or "the Property") for a gross sale price of $150.6 million.  111 East Wacker is a 1.0 million square foot office property located in the central business district of Chicago and was 94.8% occupied as of September 1, 2011.  The Property currently serves as collateral for a $148.5 million non-recourse mortgage loan with a fixed interest rate of 6.3% and maturity date in July 2016.  The buyer has concluded its due diligence and the sale is expected to close during the fourth quarter of 2011, subject to the buyer's successful modification and assumption of the existing mortgage loan and customary closing conditions.  Upon the sale of 111 East Wacker, Parkway will have a partial interest in two remaining assets located in suburban Chicago totaling 815,000 square feet, both of which are owned by Parkway Properties Office Fund, L.P. ("Fund I").

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James R. Heistand, Executive Chairman stated, "Our pending sale of 111 East Wacker is encouraging, as we believe this sale represents an important strategic move in the right direction.  In addition, this is a natural step to take following the Company's recent sale of the directly adjacent 233 North Michigan building."

Steven G. Rogers, President and Chief Executive Officer stated, "In addition to the strategic benefit of narrowing our operational focus, we expect this sale to produce a number of financial benefits.  Specifically, the sale of this property will remove the single largest mortgage loan from our balance sheet, significantly reducing our leverage.  Also, approximately one third of the square footage at the building is expected to be vacated over the next 12 months, though these expirations have been partially backfilled with a previously announced 135,000 square foot lease.  Given the required re-leasing of the property, this sale should result in meaningful capital cost savings over the next couple of years.  Those savings should have a materially positive impact on Parkway's projected cash flow and funds available for distribution over that period."

The Company estimates that for financial reporting purposes it will recognize a non-cash impairment loss of approximately $18 to $20 million in the third quarter of 2011, however this is only an estimate and could change based primarily upon the ultimate timing of the sale.  Until there is more certainty around the timing of the closing of the sale of 111 East Wacker, the Company is not revising its current 2011 reported FFO outlook. The Company will also provide further financial details about the sale upon closing.

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 operation, leasing, acquisition, and ownership of office properties.  Parkway owns or has an interest in 67 office properties located in 12 states with an aggregate of approximately 14.5 million square feet of leasable space as of September 22, 2011.  Included in the portfolio are 26 properties totaling 6.6 million square feet that are owned jointly with other investors, representing 45.5% of the portfolio.  Fee-based real estate services are offered through wholly-owned subsidiaries of the Company, which in total manage and/or lease approximately 12.9 million square feet for third-party owners at September 22, 2011.

Parkway Properties, Inc.'s press releases and additional information about the Company are available on the Company's website at

Forward Looking Statements

Certain statements in this release that are not in the present or past tense or discuss the Company's expectations (including the use of the words anticipate, will, believe, forecast, intends, expects, estimates, projects, 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 belief as to the outcome and timing of future events. There can be no assurance that future developments affecting the Company will be those anticipated by the Company. 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 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; the risks associated with the ownership and development of real property; the failure to acquire or sell properties as and when anticipated; 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; 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 results could differ materially from those expressed in the forward-looking statements. The Company does not undertake to update forward-looking statements, except as may be required by law.






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SOURCE Parkway Properties, Inc.