Parkway Announces Leasing and Occupancy Update

JACKSON, Miss.,  Jan. 13, 2011 /PRNewswire/ -- Parkway Properties, Inc. (NYSE: PKY) announced today that it signed a total of 178,000 square feet of new leases, 594,000 square feet of renewal leases, and 46,000 square feet of expansion leases during the fourth quarter of 2010.  Key metrics associated with this activity will be disclosed in the Company's fourth quarter 2010 earnings press release and supplemental package. Additionally, Parkway currently anticipates customers occupying approximately 431,000 square feet to either vacate or contract upon lease expiration during the first quarter of 2011. This represents 3.3% of the total portfolio and 71.0% of total first quarter lease expirations. The Company's portfolio is currently 85.6% occupied.  After accounting for recent leasing activity, and offset by known move-outs, Parkway's portfolio is anticipated to be 83.4% leased as shown in the attached exhibit. This leased percentage does not include pending leasing activity for leases not yet signed, and Parkway anticipates 2011 leasing volume to be in line with historical levels.  

William R. Flatt, Chief Operating Officer at Parkway, stated, "We expect our occupancy to decline during the first quarter of 2011 due to a larger than normal amount of known move-outs and contractions, the majority of which have either been previously disclosed or will not have a negative impact on cash income in 2011. We continue to see encouraging levels of new and expansion leasing activity and anticipate our occupancy to begin to recover after the first quarter."

Major leases greater than 20,000 square feet signed during the fourth quarter of 2010 include:

• Blue Cross Blue Shield of Georgia, Inc. ("BCBS of GA") signed a 126 month renewal for 199,000 square feet which commenced January 1, 2011, at One Capital City Plaza in Atlanta, Georgia.  This renewal included a contraction of 53,000 square feet effective upon commencement.  The new rental rate per square foot increases in 2011 such that total cash income does not decline in 2011, despite the contraction.  However, the effective rental rate per square foot over the entire term of the renewal is in-line with the prior in-place rate.
• Motorola, Inc. signed a four year renewal for 53,000 square feet commencing April 1, 2011, at 233 North Michigan in Chicago, Illinois. This renewal includes a contraction of 15,000 square feet effective upon commencement.
• A major national health insurance carrier signed a five year new lease for 46,000 square feet commencing May 1, 2011, at Peachtree Dunwoody Pavilion in Atlanta, Georgia. This new customer will occupy a portion of the space to be vacated by Autotrader.com during the first quarter.
• National Council of State Boards of Nurses signed a 111 month renewal for 29,000 square feet and expanded by 6,000 square feet commencing May 1, 2012, at 111 East Wacker in Chicago, Illinois.
• Intercall, Inc. signed a 94 month renewal for 28,000 square feet commencing May 1, 2011, at US Cellular Plaza in Chicago, Illinois.
• Brenntag Latin America, Inc. signed a 134 month renewal for 25,000 square feet commencing February 1, 2011, at 5300 Memorial Building in Houston, Texas.
• Dart Container Sales Company signed a seven year renewal for 20,000 square feet and expanded by 4,000 square feet commencing February 1, 2011, at Hillsboro Center V in Fort Lauderdale, Florida.
• Mid-Atlantic Convenience Stores signed a 69 month new lease for 23,000 square feet which commenced December 27, 2010, at Boulders Center in Richmond, Virginia.
• Full Sail, Inc. signed a 64 month new lease for 22,000 square feet commencing January 16, 2011, at Gateway Center in Orlando, Florida.

Major known move-outs greater than 20,000 square feet during the first quarter of 2011 include:

• AutoTrader.com will vacate 193,000 square feet on February 28, 2011, at Peachtree Dunwoody Pavilion in Atlanta, Georgia.
• United States Attorney's Office is expected to vacate 31,000 square feet on February 28, 2011, at One Jackson Place in Jackson, Mississippi.
• US Bankruptcy Court is expected to vacate 29,000 square feet on March 31, 2011, at Parking at Jackson Place in Jackson, Mississippi.
• Supportive Oncology Services, Inc will vacate 25,000 square feet on January 14, 2011, at Forum II & III in Memphis, Tennessee.
• AAM, LLC will contract by 23,000 square feet on January 31, 2011, at Squaw Peak Corporate Center I in Phoenix, Arizona.
• Digital Risk, LLC will vacate 20,000 square feet on January 31, 2011, at Gateway Center in Orlando, Florida.

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. The Company is geographically focused on the Southeastern and Southwestern United States and Chicago. Parkway owns or has an interest in 64 office properties located in 11 states with an aggregate of approximately 13.2 million square feet of leasable space as of January 13, 2011.  Included in the portfolio are 20 properties totaling 3.7 million square feet that are owned jointly with other investors, representing 28.0% of the portfolio.  Fee-based real estate services are offered through the Company's wholly-owned subsidiary, Parkway Realty Services, which also manages and/or leases approximately 1.8 million square feet for third-party owners at January 13, 2011.

Parkway Properties, Inc.'s press releases and additional information about the Company are available on the Company's website at http://www.pky.com.

Forward Looking Statement

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, believe, forecast, intends or project) 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; 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 results could differ materially from those expressed in the forward-looking statements. The Company does not undertake to update forward-looking statements.

SOURCE Parkway Properties, Inc.