Parkway Completes Purchase of Phoenix Asset

^{Published on 2012-02-13 05:20:55 - Market Wire}
 

Parkway Completes Purchase of Phoenix Asset -- ORLANDO, Fla., Feb. 13, 2012 /PRNewswire/ --

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ORLANDO, Fla., Feb. 13, 2012 /PRNewswire/ -- Parkway Properties, Inc. (NYSE: [ PKY ]) announced today the completion of the previously announced purchase of Hayden Ferry Lakeside II ("Hayden Ferry II", or the "Property") on behalf of Parkway Properties Office Fund II, L.P. ("Fund II") for a purchase price of $86.0 million.  Parkway's ownership share in this investment is 30%.  Hayden Ferry II is a 300,000 square foot, Class A+ office building located in the Tempe submarket of Phoenix.  The property is currently 94% leased to 20 customers, including high quality names such as KPMG and Microsoft.

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James R. Heistand, President and Chief Executive Officer at Parkway, stated, "Hayden Ferry II is an iconic asset located directly on Tempe Town Lake in the Tempe submarket of Phoenix.  The high-quality tenant mix at the Property is expected to provide stable cash flows for Fund II and should blend well with Fund II's previous value-add investment in the directly adjacent Hayden Ferry I, which is now 94% leased.  I am also pleased to note that the purchase of Hayden Ferry II completes Parkway's investment of Fund II."

Simultaneous with the purchase, Fund II closed a $50.0 million first mortgage with a maturity date of July 2018.  The mortgage has an initial fixed interest rate of 5.0%, which is scheduled to decline in stated increments over the first four years of the term, with the decline in the fourth year of the term subject to achieving a defined debt yield hurdle, at which time the rate will remain fixed through maturity.  The mortgage loan secured by Hayden Ferry I has been amended such that it is now cross-collateralized and cross-defaulted and is coterminous with the mortgage loan secured by Hayden Ferry II.  Parkway's equity contribution of $10.8 million was initially funded through availability under the Company's existing revolving credit facility.

Fund II is a $750 million discretionary fund formed in May 2008 for the purpose of acquiring high-quality, multi-tenant office properties.  Fund II investments include assets located in Atlanta, Charlotte, Jacksonville, Orlando, Philadelphia, Phoenix, and Tampa.  As of February 13, 2012, Fund II owns 12 assets with a combined total of 4.2 million square feet.

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 57 office properties located in 11 states with an aggregate of approximately 11.9 million square feet of leasable space at February 13, 2012.  Fee-based real estate services are offered through wholly-owned subsidiaries of the Company, which in total manage and/or lease approximately 11.9 million square feet for third-party owners at February 13, 2012.

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

SOURCE Parkway Properties, Inc.

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