JACKSON, Miss., Oct. 16 /PRNewswire-FirstCall/ -- Parkway Properties, Inc. announced plans today for a new multi-story office building to be developed in the central business district of Jackson, Mississippi, which along with new residential spaces and significantly renovated parking and retail space will transform an entire city block. Construction is scheduled to begin next spring on the development, which planners say will invigorate the downtown Jackson business district. The development is expected to be completed in the fall of 2008.
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Highlighting the development will be The Pinnacle, a new eight-story office building encompassing 175,000 feet of commercial office space. The building will be constructed on an undeveloped area at the corner of Capitol and Lamar Streets, adjacent to One Jackson Place, Parkway's corporate headquarters. Parkway has received commitments to lease 75 percent of the new office space in The Pinnacle through agreements with four major customers. The law firms of Brunini, Grantham, Grower & Hewes, PLLC and Watkins Ludlam Winter & Stennis, P.A. have committed to relocate their operations to the building, taking a total of approximately 110,000 to 120,000 square feet under long term leases of fifteen years or longer. Trustmark Bank will also locate a full service branch plus professional and executive banking services on the ground floor. EastGroup Properties, Inc., a NYSE real estate investment trust, will also relocate its headquarters to the building.
Estimated cost of The Pinnacle is $39 million with construction financing to be provided by AmSouth Bank and Trustmark National Bank. Parkway will be seeking partners for an 80% ownership interest in The Pinnacle. The Company is also considering a larger joint venture to include One Jackson Place. The Pinnacle development will qualify for various economic incentives made possible by the Gulf Opportunity Zone Act. This legislation was enacted by Congress in 2005 with the intention of encouraging rebuilding efforts and increasing economic activity in areas effected by Hurricane Katrina. Through its Parkway Realty Services subsidiary, Parkway will provide asset, property and construction management services, as well as leasing services to the building. Details of Parkway's ownership, capitalization and economic return from the project will be released as plans are finalized over the next few months. This investment is consistent with the Company's GEAR UP strategy of owning assets through joint ventures.
Steve Rogers, President and Chief Executive Officer of Parkway Properties said, "We believe this project is a rare opportunity for an investment to meet the Company's return criteria while making a noticable impact on an urban area. Similar to our experiences with the Toyota Center in Memphis, this project will be a model of cooperation between private investors, government and the community at large."
The Jackson Place development will also include The Residences at Jackson Place, a high quality residential development of 50 to 60 units. Parkway will seek to partner with experts in residential development to complete this phase of the development in a manner that is complimentary to the Jackson Place master plan. At this time detailed plans are not available for the residential portion of the development.
As part of the overall project, the downtown parking garage will be leased on a long term basis by Parkway and renovated and redesigned. Extensive improvements will be made to the 1,732 space garage, both to retail spaces in the lobby and parking levels. A specially-landscaped garden area will be located between the garage and the new office building. In addition to the assets at Jackson Place, this garage serves as additional parking for the Company's 111 East Capitol Building.
More information about the project and project renderings can be found at http://www.thepinnacleatjacksonplace.com/.
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, acquisition, ownership, management, and leasing of office properties. The Company is geographically focused on the Southeastern and Southwestern United States and Chicago. Parkway owns or has an interest in 67 office properties located in 11 states with an aggregate of approximately 12,812,000 square feet of leasable space as of October 16, 2006. The Company also offers fee-based real estate services through its wholly owned subsidiary, Parkway Realty Services, to its owned properties and to its third party and minority interest properties.
Parkway Properties, Inc.'s press releases and additional information about the Company are available on the World Wide Web at http://www.pky.com/.
Certain statements in this release that are not in the present tense or discuss the Company's expectations (including the use of the words anticipate, forecast 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; the risks associated with the ownership of real property; and other risks and uncertainties detailed from time to time on 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.
Contact: Steven G. Rogers
President & Chief Executive Officer
William R. Flatt
Chief Financial Officer
(601) 948-4091
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