JACKSON, Miss., June 29 /PRNewswire-FirstCall/ -- Parkway Properties, Inc. today announced the closing of the fee simple sale of two properties in Knoxville, Tennessee totalling 549,000 square feet. First Tennessee Plaza in the downtown Knoxville submarket and Cedar Ridge in the Cedar Bluff submarket were a combined 91% occupied as of June 1, 2007. The gross sales price was $59.0 million and represents a capitalization rate of approximately 7.7% on the projected 2007 cash net operating income. Parkway received net cash proceeds from the sale of approximately $56.8 million and the proceeds were used to prepay the $7.4 million first mortgage and to reduce amounts outstanding under the Company's bank lines of credit. The Company will recognize a gain on the sale of approximately $20.3 million and expenses related to the prepayment of the mortgage of approximately $494,000 in the second quarter. Parkway Realty Services LLC was retained to provide management services for the properties under a five-year agreement.
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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 65 office properties located in 11 states with an aggregate of approximately 12.9 million square feet of leasable space as of June 29, 2007. Included in the portfolio are 18 properties totaling 2.7 million square feet that are owned jointly with other investors, representing 21% of the portfolio. Under the Company's GEAR UP Plan, which started January 1, 2006 and ends December 31, 2008, it is the Company's goal to transform its strategy from being an owner-operator to being an operator- owner. The strategy highlights the Company's strength in providing excellent service in the operation of office properties in addition to its direct ownership of real estate assets. 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 as of June 29, 2007.
Parkway Properties, Inc.'s press releases and additional information about the Company are available on the World Wide Web at http://www.pky.com/.
CONTACT: William R. Flatt
Chief Financial Officer
(601) 948-4091
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