JACKSON, Miss., June 2 /PRNewswire-FirstCall/ -- PARKWAY PROPERTIES, INC. today announced the closing of the fee simple sale of the 1717 St. James Place office property located in Houston, Texas. The 1975 office building is a 110,000 square foot property that was 87.9% occupied at June 1, 2009. The gross sales price was $8.7 million and represents a capitalization rate of approximately 10.0% on twelve months projected cash net operating income from the date of closing. Parkway received net cash proceeds from the sale of approximately $8.4 million. The Company will recognize a gain on the sale of approximately $450,000 in the second quarter of 2009.
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Parkway also announced that the following significant new and renewal leasing agreements have been signed subsequent to April 22, 2009 (the date of the Company's first quarter earnings press release). The Company signed a new lease agreement with a public company on 101,000 square feet at One Commerce Green in Houston, Texas, which will replace 100% of the DHL Airways space that expires in November, 2009. In addition, the Company announced the renewal lease of The Automation Group for 34,000 square feet at Town & Country in Houston, Texas, which was scheduled to expire in late 2009. The Company's occupancy at June 1, 2009, is 89.3% as compared to 89.2% at April 1, 2009.
The Company recently closed an $18.5 million non-recourse first mortgage at 7.58% per annum for seven years with John Hancock Life Insurance Company secured by two properties in Houston, Texas. Proceeds from the refinancing were used to reduce amounts outstanding under the Company's line of credit. At June 1, 2009, the balance outstanding on the Company's line of credit was $100.0 million. Additionally, the Company had approximately $32.0 million in cash and cash equivalents.
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 13.4 million square feet of leasable space at June 2, 2009. Included in the portfolio are 21 properties totaling 3.9 million square feet that are owned jointly with other investors, representing 28.8% 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 1.9 million square feet for third-party owners at June 2, 2009.
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: STEVEN G. ROGERS CHIEF EXECUTIVE OFFICER J. MITCHELL COLLINS CHIEF FINANCIAL OFFICER (601) 948-4091
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Parkway Properties, Inc.
CONTACT: Steven G. Rogers, Chief Executive Officer, or J. Mitchell
Collins, Chief Financial Officer, both of Parkway Properties, Inc.,
+1-601-948-4091
Web Site: http://www.pky.com/
