JACKSON, Miss., April 15 /PRNewswire-FirstCall/ -- Parkway Properties, Inc. today announced the closing of the fee simple sale of the One Park Ten office property, located in Houston, Texas. One Park Ten is a 163,000 square foot property built in 1982 that was 93.7% occupied as of April 1, 2010. The gross sales price was $15.7 million and represents a capitalization rate of approximately 10.35% based on in place cash net operating income. Parkway received net cash proceeds from the sale of approximately $4.8 million, which were used to reduce amounts outstanding under the Company's line of credit. The $8.7 million first mortgage was assumed by the Buyer, and Parkway is also providing a $1.5 million seller financing loan, which bears interest at 7.25% with interest-only payments maturing on June 1, 2012. The Company will recognize a gain on the sale of approximately $8.6 million in the second quarter of 2010.
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Steven G. Rogers, President and Chief Executive Officer stated, "We are pleased to complete the sale of this asset as part of the Company's ongoing asset recycling program aimed at transitioning our portfolio into larger, newer assets. We purchased One Park Ten in 1996 and it has performed well over the past 14 years. We were also successful in retaining management at the property, as well as extending our current management contract at 1717 St. James Place, which expands our operator/owner strategy. As a result of the sale, we reduced total Company debt by $13.5 million, which further improves our balance sheet metrics. Both the improvement in our balance sheet and the increase in third-party fee income that resulted from this sale are key elements of our recently announced FOCUS Plan."
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 April 15, 2010. Included in the portfolio are 21 properties totaling 3.9 million square feet that are owned jointly with other investors, representing 29.3% 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 2.8 million square feet for third-party owners at April 15, 2010.
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 PRESIDENT & CHIEF EXECUTIVE OFFICER (601) 948-4091 MANDY M. POPE INTERIM CHIEF FINANCIAL OFFICER (601) 948-4091
Parkway Properties, Inc.
CONTACT: Steven G. Rogers, President & Chief Executive Officer,
+1-601-948-4091, Mandy M. Pope, Interim Chief Financial Officer,
+1-601-948-4091
Web Site: http://www.pky.com/
