ORLANDO, Fla., Nov. 11, 2013 /PRNewswire/ --Parkway Properties, Inc. (NYSE: PKY) announced today that its previously disclosed joint venture that owned the mortgage note secured by 7000 Central Park in Atlanta, Georgia has foreclosed on the asset and taken ownership of the property. Additionally, Parkway announced that it has completed the sale of Carmel Crossing, a 326,000 square foot office complex located in Charlotte, North Carolina.
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7000 Central Park is an 18-story, 415,000 square foot, Class A office tower located in the Central Perimeter of Atlanta. It was built in 1988 with an attached structured parking garage, and offers numerous amenities including a 7,000 square foot fitness club. The property is currently 77.5% occupied and is expected to generate initial full-year cash net operating income yield of approximately 5.0%.
Parkway previously announced that the Company acquired a 40% common equity interest in a mortgage note secured by 7000 Central Park, which had an outstanding balance of $65 million at closing. The total purchase price for the note was $56.6 million plus an additional $318,000 in transaction costs. Parkway's share of such amount was approximately $45.0 million, comprised of an investment of approximately $37.0 million for a preferred equity interest in the joint venture that acquired the note and an investment of approximately $8.0 million for a 40% common equity interest. On November 5, 2013, the joint venture foreclosed on the property and assumed ownership of the asset. The joint venture intends to place secured financing on the asset, the proceeds of which will be used to repay in part the Company's preferred equity investment.
On November 8, 2013, Parkway completed the sale of Carmel Crossing for a gross purchase price of $37.5 million. Parkway had a 30% ownership interest in the property, which was owned by Parkway Properties Office Fund II, L.P. The Fund originally purchased the asset in November 2010, for a gross purchase price of $25 million. During the fourth quarter, Parkway expects to record a gain on the sale of approximately $14.5 million, $4.4 million of which is Parkway's share, and expenses related to the prepayment of the mortgage of approximately $2.1 million, $620,000 of which is Parkway's share. Additionally, Parkway expects to receive approximately $7.1 million in its share of net proceeds.
About Parkway Properties
Parkway Properties, Inc. is a fully integrated, self-administered and self-managed real estate investment trust specializing in the acquisition, ownership and management of quality office properties in higher growth submarkets in the Sunbelt region of the United States. Parkway owns or has an interest in 43 office properties located in eight states with an aggregate of approximately 12.6 million square feet at October 1, 2013. Parkway also offers fee-based real estate services which manage and/or lease approximately 11.7 million square feet for third parties as of October 1, 2013. Additional information about Parkway is available on the company's website at www.pky.com.
Forward Looking Statement
Certain statements in this press release that are not in the present or past tense or that discuss the Company's expectations (including any use of the words "anticipate," "assume," "believe," "estimate," "expect," "forecast," "guidance," "intend," "may," "might," "outlook," "project", "should" 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 beliefs as to the outcome and timing of future events. There can be no assurance that actual future developments affecting the Company will be those anticipated by the Company. Examples of forward-looking statements include projected 2013 fully diluted EPS, share of depreciation and amortization, reported FFO per share, projected net operating income, cap rates, internal rates of return, future dividend payment rates, forecasts of FFO accretion, projected capital improvements, expected sources of financing, expectations as to the timing of closing of acquisitions, dispositions and other potential transactions and descriptions relating to these expectations. 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 actual or perceived impact of U.S. monetary policy; the demand for and market acceptance of the Company's properties for rental purposes; the ability of the Company to enter into new leases or renewal leases on favorable terms; 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; risks associated with the ownership and development of real property; 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; the ability to satisfy conditions necessary to close pending transactions and the ability to successfully integrate pending transactions; applicable regulatory changes; 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 financial results could differ materially from those expressed in the Company's forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for us to predict the occurrence of those matters or the manner in which they may affect us. The Company does not undertake to update forward-looking statements except as may be required by law.
Contact:
Ted McHugh
Director of Investor Relations
(407) 650-0593
SOURCE Parkway Properties, Inc.
