Profile: Parkway Properties Inc (PKY.N)

PKY.N on New York Stock Exchange

17.78USD
1 Aug 2013
Price Change (% chg)

$0.28 (+1.60%)
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Parkway Properties, Inc. (Parkway), incorporated on May 17,1996, is a self-administered real estate investment trust (REIT) specializing in the ownership of office properties in higher growth submarkets in the Sunbelt region of the United States. The Company owned or had an interest in 43 office properties located in nine states with an aggregate of approximately 11.9 million square feet of leasable space. It offers fee-based real estate services through wholly owned subsidiaries, which in total managed and/or leased approximately 10.8 million square feet for third-party property owners at January 1, 2013. The Company generally performs commercial real estate leasing, management and acquisition services on an in-house basis. As of December 31, 2012, it had 286 employees. Its principal executive office is located at 390 North Orange Avenue, Suite 2400, Orlando, FL 32801 and its telephone number is (407) 650-0593. In addition, it has regional offices in Jackson, MS and Jacksonville, FL. In July 2012, the Company sold 100 Ashford Center and Peachtree Ridge, both located in Atlanta. In December 2012, the Company acquired Phoenix Tower and 525 North Tryon. Effective March 7, 2013, it acquired eight undisclosed office buildings, located in Jacksonville, Florida. In July 2013, Parkway Properties Inc announced the sale of Waterstone.

As of December 31, 2012, it had one partnership structured as a discretionary fund. Parkway Properties Office Fund II, L.P. (Fund II), a $750.0 million discretionary fund, was formed on May 14, 2008 and was fully invested at February 10, 2012. Fund II was structured with Teacher Retirement System of Texas (TRST) as a 70% investor and its operating partnership is a 30% investor. Fund II owns 13 properties totaling 4.2 million square feet in Atlanta, Charlotte, Phoenix, Jacksonville, Orlando, Tampa and Philadelphia. It consists of a 2,500 space parking garage, a 21,000 square foot office property and a vacant parcel of development land, all adjacent to Fund II's Hayden Ferry Lakeside I and Hayden Ferry Lakeside II office properties in Phoenix.

The Company serves as the general partner of Fund II and provides asset management, property management, leasing and construction management services to the fund, for which it is paid market-based fees. Cash is distributed by Fund II pro rata to each partner until a 9% annual cumulative preferred return is received and invested capital is returned. It benefits from a fully integrated management infrastructure, provided by its wholly owned subsidiaries. As of January 1, 2013, its management companies managed and/or leased properties containing an aggregate of approximately 22.6 million net rentable square feet, of which approximately 11.8 million net rentable square feet related to properties owned fully or partially by them and approximately 10.8 million net rentable square feet related to properties owned by third parties.

The Company monitors a number of leverage and other financial metrics defined in its senior unsecured revolving credit facility and unsecured term loan, which includes but is not limited to its total debt to total asset value. In addition it also monitor interest, fixed charge and modified fixed charge coverage ratios as well as the net debt to earnings before interest, taxes, depreciation and amortization (EBITDA) multiple. The Company‘s primary business is the ownership and operation of office properties. It accounts for each office property or groups of related office properties as an individual operating segment. It has aggregated its individual operating segments into a single reporting segment due to the fact that the individual operating segments have similar operating and economic characteristics, such as being leased by the square foot, sharing the same primary operating expenses and ancillary revenue opportunities and being cyclical in the economic performance based on current supply and demand conditions. The individual operating segments are also similar in that revenues are derived from the leasing of office space to tenants and each office property is managed and operated consistently in accordance with its standard operating procedures. The range and type of tenant uses of its properties is similar throughout its portfolio regardless of location or class of building and the needs and priorities of its tenants do not vary widely from building to building. Therefore, its management responsibilities do not vary widely from location to location based on the size of the building, geographic location or class.

The Company generally financed these acquisitions through availability under its senior unsecured revolving credit facilities. The Company purchased these nine assets at an estimated weighted average capitalization rate of 6.8%. On January 17, 2013, it purchased Tower Place 200, a 260,000 square foot office tower located in the Buckhead submarket of Atlanta, Georgia. The purchase of Tower Place 200 was financed with borrowings on its unsecured credit facilities. During the year ended December 31, 2012, the Company completed dispositions as part of its strategic objective of becoming a owner of high-quality office assets in higher-growth markets in the Sunbelt region of the United States. As of December 31, 2011, it had completed the sale of nine of these 13 assets. As of July 1, 2012, it had completed the sale of the remaining four Fund I assets. It completed the sale of four additional assets during the year ended December 31, 2012, including the sale of 111 East Wacker, a 1.0 million square foot office property located in Chicago, Illinois, the Wink building, a 32,000 square foot office property in New Orleans, Louisiana, Sugar Grove, a 124,000 square foot office property in Houston, Texas, and Falls Pointe, a 107,000 square foot office property located in Atlanta, Georgia owned by Fund II.

During the year ended December 31, 2012, it completed the sale of 15 properties included in its strategic sale of a portfolio of non-core assets. The 15 assets that were sold included five assets in Richmond, Virginia, four assets in Memphis, Tennessee and six assets in Jackson, Mississippi. As of January 1, 2013, its office properties were leased to 884 customers, which are in a wide variety of industries including banking, insurance, professional services (including legal, accounting, and consulting), energy, financial services and telecommunications.

Company Address

Parkway Properties Inc

Bank of America Center
Suite 2400, 390 North Orange Ave
ORLANDO   FL   32801
P: +1407.6500593

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