Parkway Properties Takes Further Steps to Reposition Portfolio

Parkway Properties Inc., an Orlando-based REIT, has been repositioning its office properties portfolio. Most recently, it sold two Atlanta assets and a smaller building in New Orleans.

Parkway Properties Inc., an Orlando-based REIT, has been repositioning its office properties portfolio. Most recently, it sold two Atlanta assets for $29.9 million and a smaller building in New Orleans for $765,000.

Peachtree Ridge and 100 Ashford Center in Atlanta totaled 321,000 square feet and were 74.6 percent occupied at closing. The unidentified buyer assumed the $29.7 million first mortgage secured by the properties. Parkway received about $211,000 in net proceeds from the sale. Both properties were part of Parkway’s first discretionary fund, known as Fund I. The REIT has now completed the sale of all the assets in Fund I.

The REIT also announced this week that it sold a 32,000-square-foot office property in New Orleans, receiving approximately $742,000 in net proceeds. The building was vacant and had no debt.

The dispositions are part of Parkway’s previously announced plan to become “a leading owner of high-quality office assets in higher-growth markets in the Sunbelt.” While Parkway continues to own numerous assets in Atlanta, a company executive told Commercial Property Executive in June that it was focusing on the Buckhead section of Atlanta as one of its core markets. Other markets Parkway wants to expand in are Jacksonville, Tampa and Orlando in Florida; Houston; Phoenix; and Charlotte, N.C. It wants to acquire properties in two new markets, Miami and Austin.

“Through 2011and early 2012, it’s been a portfolio recycling exercise and getting out of those non-core markets and focusing on the core markets. During that time, we also substantially deleveraged our balance sheet,” said David O’Reilly, executive vice president, chief investment officer & interim chief financial officer.

In recent months, Parkway has sold all its Richmond, Va., assets, as well as properties in Memphis and Jackson, Miss. The REIT has also been aggressively picking up properties, including the Hearst Tower, a 46-story, 972,000-square-foot office tower in downtown Charlotte that it bought in June for $250 million.

Parkway now owns or has an interest in 42 office properties in 10 states with about 10.7 million square feet of leasable space. Wholly-owned subsidiaries of the company also manage and/or lease approximately 12.2 million square feet of space for third-party owners.