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Parkway Announces Agreements To Purchase Tampa Fund II Assets And Tempe Office Property



Parkway Announces Agreements To Purchase Tampa Fund II Assets And Tempe Office
                                   Property

PR Newswire

ORLANDO, Fla., March 19, 2013

ORLANDO, Fla., March 19, 2013 /PRNewswire/ -- Parkway Properties, Inc.
(NYSE:PKY) announced today that it has entered into a purchase and sale
agreement to acquire its co-investor's 70% interest in three office properties
located in the Westshore submarket of Tampa, Florida owned by Parkway
Properties Office Fund II, L.P. ("Fund II") and has entered into a purchase
and sale agreement to acquire a 75% interest in the US Airways Building, a
225,000 square foot office building located in the Tempe submarket of Phoenix,
Arizona.  

(Logo:  http://photos.prnewswire.com/prnh/20030513/PARKLOGO )

James R. Heistand, Parkway's President and Chief Executive Officer, stated,
"Our Fund II assets in Tampa have performed well since they were acquired by
Fund II, and we believe there is still plenty of opportunity for upside in
these properties through both occupancy gains and rental rate growth.  The US
Airways Building gives us further scale in the Tempe submarket with a
high-quality core asset that we believe will generate stable cash flows for a
number of years.  Our investment strategy is focused on gaining a critical
mass in targeted submarkets throughout the Sunbelt that we expect to
outperform the overall market.  Each of these acquisitions fits well within
this approach and complements our blended portfolio of core, core-plus and
value-add investments."

Tampa Fund II Assets

Parkway is under contract to acquire its co-investor's 70% interest in three
office properties located in the Westshore submarket of Tampa, Florida owned
by Fund II (the "Tampa Fund II Assets").  The agreed-upon gross valuation of
the Tampa Fund II Assets is $139.3 million.  Parkway's purchase price for its
co-investor's 70% interest in the Tampa Fund II Assets is $97.5 million, which
will be funded at closing using approximately $56.8 million of cash (subject
to closing prorations and other customary adjustments) and the assumption of
$40.7 million of in-place mortgage indebtedness that is secured by the
properties, which represents its co-investor's 70% share of the approximately
$58.1 million of current in-place mortgage indebtedness.  The three assets
include Corporate Center IV at International Plaza, Cypress Center I, II and
III, and The Pointe.  The Tampa Fund II Assets had a combined occupancy of
93.5% as of March 1, 2013 and are expected to generate an initial full-year
cash net operating income yield of approximately 8.1%.  Closing is expected to
occur by the end of the first quarter 2013, subject to customary closing
conditions. 

US Airways Building

Parkway is under contract to acquire a 75% interest in the US Airways Building
in the Tempe submarket of Phoenix, Arizona.  The agreed-upon gross valuation
of the US Airways Building is $56.0 million.  Parkway's purchase price for the
approximate 75% interest is $41.8 million.  US Airways will retain the
remaining 25% interest in the property.  The US Airways Building was built in
1999 and is LEED^® Gold Certified.  It is located adjacent to Parkway's Hayden
Ferry Lakeside and Tempe Gateway assets and shares a parking garage with Tempe
Gateway.  The property is 100% leased to US Airways through April 2024 with a
current in place net rent of $17.50 per square foot.  US Airways has the
option to terminate its lease on December 31, 2016 or December 31, 2021 with
12 months prior written notice.  The property is expected to generate an
initial full-year cash net operating income yield of approximately 7.0%. 
Closing is expected to occur by the end of the second quarter 2013, subject to
customary closing conditions and Parkway's satisfactory completion of due
diligence. 

About Parkway Properties

Parkway Properties, Inc., a member of the S&P Small Cap 600 Index, is a
self-administered real estate investment trust specializing in the ownership
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 nine states with an aggregate of approximately 11.9 million square
feet of leasable space at January 1, 2013.  Fee-based real estate services are
offered through wholly owned subsidiaries of the Company, which in total
manage and/or lease approximately 10.8 million square feet for third-party
owners at January 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," "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 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, estimates of
market rental rates, the expected operating performance of anticipated
near-term acquisitions 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 demand for and market acceptance of the Company's
properties for rental purposes; the ability of the Company to enter into new
leases or renew 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:
Thomas E. Blalock
Vice President of Investor Relations
(407) 650-0593

SOURCE Parkway Properties, Inc.

Website: http://www.pky.com
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