Parkway Properties Inc., an office landlord with a market value of about $2 billion, is in the early stages of exploring strategic options including a sale, people with knowledge of the matter said.
The Orlando, Florida-based real estate investment trust, which owns office properties throughout the southern U.S., is working with Bank of America Corp.’s Merrill Lynch and Wells Fargo & Co., said the people, who asked not to be identified because the information is private. Prospective buyers haven’t yet been invited to make offers, they said.
Private equity firm TPG Capital is the company’s largest shareholder, with a stake of more than 21 percent. Parkway’s shares have dropped 15 percent in the past year. It isn’t clear if a sale of the business would attract interest from other REITs or a buyout firm, one of the people said.
A spokesman for Parkway didn’t immediately respond to requests for comment, while spokesmen for TPG and Bank of America declined to comment. A representative for Wells Fargo didn’t immediately respond to a request for comment.
Most REITs are publicly traded companies that own and operate property including apartments, offices, retail, self-storage facilities and hotels. By law, they must pay out at least 90 percent of taxable earnings to shareholders annually as dividends.
On Wednesday, Chambers Street Properties agreed to buy Gramercy Property Trust Inc. in an all-stock deal that will create a REIT with an expected enterprise value of about $5.7 billion. The combined company will have 288 properties, mostly net-lease office and industrial buildings, in the U.S. and Europe.