JACKSON, Miss., May 16 /PRNewswire-FirstCall/ -- Parkway Properties,
Inc. ("Parkway" or the "Company") (NYSE: PKY) announced the signing of a
limited partnership agreement forming Parkway Properties Office Fund II,
L.P. ("Fund II"), a $750 million discretionary fund with the Teacher
Retirement System of Texas ("TRS"), for the purpose of acquiring
high-quality multi-tenant office properties. TRS will be a 70% investor,
and Parkway will be a 30% investor in the fund, which will be capitalized
with approximately $375 million of equity capital and $375 million of
non-recourse, fixed-rate first mortgage debt. Fund II will target
investments in office buildings in Houston, Austin, San Antonio, Chicago,
Atlanta, Phoenix, Charlotte, Memphis, Nashville, Jacksonville, Orlando,
Tampa/St. Petersburg, Ft. Lauderdale, as well as other growth markets to be
determined at Parkway's discretion.
(Logo: http://www.newscom.com/cgi-bin/prnh/20030513/PARKLOGO )
Parkway will serve as the general partner of Fund II and will provide
asset management, property management, and leasing and construction
management services to Fund II for which it will be paid market-based fees.
Parkway will have four years to identify and acquire properties (the
"Investment Period"), with funds contributed as needed to complete
acquisitions, and anticipates a ten-year life for Fund II. Parkway will
exclusively represent Fund II in making acquisitions within the target
markets and within certain predefined criteria. Parkway may continue to
make fee-simple acquisitions in markets outside of the target markets,
acquire properties within the target markets that do not meet Fund II's
specific criteria or sell any currently owned properties.
In addition to the increased current return on investment due to the
fees earned, the benefits to Parkway include full investment discretion
which allows Parkway to be more competitive in the acquisition market, full
operating discretion, longer holding periods for the assets than the
typical joint venture which provides stability and durability in these
enhanced cash flows, and increased efficiency by focusing on core growth
markets. The Company's current guidance for 2008 does not include
additional acquisitions this year. As the timing of acquisitions for Fund
II becomes more certain, the Company will reevaluate the need to update its
earnings outlook. The Company intends to fund its equity contribution
primarily through borrowings under its line of credit and proceeds from
asset sales under its asset recycling program.
Steven G. Rogers, President and Chief Executive Officer stated,
"Parkway is pleased to announce its partnership with the Teacher Retirement
System of Texas to form a $750 million discretionary fund. The Teacher
Retirement System of Texas is well-known and greatly respected for its real
estate investment acumen. Fund II combines the financial capital of TRS
with the operating strength of Parkway to create new investment
opportunities for both entities. This relationship furthers Parkway's
strategy and strengthens our position as a well-established operator of
office assets, not just an investor in such assets. We believe that this
allows Parkway to be the REIT office asset manager and operator of choice
to institutional investors in the private marketplace. Additionally, it
provides us another flexible tool in our tool kit as a public company to
access capital to enhance our balance sheet and shareholder returns."
Eric Lang, Director of Real Assets for the Teacher Retirement System of
Texas stated, "We are also pleased to announce our partnership with Parkway
Properties. Parkway has a proven track record of creating value through
disciplined investments and strong operations. We look forward to expanding
our core office portfolio and receiving solid returns for our beneficiaries
through this long-term relationship."
Parkway Properties, Inc., a member of the S&P Small Cap 600 Index, is a
self-administered real estate investment trust specializing in the
operation, leasing, acquisition, and ownership of office properties. The
Company is geographically focused on the Southeastern and Southwestern
United States and Chicago. Parkway owns or has an interest in 69 office
properties located in 11 states with an aggregate of approximately 14.1
million square feet of leasable space as of May 16, 2008. Included in the
portfolio are 21 properties totaling 3.8 million square feet that are owned
jointly with other investors, representing 27.2% of the portfolio. Under
the Company's GEAR UP plan, which started January 1, 2006, and ends
December 31, 2008, it is the Company's strategy to transform from an
owner-operator to an operator-owner. The strategy highlights the Company's
strength in providing excellent service in the operation of office
properties in addition to its direct ownership of real estate assets.
Fee-based real estate services are offered through the Company's wholly
owned subsidiary, Parkway Realty Services, which also manages and/or leases
approximately 1.8 million square feet for third-party owners as of May 16,
2008.
Celebrating their 70th year of operation, Teacher Retirement System of
Texas has total assets of approximately $110 billion and 1.2 million
participants. TRS is one of the largest retirement systems in the United
States. Additional information about TRS can be found at
http://www.trs.state.tx.us.
Parkway Properties, Inc.'s press releases and additional information
about the Company are available on the Company's web site at http://www.pky.com.
Forward Looking Statement
Certain statements in this release that are not in the present or past
tense or discuss the Company's expectations (including the use of the words
anticipate, forecast or project) are forward-looking statements within the
meaning of the federal securities laws and as such are based upon the
Company's current belief as to the outcome and timing of future events.
There can be no assurance that future developments affecting the Company
will be those anticipated by the Company. 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 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; the risks associated with the ownership and development of real
property; the failure to acquire or sell properties as and when
anticipated; and other risks and uncertainties detailed from time to time
on the Company's SEC filings. Should one or more of these risks or
uncertainties occur, or should underlying assumptions prove incorrect, the
Company's results could differ materially from those expressed in the
forward-looking statements. The Company does not undertake to update
forward-looking statements.
CONTACT: STEVEN G. ROGERS
PRESIDENT & CHIEF EXECUTIVE OFFICER
J. MITCHELL COLLINS
CHIEF FINANCIAL OFFICER
JAMES M. INGRAM
CHIEF INVESTMENT OFFICER
(601) 948-4091
SOURCE Parkway Properties, Inc.
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Related links:
http://www.pky.com
http://www.trs.state.tx.us
Photo Notes:
NewsCom: http://www.newscom.com/cgi-bin/prnh/20030513/PARKLOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com
http://www.prnewswire.com/comp/103115.html /
CONTACT:
Steven G. Rogers, President & Chief Executive
Officer, or J. Mitchell Collins, Chief Financial Officer, or
James M. Ingram, Chief Investment Officer, all of Parkway
Properties, Inc., +1-601-948-4091
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