Parkway Properties will close its Jackson office by the end of this year.
Parkway notified the office’s approximately 40 employees last week, a company spokesperson said.
The real estate investment trust has its Mississippi offices in downtown Jackson’s One Jackson Place. It sold most of its Mississippi portfolio within the past couple years. The only property it still owns in Mississippi is the City Centre in downtown Jackson. Parkway was founded in Jackson in the mid-1980s, and has maintained a presence in the city since. The company moved its corporate headquarters from Jackson to Orlando early last year.
A Parkway spokesperson said the decision was made recently, and is meant to consolidate IT, HR, accounting and similar services into the company’s Orlando office. Jackson employees will be offered a severance package, and will be given the chance to apply for jobs in the Orlando office.
Parkway owns or has an interest in 45 office properties in eight states, most of those in the Sunbelt region. As of April 1, Parkway had approximately 13 million square feet of leasable space, and managed or leased just under 12 million square feet of space for third-party owners.
The company has offices in Atlanta, Charlotte, Phoenix, Jacksonville, Tampa and Houston.
The Jackson office’s closure is a blow to downtown.
At the end of 2012, downtown Jackson’s office vacancy rate hovered around 40 percent, after the Landmark Center lost anchor tenant AT&T late last year, John Barton, a Parkway Properties senior vice president and senior asset manager, told the Mississippi Business Journal last October. Parkway conducted quarterly office market surveys until the company ceased doing them last year. AT&T now occupies about 40,000 square-feet of space in the 111 Capitol Building on Capitol Street.
Landmark’s loss of AT&T left 350,000 square feet of vacant space in downtown Jackson’s inventory of about 3.2 million square feet, an increase of about 10 percent in the Central Business District vacancy rate. “We’re looking at 38 percent to 40 percent” vacancy, Barton said then. He said that the higher vacancy could further depress CBD lease rates. Parkway owned the Landmark Center until selling it last year to Hertz Investment Group.
Downtown Jackson Partners president told the Mississippi Business Journal last fall that the 40 percent vacancy rate was misleading, due to several blocs of office space undergoing redevelopment and not being actively marketed to new tenants.
Parkway’s pending closure is the second blow to downtown this year. In the spring, the Mississippi Department of Finance Administration recommended Clinton’s South pointe office complex for the Mississippi Department of Revenue’s new location. Downtown proponents had argued Landmark was the best spot for the department’s roughly 500 employees. The tug-of-war between Jackson and Clinton for the DOR prize had elicited a full-scale public relations campaign from supporters of each location.
Parkway’s near-total exit from the Jackson market last year was viewed by favorably by industry analysts. The move was part of the company’s shifting its focus to its core markets, and diminishing its presence in secondary, or tertiary, markets.