Parkway expects office vacancies to rise

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Published: January 16,2011

Tags: Commercial Real Estate, leases, occupancy, real estate

JACKSON — Parkway Properties Inc. signed a total of 178,000 square feet of new leases, 594,000 square feet of renewal leases and 46,000 square feet of expansion leases during the fourth quarter of 2010.

Key metrics associated with this activity will be disclosed in the Company’s fourth quarter 2010 earnings press release and supplemental package.

Additionally, Parkway currently anticipates customers occupying approximately 431,000 square feet to either vacate or contract upon lease expiration during the first quarter of 2011. This represents 3.3 percent of the total portfolio and 71 percent of total first quarter lease expirations.

The company’s portfolio is currently 85.6 percent occupied.

After accounting for recent leasing activity, and offset by known move-outs, Parkway’s portfolio is anticipated to be 83.4 percent leased. This leased percentage does not include pending leasing activity for leases not yet signed, and Parkway anticipates 2011 leasing volume to be in line with historical levels.

William R. Flatt, COO at Parkway, said, “We expect our occupancy to decline during the first quarter of 2011 due to a larger than normal amount of known move-outs and contractions, the majority of which have either been previously disclosed or will not have a negative impact on cash income in 2011. We continue to see encouraging levels of new and expansion leasing activity and anticipate our occupancy to begin to recover after the first quarter.”

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