Parkway continues ‘shift’ with sale of 15 buildings
Published: January 6,2012
JACKSON — Parkway Properties Inc. is selling 15 buildings for $147.5 million to Hertz Investment Group. The sale of structures in Jackson, Memphis, Tenn., and Richmond, Va., is part of a shift out of what Parkway now describes as “non-core” markets.
Parkway said yesterday it would sell four buildings and a parking garage in Jackson, four buildings in Memphis and five buildings in Richmond. The company estimates it will incur a non-cash loss of $58 million to $60 million in 2011’s fourth quarter on the sale.
The buildings have 1.9 million square feet of space, and are 76 percent occupied.
Parkway, which recently shifted its headquarters from Jackson to Orlando, Fla., will have one building left in Jackson and one left in Memphis. Parkway is trying to sell each. It will own no more buildings in Richmond.
Privately held Hertz, based in Santa Monica, Calif., already owns the tallest building in downtown Jackson. It backed out of buying a building in Memphis in 2007, and now will be entering Memphis and Richmond for the first time. The sale is expected to close by the end of March, and Parkway plans to use proceeds to buy new buildings elsewhere.
“A portfolio sale of these assets allows us to quickly realign our overall portfolio and focus our resources and capital on building critical mass in our remaining core markets,” Parkway CEO James Heistand said in a statement.
Parkway said it had also completed a sale of nine other buildings from one of its investment funds to its partner, the Ohio Public Employees Retirement System. The company is in the process of selling four other buildings from the fund. The total sale price for the 13 is $344 million, although Parkway will net much less after paying off mortgages.
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