While Parkway Properties is shifting its operations to Orlando and selling off nearly all its Jackson office properties, a company often incorrectly thought of as a cousin to Parkway – EastGroup Properties – is staying put in Mississippi’s capital.
EastGroup CEO David H. Hoster II says the only reason his company and Parkway are believed to be joined at the hip is that they share the same founder – Leland Speed.
Both are publicly held real estate investment trusts and both came to Jackson more than 25 years ago under Speed’s direction. Speed, too, has had a hand in guiding the growth of both.
But these days operational management and the specialties in which they operate – office properties for Parkway, industrial warehouse for EastGroup – are separate.
And, as Hoster is quick to note, EastGroup is capitalized at a much higher level than Parkway. EastGroup has common equity of $1.2 billion and assets in the $2 billion neighborhood. Parkway, which recently acquired Orlando’s Eola Properties in a $436 million deal, has common equity of about $200 million, Hoster noted.
Today, with Speed in the role of chairman emeritus of Parkway, EastGroup has no board or management overlap with Parkway, according to Hoster.
However, the two real estate entities had substantial board and management overlap up to the early 1990s. Change came, Hoster said, when EastGroup determined that for it to grow “the companies had to be totally independent from that point going forward.”
From then on, the only connection between the two companies was Leland Speed’s chairmanship of both.
Parkway originated as a real estate investment firm in Houston in the early 1970s. An investor group headed by Speed got control of the company and moved it to Jackson around 1980, Hoster said.
Meanwhile, EastGroup started life in New York City as ICM Realty in 1969 and went public in 1971. Jackson investors led by Speed subsequently took over the firm’s board and moved the operation to Jackson in 1983.
EastGroup, which rents headquarters space at Parkway’s Pinnacle at One Jackson, is not going anywhere, Hoster said.
The company has regional offices in Orlando, Phoenix and Houston and a half dozen property management offices around the Southeast and Southwest. Having the right management on the ground in key markets makes it possible to remain in Jackson, Hoster said. “We have sent senior people out into the field to live and work in the markets they are responsible for.”