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Parkway packs bags

<< MBJ’s Sept. 19 cover story, by Amy McCullough, details the rational of why Parkway Properties decided to move its headquarters from Jackson to Florida.

The headquarters for Jackson’s Parkway Properties Inc. will move to downtown Orlando, Fla., in early 2012, according to a statement made by the upcoming CEO in a Florida newspaper in October. A handful of senior level management will transfer, but most of Parkway’s 89 Jackson employees will stay in town.

Parkway Properties is a publicly traded real estate investment trust that owns or has an interest in more than 60 office properties in 12 states. The company was founded by Leland Speed, current director of the Mississippi Development Authority. It has about 14 million square feet of leasable space.

CEO Steve Rogers, 57, a Jackson native who has led the company for more than 18 years, announced his retirement in September to spend more time with family.

Regarding the move and possible future reductions in Jackson’s employee base, Rogers said he could not speculate and noted that businesses today operate in a world that is somewhat “virtual” due to technological advances.

“It’s difficult to speculate on that. All I can say is the Eola organization’s accounting department has been in Jacksonville, Fla. for 15 years. It’s worked very well for them, and it’s working very well today. … The way the world works off technology now … everyone just does not have to be in the same room any longer,” he said.

Company chairman Jim Heistand – who founded Orlando-based Eola Capital, which combined with Parkway earlier this year — will become CEO Jan. 1. Charles Cannada will become the new board chairman. M. Jayson Lipsey, who was Parkway’s senior vice president and fund manager, became chief operating officer in October. The incoming chief investment officer is David O’Reilly, a longtime associate of Heistand’s.

O’Reilly told the Orlando Sentinel the company will be looking to improve its market position: “Generally speaking, it’s not difficult to see that, historically over the last three, five, or 10 years, Parkway has underperformed the market, and we would like to restore Parkway to where it was in the mid-1990s as one of the leading REITs in the industry.”

In May Parkway combined with Eola Capital, paying paid more than $32 million for the transaction in which it acquired some Eola assets and management contracts and hired 135 Eola employees.

Eola is one of the largest privately held commercial real estate firms in the eastern United States. Eola and affiliates own, manage or have an interest in 90 office properties in six states with an aggregate of more than 14 million feet of leasable space.

In September Parkway sold 111 East Wacker, a 32-story tower in Chicago, for $150 million.

In a press release Rogers said, “In addition to the strategic benefit of narrowing our operational focus, we expect this sale to produce a number of financial benefits. Specifically, the sale of this property will remove the single largest mortgage loan from our balance sheet, significantly reducing our leverage.”

A lawsuit is still in progress in Hinds County Circuit Court in which Parkway’s former chief financial officer, Mitch Collins, is suing the company on claims of wrongful termination, defamation and fraud, claiming there were issues with forward-looking guidance and liquidity. Collins says he resigned from the company, while Parkway says he was a “workplace bully” who was fired.


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About Amy McCullough

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