CHARLOTTE, N.C. — Parkway Properties (NYSE: PKY) has closed on the acquisition of the 972,000-square-foot Hearst Tower, an office building located in Charlotte’s CBD. Additionally, the company has received a $200 million equity investment by TPG, a leading global private investment firm.
“We are pleased to have completed these important steps in the evolution of Parkway as we continue to position ourselves for long-term growth,” says Jim Heistand, president and CEO of Orlando, Florida-based Parkway. “We remain firmly committed to improving operations and cash flow, and on pursuing new acquisitions to grow the company.”
The 46-story office tower is 94 percent leased, and tenants include Bank of America, which signed a new lease for 322,000 square feet in the building. The property is expected to generate cash net operating income of approximately $17.5 million during the first year of the company’s ownership period.
“Parkway’s high-quality office portfolio, which is concentrated in attractive Sunbelt markets, provides a unique investment opportunity,” says Avi Banyasz, partner at TPG. “Hearst Tower is a great example of the type of investments Parkway’s talented management team will seek to identify and secure in the future.”
The acquisition was financed with the money received from TPG, as well as borrowings on the company’s credit facility.
“With TPG’s financial commitment and strategic partnership, we will continue to take advantage of attractive opportunities, such as Hearst Tower, as we strive to become one of the leading owners of high-quality office properties in select submarkets throughout the fast-growing Sunbelt region,” Heistand says.
Currently, the company owns or has interest in 42 office properties, which total 10.7 million square feet.
Parkway’s stock price on Wednesday closed at $10.88 per share, down from $16.58 a year earlier.