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TAMPA, FLA. — Parkway Properties Inc. (NYSE: PKY) has reached an agreement to acquire three Class A office properties located in the Westshore submarket of Tampa. Corporate Center I, II, and III at International Plaza, which are adjacent to Parkway's Corporate Center IV at International Plaza, total approximately 974,000 square feet. HFF represented the undisclosed seller in the transaction.

As part of the same deal, Parkway has agreed to purchase 19 additional office properties located in six states totaling approximately 2.1 million square feet. The Orlando-based real estate investment trust (REIT) intends to sell these 19 properties, which are not consistent with Parkway's current investment strategy. Parkway plans to sell the assets either concurrently with, or within 12 months after, the acquisition of the Corporate Center assets.

Parkway's gross purchase price for the entire portfolio is $475 million. Parkway expects the closing of the portfolio acquisition to occur during the fourth quarter of 2014.

The Corporate Center assets have a combined occupancy of 69.7 percent, which is adjusted to reflect approximately 50,000 square feet of known move-outs during the next 12 months.

“This transaction is an example of Parkway's ability to creatively structure a deal that will enable us to enhance critical mass in a targeted submarket at an attractive cost basis,” says James Heistand, president and CEO of Parkway. “The Corporate Center at International Plaza assets are within the strongest performing submarket in Tampa. The assets are currently well below market occupancy, and we believe we can leverage our existing regional operating platform to add value to the assets and replicate our recent leasing success within the Westshore submarket.”

Parkway estimates that the initial full-year cash net operating income (NOI) yield for the Corporate Center assets will be in the range of 4.4 to 4.7 percent. After adjusting for initial full-year contractual rent concessions, Parkway estimates that the initial full-year cash NOI yield will be in the range of 5.7 to 6.0 percent.

Parkway Properties Inc. owns or has an interest in 51 office properties located in eight states with an aggregate of approximately 18.3 million square feet of leasable space as of July 1, 2014. The company also manages and/or leases approximately 11.1 million square feet for third-party owners as of July 1, 2014.

Parkway Properties’ stock price closed at $19.43 per share on Friday, Sept. 19, up from $17.27 per share at this time last year.

— John Nelson

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