VOL. 127 | NO. 5 | Monday, January 9, 2012
Parkway Sells Most of Local CRE Portfolio
By Sarah Baker
Parkway Properties Inc. has sold the majority of its Memphis portfolio, totaling 672,247 square feet, to Hertz Investment Group LLC.
The news is part of Parkway’s contract to sell a portfolio of 15 non-core assets spanning 1.9 million square feet in Memphis, Jackson, Miss., and Richmond, Va., for a gross sale price of $147.5 million. Parkway announced the disposition of Falls Building, Forum I, II & III, and Toyota Center in the same Thursday, Jan. 5, statement that announced the date of its fourth quarter 2011 earnings release and conference call.
Jackson, Miss.-based Parkway is a real estate investment trust (REIT) specializing in the ownership of office properties. Prior to the sale, Parkway owned 1.2 million square feet of office property in the Memphis area, including the Renaissance Center, Forum, Morgan Keegan Tower, Falls Building and Toyota Center.
The company announced in November it would sell the Renaissance Center, and local experts expected the deal to close by 2011’s end.
Parkway did not directly mention its remaining asset in Memphis – Morgan Keegan Tower – but did say it had “one remaining asset located in Memphis totaling 337,000 square feet. … The remaining assets in Jackson and Memphis will continue to be marketed for sale.”
James R. Heistand, who took over as president and CEO of Parkway Jan. 1, said in the release that part of Parkway’s new strategy is to pursue an efficient exit from certain non-core markets.
“As a result of the thorough review of all of our markets, we determined that Jackson, Memphis and Richmond were non-core markets,” Heistand said. “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.”