Parkway Properties to buy Los Angeles company, increase footprint in Texas

Staff and wire reports

ORLANDO, Fla. – Parkway Properties, the owner of about 3.3 million square feet of office space in Charlotte, including the 46-story Hearst Tower, has agreed to buy Thomas Properties Group, based on Los Angeles, the companies announced Thursday.

Parkway, which is based in Orlando and has holdings throughout the southeast as well as in Philadelphia, Houston and Phoenix, is buying Thomas for about $292 million in stock. It will keep Thomas office properties in Houston and Austin, and anticipates selling assets in Austin, Northern Virginia and Philadelphia.

The deal, valued at about $1.2 billion and ultimately including about 4.9 million square feet of office space, was approved unanimously by both companies’ boards of directors and is expected to be finalized by the end of this year.

In addition to the Hearst Tower, Parkway’s properties in Charlotte include 525 North Tryon, Nascar Plaza, and several buildings each in Carmel Crossing on Highway 51; Mallard Creek in the northeast; and Oak Hill Business Park and Parkway Plaza in the Interstate 77 corridor.

Parkway is a real estate investment trust that, before adding Thomas’s assets, owns and operates 13.3 million square feet of office properties.

“Parkway will be adding a portfolio of seven, high-quality assets totaling 4.9 million square feet, each located in one of Parkway’s targeted submarkets,” said James R. Heistand, Parkway’s president and chief executive officer.

“This transaction will significantly expand and upgrade our presence in Houston and simultaneously will allow us to fulfill our stated strategy of expanding into the Austin market. We continue to believe that our markets are in the early stages of recovery, and this transaction will give us an attractive basis with potential opportunity to create additional value through occupancy gains and rental rate growth.”