Still, the good news for the real estate investment company during Q2 2009 was that funds from operations, at $0.86 per diluted share, versus $1.03 per diluted share a year ago; and portfolio occupancy, which stood at 89.5% versus last year's figure of 91.3%, exceeded internal expectations. During the previous quarter, Parkway Properties also completed an $85-million stock offering, geared to provide borrowing capacity to help retire debt maturities well into 2013. The company is also working to unload its non-core assets. By that time, commented Parkway Properties president and CEO Steven G. Rogers, the economy should be well on its way to recovery.

Another activity during Q2 involved expanding the company's realty platform in Houston, which is one of Parkway Properties' stronger locations. This was accomplished by hiring Mark Preston, formerly of Moody Rambin Interests, as Parkway Properties' senior vice president. "Mark complements a strong Houston team and will help us expand our leasing and management services in Houston," Rogers commented.

However, the economy is still in a downturn, and Parkway Properties did have its challenges. For one thing, the contract to sell non-core office building Atrium at Stoneridge in Columbia, SC was terminated in July because the buyer couldn't raise enough equity to complete the purchase. J. Mitchell Collins, executive vice president and CFO, said Parkway Properties did everything it could to help the struggling buyer, but the TIC money the buyer typically raised for such expenditures had dried up.

"We were flexible, but they simply couldn't come up with any more money for us on a non-refundable basis, nor could they show us with any confidence that the money would be there," Mitch acknowledged. "So we terminated the contract."

Mitch predicted that selling non-core assets would continue to be a challenge. "We're going into extra innings to complete the sale of some of these non-core assets," he remarked.