TAMPA, FL—Parkway Properties just agreed to acquire a trio of class A office properties in Tampa's Westshore submarket. Parkway purchased Corporate Center I, II, and III at International Plaza. The buildings sit next to Parkway's Corporate Center IV at International Plaza and span 974,000 square feet.
Parkway waxed creative on the deal. As part of the same acquisition, the firm purchased 19 other office assets in six states spanning about 2.1 million square feet. The total sale price is $475 million.
But Parkway isn't going to keep them. Instead, the firm plans to sell those 19 office properties, which execs say are not consistent with the current investment strategy. Parkway will either dispose of the 19 office buildings with the acquisition of the three Corporate Center assets or within 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 R. Heistand, president and CEO of Parkway. "The Corporate Center at International Plaza assets are within the strongest performing submarket in Tampa.”
Corporate Center assets have a combined occupancy of 69.7%. That figure is adjusted to reflect about 50,000 square feet of known move-outs over the next 12 months.
Parkway estimates that the initial full-year cash net operating income yield for these assets will be in the range of 4.4% to 4.7%. After adjusting for initial full-year contractual rent concessions, Parkway figures the initial full-year cash net operating income yield will be in the range of 5.7% to 6%.
“The assets are currently well below market occupancy,” Heistand says. “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 expects the closing of the portfolio acquisition to occur during the fourth quarter of 2014. HFF represented the undisclosed seller.
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to asset-and-logo-licensing@alm.com. For more inforrmation visit Asset & Logo Licensing.
