Parkway Properties, Inc. (PKY - Snapshot Report), a real estate investment trust (REIT), recently announced that it has completed its previously announced divestiture of assets, namely ‘100 Ashford Center’ and ‘Peachtree Ridge,’ both located in Atlanta for $29.9 million. At the time of closure, the two assets were a combined 74.6% occupied totaling 321,000 square feet.
With the completion of this deal, Parkway Properties dispensed with all the assets belonging to its discretionary fund known as Fund 1, which included the assets located in Atlanta. The net proceeds generated from the asset disposition were $211,000.
Additionally, Parkway Properties also sold a property in New Orleans for $765,000. The 32,000-square-foot property was 100% vacant at closing. The net proceeds generated from this sale were $742,000.
The asset divestiture should facilitate financial flexibility for Parkway Properties and improve the overall quality of its portfolio.
Parkway Properties reported first quarter 2012 FFO (funds from operations) of 43 cents per share compared with 59 cents in the year-earlier quarter. Funds from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
Parkway Properties specializes in the ownership of office properties in the highgrowth submarkets in the Sunbelt region of the United States. As of June 6, 2012, the company had interest in 42 office properties located in 10 states with an aggregate of approximately 10.6 million square feet of leasable space.
Parkway Properties currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We also have a long-term Neutral recommendation on the stock. One of its competitors, Brandywine Realty Trust Common (BDN - Snapshot Report) also holds a Zacks #3 Rank.