Co-Investor Sells 70% Stake in Bank of America Center, PKY Enters Sale Agreements in Three Other Markets
Parkway Properties, Inc. (NYSE: PKY
) has acquired its co-investor's 70 percent interest in the Bank of America Center at 390 N. Orange Ave. in Orlando, FL.
PKY takes full ownership of the asset for $52.5 million, or about $178 per square foot, which values the property at $75 million. The acquisition was funded in part with $28.8 million in cash on hand and the assumption of $23.7 million of in-place mortgage debt secured by the property.
The 28-story, 421,069-square-foot, 4-Star office building was constructed in 1987 on 2.3 acres in Downtown Orlando's CBD. At the time of sale the asset was 87% occupied, and is expected to generate an initial full-year cash NOI yield of approximately 6.3%, according to a corporate release.
"We remain committed to building a high-quality portfolio of assets located in targeted submarkets throughout the Sunbelt," said James R. Heistand, president and chief executive officer at Parkway. "The Bank of America Center is our headquarters location and is a landmark asset in the Orlando CBD. It is a core-plus investment that has a solid base of high-quality, credit tenants with the opportunity to add value through leasing the remaining vacancy at the building."
The property was previously held by Pky Fund II Orlando I LLC, a joint venture between Parkway and the Teacher Retirement System of Texas. Both parties handled the direct sale in-house.
Please see CoStar COMPS #2925364 for additional information on this transaction.
The acquisition comes on the heels of Parkway's announcement it has entered a definitive purchase agreement to acquire the JTB Center in Jacksonville, FL for an aggregate purchase price of $33.3 million. The three-building office park totals 248,000 square feet in the Derwood submarket, is 94% occupied, and is currently unencumbered by debt. Parkway has separately entered agreements to sell two properties in Houston, TX and Phoenix, AZ for a combined $28.2 million. These three transactions are all expected to close in the first quarter.
Added Heistand, "JTB Center will allow Parkway to gain additional scale in the highly-desirable Deerwood submarket of Jacksonville. We believe that each of these off-market transactions will allow Parkway to leverage economies of scale and increase exposure to two of our targeted submarkets. Furthermore, we continue to be proactive and look for opportunities to divest non-core assets that will generate strong returns and strengthen our balance sheet."