Parkway Properties (PKY) Completes $86.3M Acquisition of Hayden Ferry Lakeside II
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Parkway Properties, Inc. (NYSE: PKY) announced today the completion of the previously announced purchase of Hayden Ferry Lakeside II on behalf of Parkway Properties Office Fund II, L.P. for a purchase price of $86.0 million. Parkway's ownership share in this investment is 30%. Hayden Ferry II is a 300,000 square foot, Class A+ office building located in the Tempe submarket of Phoenix. The property is currently 94% leased to 20 customers, including high quality names such as KPMG and Microsoft.
Simultaneous with the purchase, Fund II closed a $50.0 million first mortgage with a maturity date of July 2018. The mortgage has an initial fixed interest rate of 5.0%, which is scheduled to decline in stated increments over the first four years of the term, with the decline in the fourth year of the term subject to achieving a defined debt yield hurdle, at which time the rate will remain fixed through maturity. The mortgage loan secured by Hayden Ferry I has been amended such that it is now cross-collateralized and cross-defaulted and is coterminous with the mortgage loan secured by Hayden Ferry II. Parkway's equity contribution of $10.8 million was initially funded through availability under the Company's existing revolving credit facility.
Fund II is a $750 million discretionary fund formed in May 2008 for the purpose of acquiring high-quality, multi-tenant office properties. Fund II investments include assets located in Atlanta, Charlotte, Jacksonville, Orlando, Philadelphia, Phoenix, and Tampa. As of February 13, 2012, Fund II owns 12 assets with a combined total of 4.2 million square feet.
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Simultaneous with the purchase, Fund II closed a $50.0 million first mortgage with a maturity date of July 2018. The mortgage has an initial fixed interest rate of 5.0%, which is scheduled to decline in stated increments over the first four years of the term, with the decline in the fourth year of the term subject to achieving a defined debt yield hurdle, at which time the rate will remain fixed through maturity. The mortgage loan secured by Hayden Ferry I has been amended such that it is now cross-collateralized and cross-defaulted and is coterminous with the mortgage loan secured by Hayden Ferry II. Parkway's equity contribution of $10.8 million was initially funded through availability under the Company's existing revolving credit facility.
Fund II is a $750 million discretionary fund formed in May 2008 for the purpose of acquiring high-quality, multi-tenant office properties. Fund II investments include assets located in Atlanta, Charlotte, Jacksonville, Orlando, Philadelphia, Phoenix, and Tampa. As of February 13, 2012, Fund II owns 12 assets with a combined total of 4.2 million square feet.
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