Office REIT Parkway Properties has signed an agreement to purchase a 22-property portfolio of Class A assets located across six states in the Sunbelt region for $475 million.
Once the transaction has been completed, Parkway is only planning to retain three of the properties – Corporate Centers I, II, and III at International Plaza in Tampa, Florida – in its portfolio. The REIT is planning to sell off the rest of the property group.
The three Corporate Center assets are located in the Westshore market of Tampa, which is the strongest one in the city. It has outperformed other city submarkets in rental and vacancy rates.
Parkway’s highly-targeted investment strategy focuses on Class A properties in the business districts of “higher growth submarkets.”The 19 properties that are going to be sold are of high quality but simply don’t fit in with Parkway’s current investment strategy.
The Corporate Center Buildings were particularly attractive to Parkway because they are situated close to the International Plaza mall, a 1.2 million sq ft upscale shopping centre, as well as the Tampa International Airport.
Due to the number of amenities located close by, the area is a popular choice for potential tenants looking for office space.
Parkway plans to sell the 19 buildings in its soon-to-be acquired portfolio purchase simultaneously with the portfolio purchase or within 12 months of its closing date.
Most of the properties are located in Tampa outside of the Westshore submarket; some of them are in Atlanta, Houston and Orlando.
To finance its latest acquisition, Parkway announced a secondary equity offering of 10 million shares. The net proceeds will be used toward funding the acquisition, which is slated to close during the Q4 this year.
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