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Parkway Prices Share Offering

Zacks Equity Research

Parkway Properties, Inc. (PKY), a real estate investment trust (:REIT), has recently priced an underwritten public offering of 13.5 million shares at $13.00 each, to increase its liquidity. The company has also decided to grant the underwriters a 30-day option to purchase up to an additional 1.2 million shares.

Parkway Properties expects to rake in $170.5 million of net proceeds from the share offering. The company intends to utilize the proceeds to fund the acquisitions of NASCAR Plaza and 525 North Tryon in Charlotte, North Carolina; Phoenix Tower in Houston, Texas; and Tower Place 200 in Atlanta, Georgia. The remaining proceeds will be utilized to repay debt under its senior unsecured revolving credit facility and for general corporate purposes.

BofA Merrill Lynch, part of Bank of America Corporation (BAC); Wells Fargo Securities LLC, part of Wells Fargo & Company (WFC); and Barclays, part of Barclays PLC (BCS) are the joint book running managers for the offering.

As of September 30, 2012, cash and cash equivalents stood at $53.6 million and total debt stood at $276.6 million. Subsequent to end of third quarter 2012, Parkway properties exercised $25 million of the $160 million accordion feature of its existing unsecured revolving credit facility and increased the capacity from $190 million to $215 million.

Parkway Properties specializes in the ownership of office properties in high-growth submarkets in the Sunbelt region of the United States. As of November 1, 2012, the company had interest in 38 office properties located in nine states with approximately 10.0 million square feet of leasable space.

Parkway Properties currently retains a Zacks #2 Rank, which translates into a short-term Buy rating. We have a long-term Neutral recommendation on the stock.

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