Parkway Announces Contract to Sell Chicago Asset, Sees Proceeds of $75.5M (PKY)
Parkway Properties, Inc. (NYSE: PKY) announced today that it has entered into a contract to sell 233 North Michigan for a gross sale price of $162.2 million and has received a $17.0 million non-refundable earnest deposit. 233 North Michigan is a 1.1 million square foot office property located in the central business district of Chicago, Illinois. The property was 83.8% occupied as of May 1, 2011. Closing is expected to occur later this month and is subject to customary closing conditions. The gross sale price represents a capitalization rate of approximately 6.9%, which is based on projected in-place cash net operating income for the 12 month period following the anticipated closing date, and includes the impact of contractual rent abatements. The Company plans to repay the $84.6 million first mortgage that is secured by the property upon closing. Parkway expects to receive net cash proceeds from the sale after the repayment of the first mortgage of approximately $75.5 million, which the company expects to use to reduce amounts outstanding under the Company's revolving credit facility. The Company estimates that it will recognize a gain on the sale of approximately $2.6 million in the second quarter of 2011.
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