Miami Office Building Fetches $472 PSF

Parkway Properties, Inc. (NYSE: PKY) entered into a purchase and sale agreement to acquire Lincoln Place, a 140,000 square foot office and retail building located in the South Beach submarket of Miami, Florida.
James R. Heistand, Parkway’s President and Chief Executive Officer, stated, “We are excited for the opportunity to expand into the South Florida area.  We believe this market is in the early stages of a recovery and has the potential to improve quickly given the diversity and vibrancy of its economy.  Additionally, the South Beach submarket is highly land-constrained and boasts a current vacancy rate of only 8.7%.  Lincoln Place is a high-quality, core asset located one block away from the world-class retail destination of Lincoln Road.  We hope to continue our expansion in the South Florida area with a similar blend of core, core-plus and value-add investments as we have done recently in several of our other markets.”
Lincoln Place was built in 2002 and is comprised of 111,000 square feet of office space and 29,000 square feet of retail space on the ground floor.  There is a five-story garage with 534 parking spaces adjacent to the property that provides parking for daytime office tenants as well as hourly parking on nights and weekends.
The property is currently 100% leased to LNR Corporation through June 2021 with no renewal or early termination options.
Parkway is under contract to acquire Lincoln Place in exchange for the assumption of the existing secured first mortgage, which has a current outstanding balance of approximately $49.6 million, a fixed interest rate of 5.9% and matures in June 2016, and the issuance of 900,000 operating partnership units.  Based on Parkway’s closing stock price of $18.20 on May 3, 2013, the implied purchase price would be approximately $66.0 million, or $472 per square foot.
Closing is expected to occur by the end of the third quarter of 2013, subject to customary closing conditions, the successful assumption of the existing first mortgage and Parkway’s satisfactory completion of due diligence.
Parkway Properties, Inc. owns or has an interest in 45 office properties located in eight states with an aggregate of approximately 13.0 million square feet.
 
Source:  PRNewswire