Office Joint Venture to Invest $750 Million
Parkway Properties has formed a $750 million office fund with the Teacher Retirement System of Texas (TRS) to acquire office properties in the United States.
The fund will have a capital base of $375 million in equity capital and another $375 million in mortgage debt funding. The Jackson, Miss.-based real estate investment trust is a 30% investor in the fund, while the Texas pension fund will comprise 70% of the investment.
Steven G. Rogers, president and CEO of Parkway, expects that the fund will combine “the financial capital of TRS with the operating strength of Parkway to create new investment opportunities for both entities.”
And Eric Lang, director of real assets for TRS, says that the fund will help expand the pension fund’s office portfolio and also provide good returns through a long-term relationship with Parkway.
Targets for acquisition are multi-tenant office properties in the Texas cities of Houston, Austin and San Antonio; Florida cities of Jacksonville, Orlando, Fort Lauderdale and Tampa/St. Petersburg; Charlotte, N.C; Memphis, Tenn.; and Nashville, Tenn. Other target cities include Chicago, Atlanta and Phoenix. The fund may also invest in other markets that have scope for growth.
Parkway will identify assets over a four-year period for the fund, which is expected to have a 10-year life. The REIT will manage the properties for a fee.
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© 2012 Penton Media Inc.
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