Staff Report

It’s official: Parkway Properties Inc. Friday announced closing the sale of the Capitol Center office complex for $47.5 million to U.S. Real Estate Investment Fund, which is managed by Boston-based Intercontinental Real Estate Corp.

The building is a 460,000-square-foot property that was 97.5% occupied as of Sept. 1.

Parkway received net cash proceeds from the sale of approximately $45.8 million, which were used to prepay the $18.1 million first mortgage plus related mortgage prepayment expenses and reduce amounts outstanding under the company's line of credit. The company will recognize a gain on the sale of approximately $11.7 million and expenses related to the prepayment of the mortgage of approximately $2.2 million in the third quarter of 2008.

"With this sale, we have completed the sale of three assets announced in May of 2008, with total gross proceeds of $86.3 million. These sales resulted in a net pay down in the Company's line of credit of $62.6 million, and we will recognize a total gain on these sales of $22.6 million in the third quarter of 2008," said Steven G. Rogers, Parkway’s president and CEO.

Parkway Properties, of Jackson, Miss., is a self-administered real estate investment trust specializing in the operation, leasing, acquisition and ownership of office properties. The Company is geographically focused on the Southeastern and Southwestern United States and Chicago.