Parkway To Buy One Orlando Centre

Apr 16, 2014 No Comments by

Rumors about Parkway Properties Inc. buying a downtown Orlando office complex were confirmed when the firm on April 14 announced it bought and restructured a mortgage loan on the building.

The Orlando-based real estate investment trust took over ownership of the 19-story, 356,000-square-foot One Orlando Centre on North Magnolia, also known as the Wells Fargo building. Prior to the sale, Parkway was handling leasing for the building, which was one of the assets not acquired by Parkway Properties when it  bought up some of the assets and management team of Eola Capital in 2011.

When REITs invest into commercial properties, it attracts other investors into the market who are seeking to put money into real estate assets. Also, with Parkway being a local REIT, the deal strengthens its growing portfolio and thereby, the company.

Parkway announced that the complex deal to buy the office tower — which includes an eight-story integrated parking garage — involved an $8 million equity investment held in reserve accounts to cover leasing and repositioning of the property, said a news release. Additionally, an existing $68.3 million first mortgage note on the building was restructured into a new $54 million first mortgage that matures in May 2017, and $16.4 million B-note.

“The acquisition of One Orlando Center represents a creatively structured, off-market transaction that enables Parkway to strengthen its portfolio in a targeted submarket at an attractive basis,” said Jim Heistand, Parkway president and CEO, in a prepared statement. “The Orlando central business district continues to show signs of an early-stage recovery in office fundamentals, and with this acquisition, Parkway will own approximately 23 percent of the entire Class A inventory in that submarket.”

One Orlando Center is 81.3 percent occupied and is expected to generate an initial full-year cash net operating income yield of 7 percent, the release said.

On Friday, it was announced that Parkway purchased Class A Miami office complex Courvoisier Centre. The company paid $422 per square foot for the two-building complex that totals 346,000 square feet. The office buildings are lcoated at 501 and 601 Brickell Key Drive and rise seven and 12 stories.


Source:  OBJ

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