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Parkway Properties Announces Sale of Columbia, South Carolina Asset

JACKSON, Miss., Sept. 5 /PRNewswire-FirstCall/ -- Parkway Properties, Inc. (NYSE: PKY) today announced the closing of the fee simple sale of the Capitol Center office property, located inColumbia, South Carolina. Capitol Center is a 460,000 square foot property that was 97.5% occupied as of September 1, 2008. The gross sales price was $47.5 million and represents a capitalization rate of approximately 9.5% on twelve months projected cash net operating income from the date of closing. 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.

Steven G. Rogers, President and Chief Executive Officer stated, "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."

Parkway Properties, Inc., a member of the S&P Small Cap 600 Index, is a selfadministered real estate investment trust specializing in the operation, leasing, acquisition, and ownership of office properties. The Company is geographically focused on the Southeastern andSouthwestern United States and Chicago. Parkway owns or has an interest in 66 office properties located in 11 states with an aggregate of approximately 13.3 million square feet of leasable space as of September 5, 2008. Included in the portfolio are 21 properties totaling 3.8 million square feet that are owned jointly with other investors, representing 28.8% of the portfolio. Under the Company's GEAR UP Plan, which started January 1, 2006 and ends December 31, 2008, it is the Company's goal to transform its strategy from being an owner-operator to being an operator- owner. The strategy highlights the Company's strength in providing excellent service in the operation of office properties in addition to its direct ownership of real estate assets. Feebased real estate services are offered through the Company's wholly-owned subsidiary, Parkway Realty Services, which also manages and/or leases approximately 1.8 million square feet for third party owners as of September 5, 2008.

Parkway Properties, Inc.'s press releases and additional information about the Company are available on the World Wide Web at www.pky.com.

    CONTACT: STEVEN G. ROGERS
      PRESIDENT & CHIEF EXECUTIVE OFFICER
    J. MITCHELL COLLINS
      CHIEF FINANCIAL OFFICER
        (601) 948-4091

SOURCE Parkway Properties, Inc.

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Parkway Properties Announces Sale of Columbia, South Carolina Asset