By Georgiana Mihaila, Associate Editor
In a move to expand its presence in South Florida, Parkway Properties Inc. will be buying the 140,000-square-foot Lincoln Place for $66 million in debt and stock, the South Florida Business Journal reports. The company recently announced entering into a purchase and sale agreement to acquire the South Beach office/retail building and add it to the portfolio of 45 office properties in eight states—with an aggregate of approximately 13.0 million square feet in which the company has interest.
“We are excited for the opportunity to expand into the South Florida area,” said James R. Heistand, Parkway’s president and CEO. “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 percent.”
He added: “Lincoln Place is a high-quality, core asset located one block away from the world-class retail destination of Lincoln Road.”
Built in 2002, the Lincoln Place property consists of 111,000 square feet of office space, 29,000 square feet of retail space on the ground floor, and an adjacent five-story garage with 534 parking spaces. The property is currently 100 percent leased to LNR Corporation through June 2021 with no renewal or early termination options.
Company officials say that 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 percent that 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 million, or $472 per square foot.
The deal is expected to close 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.
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