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Investment in Office Properties and Parking Properties
 9 Months Ended
Sep. 30, 2014
Business Combinations [Abstract]  
Investment in Office and Parking Properties
Investment in Office and Parking Properties

Included in investment in office and parking properties at September 30, 2014 are 45 office and parking properties located in eight states. These office and parking properties include two office properties acquired through the December 2013 merger transactions (the "Mergers") with Thomas Properties Group, Inc. ("TPGI").

Acquisitions

On January 30, 2014, the Company completed the acquisition of the JTB Center, a complex of three office buildings located in the Deerwood submarket of Jacksonville, Florida, for a gross purchase price of $33.3 million. The JTB Center was unencumbered by secured indebtedness and financed through available cash.

On April 10, 2014, the Company completed the acquisition of Courvoisier Centre, a complex of two office buildings located in the Brickell submarket of Miami, Florida, for a gross purchase price of $145.8 million. The acquisition was financed through available cash and borrowings under the Company's term loans.

On April 14, 2014, the Company commenced construction of Hayden Ferry Lakeside III, a planned office development in the Tempe submarket of Phoenix, Arizona. The Company's operating partnership, Parkway Properties LP (the "operating partnership"), entered into an amendment to the partnership agreement of Parkway Properties Office Fund II L.P. ("Fund II") to, among other things, authorize the Hayden Ferry Lakeside III development and authorize the general partner of Fund II to transfer an interest in the ownership of Hayden Ferry Lakeside III, a subsidiary of Fund II, to the operating partnership for $2.0 million. The Company now owns a 70% indirect controlling interest in Hayden Ferry Lakeside III. Costs related to planning, developing, leasing and constructing the property, including costs of development personnel working directly on projects under development, are capitalized. For the nine months ended September 30, 2014, development costs incurred totaled $11.7 million. On July 2, 2014, Fund II closed on a construction loan secured by Hayden Ferry Lakeside III. See "Note 6 – Capital and Financing Transactions – Mortgage Notes Payable" for additional details.

On April 14, 2014, the Company completed the acquisition of One Orlando Centre, an office building located in the central business district of Orlando, Florida, for a gross purchase price of $55.1 million. The Company made an $8.0 million equity investment that will be held in lender reserve accounts to fund the leasing and repositioning of the asset. As part of the purchase price, the Company paid $1.1 million to acquire its 100% interest in the property and simultaneously with the equity investment, the existing $68.3 million first mortgage note secured by the property was restructured into a new $54.0 million first mortgage and a $15.3 million subordinated note.

On July 3, 2014, the Company completed the acquisition of Millenia Park One, an office building located in the Millenia submarket of Orlando, Florida, for a gross purchase price of $25.5 million. The acquisition was funded using available cash and borrowings from the Company's credit facility.

On July 29, 2014, the Company purchased a first mortgage note in an original principal amount of $50.0 million secured by The Forum at West Paces, an office building located in the Buckhead submarket of Atlanta, Georgia. The total purchase price for the note, which was previously under special servicer oversight, was $47.0 million. The note purchase was funded with borrowings under the Company's credit facility. On August 19, 2014, the Company took ownership of The Forum at West Paces by way of a deed in lieu of foreclosure. 

On September 19, 2014, the Company reached an agreement to acquire a portfolio of 22 properties located in six states (the “Southern U.S. Office Properties Acquisition”) for an aggregate gross purchase price of $475.0 million, including an earnest money deposit of $35.0 million. The Company intends to sell 19 of the properties and retain ownership of Corporate Center I, II and III at International Plaza, located in the Westshore submarket of Tampa, Florida and adjacent to the Company's Corporate Center IV at International Plaza. On October 5, 2014, the Company reached an agreement to sell the membership interests of certain entities that own the 19 properties for an aggregate gross sales price of $237.0 million, before adjustments for transfer taxes, prorations, and other customary closing costs and adjustments.





The allocation of purchase price related to tangible and intangible assets and liabilities based on Level 2 and Level 3 inputs for the JTB Center, Courvoisier Centre (1), One Orlando Centre, Millenia Park One, and The Forum at West Paces upon foreclosure is as follows (in thousands):

 
Amount
Land
$
72,184

Office and parking properties
188,629

Tenant improvements
18,407

Lease commissions
6,967

Lease in place value
15,362

Above market leases
5,035

Below market leases
(3,369
)
Mortgage debt premium (2)
(1,967
)
(1) The purchase price of Courvoisier Centre was reduced by $5.3 million of credits from the seller.
(2) Mortgage debt assumed with the purchase of One Orlando Centre.

The allocation of the purchase price was based on preliminary estimates and is subject to change within the measurement period as valuations are finalized.

The Company's unaudited pro forma results of operations after giving effect to the purchases of the JTB Center, Courvoisier Centre, One Orlando Centre, Millenia Park One and The Forum at West Paces as if the purchases had occurred on January 1, 2013 is as follows (in thousands, except per share data):

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2014
 
2013
 
2014
 
2013
Revenues
$
113,594

 
$
110,186

 
$
331,118

 
$
321,185

Net loss attributable to common stockholders
$
(615
)
 
$
(596
)
 
$
(990
)
 
$
(960
)
Basic net loss attributable to common stockholders per share
$
(0.01
)
 
$
(0.01
)
 
$
(0.01
)
 
$
(0.01
)
Diluted net loss attributable to common stockholders per share
$
(0.01
)
 
$
(0.01
)
 
$
(0.01
)
 
$
(0.01
)


Dispositions

On September 4, 2014, the Company sold the Schlumberger Building located in Houston, Texas. The Company received approximately $17.0 million in gross proceeds. The Company received $16.2 million in net proceeds from the sale, which the Company expects to use to fund subsequent acquisitions. The Company recorded a gain of approximately $6.7 million during the three months ended September 30, 2014.

In accordance with the Company's adoption of ASU 2014-08, "Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity," effective January 1, 2014, the sale of the Schlumberger Building was not included in discontinued operations as it was not previously classified as held for sale as of December 31, 2013 and does not represent a strategic shift in the Company's operations. For details regarding dispositions included in discontinued operations during the nine months ended September 30, 2014, see "Note 11 – Discontinued Operations."