Parkway Buys 3344 Peachtree for $167.3m
Located in the Buckhead submarket of Atlanta, Georgia, 3344 Peachtree is the office and retail portion of a 50-story, vertical mixed-use development with remarkable amenities and access not replicated elsewhere in the Atlanta market. 3344 Peachtree contains approximately 484,000 square feet of office and retail space and includes an adjacent eleven-story parking structure.
The project was developed in 2008 by Regent Partners and was designed by Smallwood, Reynolds, Stewart, Stewart & Associates. Due to the completion of recent leasing activity, the office and retail space has increased to 97 percent leased as of January 21, 2011.
Fund II's investment in the Property will total $160m, and Parkway Properties will fund the remaining $7.3m. Parkway's ownership share in Fund II is 30 percent, resulting in an effective ownership interest in the Property by Parkway of 33 percent.
An additional $2.6m is expected to be spent for closing costs, building improvements, leasing costs and tenant improvements during the first two years of ownership. Simultaneous with closing, Parkway assumed the $89.6m first mortgage that was in-place at the Property.
The first mortgage has a fixed interest rate of 4.75 percent and a maturity date of October 1, 2017. Parkway's equity contribution in the investment is $25.5m and was initially funded through availability under the company's existing revolving credit facility.
Fund II is a $750m discretionary fund formed in May 2008 for the purpose of acquiring high-quality, multi-tenant office properties. Parkway is a 30 percent investor in the Fund, which will be capitalized with approximately $375m of equity capital and $375m of non-recourse, fixed-rate first mortgage debt. This represents a target debt to total capitalization of approximately 50 percent for the Fund.
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