Parkway Properties Wells Fargo Conference

Parkway Properties, Inc.
Wells Fargo Securities

Global Real Estate
PKY Securities Conference Dec. 9, 2009
Company▲ Ticker▲ Event Type▲ Date▲
MANAGEMENT DISCUSSION SECTION
Young Ku, Analyst, Wells Fargo Securities
Hi. Good morning, everyone, and welcome to our 13th Annual Wells Fargo/Wachovia Global Real
Estate Conference. My name is Young Ku with Wells Fargo Securities. And we have here with us
Steve Rogers, the CEO; and Mitch Collins, the CFO with Parkway Properties which owns or has
interest in almost 13.5 million square feet of office space in 11 different states. So without further
ado, let’s turn it to Steve and then have – we’ll have a Q&A session at the end of the presentation.
Thank you.
Steven G. Rogers, President & Chief Executive Officer
Thank you, Young. Well good morning from us, and thanks for attending our presentation at such
an ungainly hour, and what we’d like to talk about today is our investment strategy, our ops strategy
and our financial strategy.
A little bit about our company, we’re a S&P 600 company. We own about 13.5 million square feet.
We define ourselves as an operator-owner, and we run about $2 billion worth of assets under
management today.
I don’t think that it would be possible to hold a discussion of an office building company without at
least backing up and talking a little bit about where we are in the cycle, how we fit into the cycle and
sort of how we see ourselves getting out of the great recession.
corrected transcript
This particular chart in front of you shows office metrics all the way back to 1991, and forward –
looking forward to 2013. The reason I like this chart, it wasn’t prepared by Parkway, it was
prepared by Property & Portfolio Research, and I’ll give them credit for it. They did a great job of
identifying a very key fundamental in our industry, that office buildings lag the national economy,
and what that means is, is even though GDP turned positive in the third quarter, until you get some
job creation, you really don’t get any rental rate growth, NOI growth, and therefore great value
creation until you move through the various components of the cycle.
And so as you can see here in front of us here, we’ve been – if you go all the way back to ‘91, we
actually had six years of negative NOI growth. Then we came in the recession light, which really
wasn’t too tough, and now we find ourselves – oops, let me get back here. Now we find ourselves
in the great recession, and you can see from the blue arrows, there’s been a pretty good loss of
value here from the peak, probably 40 to 45% by most practitioners’ estimates, and that we do see
ourselves coming out of it, but not until we reach a sustainable job growth level to try to replace the
seven million jobs that have been lost during this recession. So the good news is we will come out
of this recession. It will simply take some time and our company is positioning itself well to come
out of the recession and to be able to do some things that I’d like to talk to you about now.
One of the important things I think we come out with is talking about operating strategies. Really
the main goal here is just get through the recession with your customers or tenants in place, blend
and extend leases where necessary. The customers don’t need as much space today, you just
simply have to give back a little space to them in exchange for lower TIs and longer terms.
We work very carefully on operating expenses during a time like this, with particular emphasis on
ad valorem taxes. Clearly, values are down, so we arm wrestle with the municipalities pretty
routinely to make sure that we’re getting our fair shake on the devaluation from a tax standpoint.
w w w .Ca ll St r eet . com • 21 2- 84 9- 40 7 0 • C op yr i g ht © 20 0 1- 2 00 9 C a ll S tr ee t 1

Parkway Properties, Inc. Wells Fargo Securities
Global Real Estate
On the investment strategy front, we are – we do have a great non-monetized asset in Parkway in
the form of the Texas Teachers Retirement system, $750 million Fund II. I’d like to take a moment
and talk to you about the advantages of the fund and why we feel so strongly that the fund model is
a better mousetrap.
I think first of all, it produces a higher EBITDA and FFO accretion. This is really done through the
generation of fees, wherein we do receive fees for asset management, property management,
leasing, construction management, and hopefully an incentive fee on sale at some point in time. It
is a fully discretionary fund. That is important because a fully discretionary fund gives the general
partner, Parkway the right to make the investments without having to go back to the partner, and
everyone knows that if you have to go back to a lot of committees, nothing ever happens and we
need that latitude to be able to act.
We have creditworthy liquid partners in the form Ohio PERS and Texas Teachers. We have
durable asset management fees and property management fees, and that durability of the fees
gives rise to some value creation that we like to talk about in these sessions, although I think that if
we were probably looking at valuation of Parkway’s fees in the capital markets, I’m not sure that we
received full value in our estimation for that, but in full disclosure I think the capital markets are
waiting for us to show them the money, and once we do show the money of these durable fees,
then I think that they do get capitalized into the value.
I’d like to use this particular chart as an illustration. This is a backwards looking chart. This looks
at the Ohio PERS fund, which we have completed the investment period of and made the $500
million investment.
The blue bar represents really the property level cash flows, and that’s a little north of 6%
unleveraged cap rate kind of analysis, but if you look on top of the blue bar, you’ll see that there’s
leasing fees, property management fees and asset management fees that go up to make up a total
return from a Parkway perspective of nearly 9%.
So one way to look at it is, if you’ve got a cap rate no matter what it is, you could drive up to 30, 40,
50% higher cap rate just by tacking on the fees. Now eventually that’s got to translate into some
kind of financial metric, and so we’ve done an analysis here on the side that’s in your booklet to
show you that if we held the asset fee simple, it would be $0.21 a share and if we held it in the fund
it would be 36, which we do, therefore deriving 71% more accretion.
The Texas fund is actually larger than the Ohio fund. It’s 750 million. We have a 30% equity
interest in the fund, or we will put in $112.5 million, and I’ll talk to you in a moment of where that’ll
come from. Texas’s commitment to us is 262.5, and we will leverage our 375 total equity one-to-
one or 50% creating a $750 million fund. Our investment period ends 2012 and we have a seven-
year hold with two one-year extensions. There’s significant fee income growth opportunities here.
Once fully invested, and we’re not, we’ve not invested a dollar yet, there’s approximately $7 million
of net fees to Parkway. In a company with a share count as small as ours, this certainly is an
additive matter.
How do we pay for it? We have $23 million in the bank today, and if we just simply used that
money and didn’t draw on our line of credit and used unrestricted cash, we could buy up to $150
million with Texas. And then every $50 million in net cash proceeds from wholly-owned asset sales
purchases another 300 million. As you know, we have a lot of properties that we announced over
the last two or three years for sale, not for liquidity purposes but for just strategic purposes, smaller
buildings, smaller cities, places we don’t see as much opportunity for growth. And we’re just
steadfastly working that list to make sure that we generate those sales, and then the cash from
those sales will be used to fund Texas Teachers. And then we are a public company, so we do

Global Real Estate
have the ability to raise additional common equity in conjunction with known and accretive
acquisitions.
So those would be our three preferred methods of funding Texas, and I think it’s reasonably, in our
view, it’s reasonable to assume that we can fund that $112 million without any really challenges to
our balance sheet.
I’d like to take a moment and talk to you a little bit about where we’re going to take the company
and not only Texas, but the overall Parkway. We want to focus on 10 or fewer markets in our
company. I think one of the things that as I look back over the last 10 or 15 years, we were allowed
ourselves, and that’s – to get a little scattered and not as focused on the markets. And so as we’ve
sort of sharpened our pencil and our focus, we are looking really more at about 10 markets or less
– where we’re going to put our money in this company going forward.
We’ve announced the exiting of some non-strategic markets, and we’re going to focus on places
that show better rent growth and occupancy. We weight rent and occupancy about 60% in our
model, job and population growth about 20, and favorable market demographics and some other
factors go in there.
We’re looking for places where we can at least a million square feet of mass. Historically, we’ve
gotten a foothold in some cities like Virginia Beach or Richmond, even Winston-Salem, Birmingham
and Knoxville, and not really been able to gain critical mass there. And if you don’t have critical
mass, you really can’t have a top-notch senior staff there that’s really on top of the market and can
check the box that says, we know Nashville or we know Houston.
Kind of moving over to the next slide, you’ll see that we’ve named those markets, and our home
town, Jackson we use as a training ground, and we’ll continue to stay in Jackson, and mostly own
those particular properties in a joint venture format.
Richmond, Columbia, Fort Lauderdale and Hampton Roads, we’ve been unable to achieve critical
mass, and we have decided and had announced years ago that those cities will be cities that we
will, over time and in a very measured format, dispose off.
And if we do these disciplined sales not for liquidity reasons, but for strategic reasons, we’ll
generate still about somewhere north of $100 million, possibly as high as $200 million that can be
redeployed in Texas.
So that’s kind of the game plan strategically going forward.
I would like to turn the mic over to our Chief Financial Officer, Mitch Collins, who will carry you
through the balance of our presentation.
J. Mitchell Collins, Executive Vice President, Chief Financial Officer and Secretary
Thank you, Steve. I want to go through our Q3 ‘09 operational highlights and give you the big
picture. Every office REIT in America is having declining rate in occupancy right now and you
should expect that to continue at least through 2010.
When you look at Parkway’s portfolio, we’ve been immune to the current rate recession as Steve
alluded to. That said, we are holding our own and actually doing better than we had projected at
the beginning of the year. We’re on the high end of our occupancy guidance and are exceeding
our rate guidance for 2009 versus what we had given at the beginning of the year.

Global Real Estate
NOI margin is actually slightly up, it’s about 52% and NOI down 3.1%. And our FFO and FAD has
continued to beat expectations through the year-to-date. We actually updated our FFO guidance
for 2009 at the end of Q3. I want to also reflective on this slide point out that we did have a
common stock offering in 2009 that is diluting down the FFO and FAD for this year versus the prior
year comparison.
But overall when you look at us from an ‘09 operational standpoint, I think we are doing better than
most and doing on the top end of what we said we would do at the beginning of the year.
When you go into key leasing, this is an ‘10, ‘11 slide. When we start looking out to the future, we
want to remind everybody, just a little bit less than two weeks ago, we did an announcement on a
large important renewal in Chicago at our 233 North Michigan building. We actually extended the
GSA lease for a total of 12 years. GSA was a large, about 20% occupant of that building and it was
a long, strong, loyal customer of ours. We’re glad to have that renewal behind us and we’ll
definitely continue to support the valuation in the East Loop by having such an important customer
stay.
When you look out at 2010 the company does not have a lot of lease roll for 2010. It has a fair
amount in 2011, but let us be clear that we’re on these customers, these important customers right
now. Like Steve talked about, we know the leasing environment over the next couple years will be
tough, and we’re going to be in front of these customers trying to get early extensions, blend and
extend where feasible and that we are in the middle on several of these larger customers such as
US Cellular, Forman and Perry and also some of the Charles Schwab subleases in getting these
renewals or new leasing extended. So that is a key point here. We got about 1.4 million rolling in
2010, and just slightly over two million square feet out of 13 rolling in 2011.
You move on to the – I think it’s pretty interesting when you go in and look at occupancy, and you
read your CoStar or PPR reports and it says, Houston is going to be 85% vacant in 2010 and the
different metrics; Phoenix will be x, y, and z; Chicago, x. When you think of Parkway, I think it’s
important to know that we’ve historically maintained an occupancy premium in our respective
markets. Just remember that as you read these reports, and this is a depiction of what we’ve run
over the five year – last five year average and what it shows you is, is that Parkway historically has
run up in the low 90s, and you’ve got Parkway’s markets have historically run around 86, and then
the national average has run right at 86 as well. So think of that when you read these reports. If
Houston says for 2010 it’s going to be between 84 and 85% occupied as an MSA, that Parkway
should be about 500 basis point or better on average across all of our MSA markets.
When you look at our balance sheet perspective, I will say this, that the balance sheet today is as
strong as it’s been in the last two years. We’ve done a – we’ve paid down our debts, over $200
million over the last two years through a combination of a common stock offering and strategic
asset sales, moving out of some of our non-core markets. You can see our EBITDA leverage is
now at 6.6 times and in mid ‘08 that was at about 7.5 times. So we brought that down. We actually
have a slide showing you to a comparison group here shortly.
Line capacity has continued to improve. Today if we so choose we could fund every dollar of
Texas Teachers off of our line of credit. It’s $141 million of dry powder today, and we have $100
million outstanding balance on it. We could burrow 141 today and we could also use the $23
million off our balance sheet of unrestricted cash to support acquisitions under Texas Fund II.
When you look at where we’re going long-term, Steve alluded to the fat cash. It could be some
common stock issued in conjunction with accretive acquisitions. We do have targeted asset sales
in non-strategic areas.

Global Real Estate
This is where we sit from a capital structure. We are slightly north of 50% today; I’ve got a slide on
that, and long-term we want a debt to GAV of around 50%. That’s using the 8.5% cap rate. Why
8.5? That is basically the average cap rate of our acquisitions for our typical product offering over
the last 10 years, and we feel reflective that that’s long-term where the cap rate for our product type
will be. And it shows that we are now at 6.6 times debt to EBITDA, with a goal of 6.5.
And if you look at the next slide, this is our – basically the debt to GAV roll forward. Steve alluded
to the fact of the fees that we have and the significant fees that’ll be generated. You can see nearly
$3 million for the quarter gives you 12 million for the year. Texas will add another seven million in
fees to that number there in the middle of the slide. You can see the share of the NOI coming in on
a cash basis, and overall puts our debt to GAV right at 53.9%.
That will continue to de-lever. As we buy Texas, we’re targeting acquisitions with cap rates in
between nine and 10% in our relative MSA markets that we’re shooting for from an acquisition
standpoint.
And with that, I’m going to turn it back over to Mr. Rogers.
Okay. Well I think in the interest of time, we’ll take questions from the field, and thank you very
much. Young, you...

Global Real Estate
QUESTION AND ANSWER SECTION

<Q>: Yeah. I’ll start off with a couple of questions and see if there are any questions from the
audience. But either Steve or Mitch, could you talk a little bit more about your outlook for
fundamentals? I think you said that you expect occupancy to continue to decline into 2010. When
exactly do you think the net absorption will turn positive? Or – and when the rents will start to
increase?
<A – Steven Rogers>: Okay. Let me try to direct your attention in your materials back to the PPR
chart, because I think it – we have not issued 2010 guidance in Parkway yet. We will do that in our
normal February conference call and will articulate our FFO and NOI and same-store numbers et
cetera like we always do, but I think if you kind of look at this chart, Young, you could kind of get a
feel for where it’s going to be. If you’ll look at 2010 here on the chart, you will note that at least the
average NOI decline in the marketplace is projected to be somewhere between three to five, 6% in
that area.
We’re not offering that as guidance to you, we’re just simply pointing out that rents are going down
about 10%, maybe 11 in the United States. Expenses, we’re fighting hard to reduce those, but it’s
not always a given that you can do that, and when your rents are going down and your occupancy’s
going down, then it’s pretty tough to make the revenue line item do anything other than just play
defensive ball and try not to give up too many points there. And that’s really what we’re doing. I
would say that our goal is to play defensive ball during this 2010 timeframe and try not to give up
too much on the rent and the occupancy, and then rebuild as we come out.
So it would not be out of the question for us to be down a few points on the NOI. I think you should
expect, but fortunately we don’t have many leases expiring next year, and those that do expire, I
think it’d be reasonable to assume they’ll roll down about 10%. And if you kind of do that math,
you’ll sort of end up at a number that you could probably come up with really without much help
from me, but I think we’re fighting a good fight. We’re working hard to keep the NOI as close to
where it is today as possible, but it would be fair to assume that, that would be down a few points
next year.
<Q>: Okay. And could you also give your perspective on the recovery, whether you think it’ll be
better for CBD-type office types – office products or suburban office products that will do better in
the recovery? And the rationale or the reasons why you think so?
<A – Steven Rogers>: Okay. We have about 50% suburban and 50% urban in Parkway, and
some of our urban projects in like Memphis, Tennessee and Nashville, Tennessee, one might
assume that they act like suburban, but I do – often times we are quoted as being a suburban office
REIT and I do at least want to make the audience aware that we have two million square feet on
Michigan Avenue in Chicago and the last time I looked, that was a pretty urban area, while
Memphis, one could argue that Regions Bank tower and Toyota Center and the Falls Building are
not million square foot buildings. They’re very, very high quality granite, highly articulated buildings
with great rent rolls.
I think those kinds of buildings act like CBDs for any major metro area in as much as, it’s very hard
to build new product in downtown areas in any city in the United States, some harder than others.
Currently San Francisco’s a tougher place to build in than Nashville, Tennessee, but you still have
the same kind of barriers to entry, whether they be judicial or land constraint or easements and the
like in those type markets.
With that said, I would expect the CBD to probably pick up a little bit faster just simply because I
think the constraints will probably kick in a little bit better. One of the great things about this

Global Real Estate
recession, if there is any silver lining, is we just haven’t overbuilt the economy. So typically we –
real estate leads us into the recession through overbuilding, and this time we just didn’t.
We’ve got to get the demand side straight. So that still manifests itself in a high vacancy factor in
America, but we just don’t have anything under construction today. And that is great news, first for
the CBDs, which take a lot longer. So you take a place like Chicago, I hear of some buildings being
thrown around, but it would just be silliness to think that one’s going to get put up today. And so I
think we’ve got a pretty long run at the recovery when we do get it. So the short answer’s probably
first urban, second suburban, good long run, and no building once that actually takes place.
<Q>: Okay, thank you. And also what are some of the two or three markets that you think will
perform the best and the worst?
<A – Steven Rogers>: Well, I think Houston would be the best. We are seeing good things still
come out of Houston. It’s one of the markets in Parkway that still has an embedded growth,
positive embedded growth in there. The economics, we just went through our business planning
last week where all the managers come in and visit with our senior team and go through it. I would
say of all that, Houston was showing the best prospects for going forward.
On the worst side, I think Phoenix, Arizona would probably represent the toughest market. I don’t
think it’s any surprise to anyone that Phoenix was hit extraordinarily hard by the normal residential
recession, and while residential normally doesn’t drive office space, it’s typically job demand and
fire-type jobs, it’s not uncommon in a city like Phoenix that’s so dependent on residential
construction and title companies, mortgage bankers and things like that to have a very soft market
conditions.
So Phoenix is our toughest market today. We’ve got a good product there. For those of you that
came on our Phoenix in a flash tour, at the NAREIT Convention, we toured Squaw Peak – or we
toured Desert Ridge, a fund asset that’s very highly occupied, and Squaw Peak, a very high-quality
asset that’s highly occupied. The only real weakness we have, in our – we have one building that
has some weakness in the occupancy and we will struggle a little with that, but it’s just one building
in the market.
So Houston strongest, Phoenix weakest, probably a couple of markets underneath Houston that
are doing pretty well. Nobody’s doing great out there today. Maybe Nashville, pretty stable
economy, Jackson, these cities are government, medical, educationally driven. Those three
industries are the only three industries actually growing right now, so the capital cities in the smaller
Southern markets are doing well, and the financially driven cities, residentially oriented cities are
doing the worst.
<Q>: Okay. So following on to that question, so since Huston still seems like it’s a pretty strong
market, how do you see that impacting your renewal of neighbors in 2010? Whether you think you
might be able to even roll up rents or maybe get the renewal at a low concession?
<A – Steven Rogers>: We are in discussions with neighbors. I certainly would hate to jeopardize
anything our good team is doing there in Houston by throwing anything I’d say here today. We – I
think the best thing that happened in that building recently was that Southwestern Energy moved in
and took all of the space that was vacated by DHL and then some. It was a tremendous boon to
the building, and what that means is, is that, where normally you might have some vacancy that
would create bargaining power for the customer on the other side, with Southwestern Energy
coming in and expanding, and it’s actually expanding out of the building into a smaller building we
own adjacent to it, it gives us a little more room to bargain than we would normally have.

Global Real Estate
And so my guess is, is that – my guess sitting here today is we’ll renew neighbors. I would be loath
to give you any economics on that today. I would just say, let’s just call it at whatever we’re calling
embedded growth there in Houston today is probably where we would renew that customer.
<Q>: Okay. Do we have any questions from the audience? Yeah, let’s just go back to another
lease deal that you did recently on the GSA lease. You did get the lease done, it was a very big
deal for you guys, but the concession ratios were a little bit higher. Isn’t that just what we’re seeing
in the market today? Because you guys also renewed a couple other deals that were reduced in
terms of square footage needs. I mean is that what we should be expecting for 2010 as well?
<A – Steven Rogers>: Well, since that’s such a hard question, Young, let me turn that one over to
our capable CFO here and let him answer that one.
<A – J. Mitchell Collins>: Thanks, Young. That one over there was a tough but important renewal
for Chicago and for the 233 North Michigan, it ran a little bit over 5.50 a foot, all blended on leasing
and TI. The TI can be used obviously to improve the building or it can be used as future rent
concessions. I would say on a general trend, Young, we are seeing higher packages. Leasing
commissions are staying pretty static, but we are seeing higher packages on the TI, and so that’ll
make us, as we do with every lease, look at it from a long-term perspective, look at it from a what
does it do to the terminal value of the building, but trend lines are that TI packages especially in the
bigger, more competitive cities are going to be higher than they were let’s say two years ago, and
kind of...
<A – Steven Rogers>: I think it’s going to be a classic battle, Mitch and Young, customers and the
tenant rent brokers, they read the same PPR charts you’re looking at up here. And if you’re a
customer and you’re a big customer, especially in a big city, very sophisticated, you’re going to look
at that chart and say, what should I be doing now? And the answer is, try to do a long-term
renewal at the bottom of the market.
And so the classic arm wrestling that’s going to be going on right now is a battle of wills. It’s going
to be the landlord wants to do a shorter term, don’t give away leasehold value; the customer’s
going to want to be doing long term, big package, low rent and ask for anything, ask for the moon
and if you end up close to the moon, you’ve had a victory. So I think that’s just going to be the
classic battle for 2010 and I can’t predict who’s going to win it today. In fact, I guess if I had to give
the odds, I’d give the odds to the customer just because we have 20% vacant America today.
<Q>: Then moving on to the acquisitions and dispositions, you guys are still looking to exit some of
your non-core markets. When do you think you’ll be able to dispose of about 100 to $200 million in
assets that you’re looking to do?
<A – Steven Rogers>: It’s just going to take, I would call it over the next couple or three years just
to give us a good enough timeframe. What we’re finding out there today is that we’re putting
packages together with the major brokerage houses, CB Richard Ellis and HFF. They are going to
the market and you don’t have a robust bidding market out there, but do you have bidder’s market, I
mean there is some bidding going on. Every project we put out for bid has come back with multiple
bids on it. Now we’ll be honest and say that most of those bids have been unacceptable, but the
great thing about the bidding world when you go that route is you don’t have to take any prices, and
if you do like one of the prices you take that one and you negotiate it and you close. And that’s kind
of what we’ve been doing.
If you’ll notice, we’ve only closed a couple this year, we’ve got a couple working right now and we
did about 100 million last year. I think last year was a little bit of an anomaly in as much as we just
got a lot of stuff out the door at a good time. So I think we made some good sales last summer

Global Real Estate
especially in Columbia, South Carolina. Made a good sale up in Hampton Roads, Virginia earlier
this year. And we’ve got a couple of good sales on the drawing board right now.
But if you kind of aggregate all of that, it’s probably going to be 25 to $35 million every six months
or so, which would give you an annualized rate of maybe about $70 million. So if you went for the
full 200, it might take you three years, where if we want to stop at 100, 120 I think we could do it
probably in 18 months to two years.
So we’re just kind of out there in a very measured disciplined way of going about disposing of eight
or nine or 10 buildings that just don’t fit what we do anymore in our company. And that’s really all
that’s about. In the process, the side benefit of that strategic initiative that we announced well
before the great recession came about, is it’s just going to simply generate some liquidity for us.
And then we’ll use that liquidity to pay down debt temporarily, and then to go back in to Texas
Teachers as the acquisition market picks up.
<Q>: Okay, and could you also give us an update on your potential acquisitions? I know you guys
had a bid out for around $250 million? Or no?
<A – Steven Rogers>: Not a bid. We were looking at and analyzing about $0.25 billion, that is
correct.
<Q>: Got you, okay. Do you have any – could you give us like a number in terms of what we could
be expecting within the next six months or so?
<A – Steven Rogers>: Well, we typically don’t give guidance on capital activity, buys and sales
anymore. I used to in the old days, and I just had so many tomatoes tossed at me when we missed
those things, I just sort of quit doing that, but what I’d like to say is that we are actively out there on
the buy market again today and we are making hard bids now. I would expect to see the buying
opportunities be better in the latter half of 2010. This is going to be a very disciplined approach to
putting this $750 million out. We’re not in a hurry. We’ve got a long time horizon and we’ve got a
great partner. And even if I needed a little additional time, I feel good that we could discuss that
favorably. So I think the best thing we can do is recognize there will be some very good buys. We
don’t need a lot, so you don’t need trillions, you don’t need billions, we just need millions, and that
we can do.
<Q>: Okay. And on the cap rate side, we’ve heard that some of the primary market cap rates have
held very steady. Do you see that a lot of your assets that you’re looking at, do you see any – a lot
of the capital chasing those assets, since those aren’t, let say, primary markets?
<A – Steven Rogers>: I must tell you that the published cap rates that I’m seeing in the trade
press, I’m just quite frankly mystified by the sixes and 6.5s we just don’t see in the private
marketplace. And it’s not just because we’re in one city or another, that – those cap rates are
across the board that low, not just in New York or San Francisco; they’re showing some markets
such as Atlanta and Orlando having cap rates pretty low. And I just don’t see that being the case
today.
So I think this probably needs to be a little bit more time to digest what’s really taking place on Main
Street out there. It maybe six months, nine months, a year before we have published cap rate data
from Reece and Green Street and others that are out there following that, real capital analytics
that’s actually what I’d consider to be valid data that we could look at.
Now – the way I look at it is we go out and we make an offer. If you offer a 10 cap on something
and somebody accepts it, that’s the marketplace. And if somebody says it’s six, but the seller’s
taking 10, then I don’t know, where’s the 400 bps? Somebody just imagined they disappeared?
Global Real Estate
So we’re out there making things, making offers in the nine to 10 range today. Things are trading in
that range today. We’ve announced a couple of small non-strategic sales in that range. So that’s
kind of where I’m calling the range today, but I know that, that does not square with what you’re
probably reading up there at that podium today, Young. So I’ll just leave it at that.
<Q>: Got you. Thank you, Steve.
<A – Steven Rogers>: Yes sir.
<Q>: So, if we don’t have any questions, I think that’ll be it for us. Thank you.
Okay. Well, we’ll turn it over to another group that’s walking in the door now. And thank you very
much for your time and appreciate you listening to the Parkway presentation.
Young Ku, Analyst, Wells Fargo Securities
Thank you.
Disclaimer
The information herein is based on sources we believe to be reliable but is not guaranteed by us and does not purport to be a complete or error-free statement or summary of the
available data. As such, we do not warrant, endorse or guarantee the completeness, accuracy, integrity, or timeliness of the information. You must evaluate, and bear all risks
associated with, the use of any information provided hereunder, including any reliance on the accuracy, completeness, safety or usefulness of such information. This information is not
intended to be used as the primary basis of investment decisions. It should not be construed as advice designed to meet the particular investment needs of any investor. This report is
published solely for information purposes, and is not to be construed as financial or other advice or as an offer to sell or the solicitation of an offer to buy any security in any state where
such an offer or solicitation would be illegal. Any information expressed herein on this date is subject to change without notice. Any opinions or assertions contained in this information
do not represent the opinions or beliefs of FactSet CallStreet, LLC. FactSet CallStreet, LLC, or one or more of its employees, including the writer of this report, may have a position in
any of the securities discussed herein.
THE INFORMATION PROVIDED TO YOU HEREUNDER IS PROVIDED "AS IS," AND TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, FactSet CallStreet, LLC
AND ITS LICENSORS, BUSINESS ASSOCIATES AND SUPPLIERS DISCLAIM ALL WARRANTIES WITH RESPECT TO THE SAME, EXPRESS, IMPLIED AND STATUTORY,
INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, ACCURACY, COMPLETENESS, AND NON-
INFRINGEMENT. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, NEITHER FACTSET CALLSTREET, LLC NOR ITS OFFICERS, MEMBERS, DIRECTORS,
PARTNERS, AFFILIATES, BUSINESS ASSOCIATES, LICENSORS OR SUPPLIERS WILL BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL OR
PUNITIVE DAMAGES, INCLUDING WITHOUT LIMITATION DAMAGES FOR LOST PROFITS OR REVENUES, GOODWILL, WORK STOPPAGE, SECURITY BREACHES, VIRUSES,
COMPUTER FAILURE OR MALFUNCTION, USE, DATA OR OTHER INTANGIBLE LOSSES OR COMMERCIAL DAMAGES, EVEN IF ANY OF SUCH PARTIES IS ADVISED OF THE
POSSIBILITY OF SUCH LOSSES, ARISING UNDER OR IN CONNECTION WITH THE INFORMATION PROVIDED HEREIN OR ANY OTHER SUBJECT MATTER HEREOF.
The contents and appearance of this report are Copyrighted FactSet CallStreet, LLC 2009. CallStreet and FactSet CallStreet, LLC are trademarks and service marks of FactSet
CallStreet, LLC. All other trademarks mentioned are trademarks of their respective companies. All rights reserved.

Parkway Properties Wells Fargo Conference

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Parkway Properties Wells Fargo Conference

Uploaded by

Copyright:

Available Formats

Parkway Properties, Inc.

Wells Fargo Securities

MANAGEMENT DISCUSSION SECTION

Young Ku, Analyst, Wells Fargo Securities

Steven G. Rogers, President & Chief Executive Officer

w w w .Ca ll St r eet . com • 21 2- 84 9- 40 7 0 • C op yr i g ht © 20 0 1- 2 00 9 C a ll S tr ee t 1

w w w .Ca ll St r eet . com • 21 2- 84 9- 40 7 0 • C op yr i g ht © 20 0 1- 2 00 9 C a ll S tr ee t 2

So that’s kind of the game plan strategically going forward.

w w w .Ca ll St r eet . com • 21 2- 84 9- 40 7 0 • C op yr i g ht © 20 0 1- 2 00 9 C a ll S tr ee t 3

w w w .Ca ll St r eet . com • 21 2- 84 9- 40 7 0 • C op yr i g ht © 20 0 1- 2 00 9 C a ll S tr ee t 4

Steven G. Rogers, President & Chief Executive Officer

w w w .Ca ll St r eet . com • 21 2- 84 9- 40 7 0 • C op yr i g ht © 20 0 1- 2 00 9 C a ll S tr ee t 5

QUESTION AND ANSWER SECTION

w w w .Ca ll St r eet . com • 21 2- 84 9- 40 7 0 • C op yr i g ht © 20 0 1- 2 00 9 C a ll S tr ee t 6

w w w .Ca ll St r eet . com • 21 2- 84 9- 40 7 0 • C op yr i g ht © 20 0 1- 2 00 9 C a ll S tr ee t 7

w w w .Ca ll St r eet . com • 21 2- 84 9- 40 7 0 • C op yr i g ht © 20 0 1- 2 00 9 C a ll S tr ee t 8

<Q>: Got you. Thank you, Steve.

<A – Steven Rogers>: Yes sir.

Steven G. Rogers, President & Chief Executive Officer

Young Ku, Analyst, Wells Fargo Securities

w w w .Ca ll St r eet . com • 21 2- 84 9- 40 7 0 • C op yr i g ht © 20 0 1- 2 00 9 C a ll S tr ee t 10

You might also like