Simultaneous with closing, the joint venture that owns the properties closed an$11.53 million mortgage secured by the properties. The non-recourse first mortgage with Southern Farm Bureau Life Insurance Company has a fixed interest rate of 5.84%, amortizes over 28 years and matures in 10 years. Parkway Properties subsidiary Parkway Realty Services will continue to manage, lease and operate the buildings on a 10-year non-cancelable management and leasing contract at market rates.

Parkway Properties will receive net cash proceeds from the sale and the financing of approximately $15.5 million, which will be used to reduce short-term borrowings under the Company's lines of credit pending reinvestment in new properties and other general corporate purposes. Parkway Properties expects to recognize a gain on the sale of approximately $4 million in the second quarter.

Parkway has been involved with these two assets for over a decade and their historical occupancy and customer retention are among the highest in the company's 56 building portfolio. Parkway SVP James Ingram, the managing member of the new venture, says the transaction in its home town of Jackson follows the successful completion of similar joint ventures in Chicago and Phoenix.