The properties acquired were a two-building portfolio consisting of a five-story, 154,000-sf building at 100 Ashford Center North and the seven-story, 159,000-sf Peachtree Ridge for $48.5 million. The third property was a 13-story, 262,000-sf Overlook II for $44.6 million. Parkway did not name the sellers of the properties and company officials could not be reached for comment before deadline.

For the two-building portfolio, Parkway plans to spend an additional $3.8 million and for Overlook II an additional $2.3 million for closing costs, building improvements, leasing costs and tenant improvements during the first two years of ownership. As part of the purchase of the portfolio, Parkway will assume an existing $30.9-million first mortgage with a fixed interest rate of 5.68% that matures in January 2016. For Overlook II, the company expects to place a $31.5-million, 10-year first mortgage before Jan. 31.

Constructed in 1987, 100 Ashford Center is located on 6.1 acres and is connected to a five-level parking garage with 525 spaces. It is 93.8% leased. Peachtree Ridge was constructed in 1986 and is located on 12.5 acres. It includes a two-level parking deck with 172 spaces and 420 spaces in a surface lot and is 89.8% leased. Constructed in 1985, Overlook II includes a five-level parking garage with 794 spaces and is 91.5% leased.

The portfolio properties are expected to yield a cap rate of 6.6% in the first year of operations and a leveraged internal rate of return of approximately 11.9%. Overlook II is expected to yield a cap rate of 6.3% in the first year and an IRR of 13.2%.

The properties were purchased under the $500-million Parkway Properties Office Fund formed in July 2005. As of Jan. 1, the fund had invested $224.7 million and owned nine assets with a total of 1.38 million sf that is 92.1% leased.