ORLANDO—In a $1.2 billion deal, Parkway Properties and Thomas Properties Group are merging. Parkway is acquiring Thomas in a stock-for-stock transaction that could close by the end of the fourth quarter.

The acquisition gives Parkway ownership interest in Thomas assets, including two office properties in Houston and five office properties in Austin. Parkway may take ownership of three assets in Northern Virginia.

Parkway also has separately reached an agreement with Brandywine Realty Trust to sell substantially all of Thomas' ownership interest in two Philadelphia office properties known as Commerce Square for $332 million. Parkway will also sell Thomas' Four Points Centre and a contiguous land parcel located in Austin to Brandywine for $51 million.