Parkway Properties Inc (PKY) is a turnaround company seeing rent growth in its office buildings in the Sun Belt, and continues to deliver by making smart acquisitions that fit into their strategy, says Alexander D. Goldfarb, Managing Director and Senior REIT Analyst at Sandler O’Neill + Partners, L.P.
“If you look down the Sun Belt, Parkway (PKY) is benefiting hugely because there is low tax, pro growth, and you don’t have the macro hurdles that New York and D.C. are facing,” Goldfarb said. “This is a turnaround company with a new management that came in almost two years ago. They now focus on owning high-quality, desirable office buildings in the desirable submarkets in the Sun Belt, so places like Buckhead in Atlanta, Uptown in Charlotte, Westshore in Tampa, places where people are willing to pay more for rents.”
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Most areas in downtown Sun Belt cities have been built up, and cities are much more strict on new builds, thus companies like PKY are seeing rent growth, Goldfarb adds. This coupled with the company’s new strategy make PKY an attractive investment in the office REIT space.
“Parkway has done very well, and the team continues to do smart acquisitions that fit well within their strategy. For us, you’ve got an office company without any of the political or macro headwinds and a team that just continues to deliver, so we certainly like those guys,” Goldfarb said.
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