Tuesday , 18 February 2020
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Huge Houston Real Estate Company Quietly Created Last Friday

(By Ralph Bivins) HOUSTON – One of the biggest Houston-focused real estate companies ever was born last week.

It’s holdings: All Houston. All office.
The new Houston REIT began trading on the New York Stock Exchange on Friday, Oct. 7.
The new REIT was created as the byproduct of the $2 billion merger of Cousins Properties and Parkway Properties. When the two REITs combined, their Houston office buildings were shunted off into this newly created REIT.
The new Houston-only REIT is traded on the NYSE under the symbol “PKY.” The  new independent company is called Parkway Inc. or “New Parkway.”
Parkway Inc., the new Houston REIT controls some prime office holdings. It owns five Houston office properties with 8.7 million SF: the 10-building 4.4. million SF Greenway Plaza,  the 1.3 million SF Post Oak Central, the 627,000-SF Phoenix Tower in Houston, the 980,000-SF San Felipe Plaza and the 1.5 million SF CityWest Place in Westchase.
Any publicly traded REIT with substantial Houston holdings has been open to criticism and downgrades over the last couple of years.
The Houston office market soured when oil prices crashed, creating a surge in sublease space availability and rising vacancies.  The supply of sublease office space has risen to 12.2 million SF, according to JLL, and there’s still about 3 million SF of new buildings still under construction.
So it made sense to create Parkway Inc. as a place to shed the Houston office buildings, at least for publicly traded firm that wants to avoid the taint of Houston holdings.
Atlanta-based Cousins, which has major holdings in Austin, continues on as a big REIT without any Houston properties.
Whether you believe the Houston office market has reached the bottom or not, this new REIT offers a chance to buy shares of the Houston office market. Maybe it’s a smart buy. Maybe it’s not.
But as a new REIT, Parkway Inc. owns a homogenized portfolio. It’s all Houston, all office.
Oct. 12, 2016 Realty News Report Copyright 2016


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