HOUSTON – (Realty News Report) – Midway Holdings LP, a Houston-based firm behind the notable CityCentre mixed-use development in West Houston, has reached an agreement with Parkway Property Investments LLC to create a new firm with a national focus on real estate investment, operations and management.
Orlando-based Parkway has extensive office holdings from coast to coast, including Greenway Plaza, near the Southwest Freeway and Buffalo Speedway in central Houston.
The new company, operating under a refreshed Parkway brand, will be headquartered in Houston and have 300 employees with combined leasing, property management, accounting, asset management and other functions.
Parkway, which was once part of a publicly traded REIT, has an extensive network for raising capital on a national basis. Midway, founded in 1968, has been more focused on Texas.
A key factor in the partnership, is Midway’s experience in developing mixed-use places with green space, retail, hotels, and multifamily amid office space. As the nation’s office markets are roiled in the post-covid era and the work-from-home trend, plain commodity office buildings must be transformed.
This is Midway’s strength – and it’s a weakness for Parkway.
Simply put: “They don’t do development. We do development,” commented Midway chairman and CEO Brad Freels in an interview where he described the complementary nature of the Midway/Parkway partnership.
Midway, owned by Brad Freels, will continue to operate as a separate development entity under the Midway name and act as the new combined company’s development partner.
In Houston, Midway has high-profile developments underway, East River, the redevelopment of the150-acre Brown & Root campus near downtown; and Watermark, the development of the old Kevin Roche-designed ConocoPhillips campus in the Energy Corridor.
And Midway’s redevelopment of Levy Park, next to its new Kirby Grove tower on Richmond Avenue, won the international Urban Land Institute’s Open Space Award in 2018.
It’s Midway’s background with these kinds of transformational redevelopments that could invigorate Parkway’s existing office holdings.
“We believe the rapid and ongoing evolution in how people choose to live, work, and seek entertainment presents amazing opportunities for our combined resources,” said Jayson Lipsey, CEO of Parkway. “Midway’s extraordinary development and placemaking capabilities together with Parkway’s broad capital market expertise will provide the scale, efficiency, and financial strength to engage and respond proactively to these trends and drive enhanced stakeholder value through market cycles.”
For Houston, the Parkway/Midway venture raises questions about opportunities for redeveloping landmark properties.
Parkway owns Greenway Plaza, an 11-building campus with 5 million SF near the Southwest Freeway and Buffalo Speedway in central Houston. Led by Kenneth Schnitzer, Century Development built Greenway Plaza primarily in the 1970s. Greenway Plaza has some retail components and the high-profile Lakewood Church in the former Summit arena where the Rockets NBA team once played.
Parkway also operates Post Oak Central, a three-building office campus developed by Mr. Gerald D. Hines’ company primarily in the 1970s. Designed by architects Philip Johnson and John Burgee, Post Oak Central is two blocks from The Galleria. Late last year, the Apache oil and gas firm announced it is moving out to Westchase after 30 years as a major tenant in Post Oak Central.
As Parkway and Midway join forces, the new combined firm will operate in 13 markets across Texas, Florida, Georgia, Virginia, Arizona, Colorado, and California.
The full integration of the Parkway and Midway teams is targeted for the third quarter of this year.
Upon full integration, Bradley Freels and Parkway’s James Heistand will serve as Co-Executive Chairmen of the new firm’s board, and Parkway’s Jayson Lipsey and Midway’s Jamie Bryant will serve as Co-Chief Executive Officers of the new firm. The remainder of the new company’s leadership team will include executives from both Midway and Parkway. A. Noni Holmes-Kidd will serve as Chief Legal Officer, Matt Mooney will serve as Chief Operating Officer, John Kosciulek will serve as Chief Financial Officer, and Pam Jesse will serve as Chief People Officer. Midway will continue to operate its development entity under current management.
“Together, we are stronger and better positioned to drive meaningful market share gains, sustainable growth, and value creation,” said James Heistand, Parkway’s Chairman. “We look forward to bringing our talented teams together to unlock the tremendous potential of this compelling new company.”
The new Parkway company will offer commercial real estate solutions including: Acquisitions and Dispositions, Asset Management, Investment and Development (in partnership with Midway), Accounting Services, Property Operations and Management, Construction Management, REIT Compliance and Governance, Mergers & Acquisitions, Marketing and Communications, Strategic Leasing and Advisory, and Portfolio Repositioning.
The formation of the new company will be completed without Midway and Parkway trading any assets.
May 10, 2023 Realty News Report Copyright 2023
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Images: Courtesy Midway. Photo Credit Brittney-Ellaway with Ellaway House Photography