Real estate firms Parkway Property Investments and Midway Holdings are forming a new real estate investment, operations and management firm to be headquartered in Houston.
The new company will operate under what both companies are calling a “refreshed Parkway brand,” while Houston-based Midway will continue to operate under its established name, a news release stated. Midway will become Orlando, Florida-based Parkway’s exclusive development partner, though Midway may still pursue specialized or niche opportunities that are not part of Parkway’s business strategy, a spokesperson told Bisnow.
The company is a new venture and not a merger, the spokesperson said. “We believe the rapid and ongoing evolution in how people choose to live, work, and seek entertainment represents amazing opportunities for our combined resources,” Parkway CEO Jayson Lipsey said in the release.
“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.”
The full integration of Parkway and Midway teams is targeted for Q3 2023. The companies have a combined 45M SF of assets under management, including developments in progress. Per the release, the new firm will leverage Parkway’s experience and relationships that have helped it raise institutional capital in multiple U.S. markets for more than 50 years and Midway’s development experience, which has been concentrated in Texas since 1968.
Midway is well-known in the Houston area for its CITYCENTRE development, a 2M SF mixed-use walkable urban development in Memorial City. It is also developing East River, a 150-acre tract on Houston’s east waterfront near downtown. The first phase, which will include 26 acres with office, retail and multifamily, is expected to be delivered this year. Its nine-hole golf course and restaurant are already open.
Though Midway's projects have centered around Houston, it has also developed projects in San Antonio and College Station, according to its website. Parkway owns, operates and manages primarily office properties across six markets: Charlottesville, Virginia; Houston; and another four in Florida, though it has previously done business in other locales.
In Houston, Parkway’s properties include Greenway Plaza and CityWest Place, the latter in the Westchase District. Parkway sold the 46-story San Felipe Plaza last month after two decades of ownership for at least $50M less than its original purchase price. The firms will work together to increase investment and expand ownership and operations across the Sun Belt region and beyond, the release states.
“Together, we are stronger and better positioned to drive meaningful market share gains, sustainable growth, and value creation,” Parkway Chairman James Heistand said. Parkway, a former publicly traded REIT, merged with Cousins Properties in 2016 in a nearly $2B all-stock transaction. Cousins spun off the Houston assets into a new real estate investment trust, still named Parkway, headed by then-CEO Heistand. A year later, Parkway was acquired by the Canada Pension Plan Investment Board for $1.2B. Heistand, along with two other executives, later purchased Parkway's asset management business and created Parkway Property Investments, Bisnow previously reported.
The new joint firm will employ about 300 people and be headquartered in Houston, but will have employees and assets in 13 markets across Texas, Florida, Georgia, Virginia, Arizona, Colorado and California, the news release said.
Midway Chairman and CEO Bradley Freels, along with Parkway’s Heistand, will serve as co-executive chairmen of the new firm’s board. Midway President Jamie Bryant and Parkway’s Lipsey will serve as co-CEOs. The remainder of the new company’s leadership team will include executives from both Midway and Parkway. Midway will continue to operate its development entity under current management.