Parkway Properties Announces Chicago Leasing Activity

JACKSON, Miss., June 20 /PRNewswire-FirstCall/ -- Parkway Properties, Inc. announced today that it had signed a 61,000 square foot lease expansion in One Illinois Center in Chicago with Health Care Services Corporation (operating as Blue Cross Blue Shield of Illinois), the largest customer in the building with 263,000 square feet under various leases expiring between March 2012 and March 2017. This lease, combined with 11,000 square feet of other recent leases, brings the 1,013,000 square foot building to 91.6% leased, up from 86% leased when Parkway purchased the building in July 2006.

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In addition to One Illinois Center, Parkway Properties, Inc. owns the 1,071,000 square foot Two Illinois Center within Illinois Center, one of America's premier mixed-use urban projects, which has an estimated daytime population of 40,000 employees plus 3,342 hotel rooms and over 4,000 residential units. The properties are a combined 92.7% leased as of June 20, 2007.

Steven G. Rogers, President and CEO, stated, "We are pleased to announce this significant expansion of Blue Cross within One Illinois Center. Leasing activity in our two properties located in the East Loop of downtown Chicago continues to be strong. The overall Chicago office market and the East Loop submarket have seen dramatic improvement over the last several quarters."

Parkway Properties, Inc., a member of the S&P Small Cap 600 Index, is a self-administered real estate investment trust specializing in the operation, leasing, acquisition, and ownership of office properties. The Company is geographically focused on the Southeastern and Southwestern United States and Chicago. Parkway owns or has an interest in 67 office properties located in 11 states with an aggregate of approximately 13.5 million square feet of leasable space as of June 20, 2007. Included in the portfolio are 18 properties totaling 2.7 million square feet that are owned jointly with other investors, representing 20% of the portfolio. Under the Company's GEAR UP Plan, which started January 1, 2006 and ends December 31, 2008, it is the Company's goal to transform its strategy from being an owner-operator to being an operator- owner. The strategy highlights the Company's strength in providing excellent service in the operation of office properties in addition to its direct ownership of real estate assets. Fee-based real estate services are offered through the Company's wholly-owned subsidiary, Parkway Realty Services, which also manages and/or leases approximately 1.2 million square feet for third party owners as of June 20, 2007.

Parkway Properties, Inc.'s press releases and additional information about the Company are available on the World Wide Web at http://www.pky.com/.

Contact: William R. Flatt Chief Financial Officer (601) 948-4091