content: <html>
  
  <head>
  
  
  <title>UNITED STATES</title>
  
  
  
  </head>
  
  <body lang=EN-US>
  
  <div class=Section1 style="border-bottom-style: solid; border-bottom-width: 1; padding-bottom: 1">
  
  <h5 align=center style='text-align:center'>UNITED STATES<br>
  <br>
  SECURITIES AND EXCHANGE COMMISSION<br>
  <br>
  WASHINGTON, DC&nbsp; 20549<br>
  <br>
  <br>
  </h5>
  
  <table class=MsoNormalTable border=1 cellspacing=0 cellpadding=0
   style='border-left:medium none; border-right:medium none; border-top:medium none; margin-left:108.9pt;border-collapse:collapse;border-bottom-color:inherit'>
   <tr>
    <td width=348 valign=top style='border-left:medium none; border-right:medium none; border-bottom:1px solid; width:261.0pt;border-top:1.0pt solid windowtext;
    padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
  
    </td>
   </tr>
  </table>
  
  <h4 align=center style='text-align:center'>FORM
  8-K<br>
  <br>
  <br>
  CURRENT REPORT<br>
  <br>
  <br>
  </h4>
  
  <table class=MsoNormalTable border=1 cellspacing=0 cellpadding=0
   style='margin-left:-8.1pt;border-collapse:collapse' bordercolorlight="#FFFFFF" bordercolordark="#FFFFFF" bgcolor="#FFFFFF">
   <tr style='page-break-inside:avoid;height:51.9pt'>
    <td width=660 colspan=5 valign=top style='width:495.0pt;padding:0in 5.4pt 0in 5.4pt;
    height:51.9pt'>
    <p class=MsoNormal align=center style='text-align:center'>Pursuant to Section 13 or
    15(d)<br>
    of the <br>
    Securities Exchange Act of 1934<br>
    <br>
    <br>
    </p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid;height:16.65pt'>
    <td width=498 colspan=4 valign=top style='width:373.5pt;padding:0in 5.4pt 0in 5.4pt;
    height:16.65pt'>
    <p class=MsoNormal>Date
    of Report (Date of earliest event reported):</p>
    </td>
    <td width=162 valign=top style='width:121.5pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt;height:16.65pt'>
    <p class=MsoNormal align=center style='text-align:center'>N/A</p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=660 colspan=5 valign=top style='width:495.0pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=660 colspan=5 valign=top style='width:495.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'>PARKWAY PROPERTIES, INC.</p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=660 colspan=5 valign=top style='width:495.0pt;border:none;
    border-top:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'>(Exact name of registrant as specified in its
    charter)<br>
    <br>
    <br>
    <br>
    </p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=210 valign=top style='width:157.5pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'>Maryland</p>
    </td>
    <td width=192 valign=top style='width:2.0in;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'>1-11533</p>
    </td>
    <td width=258 colspan=3 valign=top style='width:193.5pt;border:none;
    border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'>74-2123597</p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid;height:13.85pt'>
    <td width=210 valign=top style='width:157.5pt;padding:0in 5.4pt 0in 5.4pt;
    height:13.85pt'>
    <p class=MsoNormal>(State
    or other jurisdiction of<br>
    incorporation or organization)</p>
    </td>
    <td width=192 valign=top style='width:2.0in;padding:0in 5.4pt 0in 5.4pt;
    height:13.85pt'>
    <p class=MsoNormal align=center style='text-align:center'>(Commission File Number)</p>
    </td>
    <td width=258 colspan=3 valign=top style='width:193.5pt;padding:0in 5.4pt 0in 5.4pt;
    height:13.85pt'>
    <p class=MsoNormal>(IRS
    Employer Identification Number)</p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid;height:13.8pt'>
    <td width=210 valign=top style='width:157.5pt;padding:0in 5.4pt 0in 5.4pt;
    height:13.8pt'>
  
    </td>
    <td width=192 valign=top style='width:2.0in;padding:0in 5.4pt 0in 5.4pt;
    height:13.8pt'>
  
    </td>
    <td width=258 colspan=3 valign=top style='width:193.5pt;padding:0in 5.4pt 0in 5.4pt;
    height:13.8pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid;height:13.8pt'>
    <td width=660 colspan=5 valign=top style='width:495.0pt;border:none;
    border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.8pt'>
    <p class=MsoNormal align=center style='text-align:center'>One Jackson Place Suite 1000<br>
    188 East Capitol Street<br>
    P. O. Box 24647<br>
    Jackson, Mississippi&nbsp; 39225-4647</p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid;height:20.5pt'>
    <td width=660 colspan=5 valign=top style='width:495.0pt;padding:0in 5.4pt 0in 5.4pt;
    height:20.5pt'>
    <p class=MsoNormal align=center style='text-align:center'>(Address of principal
    executive offices) (Zip Code)<br>
    <br>
    <br>
    <br>
    </p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid;height:.2in'>
    <td width=444 colspan=3 valign=top style='width:333.0pt;padding:0in 5.4pt 0in 5.4pt;
    height:.2in'>
    <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Registrant's
    telephone number, including area code </p>
    </td>
    <td width=216 colspan=2 valign=top style='width:2.25in;border:none;
    border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
    <p class=DefaultText>(601) 948-4091</p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid;height:14.8pt'>
    <td width=660 colspan=5 valign=top style='width:495.0pt;border:none;
    border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:14.8pt'>
    <p class=DefaultText><br>
    <br>
    <br>
    </p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid;height:12.6pt'>
    <td width=660 colspan=5 valign=top style='width:495.0pt;padding:0in 5.4pt 0in 5.4pt;
    height:12.6pt'>
    <p class=MsoNormal align=center style='text-align:center'>(Former name, former address
    and former fiscal year, if changed since last report)</p>
    </td>
   </tr>
   <tr height=0>
    <td width=184 style='border:none'></td>
    <td width=168 style='border:none'></td>
    <td width=37 style='border:none'></td>
    <td width=47 style='border:none'></td>
    <td width=142 style='border:none'></td>
   </tr>
  </table>
  
  
  
  <hr color="#000080"><br clear=all
  style='page-break-before:always'>
  
  
  <p class=MsoNormal align=center style='text-align:center'><b>FORM 8-K<br>
  <br>
  PARKWAY PROPERTIES, INC.</b></p>
  
  <p class=MsoNormal><b><br>
  Item 5. Other Events.</b></p>
  
  <p class=MsoNormal style='text-align:justify'><b><br>
  </b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
  August 28, 2003, Parkway Properties, Inc. (&quot;Parkway&quot;) purchased the
  Peachtree Dunwoody Pavilion, a 366,000 square foot office building in Atlanta,
  Georgia.&nbsp; Parkway acquired the Peachtree Dunwoody Pavilion for a purchase price
  of $40 million plus $2 million in closing costs and anticipated first year
  capital expenditures and leasing commissions.&nbsp; The purchase was funded with
  proceeds from the tax-deferred sale of the BB&amp;T Financial Center in
  Winston-Salem, North Carolina on August 1, 2003 and with proceeds from the
  issuance of common stock on March 24, 2003.</p>
  
  <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The&nbsp;Peachtree Dunwoody Pavilion consists
  of four buildings totaling 366,000 square feet on 20 acres with 1,157 surface
  parking spaces.&nbsp; Two of the buildings were constructed in 1976 and two in 1980
  with over $2 million in capital upgrades since 2000.&nbsp; The properties are
  currently 88% leased to 24 customers, with three customers, Cox Communications,
  Auto Trader.com, a subsidiary of Cox Communications, and Beazer Homes,
  occupying approximately 50% of the properties.</p>
  
  
  
  <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
  September 12, 2003, Parkway purchased the Wells Fargo Building, a 135,000
  square foot, eight-story office building in the Northwest Freeway Corridor
  submarket of Houston, Texas.&nbsp; The property was acquired for $12 million plus $1
  million in closing costs and anticipated first year capital expenditures and
  leasing commissions.&nbsp; The purchase was funded with proceeds from the issuance
  of common stock on March 24, 2003.&nbsp; The Wells Fargo Building was constructed in
  1978 and is currently 91% leased to 18 customers, with four customers, Gulf
  States Financial, Liberty Mutual Insurance, Auto One Acceptance and Wells Fargo
  Bank, occupying approximately 63% of the building.</p>
  
  <p class=MsoNormal style='text-align:justify'><br>
  <b>Item 7.&nbsp; Financial Statements and Exhibits.</b></p>
  
  <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
  
  <table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
   style='border-collapse:collapse'>
   <tr>
    <td width=589 valign=top style='width:441.9pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Financial
    Statements</p>
    </td>
    <td width=49 valign=top style='width:36.9pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><b>&nbsp;</b></p>
    </td>
   </tr>
   <tr>
    <td width=589 valign=top style='width:441.9pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=49 valign=top style='width:36.9pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><b>&nbsp;</b></p>
    </td>
   </tr>
   <tr>
    <td width=638 colspan=2 valign=top style='width:6.65in;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    following audited financial statement of the Peachtree Dunwoody Pavilion for
    the year ended December 31, 2002 is attached hereto.&nbsp; Also included is the
    unaudited financial statement for the six months ended June 30, 2003:</p>
    </td>
   </tr>
   <tr>
    <td width=589 valign=top style='width:441.9pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=49 valign=top style='width:36.9pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><b>&nbsp;</b></p>
    </td>
   </tr>
   <tr>
    <td width=589 valign=top style='width:441.9pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=49 valign=top style='width:36.9pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><b>Page</b></p>
    </td>
   </tr>
   <tr>
    <td width=589 valign=top style='width:441.9pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Report
    of Independent Auditors</p>
    </td>
    <td width=49 valign=top style='width:36.9pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'>4</p>
    </td>
   </tr>
   <tr>
    <td width=589 valign=top style='width:441.9pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Statements
    of Rental Revenues and Direct Operating Expenses</p>
    </td>
    <td width=49 valign=top style='width:36.9pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'>5</p>
    </td>
   </tr>
   <tr>
    <td width=589 valign=top style='width:441.9pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notes
    to Statements of Rental Revenues and Direct Operating Expenses</p>
    </td>
    <td width=49 valign=top style='width:36.9pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'>6</p>
    </td>
   </tr>
   <tr>
    <td width=589 valign=top style='width:441.9pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=49 valign=top style='width:36.9pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><b>&nbsp;</b></p>
    </td>
   </tr>
   </table>
  
  <hr color="#000080">
  <p>&nbsp;</p>
  
  <table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
   style='border-collapse:collapse' id="AutoNumber1">
   <tr>
    <td width=638 colspan=2 valign=top style='width:6.65in;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    following audited financial statement of the Wells Fargo Building for the
    year ended December 31, 2002 is attached hereto.&nbsp; Also included is the
    unaudited financial statement for the six months ended June 30, 2003:</p>
    </td>
   </tr>
   <tr>
    <td width=589 valign=top style='width:441.9pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=49 valign=top style='width:36.9pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><b>&nbsp;</b></p>
    </td>
   </tr>
   <tr>
    <td width=589 valign=top style='width:441.9pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=49 valign=top style='width:36.9pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><b>&nbsp;</b></p>
    </td>
   </tr>
   <tr>
    <td width=589 valign=top style='width:441.9pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=49 valign=top style='width:36.9pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><b>Page</b></p>
    </td>
   </tr>
   <tr>
    <td width=589 valign=top style='width:441.9pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Report
    of Independent Auditors</p>
    </td>
    <td width=49 valign=top style='width:36.9pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'>8</p>
    </td>
   </tr>
   <tr>
    <td width=589 valign=top style='width:441.9pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Statements
    of Rental Revenues and Direct Operating Expenses</p>
    </td>
    <td width=49 valign=top style='width:36.9pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'>9</p>
    </td>
   </tr>
   <tr>
    <td width=589 valign=top style='width:441.9pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notes
    to Statements of Rental Revenues and Direct Operating Expenses</p>
    </td>
    <td width=49 valign=top style='width:36.9pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'>10</p>
    </td>
   </tr>
   <tr>
    <td width=589 valign=top style='width:441.9pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=49 valign=top style='width:36.9pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr>
    <td width=589 valign=top style='width:441.9pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (b)&nbsp;&nbsp;&nbsp;&nbsp;Pro Forma Consolidated Financial Statements</p>
    </td>
    <td width=49 valign=top style='width:36.9pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr>
    <td width=589 valign=top style='width:441.9pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=49 valign=top style='width:36.9pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr>
    <td width=638 colspan=2 valign=top style='width:6.65in;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    following unaudited Pro Form Consolidated Financial Statements of Parkway are
    attached hereto:</p>
    </td>
   </tr>
   <tr>
    <td width=589 valign=top style='width:441.9pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=49 valign=top style='width:36.9pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr>
    <td width=589 valign=top style='width:441.9pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=49 valign=top style='width:36.9pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><b>Page</b></p>
    </td>
   </tr>
   <tr>
    <td width=589 valign=top style='width:441.9pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pro
    Forma Consolidated Financial Statements (Unaudited)</p>
    </td>
    <td width=49 valign=top style='width:36.9pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'>12</p>
    </td>
   </tr>
   <tr>
    <td width=589 valign=top style='width:441.9pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pro
    Forma Consolidated Balance Sheet (Unaudited) - As of June 30, 2003</p>
    </td>
    <td width=49 valign=top style='width:36.9pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'>13</p>
    </td>
   </tr>
   <tr>
    <td width=589 valign=top style='width:441.9pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pro
    Forma Consolidated Statement of Income (Unaudited) - </p>
    </td>
    <td width=49 valign=top style='width:36.9pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr>
    <td width=589 valign=top style='width:441.9pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
    the Year Ended December 31, 2002</p>
    </td>
    <td width=49 valign=top style='width:36.9pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'>14</p>
    </td>
   </tr>
   <tr>
    <td width=589 valign=top style='width:441.9pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pro
    Forma Consolidated Statement of Income (Unaudited) - </p>
    </td>
    <td width=49 valign=top style='width:36.9pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr>
    <td width=589 valign=top style='width:441.9pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
    the Six Months Ended June 30, 2003</p>
    </td>
    <td width=49 valign=top style='width:36.9pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'>15</p>
    </td>
   </tr>
   <tr>
    <td width=589 valign=top style='width:441.9pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notes
    to Pro Forma Consolidated Financial Statements (Unaudited)</p>
    </td>
    <td width=49 valign=top style='width:36.9pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'>16</p>
    </td>
   </tr>
   <tr>
    <td width=589 valign=top style='width:441.9pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=49 valign=top style='width:36.9pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr>
    <td width=589 valign=top style='width:441.9pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exhibits</p>
    </td>
    <td width=49 valign=top style='width:36.9pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr>
    <td width=589 valign=top style='width:441.9pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(23)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consent
    of Ernst &amp; Young, LLP</p>
    </td>
    <td width=49 valign=top style='width:36.9pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr>
    <td width=589 valign=top style='width:441.9pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=49 valign=top style='width:36.9pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr>
    <td width=589 valign=top style='width:441.9pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=49 valign=top style='width:36.9pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr>
    <td width=589 valign=top style='width:441.9pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=49 valign=top style='width:36.9pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
  </table>
  
  <p class=MsoNormal align=center style='text-align:center'><b><br>
  <br>
  <br>
  </b></p>
  
  <b><hr color="#000080"><br clear=all
  style='page-break-before:always'>
  </b>
  
  <p class=MsoNormal align=center style='text-align:center'><b>Report of Independent Auditors</b></p>
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'><br>
  <br>
  The Board of Directors</p>
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>Parkway Properties, Inc.</p>
  
  <p class=MsoNormal style='text-align:justify'><br>
  We have audited the accompanying statement of rental revenues and direct
  operating expenses of the Peachtree Dunwoody Pavilion for the year ended
  December 31, 2002.&nbsp; This statement is the responsibility of management.&nbsp; Our
  responsibility is to express an opinion on this statement based on our audit.</p>
  
  <p class=MsoNormal style='text-align:justify'><br>
  We conducted our audit in accordance with auditing standards generally accepted
  in the United States.&nbsp; Those standards require that we plan and perform the
  audit to obtain reasonable assurance about whether the statement of rental
  revenues and direct operating expenses is free of material misstatement.&nbsp; An
  audit includes examining, on a test basis, evidence supporting the amounts and
  disclosures in the statement.&nbsp; An audit also includes assessing the basis of
  accounting and accounting principles used and significant estimates made by
  management, as well as evaluating the overall statement presentation.&nbsp; We
  believe that our audit provides a reasonable basis for our opinion.</p>
  
  <p class=MsoNormal style='text-align:justify'><br>
  The accompanying statements were prepared for the purpose of complying with the
  rules and regulations of the Securities and Exchange Commission, as described
  in Note 2, for inclusion in a Form 8-K of Parkway Properties, Inc. and are not
  intended to be a complete presentation of the Peachtree Dunwoody Pavilion revenues
  and expenses. </p>
  
  <p class=MsoNormal style='text-align:justify'><br>
  In our opinion, the statement of rental revenue and direct operating expenses
  referred to above presents fairly, in all material respects, the rental
  revenues and direct operating expenses described in Note 2 of the Peachtree
  Dunwoody Pavilion for the year ended December 31, 2002, in conformity with
  accounting principles generally accepted in the United States.</p>
  
  <p class=MsoNormal style='text-align:justify'><br>
  We have compiled the accompanying statement of rental revenues and direct
  operating expenses of the Peachtree Dunwoody Pavilion for the six months ended June
  30, 2003 in accordance with the <i>Statement on Standards for Accounting and
  Review Services</i> issued by the American Institute of Certified Public
  Accountants. A compilation is limited to presenting in the form of a financial
  statement information that is the representation of management.&nbsp; We have not
  audited or reviewed the statement of rental revenues and direct operating
  expenses of the Peachtree Dunwoody Pavilion for the six months ended June 30,
  2003 and, accordingly; do not express an opinion or any other form of assurance
  on the statement.</p>
  
  <p class=MsoNormal style='text-align:justify'><br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  Ernst &amp; Young, LLP<br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;  </p>
  
  <p class=MsoNormal style="margin-top: 0; margin-bottom: 0">Jackson,
  Mississippi&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
  
  <p class=MsoNormal style="margin-top: 0; margin-bottom: 0">October
  29, 2003</p>
  
  <hr color="#000080"><br clear=all style='page-break-before:always'>
  
  
  <p class=MsoEndnoteText align=center style='text-align:center;line-height:-100%'><b>Peachtree Dunwoody Pavilion<br>
  <br>
  Statements of Rental Revenues<br>
  and Direct Operating Expenses</b></p>
  
  <div align=center>
  
  <table class=MsoNormalTable border=1 cellspacing=0 cellpadding=0 width=678
   style='width:508.3pt;border-collapse:collapse' bordercolorlight="#FFFFFF" bordercolordark="#FFFFFF" bgcolor="#FFFFFF">
   <tr>
    <td width=368 valign=top style='width:276.25pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><b><font size="2">&nbsp;</font></b></p>
    </td>
    <td width=145 valign=top style='width:108.75pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center;line-height:-100%'><b>
    <font size="2">Year Ended</font></b></p>
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center;line-height:-100%'><b>
    <font size="2">Six Months
    Ended</font></b></p>
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;border:none;border-bottom:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><b><font size="2">&nbsp;</font></b></p>
    </td>
    <td width=145 valign=top style='width:108.75pt;border:none;border-bottom:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center;line-height:-100%'><b>
    <font size="2">December 31,
    2002</font></b></p>
    </td>
    <td width=164 valign=top style='width:123.3pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center;line-height:-100%'><b>
    <font size="2">June 30,
    2003</font></b></p>
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=145 valign=top style='width:108.75pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=164 valign=top style='width:123.3pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center;line-height:-100%'>
    <font size="2">(unaudited)</font></p>
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">Rental revenues:</font></p>
    </td>
    <td width=145 valign=top style='width:108.75pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Minimum
    rents </font> </p>
    </td>
    <td width=145 valign=top style='width:108.75pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:20.15pt;text-align:right;
    line-height:-100%'><font size="2">$&nbsp;&nbsp;6,764,197</font></p>
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:26.45pt;text-align:right;
    line-height:-100%'><font size="2">$&nbsp;&nbsp;3,169,785</font></p>
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reimbursed
    charges </font> </p>
    </td>
    <td width=145 valign=top style='width:108.75pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:19.55pt;text-align:right;
    line-height:-100%'><font size="2">307,994</font></p>
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:26.45pt;text-align:right;
    line-height:-100%'><font size="2">171,458</font></p>
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;border:none;border-bottom:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other
    income</font></p>
    </td>
    <td width=145 valign=top style='width:108.75pt;border:none;border-bottom:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:19.55pt;text-align:right;
    line-height:-100%'><font size="2">200,547</font></p>
    </td>
    <td width=164 valign=top style='width:123.3pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:26.45pt;text-align:right;
    line-height:-100%'><font size="2">49,573</font></p>
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=145 valign=top style='width:108.75pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:19.55pt;text-align:right;
    line-height:-100%'><font size="2">7,272,738</font></p>
    </td>
    <td width=164 valign=top style='width:123.3pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:26.45pt;text-align:right;
    line-height:-100%'><font size="2">3,390,816</font></p>
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=145 valign=top style='width:108.75pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">Direct operating expenses:</font></p>
    </td>
    <td width=145 valign=top style='width:108.75pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Administrative
    and miscellaneous expenses</font></p>
    </td>
    <td width=145 valign=top style='width:108.75pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:19.55pt;text-align:right;
    line-height:-100%'><font size="2">393,227</font></p>
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:26.45pt;text-align:right;
    line-height:-100%'><font size="2">147,549</font></p>
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Salaries
    and wages</font></p>
    </td>
    <td width=145 valign=top style='width:108.75pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:19.55pt;text-align:right;
    line-height:-100%'><font size="2">452,408</font></p>
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:26.45pt;text-align:right;
    line-height:-100%'><font size="2">220,034</font></p>
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Utilities</font></p>
    </td>
    <td width=145 valign=top style='width:108.75pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:19.55pt;text-align:right;
    line-height:-100%'><font size="2">627,773</font></p>
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:26.45pt;text-align:right;
    line-height:-100%'><font size="2">294,716</font></p>
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Janitorial
    services and supplies</font></p>
    </td>
    <td width=145 valign=top style='width:108.75pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:19.55pt;text-align:right;
    line-height:-100%'><font size="2">344,125</font></p>
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:26.45pt;text-align:right;
    line-height:-100%'><font size="2">157,526</font></p>
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Maintenance
    services and supplies</font></p>
    </td>
    <td width=145 valign=top style='width:108.75pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:19.55pt;text-align:right;
    line-height:-100%'><font size="2">395,030</font></p>
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:26.45pt;text-align:right;
    line-height:-100%'><font size="2">238,052</font></p>
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Security</font></p>
    </td>
    <td width=145 valign=top style='width:108.75pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:19.55pt;text-align:right;
    line-height:-100%'><font size="2">193,668</font></p>
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:26.45pt;text-align:right;
    line-height:-100%'><font size="2">96,236</font></p>
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management
    fees</font></p>
    </td>
    <td width=145 valign=top style='width:108.75pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:19.55pt;text-align:right;
    line-height:-100%'><font size="2">340,110</font></p>
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:26.45pt;text-align:right;
    line-height:-100%'><font size="2">144,965</font></p>
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;border:none;border-bottom:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Real
    estate taxes</font></p>
    </td>
    <td width=145 valign=top style='width:108.75pt;border:none;border-bottom:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:19.55pt;text-align:right;
    line-height:-100%'><font size="2">451,336</font></p>
    </td>
    <td width=164 valign=top style='width:123.3pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:26.45pt;text-align:right;
    line-height:-100%'><font size="2">190,163</font></p>
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;border:none;border-bottom:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=145 valign=top style='width:108.75pt;border:none;border-bottom:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:19.55pt;text-align:right;
    line-height:-100%'><font size="2">3,197,677</font></p>
    </td>
    <td width=164 valign=top style='width:123.3pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:26.45pt;text-align:right;
    line-height:-100%'><font size="2">1,489,241</font></p>
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;border:none;border-bottom:
    double windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">Excess of rental revenues over direct
    operating expenses</font></p>
    </td>
    <td width=145 valign=top style='width:108.75pt;border:none;border-bottom:
    double windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:19.55pt;text-align:right;
    line-height:-100%'><font size="2">$&nbsp;&nbsp;4,075,061</font></p>
    </td>
    <td width=164 valign=top style='width:123.3pt;border:none;border-bottom:double windowtext 1.5pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:26.45pt;text-align:right;
    line-height:-100%'><font size="2">$&nbsp;&nbsp;1,901,575</font></p>
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=145 valign=top style='width:108.75pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=164 valign=top style='width:123.3pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=145 valign=top style='width:108.75pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=145 valign=top style='width:108.75pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=145 valign=top style='width:108.75pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
  </table>
  
  </div>
  
  <p class=MsoNormal align=center style='text-align:center;line-height:-100%'><br>
  <br>
  <br>
  <br>
  <i>See report of
  independent auditors and accompanying notes.</i></p>
  
  <hr color="#000080">
  <p align="center"><br clear=all style='page-break-before:always'>
  <b>Peachtree Dunwoody Pavilion<br>
  <br>
  Notes to Statements of Rental Revenues<br>
  and Direct Operating Expenses<br>
  </b><br>
  <b>December 31, 2002 and June 30, 2003</b></p>
  </p>
  
  <p class=MsoNormal><br>
  <br>
  <b>1.&nbsp;&nbsp;&nbsp;&nbsp;Organization and Significant Accounting Policies</b></p>
  
  <p class=MsoNormal><br>
  <b>Description of Property</b></p>
  
  <p class=MsoNormal style='text-align:justify'><br>
  On August 28, 2003, Parkway Properties, Inc. (&quot;Parkway&quot;) purchased the fee simple interest in
  the Peachtree Dunwoody Pavilion office building located at 5575 Peachtree
  Dunwoody Road NE in Atlanta, Georgia from an unrelated party.&nbsp; The Peachtree
  Dunwoody Pavilion contains approximately 366,000 (unaudited) net rentable
  square feet of office space.</p>
  
  <p class=MsoNormal style='text-align:justify'><br>
  <b>Management's Use of Estimates</b></p>
  
  
  
  <p class=MsoNormal style='text-align:justify'>The preparation of financial statements in conformity
  with accounting principles generally accepted in the United States requires
  management to make estimates and assumptions that affect the reported amounts
  of revenues and expenses during the reporting period.&nbsp; Actual results could
  differ from those estimates.</p>
  
  
  
  <p class=MsoNormal style='text-align:justify'><b>Rental
  Revenue</b></p>
  
  <p class=MsoNormal style='text-align:justify'><br>
  Minimum rents from leases
  are accounted for ratably over the term of each lease.&nbsp; Tenant reimbursements
  are recognized as revenue as the applicable services are rendered or expenses
  incurred.</p>
  
  <p class=MsoNormal><br>
  The future minimum rents on the Peachtree Dunwoody Pavilion's non-cancelable
  operating leases at December 31, 2002 are as follows:<br>
  <br>
  </p>
  
  <div align=center>
  
  <table class=MsoNormalTable border=1 cellspacing=0 cellpadding=0
   style='border-collapse:collapse' bordercolorlight="#FFFFFF" bordercolordark="#FFFFFF" bgcolor="#FFFFFF">
   <tr>
    <td width=87 valign=top style='width:65.2pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'><b>Year</b></p>
    </td>
    <td width=104 valign=top style='width:78.25pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'><b>Amount</b></p>
    </td>
   </tr>
   <tr>
    <td width=87 valign=top style='width:65.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'>2003</p>
    </td>
    <td width=104 valign=top style='width:78.25pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'>$&nbsp;&nbsp;6,160,038</p>
    </td>
   </tr>
   <tr>
    <td width=87 valign=top style='width:65.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'>2004</p>
    </td>
    <td width=104 valign=top style='width:78.25pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'>5,723,011</p>
    </td>
   </tr>
   <tr>
    <td width=87 valign=top style='width:65.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'>2005</p>
    </td>
    <td width=104 valign=top style='width:78.25pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'>3,723,885</p>
    </td>
   </tr>
   <tr>
    <td width=87 valign=top style='width:65.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'>2006</p>
    </td>
    <td width=104 valign=top style='width:78.25pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'>2,141,052</p>
    </td>
   </tr>
   <tr>
    <td width=87 valign=top style='width:65.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'>2007</p>
    </td>
    <td width=104 valign=top style='width:78.25pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'>1,843,257</p>
    </td>
   </tr>
   <tr>
    <td width=87 valign=top style='width:65.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'>Thereafter</p>
    </td>
    <td width=104 valign=top style='width:78.25pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'>5,135,882</p>
    </td>
   </tr>
   <tr>
    <td width=87 valign=top style='width:65.2pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=104 valign=top style='width:78.25pt;border:none;border-bottom:double windowtext 2.25pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'>$24,727,125</p>
    </td>
   </tr>
  </table>
  
  </div>
  
  <p class=MsoNormal style='text-align:justify'><br>
  The above amounts do not include tenant reimbursements for utilities, taxes,
  insurance and common area maintenance.</p>
  
  
  
  
  
  <p class=MsoNormal align=center style='text-align:center'><i>See report of independent auditors.</i></p>
  
  
  
  <hr color="#000080">
  
  
  
  
  
  <p class=MsoNormal align=center style='text-align:center'>&nbsp;</p>
  
  
  
  <p class=MsoNormal style='text-align:justify'><br>
  As of December 31, 2002, Peachtree Dunwoody had two tenants that occupied a
  majority of the office space, approximately 98,000 square feet by Cox
  Communications and 63,000 square feet by AutoConnect, LLC.</p>
  
  
  
  <p class=MsoNormal style='text-align:justify'><b>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basis of Accounting</b></p>
  
  <p class=MsoNormal style='text-align:justify'><br>
  The accompanying statements of rental revenues and direct operating expenses are
  presented on the accrual basis.&nbsp; The statements have been prepared in
  accordance with the applicable rules and regulations of the Securities and
  Exchange Commission for real estate properties acquired.&nbsp; Accordingly, the
  statements exclude certain expenses not comparable to the proposed future
  operations of the Peachtree Dunwoody Pavilion such as depreciation and mortgage
  interest expense.&nbsp; </p>
  
  <p class=MsoNormal style='text-align:justify'>Management is not aware of any material factors relating
  to the Peachtree Dunwoody Pavilion that would cause the reported financial
  information not to be necessarily indicative of future operating results.</p>
  
  <p class=MsoNormal style='text-align:justify'><br>
  <b>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management Fees</b></p>
  
  <p class=MsoNormal style='text-align:justify'><br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management fees of approximately 4.5%
  of revenues received from the operations of the Peachtree Dunwoody Pavilion were
  paid to an unrelated management company.</p>
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  <p class=MsoNormal align=center style='text-align:center'><i>See report of independent auditors.</i></p>
  
  
  
  <hr color="#000080"><br clear=all style='page-break-before:always'>
  
  
  <p class=MsoNormal align=center style='text-align:center'><b>Report of Independent Auditors</b></p>
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'><br>
  <br>
  The Board of Directors</p>
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>Parkway Properties, Inc.</p>
  
  <p class=MsoNormal style='text-align:justify'><br>
  We have audited the accompanying statement of rental revenues and direct
  operating expenses of the Wells Fargo Building for the year ended December 31,
  2002.&nbsp; This statement is the responsibility of management.&nbsp; Our responsibility
  is to express an opinion on this statement based on our audit.</p>
  
  <p class=MsoNormal style='text-align:justify'><br>
  We conducted our audit in accordance with auditing standards generally accepted
  in the United States.&nbsp; Those standards require that we plan and perform the
  audit to obtain reasonable assurance about whether the statement of rental
  revenues and direct operating expenses is free of material misstatement.&nbsp; An
  audit includes examining, on a test basis, evidence supporting the amounts and
  disclosures in the statement.&nbsp; An audit also includes assessing the basis of
  accounting and accounting principles used and significant estimates made by
  management, as well as evaluating the overall statement presentation.&nbsp; We
  believe that our audit provides a reasonable basis for our opinion.</p>
  
  <p class=MsoNormal style='text-align:justify'><br>
  The accompanying statements were prepared for the purpose of complying with the
  rules and regulations of the Securities and Exchange Commission, as described
  in Note 2, for inclusion in a Form 8-K of Parkway Properties, Inc. and are not
  intended to be a complete presentation of the Wells Fargo Building revenues and
  expenses. </p>
  
  <p class=MsoNormal style='text-align:justify'><br>
  In our opinion, the statement of rental revenue and direct operating expenses
  referred to above presents fairly, in all material respects, the rental
  revenues and direct operating expenses described in Note 2 of the Wells Fargo
  Building for the year ended December 31, 2002, in conformity with accounting
  principles generally accepted in the United States.</p>
  
  <p class=MsoNormal style='text-align:justify'><br>
  We have compiled the accompanying statement of rental revenues and direct
  operating expenses of the Wells Fargo Building for the six months ended June
  30, 2003 in accordance with the <i>Statement</i> <i>on</i> <i>Standards for
  Accounting and Review Services</i> issued by the American Institute of
  Certified Public Accountants. A compilation is limited to presenting in the
  form of a financial statement information that is the representation of
  management.&nbsp; We have not audited or reviewed the statement of rental revenues
  and direct operating expenses of the Wells Fargo Building for the six months ended June 30, 2003 and, accordingly, do not express an opinion or any
  other form of assurance on the statement.</p>
  
  <p class=MsoNormal style='text-align:justify'><br>
  <br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
  Ernst &amp; Young, LLP</p>
  
  <p class=MsoNormal style="margin-top: 0; margin-bottom: 0">Jackson,
  Mississippi&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
  
  <p class=MsoNormal style="margin-top: 0; margin-bottom: 0">October
  29, 2003</p>
  
  <hr color="#000080"><br clear=all style='page-break-before:always'>
  
  
  <p class=MsoEndnoteText align=center style='text-align:center;line-height:-100%'><b>Wells Fargo Building<br>
  <br>
  Statements of Rental Revenues<br>
  and Direct Operating Expenses</b></p>
  
  <div align=center>
  
  <table class=MsoNormalTable border=1 cellspacing=0 cellpadding=0 width=678
   style='width:508.3pt;border-collapse:collapse' bordercolorlight="#FFFFFF" bordercolordark="#FFFFFF" bgcolor="#FFFFFF">
   <tr>
    <td width=368 valign=top style='width:276.25pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><b><font size="2">&nbsp;</font></b></p>
    </td>
    <td width=145 valign=top style='width:108.75pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center;line-height:-100%'><b>
    <font size="2">Year Ended</font></b></p>
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center;line-height:-100%'><b>
    <font size="2">Six Months
    Ended</font></b></p>
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;border:none;border-bottom:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><b><font size="2">&nbsp;</font></b></p>
    </td>
    <td width=145 valign=top style='width:108.75pt;border:none;border-bottom:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center;line-height:-100%'><b>
    <font size="2">December 31,
    2002</font></b></p>
    </td>
    <td width=164 valign=top style='width:123.3pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center;line-height:-100%'><b>
    <font size="2">June 30,
    2003</font></b></p>
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=145 valign=top style='width:108.75pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=164 valign=top style='width:123.3pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center;line-height:-100%'>
    <font size="2">(unaudited)</font></p>
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">Rental revenues:</font></p>
    </td>
    <td width=145 valign=top style='width:108.75pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Minimum
    rents </font> </p>
    </td>
    <td width=145 valign=top style='width:108.75pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:20.15pt;text-align:right;
    line-height:-100%'><font size="2">$&nbsp;&nbsp;2,009,904</font></p>
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:26.45pt;text-align:right;
    line-height:-100%'><font size="2">$&nbsp;&nbsp;1,092,894</font></p>
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reimbursed
    charges </font> </p>
    </td>
    <td width=145 valign=top style='width:108.75pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:20.15pt;text-align:right;
    line-height:-100%'><font size="2">120,851</font></p>
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:26.45pt;text-align:right;
    line-height:-100%'><font size="2">26,848</font></p>
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;border:none;border-bottom:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other
    income</font></p>
    </td>
    <td width=145 valign=top style='width:108.75pt;border:none;border-bottom:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:19.55pt;text-align:right;
    line-height:-100%'><font size="2">117,945</font></p>
    </td>
    <td width=164 valign=top style='width:123.3pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:26.45pt;text-align:right;
    line-height:-100%'><font size="2">20,983</font></p>
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=145 valign=top style='width:108.75pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:19.55pt;text-align:right;
    line-height:-100%'><font size="2">2,248,700</font></p>
    </td>
    <td width=164 valign=top style='width:123.3pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:26.45pt;text-align:right;
    line-height:-100%'><font size="2">1,140,725</font></p>
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=145 valign=top style='width:108.75pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">Direct operating expenses:</font></p>
    </td>
    <td width=145 valign=top style='width:108.75pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Administrative
    and miscellaneous expenses</font></p>
    </td>
    <td width=145 valign=top style='width:108.75pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:19.55pt;text-align:right;
    line-height:-100%'><font size="2">101,918</font></p>
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:26.45pt;text-align:right;
    line-height:-100%'><font size="2">52,159</font></p>
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Salaries
    and wages</font></p>
    </td>
    <td width=145 valign=top style='width:108.75pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:19.55pt;text-align:right;
    line-height:-100%'><font size="2">93,555</font></p>
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:26.45pt;text-align:right;
    line-height:-100%'><font size="2">46,399</font></p>
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Utilities</font></p>
    </td>
    <td width=145 valign=top style='width:108.75pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:19.55pt;text-align:right;
    line-height:-100%'><font size="2">225,531</font></p>
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:26.45pt;text-align:right;
    line-height:-100%'><font size="2">135,187</font></p>
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Janitorial
    services and supplies</font></p>
    </td>
    <td width=145 valign=top style='width:108.75pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:19.55pt;text-align:right;
    line-height:-100%'><font size="2">124,124</font></p>
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:26.45pt;text-align:right;
    line-height:-100%'><font size="2">62,625</font></p>
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Maintenance
    services and supplies</font></p>
    </td>
    <td width=145 valign=top style='width:108.75pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:19.55pt;text-align:right;
    line-height:-100%'><font size="2">109,037</font></p>
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:26.45pt;text-align:right;
    line-height:-100%'><font size="2">55,896</font></p>
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Security</font></p>
    </td>
    <td width=145 valign=top style='width:108.75pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:19.55pt;text-align:right;
    line-height:-100%'><font size="2">56,491</font></p>
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:26.45pt;text-align:right;
    line-height:-100%'><font size="2">32,749</font></p>
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management
    fees</font></p>
    </td>
    <td width=145 valign=top style='width:108.75pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:19.55pt;text-align:right;
    line-height:-100%'><font size="2">71,754</font></p>
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:26.45pt;text-align:right;
    line-height:-100%'><font size="2">37,500</font></p>
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Real
    estate taxes</font></p>
    </td>
    <td width=145 valign=top style='width:108.75pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:19.55pt;text-align:right;
    line-height:-100%'><font size="2">313,522</font></p>
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:26.45pt;text-align:right;
    line-height:-100%'><font size="2">159,554</font></p>
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;border-top:solid windowtext 1.0pt;
    border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=145 valign=top style='width:108.75pt;border-top:solid windowtext 1.0pt;
    border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:19.55pt;text-align:right;
    line-height:-100%'><font size="2">&nbsp;&nbsp;1,095,932</font></p>
    </td>
    <td width=164 valign=top style='width:123.3pt;border-top:solid windowtext 1.0pt;
    border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:26.45pt;text-align:right;
    line-height:-100%'><font size="2">582,069</font></p>
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;border:none;border-bottom:
    double windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">Excess of rental revenues over
    direct operating expenses</font></p>
    </td>
    <td width=145 valign=top style='width:108.75pt;border:none;border-bottom:
    double windowtext 1.5pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:19.55pt;text-align:right;
    line-height:-100%'><font size="2">$&nbsp;&nbsp;1,152,768</font></p>
    </td>
    <td width=164 valign=top style='width:123.3pt;border:none;border-bottom:double windowtext 1.5pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:26.45pt;text-align:right;
    line-height:-100%'><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;558,656</font></p>
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=145 valign=top style='width:108.75pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=164 valign=top style='width:123.3pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=145 valign=top style='width:108.75pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=145 valign=top style='width:108.75pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=145 valign=top style='width:108.75pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
  </table>
  
  </div>
  
  <p class=MsoNormal align=center style='text-align:center;line-height:-100%'>
  <br>
  <br>
  <br>
  <br>
  <br>
  <i>See report of
  independent auditors and accompanying notes.<hr color="#000080">
  <p align="center"><br clear=all style='page-break-before:
  always'>
  </i><b>Wells Fargo Building<br>
  <br>
  Notes to Statements of Rental Revenues<br>
  and Direct Operating Expenses<br>
  </b><br>
  <b>December 31, 2002 and June 30, 2003</b></p>
  
  <p class=MsoNormal><br>
  <br>
  <b>1.&nbsp;&nbsp;&nbsp;&nbsp;Organization and Significant Accounting Policies</b></p>
  
  <p class=MsoNormal><br>
  <b>Description of Property</b></p>
  
  <p class=MsoNormal style='text-align:justify'><br>
  On September 12, 2003, Parkway Properties, Inc. (&quot;Parkway&quot;) purchased the fee simple interest in
  the Wells Fargo Building located in the Northwest Freeway Corridor submarket of
  Houston, Texas from an unrelated party.&nbsp; The Wells Fargo Building contains
  approximately 135,000 (unaudited) net rentable square feet of office space.</p>
  
  
  
  <p class=MsoNormal style='text-align:justify'><b>Management's Use of Estimates</b></p>
  
  
  
  <p class=MsoNormal style='text-align:justify'>The preparation of financial statements in conformity
  with accounting principles generally accepted in the United States requires
  management to make estimates and assumptions that affect the reported amounts
  of revenues and expenses during the reporting period.&nbsp; Actual results could
  differ from those estimates.</p>
  
  <p class=MsoNormal style='text-align:justify'><br>
  <b>Rental Revenue</b></p>
  
  <p class=MsoNormal style='text-align:justify'><br>
  Minimum rents from leases
  are accounted for ratably over the term of each lease.&nbsp; Tenant reimbursements
  are recognized as revenue as the applicable services are rendered or expenses
  incurred.</p>
  
  <p class=MsoNormal><br>
  The future minimum rents on the Wells Fargo Building's non-cancelable operating
  leases at December 31, 2002 are as follows:<br>
  <br>
  </p>
  
  <div align=center>
  
  <table class=MsoNormalTable border=1 cellspacing=0 cellpadding=0
   style='border-collapse:collapse' bordercolorlight="#FFFFFF" bordercolordark="#FFFFFF" bgcolor="#FFFFFF">
   <tr>
    <td width=87 valign=top style='width:65.2pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'><b>Year</b></p>
    </td>
    <td width=104 valign=top style='width:78.25pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'><b>Amount</b></p>
    </td>
   </tr>
   <tr>
    <td width=87 valign=top style='width:65.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'>2003</p>
    </td>
    <td width=104 valign=top style='width:78.25pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:3.9pt;text-align:right'>$&nbsp;&nbsp;1,995,164</p>
    </td>
   </tr>
   <tr>
    <td width=87 valign=top style='width:65.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'>2004</p>
    </td>
    <td width=104 valign=top style='width:78.25pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:3.9pt;text-align:right'>2,041,677</p>
    </td>
   </tr>
   <tr>
    <td width=87 valign=top style='width:65.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'>2005</p>
    </td>
    <td width=104 valign=top style='width:78.25pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:3.9pt;text-align:right'>1,752,269</p>
    </td>
   </tr>
   <tr>
    <td width=87 valign=top style='width:65.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'>2006</p>
    </td>
    <td width=104 valign=top style='width:78.25pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:3.9pt;text-align:right'>1,578,589</p>
    </td>
   </tr>
   <tr>
    <td width=87 valign=top style='width:65.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'>2007</p>
    </td>
    <td width=104 valign=top style='width:78.25pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:3.9pt;text-align:right'>925,406</p>
    </td>
   </tr>
   <tr>
    <td width=87 valign=top style='width:65.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'>Thereafter</p>
    </td>
    <td width=104 valign=top style='width:78.25pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:3.9pt;text-align:right'>1,138,233</p>
    </td>
   </tr>
   <tr>
    <td width=87 valign=top style='width:65.2pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=104 valign=top style='width:78.25pt;border:none;border-bottom:double windowtext 2.25pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:3.9pt;text-align:right'>$&nbsp;&nbsp;9,431,338</p>
    </td>
   </tr>
  </table>
  
  </div>
  
  <p class=MsoNormal style='text-align:justify'><br>
  The above amounts do not include tenant reimbursements for utilities, taxes,
  insurance and common area maintenance.</p>
  
  
  
  
  
  <p class=MsoNormal align=center style='text-align:center'><i>See report of independent auditors.</i></p>
  
  <hr color="#000080">
  
  <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
  
  <p class=MsoNormal style='text-align:justify'>As of December 31, 2002, Wells Fargo had two tenants
  that occupied 39% of the office space, approximately 26,000 square feet by each
  Gulf States Financial Services and Liberty Mutual Insurance, respectively.</p>
  
  <p class=MsoNormal style='text-align:justify'><br>
  <b>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basis of Accounting</b></p>
  
  <p class=MsoNormal style='text-align:justify'><br>
  The accompanying statements of rental revenues and direct operating expenses are
  presented on the accrual basis.&nbsp; The statements have been prepared in
  accordance with the applicable rules and regulations of the Securities and
  Exchange Commission for real estate properties acquired.&nbsp; Accordingly, the
  statements exclude certain expenses not comparable to the proposed future
  operations of the Wells Fargo Building such as depreciation and mortgage
  interest expense.&nbsp; Management is not aware of any material factors relating to the
  Wells Fargo Building that would cause the reported financial information not to
  be necessarily indicative of future operating results.</p>
  
  <p class=MsoNormal style='text-align:justify'><br>
  <b>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management Fees</b></p>
  
  <p class=MsoNormal style='text-align:justify'><br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management fees of approximately 3.5%
  of revenues received from the operations of the Wells Fargo Building were paid
  to an unrelated management company.</p>
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  <p class=MsoNormal align=center style='text-align:center'><i>See report of independent auditors.</i></p>
  
  <hr color="#000080"><br clear=all style='page-break-before:always'>
  
  
  <p class=MsoNormal align=center style='text-align:center'><b>PARKWAY PROPERTIES, INC.</b></p>
  
  <p class=MsoNormal align="center" style="margin-top: 0; margin-bottom: 0"><b>&nbsp;Pro Forma Consolidated Financial Statements</b></p>
  
  <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'>(Unaudited)</p>
  
  <p class=MsoEndnoteText style='text-align:justify'><br>
  <br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following unaudited pro forma
  consolidated balance sheet as of June 30, 2003 and pro forma consolidated
  statements of income of Parkway Properties, Inc. (&quot;Parkway&quot;) for the
  year ended December 31, 2002 and six months ended June 30, 2003 give effect to the
  recent purchases of Parkway listed below for the periods stated.&nbsp; The pro forma
  consolidated financial statements have been prepared by management of Parkway
  based upon the historical financial statements of Parkway and the adjustments
  and assumptions in the accompanying notes to the pro forma consolidated
  financial statements.</p>
  
  <p class=MsoNormal style='text-align:justify'><br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The pro forma consolidated balance
  sheet sets forth the effect of Parkway's purchase of the Peachtree Dunwoody Pavilion
  and the Wells Fargo Building and Parkway's sale of the BB&amp;T Financial
  Center as if they had been consummated on June 30, 2003.</p>
  
  <p class=MsoNormal style='text-align:justify'><br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The pro forma consolidated statements
  of income set forth the effects of Parkway's purchases of the buildings listed
  below as if each had been consummated on January 1, 2002.&nbsp; </p>
  
  
  
  <div align=center>
  
  <table class=MsoTableGrid border=1 cellspacing=0 cellpadding=0
   style='border-collapse:collapse' bordercolorlight="#FFFFFF" bordercolordark="#FFFFFF" bgcolor="#FFFFFF">
   <tr>
    <td width=211 valign=top style='width:158.6pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'><b>Building</b></p>
    </td>
    <td width=128 valign=top style='width:96.25pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify'><b>Date of Purchase</b></p>
    </td>
   </tr>
   <tr>
    <td width=211 valign=top style='width:158.6pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>Citrus Center</p>
    </td>
    <td width=128 valign=top style='width:96.25pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'>02/11/03</p>
    </td>
   </tr>
   <tr>
    <td width=211 valign=top style='width:158.6pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>Peachtree Dunwoody Pavilion</p>
    </td>
    <td width=128 valign=top style='width:96.25pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'>08/28/03</p>
    </td>
   </tr>
   <tr>
    <td width=211 valign=top style='width:158.6pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>Wells Fargo Building</p>
    </td>
    <td width=128 valign=top style='width:96.25pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'>09/12/03</p>
    </td>
   </tr>
   <tr>
    <td width=211 valign=top style='width:158.6pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=128 valign=top style='width:96.25pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
  </table>
  
  </div>
  
  <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to
  the purchases listed above, the pro forma consolidated statement of income sets
  forth the effect of the sale of 690,000 shares of common stock on March 24,
  2003 and the sale of the BB&amp;T Financial Center on August 1, 2003 as if
  these transactions had occurred on January 1, 2002.</p>
  
  
  
  <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These pro
  forma consolidated financial statements may not be indicative of the results
  that actually would have occurred if the transactions had occurred on the dates
  indicated or which may be obtained in the future.&nbsp; The pro forma consolidated
  financial statements should be read in conjunction with the consolidated
  financial statements and notes of Parkway included in its annual report on Form
  10-K for the year ended December 31, 2002.</p>
  
  <hr color="#000080">
  
  <br
  clear=all style='page-break-before:always'>
  
  
  <h1 align=center style='text-align:center'><b><font size="3">PARKWAY PROPERTIES, INC.
  AND SUBSIDIARIES<br>
  </font>
  </b><font size="3"><b>PRO
  FORMA CONSOLIDATED BALANCE SHEET<br>
  June 30, 2003<br>
  </b>(Unaudited)</font><b><font size="3"><br>
  &nbsp;</font></b></h1>
  
  <div align=center>
  
  <table class=MsoNormalTable border=1 cellspacing=0 cellpadding=0 width=707
   style='width:500.1pt;border-collapse:collapse' bordercolorlight="#FFFFFF" bordercolordark="#FFFFFF" bgcolor="#FFFFFF">
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal>&nbsp;</p>
    </td>
    <td width=90 valign=top style='width:67.8pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'><b>
    <font size="2">Parkway</font></b></p>
    <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'><b>
    <font size="2">Historical</font></b></p>
    </td>
    <td width=125 valign=top style='width:93.9pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'><b>
    <font size="2">Pro Forma</font></b></p>
    <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'><b>
    <font size="2">Adjustments (1-3)</font></b></p>
    </td>
    <td width=90 valign=top style='width:67.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'><b>
    <font size="2">Parkway</font></b></p>
    <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'><b>
    <font size="2">Pro Forma</font></b></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><b><font size="2">&nbsp;</font></b></p>
    </td>
    <td width=90 valign=top style='width:67.8pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><b><font size="2">&nbsp;</font></b></p>
    </td>
    <td width=125 valign=top style='width:93.9pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'><font size="2">(In thousands)</font></p>
    </td>
    <td width=90 valign=top style='width:67.2pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><b><font size="2">&nbsp;</font></b></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><b><font size="2">Assets</font></b></p>
    </td>
    <td width=90 valign=top style='width:67.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><b><font size="2">&nbsp;</font></b></p>
    </td>
    <td width=125 valign=top style='width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><b><font size="2">&nbsp;</font></b></p>
    </td>
    <td width=90 valign=top style='width:67.2pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><b><font size="2">&nbsp;</font></b></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><font size="2">Real
    estate related investments:</font></p>
    </td>
    <td width=90 valign=top style='width:67.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><b><font size="2">&nbsp;</font></b></p>
    </td>
    <td width=125 valign=top style='width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><b><font size="2">&nbsp;</font></b></p>
    </td>
    <td width=90 valign=top style='width:67.2pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><b><font size="2">&nbsp;</font></b></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Office
    and parking properties</font></p>
    </td>
    <td width=90 valign=top style='width:67.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">$&nbsp;&nbsp;778,837&nbsp;</font></p>
    </td>
    <td width=125 valign=top style='width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">$&nbsp;&nbsp;25,876&nbsp;</font></p>
    </td>
    <td width=90 valign=top style='width:67.2pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">$&nbsp;&nbsp;804,713&nbsp;</font></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated
    depreciation</font></p>
    </td>
    <td width=90 valign=top style='width:67.8pt;border-top:none;border-left:none;
    border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">(107,772)</font></p>
    </td>
    <td width=125 valign=top style='width:93.9pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">4,463&nbsp;</font></p>
    </td>
    <td width=90 valign=top style='width:67.2pt;border-top:none;border-left:none;
    border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">(103,309)</font></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=90 valign=top style='width:67.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">671,065&nbsp;</font></p>
    </td>
    <td width=125 valign=top style='width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">30,339&nbsp;</font></p>
    </td>
    <td width=90 valign=top style='width:67.2pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">701,404&nbsp;</font></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Land
    held for sale</font></p>
    </td>
    <td width=90 valign=top style='width:67.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">3,528&nbsp;</font></p>
    </td>
    <td width=125 valign=top style='width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">-&nbsp;</font></p>
    </td>
    <td width=90 valign=top style='width:67.2pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">3,528&nbsp;
    </font> </p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Note
    receivable from Moore Building Associates LP</font></p>
    </td>
    <td width=90 valign=top style='width:67.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">5,996&nbsp;</font></p>
    </td>
    <td width=125 valign=top style='width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">-&nbsp;</font></p>
    </td>
    <td width=90 valign=top style='width:67.2pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">5,996&nbsp;</font></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mortgage
    loans</font></p>
    </td>
    <td width=90 valign=top style='width:67.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">866&nbsp;</font></p>
    </td>
    <td width=125 valign=top style='width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">-&nbsp;</font></p>
    </td>
    <td width=90 valign=top style='width:67.2pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">866&nbsp;</font></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investment
    in unconsolidated joint ventures</font></p>
    </td>
    <td width=90 valign=top style='width:67.8pt;border-top:none;border-left:none;
    border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">20,036&nbsp;</font></p>
    </td>
    <td width=125 valign=top style='width:93.9pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">-&nbsp;</font></p>
    </td>
    <td width=90 valign=top style='width:67.2pt;border-top:none;border-left:none;
    border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">20,036&nbsp;</font></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=90 valign=top style='width:67.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">701,491&nbsp;</font></p>
    </td>
    <td width=125 valign=top style='width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">30,339&nbsp;</font></p>
    </td>
    <td width=90 valign=top style='width:67.2pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">731,830&nbsp;</font></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><font size="2">Interest,
    rents receivable and other assets</font></p>
    </td>
    <td width=90 valign=top style='width:67.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">30,221&nbsp;</font></p>
    </td>
    <td width=125 valign=top style='width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">(863)</font></p>
    </td>
    <td width=90 valign=top style='width:67.2pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">29,358&nbsp;</font></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><font size="2">Cash
    and cash equivalents</font></p>
    </td>
    <td width=90 valign=top style='width:67.8pt;border-top:none;border-left:none;
    border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">2,955&nbsp;</font></p>
    </td>
    <td width=125 valign=top style='width:93.9pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">-&nbsp;</font></p>
    </td>
    <td width=90 valign=top style='width:67.2pt;border-top:none;border-left:none;
    border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">2,955&nbsp;</font></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=90 valign=top style='width:67.8pt;border-top:none;border-left:none;
    border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">$&nbsp;&nbsp;734,667&nbsp;</font></p>
    </td>
    <td width=125 valign=top style='width:93.9pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">$&nbsp;&nbsp;29,476&nbsp;</font></p>
    </td>
    <td width=90 valign=top style='width:67.2pt;border-top:none;border-left:none;
    border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">$&nbsp;&nbsp;764,143&nbsp;</font></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><b><font size="2">Liabilities</font></b></p>
    </td>
    <td width=90 valign=top style='width:67.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=125 valign=top style='width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=90 valign=top style='width:67.2pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><font size="2">Notes
    payable to banks</font></p>
    </td>
    <td width=90 valign=top style='width:67.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;67,918&nbsp;</font></p>
    </td>
    <td width=125 valign=top style='width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">$&nbsp;&nbsp;36,204&nbsp;</font></p>
    </td>
    <td width=90 valign=top style='width:67.2pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">$&nbsp;&nbsp;104,122&nbsp;</font></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><font size="2">Mortgage
    notes payable without recourse</font></p>
    </td>
    <td width=90 valign=top style='width:67.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">239,822&nbsp;</font></p>
    </td>
    <td width=125 valign=top style='width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">(11,269)</font></p>
    </td>
    <td width=90 valign=top style='width:67.2pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">228,553&nbsp;</font></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><font size="2">Accounts
    payable and other liabilities</font></p>
    </td>
    <td width=90 valign=top style='width:67.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">31,117&nbsp;</font></p>
    </td>
    <td width=125 valign=top style='width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">(626)</font></p>
    </td>
    <td width=90 valign=top style='width:67.2pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">30,491&nbsp;</font></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;border-top:solid windowtext 1.0pt;
    border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=90 valign=top style='width:67.8pt;border:solid windowtext 1.0pt;
    border-left:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">338,857&nbsp;</font></p>
    </td>
    <td width=125 valign=top style='width:93.9pt;border:solid windowtext 1.0pt;
    border-left:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">24,309&nbsp;</font></p>
    </td>
    <td width=90 valign=top style='width:67.2pt;border:solid windowtext 1.0pt;
    border-left:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">$&nbsp;&nbsp;363,166&nbsp;</font></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><b><font size="2">Stockholders'
    Equity</font></b></p>
    </td>
    <td width=90 valign=top style='width:67.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=125 valign=top style='width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=90 valign=top style='width:67.2pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><font size="2">8.34%
    Series B Cumulative Convertible Preferred</font></p>
    </td>
    <td width=90 valign=top style='width:67.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=125 valign=top style='width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=90 valign=top style='width:67.2pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;stock,
    $.001 par value, 2,142,857 shares authorized,</font></p>
    </td>
    <td width=90 valign=top style='width:67.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=125 valign=top style='width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=90 valign=top style='width:67.2pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;issued
    and outstanding</font></p>
    </td>
    <td width=90 valign=top style='width:67.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">75,000&nbsp;</font></p>
    </td>
    <td width=125 valign=top style='width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">-&nbsp;</font></p>
    </td>
    <td width=90 valign=top style='width:67.2pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">75,000&nbsp;</font></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><font size="2">Series
    C Preferred stock, $.001 par value, 400,000 shares</font></p>
    </td>
    <td width=90 valign=top style='width:67.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=125 valign=top style='width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=90 valign=top style='width:67.2pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;authorized,
    no shares issued</font></p>
    </td>
    <td width=90 valign=top style='width:67.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">-&nbsp;</font></p>
    </td>
    <td width=125 valign=top style='width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">-&nbsp;</font></p>
    </td>
    <td width=90 valign=top style='width:67.2pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">-&nbsp;</font></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><font size="2">8.00%
    Series D Preferred stock, $.001 par value,</font></p>
    </td>
    <td width=90 valign=top style='width:67.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=125 valign=top style='width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=90 valign=top style='width:67.2pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,400,000
    shares authorized, issued and outstanding</font></p>
    </td>
    <td width=90 valign=top style='width:67.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">58,094&nbsp;</font></p>
    </td>
    <td width=125 valign=top style='width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">-&nbsp;</font></p>
    </td>
    <td width=90 valign=top style='width:67.2pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">58,094&nbsp;</font></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><font size="2">Common
    stock, $.001 par value, 65,057,143 shares</font></p>
    </td>
    <td width=90 valign=top style='width:67.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=125 valign=top style='width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=90 valign=top style='width:67.2pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;authorized,
    10,327,395 shares issued &nbsp;and outstanding</font></p>
    </td>
    <td width=90 valign=top style='width:67.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">10&nbsp;</font></p>
    </td>
    <td width=125 valign=top style='width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">-&nbsp;</font></p>
    </td>
    <td width=90 valign=top style='width:67.2pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">10&nbsp;</font></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><font size="2">Excess
    stock, $.001 par value, 30,000,000 shares authorized,</font></p>
    </td>
    <td width=90 valign=top style='width:67.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=125 valign=top style='width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=90 valign=top style='width:67.2pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;no
    shares issued</font></p>
    </td>
    <td width=90 valign=top style='width:67.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">-&nbsp;</font></p>
    </td>
    <td width=125 valign=top style='width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">-&nbsp;</font></p>
    </td>
    <td width=90 valign=top style='width:67.2pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">-&nbsp;</font></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><font size="2">Common
    stock held in trust, at cost, 128,000 shares </font> </p>
    </td>
    <td width=90 valign=top style='width:67.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">(4,321)</font></p>
    </td>
    <td width=125 valign=top style='width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">-&nbsp;</font></p>
    </td>
    <td width=90 valign=top style='width:67.2pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">(4,321)</font></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><font size="2">Additional
    paid-in capital</font></p>
    </td>
    <td width=90 valign=top style='width:67.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">234,889&nbsp;</font></p>
    </td>
    <td width=125 valign=top style='width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">-&nbsp;</font></p>
    </td>
    <td width=90 valign=top style='width:67.2pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">234,889&nbsp;</font></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><font size="2">Unearned
    compensation</font></p>
    </td>
    <td width=90 valign=top style='width:67.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">(4,313)</font></p>
    </td>
    <td width=125 valign=top style='width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">-&nbsp;</font></p>
    </td>
    <td width=90 valign=top style='width:67.2pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">(4,313)</font></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><font size="2">Accumulated
    other comprehensive loss</font></p>
    </td>
    <td width=90 valign=top style='width:67.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">(110)</font></p>
    </td>
    <td width=125 valign=top style='width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">-&nbsp;</font></p>
    </td>
    <td width=90 valign=top style='width:67.2pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">(110)</font></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><font size="2">Retained
    earnings</font></p>
    </td>
    <td width=90 valign=top style='width:67.8pt;border-top:none;border-left:none;
    border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">36,561&nbsp;</font></p>
    </td>
    <td width=125 valign=top style='width:93.9pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">5,167&nbsp;</font></p>
    </td>
    <td width=90 valign=top style='width:67.2pt;border-top:none;border-left:none;
    border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">41,728&nbsp;</font></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=90 valign=top style='width:67.8pt;border-top:none;border-left:none;
    border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">395,810&nbsp;</font></p>
    </td>
    <td width=125 valign=top style='width:93.9pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">5,167&nbsp;</font></p>
    </td>
    <td width=90 valign=top style='width:67.2pt;border-top:none;border-left:none;
    border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">400,977&nbsp;</font></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=90 valign=top style='width:67.8pt;border-top:none;border-left:none;
    border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">$&nbsp;&nbsp;734,667&nbsp;</font></p>
    </td>
    <td width=125 valign=top style='width:93.9pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">$&nbsp;&nbsp;29,476&nbsp;</font></p>
    </td>
    <td width=90 valign=top style='width:67.2pt;border-top:none;border-left:none;
    border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">$&nbsp;&nbsp;764,143&nbsp;</font></p>
    </td>
   </tr>
  </table>
  
  </div>
  
  
  
  <p class=MsoNormal align=center style='text-align:center;line-height:-100%'>See accompanying notes </p>
  
  <b><hr color="#000080"><br clear=all style='page-break-before:always'>
  </b>
  
  <p class=MsoNormal align=center style='text-align:center;line-height:10.0pt'><b>PARKWAY PROPERTIES, INC. AND SUBSIDIARIES<br>
  PRO FORMA CONSOLIDATED STATEMENT OF INCOME<br>
  FOR THE YEAR ENDED DECEMBER 31, 2002<br>
  </b>(Unaudited)<br>
  <br>
  </p>
  
  <div align=center>
  
  <table class=MsoNormalTable border=1 cellspacing=0 cellpadding=0 width=631
   style='width:472.9pt;border-collapse:collapse' bordercolorlight="#FFFFFF" bordercolordark="#FFFFFF" bgcolor="#FFFFFF">
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><b><font size="2">&nbsp;</font></b></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center;line-height:10.0pt; margin-top:0; margin-bottom:0'><b>
    <font size="2">Parkway </font> </b></p>
    <p class=MsoNormal align=center style='text-align:center;line-height:10.0pt; margin-top:0; margin-bottom:0'><b>
    <font size="2">Historical</font></b></p>
    </td>
    <td width=104 colspan=2 valign=top style='width:78.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center;line-height:10.0pt; margin-top:0; margin-bottom:0'><b>
    <font size="2">Pro Forma</font></b></p>
    <p class=MsoNormal align=center style='text-align:center;line-height:10.0pt; margin-top:0; margin-bottom:0'><b>
    <font size="2">Adjustments (4)</font></b></p>
    </td>
    <td width=104 colspan=2 valign=top style='width:78.15pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center;line-height:10.0pt; margin-top:0; margin-bottom:0'><b>
    <font size="2">Parkway</font></b></p>
    <p class=MsoNormal align=center style='text-align:center;line-height:10.0pt; margin-top:0; margin-bottom:0'><b>
    <font size="2">Pro Forma</font></b></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;border:none;border-bottom:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><b><font size="2">&nbsp;</font></b></p>
    </td>
    <td width=286 colspan=5 valign=top style='width:214.45pt;border:none;
    border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center;line-height:10.0pt'>
    <font size="2">(In thousands, except per share
    data)</font></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><b><font size="2">Revenues</font></b></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><b><font size="2">&nbsp;</font></b></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><b><font size="2">&nbsp;</font></b></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><b><font size="2">&nbsp;</font></b></p>
    </td>
    <td width=69 valign=top style='width:52.1pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><b><font size="2">&nbsp;</font></b></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><b><font size="2">&nbsp;</font></b></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">Income from office and parking&nbsp; properties</font></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">$152,442&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">$&nbsp;&nbsp;10,885&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">(a)</font></p>
    </td>
    <td width=69 valign=top style='width:52.1pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">$163,327&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">Management company income</font></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">1,197&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">327&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">(e)</font></p>
    </td>
    <td width=69 valign=top style='width:52.1pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">1,524&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">Interest on note receivable from Moore Building
    Associates LP</font></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">895&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">895&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">Incentive management fee from Moore Building
    Associates LP</font></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">325&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">325&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">Other income and deferred gains</font></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">401&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">401&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;border-top:solid windowtext 1.0pt;
    border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">Total Revenues</font></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:solid windowtext 1.0pt;
    border-left:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">155,260&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">11,212&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">166,472&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><b><font size="2">Expenses</font></b></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.95pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">Office and parking properties:</font></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.95pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating
    expense</font></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">65,942&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">5,549&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">(a)</font></p>
    </td>
    <td width=69 valign=top style='width:52.1pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">71,491&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest
    expense:</font></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.95pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contractual</font></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">18,766&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">389&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">(c)</font></p>
    </td>
    <td width=69 valign=top style='width:52.1pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">19,155&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepayment
    expenses</font></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">833&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">833&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization
    of loan costs</font></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">240&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">(6)</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">(c)</font></p>
    </td>
    <td width=69 valign=top style='width:52.1pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">234&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation
    and amortization</font></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">27,412&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">1,172&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">(a)</font></p>
    </td>
    <td width=69 valign=top style='width:52.1pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">28,584&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">Operating expense for other real estate properties</font></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">34&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">34&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">Interest expense on bank notes:</font></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.95pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contractual</font></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">6,055&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">298&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">(d)</font></p>
    </td>
    <td width=69 valign=top style='width:52.1pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">6,353&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization
    of loan costs</font></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">592&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">592&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">Management company expenses</font></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">416&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">416&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">General and administrative</font></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">5,029&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">141&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">(e)</font></p>
    </td>
    <td width=69 valign=top style='width:52.1pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">5,170&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;border-top:solid windowtext 1.0pt;
    border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">Total Expenses</font></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:solid windowtext 1.0pt;
    border-left:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">125,319&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;border-top:solid windowtext 1.0pt;
    border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">7,543&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:solid windowtext 1.0pt;
    border-left:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">132,862&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=422 colspan=2 valign=top style='width:316.75pt;border:none;
    border-right:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><b><font size="2">Income before equity in earnings,&nbsp; gain (loss) , minority
    interest&nbsp; </font> </b></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><b><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and discontinued&nbsp;
    operations </font> </b></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">29,941&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">3,669&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">33,610&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">Equity in earnings of unconsolidated joint ventures</font></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">824&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">824&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">Gain (loss) on sale of joint venture interest and real
    estate </font> </p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">(474)</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">4,195&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">(e)</font></p>
    </td>
    <td width=69 valign=top style='width:52.1pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">3,721&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">Impairment loss on office property</font></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">(1,594)</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">(1,594)</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;border:none;border-bottom:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">Minority interest - unit holders</font></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border-top:none;border-left:none;
    border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">(2)</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">(2)</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><b><font size="2">Income before discontinued operations
    </font> </b></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">28,695&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">7,864&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">36,559&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">Discontinued operations:</font></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.95pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income from
    discontinued operations</font></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">47&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">47&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;border:none;border-bottom:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on sale
    of real estate from discontinued operations</font></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border-top:none;border-left:none;
    border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">770&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">770&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><b><font size="2">Net income</font></b></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">29,512&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">7,864&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">37,376&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;border:none;border-bottom:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">Change in market value of interest rate swap</font></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border-top:none;border-left:none;
    border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">1,524&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">1,524&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;border:none;border-bottom:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><b><font size="2">Comprehensive income</font></b></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border-top:none;border-left:none;
    border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">$&nbsp;&nbsp;31,036&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;7,864&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">$&nbsp;&nbsp;38,900&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><b><font size="2">Net income available to common stockholders:</font></b></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.95pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">Net income</font></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">$&nbsp;&nbsp;29,512&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;7,864</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">$&nbsp;&nbsp;37,376&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">Dividends on preferred stock</font></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">(5,797)</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">(5,797)</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;border:none;border-bottom:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">Dividends on convertible preferred stock</font></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border-top:none;border-left:none;
    border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">(6,257)</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">(6,257)</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;border:none;border-bottom:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><b><font size="2">Net income available to common stockholders</font></b></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border-top:none;border-left:none;
    border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">$&nbsp;&nbsp;17,458&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;7,864</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">$&nbsp;&nbsp;25,322&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><b><font size="2">Net income per common share:</font></b></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.95pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">Basic:</font></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.95pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">Income before discontinued operations
    </font> </p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.78&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.45&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">Discontinued operations</font></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">.09&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">.08&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;border-top:solid windowtext 1.0pt;
    border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">Net income</font></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:solid windowtext 1.0pt;
    border-left:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.87&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;border-top:solid windowtext 1.0pt;
    border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:solid windowtext 1.0pt;
    border-left:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.53&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">(6)</font></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">Diluted:</font></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.95pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">Income before discontinued operations
    </font> </p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.75&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.41&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">Discontinued operations</font></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">.09&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">.08&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;border-top:solid windowtext 1.0pt;
    border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">Net income</font></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:solid windowtext 1.0pt;
    border-left:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.84&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;border-top:solid windowtext 1.0pt;
    border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border:solid windowtext 1.0pt;
    border-left:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.49&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">(6)</font></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;border:none;border-bottom:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><b><font size="2">Dividends per common share</font></b></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border-top:none;border-left:none;
    border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.56&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=35 valign=top style='width:26.05pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.56&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><b><font size="2">Weighted average shares outstanding:</font></b></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.95pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=35 valign=top style='width:26.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">Basic</font></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">9,312&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">690&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">10,002&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">(6)</font></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=345 valign=top style='width:258.45pt;border-top:solid windowtext 1.0pt;
    border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt'><font size="2">Diluted</font></p>
    </td>
    <td width=78 valign=top style='width:58.3pt;border:solid windowtext 1.0pt;
    border-left:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">9,480&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">690&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:52.1pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">10,170&nbsp;</font></p>
    </td>
    <td width=35 valign=top style='width:26.05pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt'>
    <font size="2">(6)</font></p>
    </td>
   </tr>
  </table>
  
  </div>
  
  <p class=MsoNormal align=center style='text-align:center;line-height:10.0pt'><br>
  <br>
  </p>
  
  <p class=MsoNormal align=center style='text-align:center;line-height:10.0pt'>See accompanying notes.<hr color="#000080">
  <p align="center"><br clear=all style='page-break-before:
  always'>
  <b>PARKWAY PROPERTIES, INC. AND SUBSIDIARIES<br>
  PRO FORMA CONSOLIDATED STATEMENT OF INCOME<br>
  FOR THE SIX MONTHS ENDED JUNE 30, 2003<br>
  </b>(Unaudited)</p>
  </p>
  
  <table class=MsoNormalTable border=1 cellspacing=0 cellpadding=0
   style='border-collapse:collapse' bordercolorlight="#FFFFFF" bordercolordark="#FFFFFF" bgcolor="#FFFFFF">
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><b><font size="2">&nbsp;</font></b></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center;line-height:-100%; margin-top:0; margin-bottom:0'><b>
    <font size="2">Parkway </font> </b></p>
    <p class=MsoNormal align=center style='text-align:center;line-height:-100%; margin-top:0; margin-bottom:0'><b>
    <font size="2">Historical</font></b></p>
    </td>
    <td width=109 colspan=2 valign=top style='width:82.05pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center;line-height:-100%; margin-top:0; margin-bottom:0'><b>
    <font size="2">Pro Forma</font></b></p>
    <p class=MsoNormal align=center style='text-align:center;line-height:-100%; margin-top:0; margin-bottom:0'><b>
    <font size="2">Adjustments (4)</font></b></p>
    </td>
    <td width=105 colspan=2 valign=top style='width:78.55pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center;line-height:-100%; margin-top:0; margin-bottom:0'><b>
    <font size="2">Parkway</font></b></p>
    <p class=MsoNormal align=center style='text-align:center;line-height:-100%; margin-top:0; margin-bottom:0'><b>
    <font size="2">Pro Forma</font></b></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;border:none;border-bottom:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><b><font size="2">&nbsp;</font></b></p>
    </td>
    <td width=289 colspan=6 valign=top style='width:217.0pt;border:none;
    border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center;line-height:-100%'>
    <font size="2">(In thousands, except per share data)</font></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><b><font size="2">Revenues</font></b></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border:none;border-right:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'><b>
    <font size="2">&nbsp;</font></b></p>
    </td>
    <td width=76 valign=top style='width:57.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'><b>
    <font size="2">&nbsp;</font></b></p>
    </td>
    <td width=33 valign=top style='width:24.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'><b>
    <font size="2">&nbsp;</font></b></p>
    </td>
    <td width=69 valign=top style='width:51.65pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'><b>
    <font size="2">&nbsp;</font></b></p>
    </td>
    <td width=36 valign=top style='width:26.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'><b>
    <font size="2">&nbsp;</font></b></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">Income from office and parking&nbsp; properties</font></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border:none;border-right:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">$&nbsp;&nbsp;72,219&nbsp;</font></p>
    </td>
    <td width=76 valign=top style='width:57.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;2,890&nbsp;</font></p>
    </td>
    <td width=33 valign=top style='width:24.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">(b)</font></p>
    </td>
    <td width=69 valign=top style='width:51.65pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">$&nbsp;&nbsp;75,109&nbsp;</font></p>
    </td>
    <td width=36 valign=top style='width:26.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">Management company income</font></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border:none;border-right:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">1,142&nbsp;</font></p>
    </td>
    <td width=76 valign=top style='width:57.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">61&nbsp;</font></p>
    </td>
    <td width=33 valign=top style='width:24.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">(e)</font></p>
    </td>
    <td width=69 valign=top style='width:51.65pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">1,203&nbsp;</font></p>
    </td>
    <td width=36 valign=top style='width:26.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">Interest on note receivable from Moore Building Associates LP</font></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border:none;border-right:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">406&nbsp;</font></p>
    </td>
    <td width=76 valign=top style='width:57.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=33 valign=top style='width:24.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.65pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">406&nbsp;</font></p>
    </td>
    <td width=36 valign=top style='width:26.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">Incentive management fee from Moore Building Associates LP</font></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border:none;border-right:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">155&nbsp;</font></p>
    </td>
    <td width=76 valign=top style='width:57.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=33 valign=top style='width:24.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.65pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">155&nbsp;</font></p>
    </td>
    <td width=36 valign=top style='width:26.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">Other income and deferred gains</font></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border:none;border-right:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">487&nbsp;</font></p>
    </td>
    <td width=76 valign=top style='width:57.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=33 valign=top style='width:24.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.65pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">487&nbsp;</font></p>
    </td>
    <td width=36 valign=top style='width:26.9pt;border-top:none;border-left:none;
    border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;border-top:1px solid windowtext;
    border-left:medium none;border-bottom:1px solid windowtext;border-right:medium none;
    padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">Total Revenues</font></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border:solid windowtext 1.0pt;
    border-left:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">74,409&nbsp;</font></p>
    </td>
    <td width=76 valign=top style='width:57.3pt;border-top:solid windowtext 1.0pt;
    border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">2,951&nbsp;</font></p>
    </td>
    <td width=33 valign=top style='width:24.75pt;border:solid windowtext 1.0pt;
    border-left:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.65pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">77,360&nbsp;</font></p>
    </td>
    <td width=36 valign=top style='width:26.9pt;border-top:none;border-left:none;
    border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><b><font size="2">Expenses</font></b></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border:none;border-right:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=76 valign=top style='width:57.3pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=33 valign=top style='width:24.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.65pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=36 valign=top style='width:26.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">Office and parking properties:</font></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border:none;border-right:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=76 valign=top style='width:57.3pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=33 valign=top style='width:24.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.65pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=36 valign=top style='width:26.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating expense</font></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border:none;border-right:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">32,379&nbsp;</font></p>
    </td>
    <td width=76 valign=top style='width:57.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">1,444&nbsp;</font></p>
    </td>
    <td width=33 valign=top style='width:24.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">(b)</font></p>
    </td>
    <td width=69 valign=top style='width:51.65pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">33,823&nbsp;</font></p>
    </td>
    <td width=36 valign=top style='width:26.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense:</font></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border:none;border-right:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=76 valign=top style='width:57.3pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=33 valign=top style='width:24.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.65pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=36 valign=top style='width:26.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contractual</font></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border:none;border-right:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">8,026&nbsp;</font></p>
    </td>
    <td width=76 valign=top style='width:57.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">(275)</font></p>
    </td>
    <td width=33 valign=top style='width:24.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">(c)</font></p>
    </td>
    <td width=69 valign=top style='width:51.65pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">7,751&nbsp;</font></p>
    </td>
    <td width=36 valign=top style='width:26.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization
    of loan costs</font></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border:none;border-right:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">132&nbsp;</font></p>
    </td>
    <td width=76 valign=top style='width:57.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">(3)</font></p>
    </td>
    <td width=33 valign=top style='width:24.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">(c)</font></p>
    </td>
    <td width=69 valign=top style='width:51.65pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">129&nbsp;</font></p>
    </td>
    <td width=36 valign=top style='width:26.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and
    amortization</font></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border:none;border-right:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">13,952&nbsp;</font></p>
    </td>
    <td width=76 valign=top style='width:57.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">295&nbsp;</font></p>
    </td>
    <td width=33 valign=top style='width:24.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">(b)</font></p>
    </td>
    <td width=69 valign=top style='width:51.65pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">14,247&nbsp;</font></p>
    </td>
    <td width=36 valign=top style='width:26.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">Operating expense for other real estate properties</font></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border:none;border-right:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">20&nbsp;</font></p>
    </td>
    <td width=76 valign=top style='width:57.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=33 valign=top style='width:24.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.65pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">20&nbsp;</font></p>
    </td>
    <td width=36 valign=top style='width:26.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">Interest expense on bank notes:</font></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border:none;border-right:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=76 valign=top style='width:57.3pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=33 valign=top style='width:24.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.65pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=36 valign=top style='width:26.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contractual</font></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border:none;border-right:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">1,523&nbsp;</font></p>
    </td>
    <td width=76 valign=top style='width:57.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">35&nbsp;</font></p>
    </td>
    <td width=33 valign=top style='width:24.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">(d)</font></p>
    </td>
    <td width=69 valign=top style='width:51.65pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">1,558&nbsp;</font></p>
    </td>
    <td width=36 valign=top style='width:26.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization
    of loan costs</font></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border:none;border-right:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">364&nbsp;</font></p>
    </td>
    <td width=76 valign=top style='width:57.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=33 valign=top style='width:24.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.65pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">364&nbsp;</font></p>
    </td>
    <td width=36 valign=top style='width:26.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">Management company expenses</font></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border:none;border-right:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">241&nbsp;</font></p>
    </td>
    <td width=76 valign=top style='width:57.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=33 valign=top style='width:24.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.65pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">241&nbsp;</font></p>
    </td>
    <td width=36 valign=top style='width:26.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">General and administrative</font></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border:none;border-right:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">2,144&nbsp;</font></p>
    </td>
    <td width=76 valign=top style='width:57.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">61&nbsp;</font></p>
    </td>
    <td width=33 valign=top style='width:24.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">(e)</font></p>
    </td>
    <td width=69 valign=top style='width:51.65pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">2,205&nbsp;</font></p>
    </td>
    <td width=36 valign=top style='width:26.9pt;border-top:none;border-left:none;
    border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;border-top:solid windowtext 1.0pt;
    border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">Total Expenses</font></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border:solid windowtext 1.0pt;
    border-left:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">58,781&nbsp;</font></p>
    </td>
    <td width=76 valign=top style='width:57.3pt;border-top:solid windowtext 1.0pt;
    border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">1,557&nbsp;</font></p>
    </td>
    <td width=33 valign=top style='width:24.75pt;border:solid windowtext 1.0pt;
    border-left:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.65pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">60,338&nbsp;</font></p>
    </td>
    <td width=36 valign=top style='width:26.9pt;border-top:none;border-left:none;
    border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><b><font size="2">Income before equity in earnings, gain and
    </font> </b></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border:none;border-right:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=76 valign=top style='width:57.3pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=33 valign=top style='width:24.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.65pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=36 valign=top style='width:26.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><b><font size="2">minority interest
    </font> </b></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border:none;border-right:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">15,628&nbsp;</font></p>
    </td>
    <td width=76 valign=top style='width:57.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">1,394&nbsp;</font></p>
    </td>
    <td width=33 valign=top style='width:24.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.65pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">17,022&nbsp;</font></p>
    </td>
    <td width=36 valign=top style='width:26.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">Equity in earnings of unconsolidated joint ventures</font></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border:none;border-right:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">1,054&nbsp;</font></p>
    </td>
    <td width=76 valign=top style='width:57.3pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=33 valign=top style='width:24.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.65pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">1,054&nbsp;</font></p>
    </td>
    <td width=36 valign=top style='width:26.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">Gain&nbsp; on sale of joint venture interest and real estate</font></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border:none;border-right:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">5,641&nbsp;</font></p>
    </td>
    <td width=76 valign=top style='width:57.3pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=33 valign=top style='width:24.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.65pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">5,641&nbsp;</font></p>
    </td>
    <td width=36 valign=top style='width:26.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;border:none;border-bottom:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">Minority interest - unit holders</font></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border-top:none;
    border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">(1)</font></p>
    </td>
    <td width=76 valign=top style='width:57.3pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=33 valign=top style='width:24.75pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.65pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">(1)</font></p>
    </td>
    <td width=36 valign=top style='width:26.9pt;border-top:none;border-left:none;
    border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><b><font size="2">Net Income</font></b></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border:none;border-right:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">22,322&nbsp;</font></p>
    </td>
    <td width=76 valign=top style='width:57.3pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">1,394&nbsp;</font></p>
    </td>
    <td width=33 valign=top style='width:24.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.65pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">23,716&nbsp;&nbsp;</font></p>
    </td>
    <td width=36 valign=top style='width:26.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">Change in market value of interest rate swap</font></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border-top:none;
    border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">60&nbsp;</font></p>
    </td>
    <td width=76 valign=top style='width:57.3pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=33 valign=top style='width:24.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.65pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">60&nbsp;&nbsp;</font></p>
    </td>
    <td width=36 valign=top style='width:26.9pt;border-top:none;border-left:none;
    border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;border-top:solid windowtext 1.0pt;
    border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><b><font size="2">Comprehensive income</font></b></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border-top:none;
    border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">$&nbsp;&nbsp;22,382&nbsp;</font></p>
    </td>
    <td width=76 valign=top style='width:57.3pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">$&nbsp;&nbsp;&nbsp; 1,394&nbsp;</font></p>
    </td>
    <td width=33 valign=top style='width:24.75pt;border:solid windowtext 1.0pt;
    border-left:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.65pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center;line-height:-100%'>
    <font size="2">$&nbsp;&nbsp;23,776&nbsp;</font></p>
    </td>
    <td width=36 valign=top style='width:26.9pt;border-top:none;border-left:none;
    border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><b><font size="2">Net income available to common stockholders:</font></b></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border:none;border-right:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=76 valign=top style='width:57.3pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=33 valign=top style='width:24.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.65pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=36 valign=top style='width:26.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">Net income</font></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border:none;border-right:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">$&nbsp;&nbsp;22,322&nbsp;</font></p>
    </td>
    <td width=76 valign=top style='width:57.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;1,394&nbsp;</font></p>
    </td>
    <td width=33 valign=top style='width:24.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.65pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">$&nbsp;&nbsp;23,716&nbsp;</font></p>
    </td>
    <td width=36 valign=top style='width:26.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid;height:13.05pt'>
    <td width=354 colspan=2 valign=top style='width:265.15pt;padding:0in 5.4pt 0in 5.4pt;
    height:13.05pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">Original issue costs associated with redemption of preferred stock</font></p>
    </td>
    <td width=69 valign=top style='width:51.6pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt;height:13.05pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">(2,619)</font></p>
    </td>
    <td width=76 valign=top style='width:57.3pt;padding:0in 5.4pt 0in 5.4pt;
    height:13.05pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=33 valign=top style='width:24.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt;height:13.05pt'>
  
    </td>
    <td width=69 valign=top style='width:51.65pt;padding:0in 5.4pt 0in 5.4pt;
    height:13.05pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">(2,619)</font></p>
    </td>
    <td width=36 valign=top style='width:26.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt;height:13.05pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid;height:13.05pt'>
    <td width=347 valign=top style='width:260.35pt;padding:0in 5.4pt 0in 5.4pt;
    height:13.05pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">Dividends on preferred stock</font></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border:none;border-right:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:13.05pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">(2,952)</font></p>
    </td>
    <td width=76 valign=top style='width:57.3pt;padding:0in 5.4pt 0in 5.4pt;
    height:13.05pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=33 valign=top style='width:24.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt;height:13.05pt'>
  
    </td>
    <td width=69 valign=top style='width:51.65pt;padding:0in 5.4pt 0in 5.4pt;
    height:13.05pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">(2,952)</font></p>
    </td>
    <td width=36 valign=top style='width:26.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt;height:13.05pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;border:none;border-bottom:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">Dividends on convertible preferred stock</font></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border-top:none;
    border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">(3,128)</font></p>
    </td>
    <td width=76 valign=top style='width:57.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=33 valign=top style='width:24.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.65pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">(3,128)</font></p>
    </td>
    <td width=36 valign=top style='width:26.9pt;border-top:none;border-left:none;
    border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><b><font size="2">Net income available to common stockholders</font></b></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border:none;border-right:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">$&nbsp;&nbsp;13,623&nbsp;</font></p>
    </td>
    <td width=76 valign=top style='width:57.3pt;border-top:solid windowtext 1.0pt;
    border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;1,394&nbsp;</font></p>
    </td>
    <td width=33 valign=top style='width:24.75pt;border:solid windowtext 1.0pt;
    border-left:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.65pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">$&nbsp;&nbsp;15,017&nbsp;</font></p>
    </td>
    <td width=36 valign=top style='width:26.9pt;border-top:none;border-left:none;
    border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;border:none;border-top:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><b><font size="2">Net income per common share:</font></b></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border-top:solid windowtext 1.0pt;
    border-left:none;border-bottom:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=76 valign=top style='width:57.3pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=33 valign=top style='width:24.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.65pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=36 valign=top style='width:26.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;border:none;border-bottom:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic</font></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border-top:none;
    border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.38&nbsp;</font></p>
    </td>
    <td width=76 valign=top style='width:57.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=33 valign=top style='width:24.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.65pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.48&nbsp;</font></p>
    </td>
    <td width=36 valign=top style='width:26.9pt;border-top:none;border-left:none;
    border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">(6)</font></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;border:none;border-bottom:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><b><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></b><font size="2">Diluted</font></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border-top:none;
    border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.36&nbsp;</font></p>
    </td>
    <td width=76 valign=top style='width:57.3pt;border-top:solid windowtext 1.0pt;
    border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=33 valign=top style='width:24.75pt;border:solid windowtext 1.0pt;
    border-left:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.65pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.45&nbsp;</font></p>
    </td>
    <td width=36 valign=top style='width:26.9pt;border-top:none;border-left:none;
    border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">(6)</font></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;border:none;border-bottom:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><b><font size="2">Dividends per common share</font></b></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border-top:none;
    border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.30&nbsp;</font></p>
    </td>
    <td width=76 valign=top style='width:57.3pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=33 valign=top style='width:24.75pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.65pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.30&nbsp;</font></p>
    </td>
    <td width=36 valign=top style='width:26.9pt;border-top:none;border-left:none;
    border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><b><font size="2">Weighted average shares outstanding:</font></b></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border:none;border-right:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=76 valign=top style='width:57.3pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=33 valign=top style='width:24.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.65pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=36 valign=top style='width:26.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;border:none;border-bottom:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic</font></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border-top:none;
    border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">9,839&nbsp;</font></p>
    </td>
    <td width=76 valign=top style='width:57.3pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">312&nbsp;</font></p>
    </td>
    <td width=33 valign=top style='width:24.75pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.65pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">10,151&nbsp;</font></p>
    </td>
    <td width=36 valign=top style='width:26.9pt;border-top:none;border-left:none;
    border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">(6)</font></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=347 valign=top style='width:260.35pt;border:none;border-bottom:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><b><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></b><font size="2">Diluted</font></p>
    </td>
    <td width=75 colspan=2 valign=top style='width:56.4pt;border-top:none;
    border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right'><font size="2">10,039&nbsp;</font></p>
    </td>
    <td width=76 valign=top style='width:57.3pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">312&nbsp;</font></p>
    </td>
    <td width=33 valign=top style='width:24.75pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=69 valign=top style='width:51.65pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%'>
    <font size="2">10,351&nbsp;</font></p>
    </td>
    <td width=36 valign=top style='width:26.9pt;border-top:none;border-left:none;
    border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%'><font size="2">(6)</font></p>
    </td>
   </tr>
   <tr height=0>
    <td width=347 style='border:none'></td>
    <td width=6 style='border:none'></td>
    <td width=69 style='border:none'></td>
    <td width=76 style='border:none'></td>
    <td width=33 style='border:none'></td>
    <td width=69 style='border:none'></td>
    <td width=36 style='border:none'></td>
   </tr>
  </table>
  
  
  
  
  
  
  
  <p class=MsoNormal align=center style='text-align:center;line-height:-100%'>See accompanying notes<br>
  </p>
  
  <hr color="#000080">
  
  
  
  
  
  
  
  <p class=MsoNormal align=center style='text-align:center;line-height:-100%'>
  <br>
  </p>
  
  <p class=MsoNormal align=center style='text-align:center'><b>PARKWAY PROPE</b><b>RTIES, INC.<br>
  Notes to Pro Forma Consolidated Financial Statements<br>
  </b>(Unaudited)<b><br>
  <br>
  </b></p>
  
  
  
  <p class=MsoNormal align=center style='text-align:justify'>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On August 1,
  2003, the Company sold its investment in the BB&amp;T Financial Center in
  Winston-Salem, North Carolina to an unrelated third party for $27.5 million
  plus the assumption of future tenant improvements of approximately $500,000.&nbsp;
  Parkway will continue to manage and lease the property under a ten-year
  management agreement and received an acquisition fee of $186,000.&nbsp; The Company
  expects to record a gain for financial reporting purposes of approximately $5
  million on the sale in the third quarter of 2003.&nbsp; The taxable gain from this
  transaction will be deferred through a Section 1031 like-kind exchange and,
  accordingly, no special dividend of the capital gain will be required.&nbsp;
  Proceeds of $11,201,000 were applied toward the early extinguishment of the
  7.3% mortgage secured by the BB&amp;T Financial Center and the remaining
  proceeds were applied toward the purchase of the Peachtree Dunwoody Pavilion.</p>
  
  
  
  <p class=MsoNormal style='text-align:justify'>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On August
  28, 2003, the Company purchased the fee simple interest in the Peachtree
  Dunwoody Pavilion office building located at 5575 Peachtree Dunwoody Road NE in
  Atlanta, Georgia for $40 million.&nbsp; The total purchase price, including closing
  costs, anticipated first year capital expenditures and leasing commissions, is
  expected to be approximately $42 million.</p>
  
  
  
  <p class=MsoNormal style='text-align:justify'>3. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
  September 12, 2003, the Company purchased the fee simple interest in the Wells
  Fargo Building located n the Northwest Freeway Corridor submarket of Houston,
  Texas for $12 million.&nbsp; The total purchase price, including closing costs,
  anticipated first year capital expenditures and leasing commissions, is
  expected to be approximately $13 million.</p>
  
  
  
  <p class=MsoNormal style='text-align:justify'>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The pro
  forma adjustments to the Consolidated Statement of Income for the year ended
  December 31, 2002 and six months ended June 30, 2003 set forth the effects of Parkway's
  purchase of the following buildings as if they had been consummated on January 1,
  2002.&nbsp; </p>
  
  
  
  <div align=center>
  
  <table class=MsoTableGrid border=1 cellspacing=0 cellpadding=0
   style='border-style:none; border-color:inherit; border-collapse:collapse;' bordercolorlight="#FFFFFF" bordercolordark="#FFFFFF" bgcolor="#FFFFFF" width="344">
   <tr>
    <td valign=top style='width:219;border:medium none;padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
    <p class=MsoNormal align=center style='text-align:center'><b>&nbsp;</b></p>
    </td>
    <td valign=top style='width:97;border:medium none;padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
    <p class=MsoNormal align=center style='text-align:center'><b>Date of</b></p>
    </td>
   </tr>
   <tr>
    <td valign=top style='border-left:medium none; border-right:medium none; border-top:medium none; width:219;border-bottom:1.0pt solid windowtext;
    padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
    <p class=MsoNormal align=center style='text-align:center'><b>Building</b></p>
    </td>
    <td valign=top style='border-left:medium none; border-right:medium none; border-top:medium none; width:97;border-bottom:1.0pt solid windowtext;
    padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
    <p class=MsoNormal align=center style='text-align:center'><b>Purchase</b></p>
    </td>
   </tr>
   <tr>
    <td valign=top style='width:219;border:medium none;padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
    <p class=MsoNormal>Citrus
    Center</p>
    </td>
    <td valign=top style='width:97;border:medium none;padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
    <p class=MsoNormal align=center style='text-align:center'>02/11/03</p>
    </td>
   </tr>
   <tr>
    <td valign=top style='width:219;border:medium none;padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
    <p class=MsoNormal>Peachtree
    Dunwoody Pavilion</p>
    </td>
    <td valign=top style='width:97;border:medium none;padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
    <p class=MsoNormal align=center style='text-align:center'>08/28/03</p>
    </td>
   </tr>
   <tr>
    <td valign=top style='width:219;border:medium none;padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
    <p class=MsoNormal>Wells
    Fargo Building</p>
    </td>
    <td valign=top style='width:97;border:medium none;padding-left:5.4pt; padding-right:5.4pt; padding-top:0in; padding-bottom:0in'>
    <p class=MsoNormal align=center style='text-align:center'>09/12/03</p>
    </td>
   </tr>
  </table>
  
  </div>
  
  
  
  <hr color="#000080"><br clear=all style='page-break-before:always'>
  
  
  <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These
  pro forma adjustments are detailed below for the year ended December 31, 2002
  and six months ended June 30, 2003.</p>
  
  
  
  <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
  effect on income and expenses from real estate properties is as follows (in
  thousands):</p>
  
  
  
  <p class=MsoNormal style='margin-left:.5in;text-indent:-.5in'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;For
  the year ended December 31, 2002:</p>
  
  
  
  <div align=center>
  
  <table class=MsoNormalTable border=1 cellspacing=0 cellpadding=0
   style='border-collapse:collapse;border:none' bordercolorlight="#FFFFFF" bordercolordark="#FFFFFF" bgcolor="#FFFFFF">
   <tr style='page-break-inside:avoid'>
    <td width=219 valign=top style='width:164.3pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><b>&nbsp;</b></p>
    </td>
    <td width=113 valign=top style='width:84.8pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'><b>Revenue</b></p>
    </td>
    <td width=208 colspan=2 valign=top style='width:156.05pt;border-top:none;
    border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'><b>Expenses</b></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=219 valign=top style='width:164.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><b>&nbsp;</b></p>
    </td>
    <td width=113 valign=top style='width:84.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'><b>Income From</b></p>
    </td>
    <td width=208 colspan=2 valign=top style='width:156.05pt;border-top:none;
    border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'><b>Real Estate Owned</b></p>
    </td>
   </tr>
   <tr>
    <td width=219 valign=top style='width:164.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><b>&nbsp;</b></p>
    </td>
    <td width=113 valign=top style='width:84.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'><b>Real Estate</b></p>
    </td>
    <td width=100 valign=top style='width:75.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'><b>Operating</b></p>
    </td>
    <td width=108 valign=top style='width:81.0pt;border-top:solid windowtext 1.0pt;
    border-left:none;border-bottom:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'><b>Depreciation</b></p>
    </td>
   </tr>
   <tr>
    <td width=219 valign=top style='width:164.3pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><b>&nbsp;</b></p>
    </td>
    <td width=113 valign=top style='width:84.8pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'><b>Properties</b></p>
    </td>
    <td width=100 valign=top style='width:75.05pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'><b>Expense</b></p>
    </td>
    <td width=108 valign=top style='width:81.0pt;border:solid windowtext 1.0pt;
    border-left:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'><b>Expense</b></p>
    </td>
   </tr>
   <tr>
    <td width=219 valign=top style='width:164.3pt;border-top:none;border-left:
    solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal>Citrus
    Center</p>
    </td>
    <td width=113 valign=top style='width:84.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:15.05pt;text-align:right'>$&nbsp;&nbsp;&nbsp;&nbsp;6,033&nbsp;</p>
    </td>
    <td width=100 valign=top style='width:75.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:12.1pt;text-align:right'>$&nbsp;&nbsp;2,841&nbsp;</p>
    </td>
    <td width=108 valign=top style='width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:15.1pt;text-align:right'>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;741&nbsp;</p>
    </td>
   </tr>
   <tr>
    <td width=219 valign=top style='width:164.3pt;border-top:none;border-left:
    solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal>Sale
    of BB&amp;T Financial Center</p>
    </td>
    <td width=113 valign=top style='width:84.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:15.05pt;text-align:right'>(4,670)</p>
    </td>
    <td width=100 valign=top style='width:75.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:12.1pt;text-align:right'>(1,586)</p>
    </td>
    <td width=108 valign=top style='width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:15.1pt;text-align:right'>(739)</p>
    </td>
   </tr>
   <tr>
    <td width=219 valign=top style='width:164.3pt;border-top:none;border-left:
    solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal>Peachtree
    Dunwoody Pavilion</p>
    </td>
    <td width=113 valign=top style='width:84.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:15.05pt;text-align:right'>7,273&nbsp;</p>
    </td>
    <td width=100 valign=top style='width:75.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:12.1pt;text-align:right'>3,198&nbsp;</p>
    </td>
    <td width=108 valign=top style='width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:15.1pt;text-align:right'>900&nbsp;</p>
    </td>
   </tr>
   <tr>
    <td width=219 valign=top style='width:164.3pt;border:solid windowtext 1.0pt;
    border-top:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal>Wells
    Fargo Building</p>
    </td>
    <td width=113 valign=top style='width:84.8pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:15.05pt;text-align:right'>2,249&nbsp;</p>
    </td>
    <td width=100 valign=top style='width:75.05pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:12.1pt;text-align:right'>1,096&nbsp;</p>
    </td>
    <td width=108 valign=top style='width:81.0pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:15.1pt;text-align:right'>270&nbsp;</p>
    </td>
   </tr>
   <tr>
    <td width=219 valign=top style='width:164.3pt;border:solid windowtext 1.0pt;
    border-top:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=113 valign=top style='width:84.8pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:15.05pt;text-align:right'>$&nbsp;&nbsp;10,885&nbsp;</p>
    </td>
    <td width=100 valign=top style='width:75.05pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:12.1pt;text-align:right'>$&nbsp;&nbsp;5,549&nbsp;</p>
    </td>
    <td width=108 valign=top style='width:81.0pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:15.1pt;text-align:right'>$&nbsp;&nbsp;1,172&nbsp;</p>
    </td>
   </tr>
  </table>
  
  </div>
  
  <p class=MsoNormal style='text-align:justify'><br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation is provided by the
  straight-line method over the estimated useful life (40 years for buildings and
  5 - 15 years for building improvements).</p>
  
  <p class=MsoNormal style='line-height:-100%'><br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;For the six
  months ended June 30, 2003:<br>
  <br>
  </p>
  
  <div align=center>
  
  <table class=MsoNormalTable border=1 cellspacing=0 cellpadding=0
   style='border-collapse:collapse;border:none' bordercolorlight="#FFFFFF" bordercolordark="#FFFFFF" bgcolor="#FFFFFF">
   <tr style='page-break-inside:avoid'>
    <td width=219 valign=top style='width:164.3pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><b>&nbsp;</b></p>
    </td>
    <td width=113 valign=top style='width:84.8pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'><b>Revenue</b></p>
    </td>
    <td width=208 colspan=2 valign=top style='width:156.05pt;border-top:none;
    border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'><b>Expenses</b></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=219 valign=top style='width:164.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><b>&nbsp;</b></p>
    </td>
    <td width=113 valign=top style='width:84.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'><b>Income From</b></p>
    </td>
    <td width=208 colspan=2 valign=top style='width:156.05pt;border-top:none;
    border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'><b>Real Estate Owned</b></p>
    </td>
   </tr>
   <tr>
    <td width=219 valign=top style='width:164.3pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><b>&nbsp;</b></p>
    </td>
    <td width=113 valign=top style='width:84.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'><b>Real Estate</b></p>
    </td>
    <td width=100 valign=top style='width:75.05pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'><b>Operating</b></p>
    </td>
    <td width=108 valign=top style='width:81.0pt;border:solid windowtext 1.0pt;
    border-left:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'><b>Depreciation</b></p>
    </td>
   </tr>
   <tr>
    <td width=219 valign=top style='width:164.3pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal><b>&nbsp;</b></p>
    </td>
    <td width=113 valign=top style='width:84.8pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'><b>Properties</b></p>
    </td>
    <td width=100 valign=top style='width:75.05pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'><b>Expense</b></p>
    </td>
    <td width=108 valign=top style='width:81.0pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'><b>Expense</b></p>
    </td>
   </tr>
   <tr>
    <td width=219 valign=top style='width:164.3pt;border-top:none;border-left:
    solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal>Citrus
    Center</p>
    </td>
    <td width=113 valign=top style='width:84.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:18.95pt;text-align:right'>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;626&nbsp;</p>
    </td>
    <td width=100 valign=top style='width:75.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:12.1pt;text-align:right'>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;159&nbsp;</p>
    </td>
    <td width=108 valign=top style='width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:15.1pt;text-align:right'>$&nbsp;&nbsp;&nbsp;&nbsp;83&nbsp;</p>
    </td>
   </tr>
   <tr>
    <td width=219 valign=top style='width:164.3pt;border-top:none;border-left:
    solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal>Sale
    of BB&amp;T Financial Center</p>
    </td>
    <td width=113 valign=top style='width:84.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:18.95pt;text-align:right'>(2,268)</p>
    </td>
    <td width=100 valign=top style='width:75.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:12.1pt;text-align:right'>(786)</p>
    </td>
    <td width=108 valign=top style='width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:15.1pt;text-align:right'>(373)</p>
    </td>
   </tr>
   <tr>
    <td width=219 valign=top style='width:164.3pt;border-top:none;border-left:
    solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal>Peachtree
    Dunwoody Pavilion</p>
    </td>
    <td width=113 valign=top style='width:84.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:18.95pt;text-align:right'>3,391&nbsp;</p>
    </td>
    <td width=100 valign=top style='width:75.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:12.1pt;text-align:right'>1,489&nbsp;</p>
    </td>
    <td width=108 valign=top style='width:81.0pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:15.1pt;text-align:right'>450&nbsp;</p>
    </td>
   </tr>
   <tr>
    <td width=219 valign=top style='width:164.3pt;border:solid windowtext 1.0pt;
    border-top:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal>Wells
    Fargo Building</p>
    </td>
    <td width=113 valign=top style='width:84.8pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:18.95pt;text-align:right'>1,141&nbsp;</p>
    </td>
    <td width=100 valign=top style='width:75.05pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:12.1pt;text-align:right'>582&nbsp;</p>
    </td>
    <td width=108 valign=top style='width:81.0pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:15.1pt;text-align:right'>135&nbsp;</p>
    </td>
   </tr>
   <tr>
    <td width=219 valign=top style='width:164.3pt;border:solid windowtext 1.0pt;
    border-top:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=113 valign=top style='width:84.8pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:18.95pt;text-align:right'>$&nbsp;&nbsp;2,890&nbsp;</p>
    </td>
    <td width=100 valign=top style='width:75.05pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:12.1pt;text-align:right'>$&nbsp;&nbsp;1,444&nbsp;</p>
    </td>
    <td width=108 valign=top style='width:81.0pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:15.1pt;text-align:right'>$&nbsp;&nbsp;295&nbsp;</p>
    </td>
   </tr>
  </table>
  
  </div>
  
  
  
  <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation
  is provided by the straight-line method over the estimated useful life (40
  years for buildings and 5 - 15 years for building improvements).</p>
  
  <hr color="#000080"><br clear=all style='page-break-before:always'>
  
  
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;Pro
  forma interest expense on real estate owned reflects interest and loan cost
  amortization on non-recourse debt assumed upon purchase and the extinguishment
  of debt from the sale proceeds of the BB&amp;T Financial Center as if in place
  January 1, 2002 and is detailed below (in thousands).</p>
  
  
  
  <div align=center>
  
  <table class=MsoTableGrid border=0 cellspacing=0 cellpadding=0
   style='border-collapse:collapse'>
   <tr>
    <td width=310 valign=top style='width:232.85pt;border:solid windowtext 1.0pt;
    border-bottom:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'><b>&nbsp;</b></p>
    </td>
    <td width=85 valign=top style='width:63.7pt;border-top:solid windowtext 1.0pt;
    border-left:none;border-bottom:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'><b>&nbsp;</b></p>
    </td>
    <td width=102 valign=top style='width:76.85pt;border-top:solid windowtext 1.0pt;
    border-left:none;border-bottom:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'><b>&nbsp;</b></p>
    </td>
    <td width=121 valign=top style='width:90.55pt;border-top:solid windowtext 1.0pt;
    border-left:none;border-bottom:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'><b>Six</b></p>
    </td>
   </tr>
   <tr>
    <td width=310 valign=top style='width:232.85pt;border-top:none;border-left:
    solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'><b>Property/Placement</b></p>
    </td>
    <td width=85 valign=top style='width:63.7pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'><b>&nbsp;</b></p>
    </td>
    <td width=102 valign=top style='width:76.85pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'><b>Year Ended</b></p>
    </td>
    <td width=121 valign=top style='width:90.55pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'><b>Months Ended</b></p>
    </td>
   </tr>
   <tr>
    <td width=310 valign=top style='width:232.85pt;border:solid windowtext 1.0pt;
    border-top:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'><b>Date/Rate</b></p>
    </td>
    <td width=85 valign=top style='width:63.7pt;border-top:none;border-left:none;
    border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'><b>Debt</b></p>
    </td>
    <td width=102 valign=top style='width:76.85pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'><b>12/31/02</b></p>
    </td>
    <td width=121 valign=top style='width:90.55pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center'><b>06/30/03</b></p>
    </td>
   </tr>
   <tr>
    <td width=310 valign=top style='width:232.85pt;border-top:none;border-left:
    solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify'>Debt assumed in Citrus Center purchase</p>
    </td>
    <td width=85 valign=top style='width:63.7pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=102 valign=top style='width:76.85pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=121 valign=top style='width:90.55pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr>
    <td width=310 valign=top style='width:232.85pt;border-top:none;border-left:
    solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;02/03&nbsp;&nbsp;&nbsp; 6.00%</p>
    </td>
    <td width=85 valign=top style='width:63.7pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:.65pt;text-align:right'>$&nbsp;&nbsp;&nbsp;&nbsp;21,153&nbsp;</p>
    </td>
    <td width=102 valign=top style='width:76.85pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:9.05pt;text-align:right'>$1,269&nbsp;</p>
    </td>
    <td width=121 valign=top style='width:90.55pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:13.8pt;text-align:right'>$&nbsp;&nbsp;&nbsp;&nbsp;143&nbsp;</p>
    </td>
   </tr>
   <tr>
    <td width=310 valign=top style='width:232.85pt;border-top:none;border-left:
    solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify'>Proceeds from sale of BB&amp;T Financial Center</p>
    </td>
    <td width=85 valign=top style='width:63.7pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=102 valign=top style='width:76.85pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=121 valign=top style='width:90.55pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr>
    <td width=310 valign=top style='width:232.85pt;border:solid windowtext 1.0pt;
    border-top:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;08/03&nbsp;&nbsp;&nbsp;&nbsp;7.30%</p>
    </td>
    <td width=85 valign=top style='width:63.7pt;border-top:none;border-left:none;
    border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:.65pt;text-align:right'>(11,201)</p>
    </td>
    <td width=102 valign=top style='width:76.85pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:9.05pt;text-align:right'>(886)</p>
    </td>
    <td width=121 valign=top style='width:90.55pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:13.8pt;text-align:right'>(421)</p>
    </td>
   </tr>
   <tr>
    <td width=310 valign=top style='width:232.85pt;border:solid windowtext 1.0pt;
    border-top:none;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=85 valign=top style='width:63.7pt;border-top:none;border-left:none;
    border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:.65pt;text-align:right'>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9,952&nbsp;</p>
    </td>
    <td width=102 valign=top style='width:76.85pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:9.05pt;text-align:right'>&nbsp;&nbsp;&nbsp;&nbsp;$&nbsp;&nbsp;&nbsp;383&nbsp;</p>
    </td>
    <td width=121 valign=top style='width:90.55pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:13.8pt;text-align:right'>$&nbsp;&nbsp;(278)</p>
    </td>
   </tr>
  </table>
  
  </div>
  
  
  
  <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
  
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;The
  pro forma effect of the Citrus Center Purchase and the Wells Fargo Building
  Purchase on interest expense on notes payable to banks was $298,000 for the
  year ended December 31, 2002 and $35,000 for the six months ended June 30, 2003.</p>
  
  
  
  <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;The
  pro forma effect of the sale of the BB&amp;T Financial Center on gain on sale
  of real estate is $4,195,000 for the year ended December 31, 2002.&nbsp; The pro
  forma effect of the acquisition fee earned on the sale of the BB&amp;T Financial
  Center on management company income is $186,000 for the year ended December 31,
  2002.</p>
  
  
  
  <p class=MsoNormal style='text-align:justify'>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
  additional income tax expenses were provided because of the Company's net
  operating loss carryover and status as a REIT.</p>
  
  <p class=Legal6 style='margin-left:0in;text-align:justify;text-indent:0in'><br>
  6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted net income per share for
  the year ended December 31, 2002 and six months ended June 30, 2003 were $1.84
  and $1.36, respectively, based on diluted weighted average shares outstanding
  of 9,480,000 and 10,039,000, respectively. </p>
  
  <p class=MsoNormal style='text-align:justify'><br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pro Forma diluted
  net income per share for the year ended December 31, 2002 and the six months
  ended June 30, 2003 reflect the sale of 690,000 shares of common stock on March
  24, 2003 as if the shares had been sold on January 1, 2002 and was $2.49 and $1.45,
  respectively, based on pro forma diluted weighted average shares outstanding of
  10,170,000 and 10,351,000, respectively.</p>
  
  <hr color="#000080"><br clear=all style='page-break-before:always'>
  
  
  <p class=MsoNormal align=center style='text-align:center'><b>F</b><b>ORM 8-K<br>
  <br>
  PARKWAY PROPERTIES, INC.<br>
  <br>
  SIGNATURES<br>
  <br>
  <br>
  </b></p>
  
  <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to
  the requirements of the Securities Exchange Act of 1934, the Registrant has
  duly caused this report to be signed on its behalf by the undersigned hereunto
  duly authorized.</p>
  
  <p class=MsoNormal style='text-align:justify'><br>
  <br>
  </p>
  
  <table class=MsoNormalTable border=1 cellspacing=0 cellpadding=0
   style='border-collapse:collapse' bordercolorlight="#FFFFFF" bordercolordark="#FFFFFF" bgcolor="#FFFFFF">
   <tr style='page-break-inside:avoid'>
    <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal>DATE:&nbsp;&nbsp;&nbsp;October
    31, 2003</p>
    </td>
    <td width=312 colspan=2 valign=top style='width:3.25in;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal>PARKWAY
    PROPERTIES, INC.</p>
    </td>
   </tr>
   <tr>
    <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=48 valign=top style='width:.5in;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=264 valign=top style='width:2.75in;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr>
    <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=48 valign=top style='width:.5in;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=264 valign=top style='width:2.75in;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr>
    <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=48 valign=top style='width:.5in;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=264 valign=top style='width:2.75in;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
   </tr>
   <tr>
    <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=48 valign=top style='width:.5in;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal>BY:</p>
    </td>
    <td width=264 valign=top style='width:2.75in;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal>/s/&nbsp;Mandy
    M. Pope</p>
    </td>
   </tr>
   <tr>
    <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=48 valign=top style='width:.5in;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=264 valign=top style='width:2.75in;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal>Mandy
    M. Pope, CPA</p>
    </td>
   </tr>
   <tr>
    <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=48 valign=top style='width:.5in;padding:0in 5.4pt 0in 5.4pt'>
  
    </td>
    <td width=264 valign=top style='width:2.75in;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal>Chief
    Accounting Officer</p>
    </td>
   </tr>
  </table>
  
  <p class=MsoNormal><br>
  <br>
  </p>
  
  
  
  
  
  </div>
  
  </body>
  
  </html>
metadata_documents: [{"type": "8-K", "sequence": "1", "filename": "pdpwellsfargo8k103103.htm", "description": "HTML FORMAT", "secsgml_size_bytes": 274729}, {"type": "8-K", "sequence": "4", "filename": "pdpwellsfargo8k103103.pdf", "description": "PDF FORMAT", "secsgml_size_bytes": 154849}]
metadata_filer: {"company-data": {"conformed-name": "PARKWAY PROPERTIES INC", "cik": "0000729237", "assigned-sic": "6798", "irs-number": "742123597", "state-of-incorporation": "MD", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-11533", "film-number": "03970849"}, "business-address": {"street1": "ONE JACKSON PL", "street2": "188 E CAPITOL ST STE 1000", "city": "JACKSON", "state": "MS", "zip": "39225-4647", "phone": "6019484091"}, "mail-address": {"street1": "ONE JACKSON PL P O BOX 24647", "street2": "188 E CAPITOL ST STE 1000", "city": "JACKSON", "state": "MS", "zip": "39225"}, "former-company": {"former-conformed-name": "PARKWAY CO", "date-changed": "19951018"}}
text: UNITED STATES
  UNITED STATES
  SECURITIES AND EXCHANGE COMMISSION
  WASHINGTON, DC  20549
  FORM
  8-K
  CURRENT REPORT
  Pursuant to Section 13 or
    15(d)
  of the
  Securities Exchange Act of 1934
  Date
    of Report (Date of earliest event reported):
  N/A
  PARKWAY PROPERTIES, INC.
  (Exact name of registrant as specified in its
    charter)
  Maryland
  1-11533
  74-2123597
  (State
    or other jurisdiction of
  incorporation or organization)
  (Commission File Number)
  (IRS
    Employer Identification Number)
  One Jackson Place Suite 1000
  188 East Capitol Street
  P. O. Box 24647
  Jackson, Mississippi  39225-4647
  (Address of principal
    executive offices) (Zip Code)
  Registrant's
    telephone number, including area code
  (601) 948-4091
  (Former name, former address
    and former fiscal year, if changed since last report)
  FORM 8-K
  PARKWAY PROPERTIES, INC.
  Item 5. Other Events.
  On
  August 28, 2003, Parkway Properties, Inc. ("Parkway") purchased the
  Peachtree Dunwoody Pavilion, a 366,000 square foot office building in Atlanta,
  Georgia.  Parkway acquired the Peachtree Dunwoody Pavilion for a purchase price
  of $40 million plus $2 million in closing costs and anticipated first year
  capital expenditures and leasing commissions.  The purchase was funded with
  proceeds from the tax-deferred sale of the BB&T Financial Center in
  Winston-Salem, North Carolina on August 1, 2003 and with proceeds from the
  issuance of common stock on March 24, 2003.
  The Peachtree Dunwoody Pavilion consists
  of four buildings totaling 366,000 square feet on 20 acres with 1,157 surface
  parking spaces.  Two of the buildings were constructed in 1976 and two in 1980
  with over $2 million in capital upgrades since 2000.  The properties are
  currently 88% leased to 24 customers, with three customers, Cox Communications,
  Auto Trader.com, a subsidiary of Cox Communications, and Beazer Homes,
  occupying approximately 50% of the properties.
  On
  September 12, 2003, Parkway purchased the Wells Fargo Building, a 135,000
  square foot, eight-story office building in the Northwest Freeway Corridor
  submarket of Houston, Texas.  The property was acquired for $12 million plus $1
  million in closing costs and anticipated first year capital expenditures and
  leasing commissions.  The purchase was funded with proceeds from the issuance
  of common stock on March 24, 2003.  The Wells Fargo Building was constructed in
  1978 and is currently 91% leased to 18 customers, with four customers, Gulf
  States Financial, Liberty Mutual Insurance, Auto One Acceptance and Wells Fargo
  Bank, occupying approximately 63% of the building.
  Item 7.  Financial Statements and Exhibits.
  (a)    Financial
    Statements
  The
    following audited financial statement of the Peachtree Dunwoody Pavilion for
    the year ended December 31, 2002 is attached hereto.  Also included is the
    unaudited financial statement for the six months ended June 30, 2003:
  Page
  Report
    of Independent Auditors
  4
  Statements
    of Rental Revenues and Direct Operating Expenses
  5
  Notes
    to Statements of Rental Revenues and Direct Operating Expenses
  6
  The
    following audited financial statement of the Wells Fargo Building for the
    year ended December 31, 2002 is attached hereto.  Also included is the
    unaudited financial statement for the six months ended June 30, 2003:
  Page
  Report
    of Independent Auditors
  8
  Statements
    of Rental Revenues and Direct Operating Expenses
  9
  Notes
    to Statements of Rental Revenues and Direct Operating Expenses
  10
  (b)    Pro Forma Consolidated Financial Statements
  The
    following unaudited Pro Form Consolidated Financial Statements of Parkway are
    attached hereto:
  Page
  Pro
    Forma Consolidated Financial Statements (Unaudited)
  12
  Pro
    Forma Consolidated Balance Sheet (Unaudited) - As of June 30, 2003
  13
  Pro
    Forma Consolidated Statement of Income (Unaudited) -
  For
    the Year Ended December 31, 2002
  14
  Pro
    Forma Consolidated Statement of Income (Unaudited) -
  For
    the Six Months Ended June 30, 2003
  15
  Notes
    to Pro Forma Consolidated Financial Statements (Unaudited)
  16
  (c)        Exhibits
  (23)      Consent
    of Ernst & Young, LLP
  Report of Independent Auditors
  The Board of Directors
  Parkway Properties, Inc.
  We have audited the accompanying statement of rental revenues and direct
  operating expenses of the Peachtree Dunwoody Pavilion for the year ended
  December 31, 2002.  This statement is the responsibility of management.  Our
  responsibility is to express an opinion on this statement based on our audit.
  We conducted our audit in accordance with auditing standards generally accepted
  in the United States.  Those standards require that we plan and perform the
  audit to obtain reasonable assurance about whether the statement of rental
  revenues and direct operating expenses is free of material misstatement.  An
  audit includes examining, on a test basis, evidence supporting the amounts and
  disclosures in the statement.  An audit also includes assessing the basis of
  accounting and accounting principles used and significant estimates made by
  management, as well as evaluating the overall statement presentation.  We
  believe that our audit provides a reasonable basis for our opinion.
  The accompanying statements were prepared for the purpose of complying with the
  rules and regulations of the Securities and Exchange Commission, as described
  in Note 2, for inclusion in a Form 8-K of Parkway Properties, Inc. and are not
  intended to be a complete presentation of the Peachtree Dunwoody Pavilion revenues
  and expenses.
  In our opinion, the statement of rental revenue and direct operating expenses
  referred to above presents fairly, in all material respects, the rental
  revenues and direct operating expenses described in Note 2 of the Peachtree
  Dunwoody Pavilion for the year ended December 31, 2002, in conformity with
  accounting principles generally accepted in the United States.
  We have compiled the accompanying statement of rental revenues and direct
  operating expenses of the Peachtree Dunwoody Pavilion for the six months ended June
  30, 2003 in accordance with the
  Statement on Standards for Accounting and
  Review Services
  issued by the American Institute of Certified Public
  Accountants. A compilation is limited to presenting in the form of a financial
  statement information that is the representation of management.  We have not
  audited or reviewed the statement of rental revenues and direct operating
  expenses of the Peachtree Dunwoody Pavilion for the six months ended June 30,
  2003 and, accordingly; do not express an opinion or any other form of assurance
  on the statement.
  Ernst & Young, LLP
  Jackson,
  Mississippi
  October
  29, 2003
  Peachtree Dunwoody Pavilion
  Statements of Rental Revenues
  and Direct Operating Expenses
  Year Ended
  Six Months
    Ended
  December 31,
    2002
  June 30,
    2003
  (unaudited)
  Rental revenues:
  Minimum
    rents
  $  6,764,197
  $  3,169,785
  Reimbursed
    charges
  307,994
  171,458
  Other
    income
  200,547
  49,573
  7,272,738
  3,390,816
  Direct operating expenses:
  Administrative
    and miscellaneous expenses
  393,227
  147,549
  Salaries
    and wages
  452,408
  220,034
  Utilities
  627,773
  294,716
  Janitorial
    services and supplies
  344,125
  157,526
  Maintenance
    services and supplies
  395,030
  238,052
  Security
  193,668
  96,236
  Management
    fees
  340,110
  144,965
  Real
    estate taxes
  451,336
  190,163
  3,197,677
  1,489,241
  Excess of rental revenues over direct
    operating expenses
  $  4,075,061
  $  1,901,575
  See report of
  independent auditors and accompanying notes.
  Peachtree Dunwoody Pavilion
  Notes to Statements of Rental Revenues
  and Direct Operating Expenses
  December 31, 2002 and June 30, 2003
  1.    Organization and Significant Accounting Policies
  Description of Property
  On August 28, 2003, Parkway Properties, Inc. ("Parkway") purchased the fee simple interest in
  the Peachtree Dunwoody Pavilion office building located at 5575 Peachtree
  Dunwoody Road NE in Atlanta, Georgia from an unrelated party.  The Peachtree
  Dunwoody Pavilion contains approximately 366,000 (unaudited) net rentable
  square feet of office space.
  Management's Use of Estimates
  The preparation of financial statements in conformity
  with accounting principles generally accepted in the United States requires
  management to make estimates and assumptions that affect the reported amounts
  of revenues and expenses during the reporting period.  Actual results could
  differ from those estimates.
  Rental
  Revenue
  Minimum rents from leases
  are accounted for ratably over the term of each lease.  Tenant reimbursements
  are recognized as revenue as the applicable services are rendered or expenses
  incurred.
  The future minimum rents on the Peachtree Dunwoody Pavilion's non-cancelable
  operating leases at December 31, 2002 are as follows:
  Year
  Amount
  2003
  $  6,160,038
  2004
  5,723,011
  2005
  3,723,885
  2006
  2,141,052
  2007
  1,843,257
  Thereafter
  5,135,882
  $24,727,125
  The above amounts do not include tenant reimbursements for utilities, taxes,
  insurance and common area maintenance.
  See report of independent auditors.
  As of December 31, 2002, Peachtree Dunwoody had two tenants that occupied a
  majority of the office space, approximately 98,000 square feet by Cox
  Communications and 63,000 square feet by AutoConnect, LLC.
  2.     Basis of Accounting
  The accompanying statements of rental revenues and direct operating expenses are
  presented on the accrual basis.  The statements have been prepared in
  accordance with the applicable rules and regulations of the Securities and
  Exchange Commission for real estate properties acquired.  Accordingly, the
  statements exclude certain expenses not comparable to the proposed future
  operations of the Peachtree Dunwoody Pavilion such as depreciation and mortgage
  interest expense.
  Management is not aware of any material factors relating
  to the Peachtree Dunwoody Pavilion that would cause the reported financial
  information not to be necessarily indicative of future operating results.
  3.     Management Fees
  Management fees of approximately 4.5%
  of revenues received from the operations of the Peachtree Dunwoody Pavilion were
  paid to an unrelated management company.
  See report of independent auditors.
  Report of Independent Auditors
  The Board of Directors
  Parkway Properties, Inc.
  We have audited the accompanying statement of rental revenues and direct
  operating expenses of the Wells Fargo Building for the year ended December 31,
  2002.  This statement is the responsibility of management.  Our responsibility
  is to express an opinion on this statement based on our audit.
  We conducted our audit in accordance with auditing standards generally accepted
  in the United States.  Those standards require that we plan and perform the
  audit to obtain reasonable assurance about whether the statement of rental
  revenues and direct operating expenses is free of material misstatement.  An
  audit includes examining, on a test basis, evidence supporting the amounts and
  disclosures in the statement.  An audit also includes assessing the basis of
  accounting and accounting principles used and significant estimates made by
  management, as well as evaluating the overall statement presentation.  We
  believe that our audit provides a reasonable basis for our opinion.
  The accompanying statements were prepared for the purpose of complying with the
  rules and regulations of the Securities and Exchange Commission, as described
  in Note 2, for inclusion in a Form 8-K of Parkway Properties, Inc. and are not
  intended to be a complete presentation of the Wells Fargo Building revenues and
  expenses.
  In our opinion, the statement of rental revenue and direct operating expenses
  referred to above presents fairly, in all material respects, the rental
  revenues and direct operating expenses described in Note 2 of the Wells Fargo
  Building for the year ended December 31, 2002, in conformity with accounting
  principles generally accepted in the United States.
  We have compiled the accompanying statement of rental revenues and direct
  operating expenses of the Wells Fargo Building for the six months ended June
  30, 2003 in accordance with the
  Statement
  on
  Standards for
  Accounting and Review Services
  issued by the American Institute of
  Certified Public Accountants. A compilation is limited to presenting in the
  form of a financial statement information that is the representation of
  management.  We have not audited or reviewed the statement of rental revenues
  and direct operating expenses of the Wells Fargo Building for the six months ended June 30, 2003 and, accordingly, do not express an opinion or any
  other form of assurance on the statement.
  Ernst & Young, LLP
  Jackson,
  Mississippi
  October
  29, 2003
  Wells Fargo Building
  Statements of Rental Revenues
  and Direct Operating Expenses
  Year Ended
  Six Months
    Ended
  December 31,
    2002
  June 30,
    2003
  (unaudited)
  Rental revenues:
  Minimum
    rents
  $  2,009,904
  $  1,092,894
  Reimbursed
    charges
  120,851
  26,848
  Other
    income
  117,945
  20,983
  2,248,700
  1,140,725
  Direct operating expenses:
  Administrative
    and miscellaneous expenses
  101,918
  52,159
  Salaries
    and wages
  93,555
  46,399
  Utilities
  225,531
  135,187
  Janitorial
    services and supplies
  124,124
  62,625
  Maintenance
    services and supplies
  109,037
  55,896
  Security
  56,491
  32,749
  Management
    fees
  71,754
  37,500
  Real
    estate taxes
  313,522
  159,554
  1,095,932
  582,069
  Excess of rental revenues over
    direct operating expenses
  $  1,152,768
  $    558,656
  See report of
  independent auditors and accompanying notes.
  Wells Fargo Building
  Notes to Statements of Rental Revenues
  and Direct Operating Expenses
  December 31, 2002 and June 30, 2003
  1.    Organization and Significant Accounting Policies
  Description of Property
  On September 12, 2003, Parkway Properties, Inc. ("Parkway") purchased the fee simple interest in
  the Wells Fargo Building located in the Northwest Freeway Corridor submarket of
  Houston, Texas from an unrelated party.  The Wells Fargo Building contains
  approximately 135,000 (unaudited) net rentable square feet of office space.
  Management's Use of Estimates
  The preparation of financial statements in conformity
  with accounting principles generally accepted in the United States requires
  management to make estimates and assumptions that affect the reported amounts
  of revenues and expenses during the reporting period.  Actual results could
  differ from those estimates.
  Rental Revenue
  Minimum rents from leases
  are accounted for ratably over the term of each lease.  Tenant reimbursements
  are recognized as revenue as the applicable services are rendered or expenses
  incurred.
  The future minimum rents on the Wells Fargo Building's non-cancelable operating
  leases at December 31, 2002 are as follows:
  Year
  Amount
  2003
  $  1,995,164
  2004
  2,041,677
  2005
  1,752,269
  2006
  1,578,589
  2007
  925,406
  Thereafter
  1,138,233
  $  9,431,338
  The above amounts do not include tenant reimbursements for utilities, taxes,
  insurance and common area maintenance.
  See report of independent auditors.
  As of December 31, 2002, Wells Fargo had two tenants
  that occupied 39% of the office space, approximately 26,000 square feet by each
  Gulf States Financial Services and Liberty Mutual Insurance, respectively.
  2.     Basis of Accounting
  The accompanying statements of rental revenues and direct operating expenses are
  presented on the accrual basis.  The statements have been prepared in
  accordance with the applicable rules and regulations of the Securities and
  Exchange Commission for real estate properties acquired.  Accordingly, the
  statements exclude certain expenses not comparable to the proposed future
  operations of the Wells Fargo Building such as depreciation and mortgage
  interest expense.  Management is not aware of any material factors relating to the
  Wells Fargo Building that would cause the reported financial information not to
  be necessarily indicative of future operating results.
  3.     Management Fees
  Management fees of approximately 3.5%
  of revenues received from the operations of the Wells Fargo Building were paid
  to an unrelated management company.
  See report of independent auditors.
  PARKWAY PROPERTIES, INC.
  Pro Forma Consolidated Financial Statements
  (Unaudited)
  The following unaudited pro forma
  consolidated balance sheet as of June 30, 2003 and pro forma consolidated
  statements of income of Parkway Properties, Inc. ("Parkway") for the
  year ended December 31, 2002 and six months ended June 30, 2003 give effect to the
  recent purchases of Parkway listed below for the periods stated.  The pro forma
  consolidated financial statements have been prepared by management of Parkway
  based upon the historical financial statements of Parkway and the adjustments
  and assumptions in the accompanying notes to the pro forma consolidated
  financial statements.
  The pro forma consolidated balance
  sheet sets forth the effect of Parkway's purchase of the Peachtree Dunwoody Pavilion
  and the Wells Fargo Building and Parkway's sale of the BB&T Financial
  Center as if they had been consummated on June 30, 2003.
  The pro forma consolidated statements
  of income set forth the effects of Parkway's purchases of the buildings listed
  below as if each had been consummated on January 1, 2002.
  Building
  Date of Purchase
  Citrus Center
  02/11/03
  Peachtree Dunwoody Pavilion
  08/28/03
  Wells Fargo Building
  09/12/03
  In addition to
  the purchases listed above, the pro forma consolidated statement of income sets
  forth the effect of the sale of 690,000 shares of common stock on March 24,
  2003 and the sale of the BB&T Financial Center on August 1, 2003 as if
  these transactions had occurred on January 1, 2002.
  These pro
  forma consolidated financial statements may not be indicative of the results
  that actually would have occurred if the transactions had occurred on the dates
  indicated or which may be obtained in the future.  The pro forma consolidated
  financial statements should be read in conjunction with the consolidated
  financial statements and notes of Parkway included in its annual report on Form
  10-K for the year ended December 31, 2002.
  PARKWAY PROPERTIES, INC.
  AND SUBSIDIARIES
  PRO
  FORMA CONSOLIDATED BALANCE SHEET
  June 30, 2003
  (Unaudited)
  Parkway
  Historical
  Pro Forma
  Adjustments (1-3)
  Parkway
  Pro Forma
  (In thousands)
  Assets
  Real
    estate related investments:
  Office
    and parking properties
  $  778,837
  $  25,876
  $  804,713
  Accumulated
    depreciation
  (107,772)
  4,463
  (103,309)
  671,065
  30,339
  701,404
  Land
    held for sale
  3,528
  -
  3,528
  Note
    receivable from Moore Building Associates LP
  5,996
  -
  5,996
  Mortgage
    loans
  866
  -
  866
  Investment
    in unconsolidated joint ventures
  20,036
  -
  20,036
  701,491
  30,339
  731,830
  Interest,
    rents receivable and other assets
  30,221
  (863)
  29,358
  Cash
    and cash equivalents
  2,955
  -
  2,955
  $  734,667
  $  29,476
  $  764,143
  Liabilities
  Notes
    payable to banks
  $    67,918
  $  36,204
  $  104,122
  Mortgage
    notes payable without recourse
  239,822
  (11,269)
  228,553
  Accounts
    payable and other liabilities
  31,117
  (626)
  30,491
  338,857
  24,309
  $  363,166
  Stockholders'
    Equity
  8.34%
    Series B Cumulative Convertible Preferred
  stock,
    $.001 par value, 2,142,857 shares authorized,
  issued
    and outstanding
  75,000
  -
  75,000
  Series
    C Preferred stock, $.001 par value, 400,000 shares
  authorized,
    no shares issued
  -
  -
  -
  8.00%
    Series D Preferred stock, $.001 par value,
  2,400,000
    shares authorized, issued and outstanding
  58,094
  -
  58,094
  Common
    stock, $.001 par value, 65,057,143 shares
  authorized,
    10,327,395 shares issued  and outstanding
  10
  -
  10
  Excess
    stock, $.001 par value, 30,000,000 shares authorized,
  no
    shares issued
  -
  -
  -
  Common
    stock held in trust, at cost, 128,000 shares
  (4,321)
  -
  (4,321)
  Additional
    paid-in capital
  234,889
  -
  234,889
  Unearned
    compensation
  (4,313)
  -
  (4,313)
  Accumulated
    other comprehensive loss
  (110)
  -
  (110)
  Retained
    earnings
  36,561
  5,167
  41,728
  395,810
  5,167
  400,977
  $  734,667
  $  29,476
  $  764,143
  See accompanying notes
  PARKWAY PROPERTIES, INC. AND SUBSIDIARIES
  PRO FORMA CONSOLIDATED STATEMENT OF INCOME
  FOR THE YEAR ENDED DECEMBER 31, 2002
  (Unaudited)
  Parkway
  Historical
  Pro Forma
  Adjustments (4)
  Parkway
  Pro Forma
  (In thousands, except per share
    data)
  Revenues
  Income from office and parking  properties
  $152,442
  $  10,885
  (a)
  $163,327
  Management company income
  1,197
  327
  (e)
  1,524
  Interest on note receivable from Moore Building
    Associates LP
  895
  -
  895
  Incentive management fee from Moore Building
    Associates LP
  325
  -
  325
  Other income and deferred gains
  401
  -
  401
  Total Revenues
  155,260
  11,212
  166,472
  Expenses
  Office and parking properties:
  Operating
    expense
  65,942
  5,549
  (a)
  71,491
  Interest
    expense:
  Contractual
  18,766
  389
  (c)
  19,155
  Prepayment
    expenses
  833
  -
  833
  Amortization
    of loan costs
  240
  (6)
  (c)
  234
  Depreciation
    and amortization
  27,412
  1,172
  (a)
  28,584
  Operating expense for other real estate properties
  34
  -
  34
  Interest expense on bank notes:
  Contractual
  6,055
  298
  (d)
  6,353
  Amortization
    of loan costs
  592
  -
  592
  Management company expenses
  416
  -
  416
  General and administrative
  5,029
  141
  (e)
  5,170
  Total Expenses
  125,319
  7,543
  132,862
  Income before equity in earnings,  gain (loss) , minority
    interest
  and discontinued 
    operations
  29,941
  3,669
  33,610
  Equity in earnings of unconsolidated joint ventures
  824
  -
  824
  Gain (loss) on sale of joint venture interest and real
    estate
  (474)
  4,195
  (e)
  3,721
  Impairment loss on office property
  (1,594)
  -
  (1,594)
  Minority interest - unit holders
  (2)
  -
  (2)
  Income before discontinued operations
  28,695
  7,864
  36,559
  Discontinued operations:
  Income from
    discontinued operations
  47
  -
  47
  Gain on sale
    of real estate from discontinued operations
  770
  -
  770
  Net income
  29,512
  7,864
  37,376
  Change in market value of interest rate swap
  1,524
  -
  1,524
  Comprehensive income
  $  31,036
  $    7,864
  $  38,900
  Net income available to common stockholders:
  Net income
  $  29,512
  $    7,864
  $  37,376
  Dividends on preferred stock
  (5,797)
  -
  (5,797)
  Dividends on convertible preferred stock
  (6,257)
  -
  (6,257)
  Net income available to common stockholders
  $  17,458
  $    7,864
  $  25,322
  Net income per common share:
  Basic:
  Income before discontinued operations
  $      1.78
  -
  $      2.45
  Discontinued operations
  .09
  -
  .08
  Net income
  $      1.87
  -
  $      2.53
  (6)
  Diluted:
  Income before discontinued operations
  $      1.75
  -
  $      2.41
  Discontinued operations
  .09
  -
  .08
  Net income
  $      1.84
  -
  $      2.49
  (6)
  Dividends per common share
  $      2.56
  $      2.56
  Weighted average shares outstanding:
  Basic
  9,312
  690
  10,002
  (6)
  Diluted
  9,480
  690
  10,170
  (6)
  See accompanying notes.
  PARKWAY PROPERTIES, INC. AND SUBSIDIARIES
  PRO FORMA CONSOLIDATED STATEMENT OF INCOME
  FOR THE SIX MONTHS ENDED JUNE 30, 2003
  (Unaudited)
  Parkway
  Historical
  Pro Forma
  Adjustments (4)
  Parkway
  Pro Forma
  (In thousands, except per share data)
  Revenues
  Income from office and parking  properties
  $  72,219
  $    2,890
  (b)
  $  75,109
  Management company income
  1,142
  61
  (e)
  1,203
  Interest on note receivable from Moore Building Associates LP
  406
  -
  406
  Incentive management fee from Moore Building Associates LP
  155
  -
  155
  Other income and deferred gains
  487
  -
  487
  Total Revenues
  74,409
  2,951
  77,360
  Expenses
  Office and parking properties:
  Operating expense
  32,379
  1,444
  (b)
  33,823
  Interest expense:
  Contractual
  8,026
  (275)
  (c)
  7,751
  Amortization
    of loan costs
  132
  (3)
  (c)
  129
  Depreciation and
    amortization
  13,952
  295
  (b)
  14,247
  Operating expense for other real estate properties
  20
  -
  20
  Interest expense on bank notes:
  Contractual
  1,523
  35
  (d)
  1,558
  Amortization
    of loan costs
  364
  -
  364
  Management company expenses
  241
  -
  241
  General and administrative
  2,144
  61
  (e)
  2,205
  Total Expenses
  58,781
  1,557
  60,338
  Income before equity in earnings, gain and
  minority interest
  15,628
  1,394
  17,022
  Equity in earnings of unconsolidated joint ventures
  1,054
  -
  1,054
  Gain  on sale of joint venture interest and real estate
  5,641
  -
  5,641
  Minority interest - unit holders
  (1)
  -
  (1)
  Net Income
  22,322
  1,394
  23,716
  Change in market value of interest rate swap
  60
  -
  60
  Comprehensive income
  $  22,382
  $    1,394
  $  23,776
  Net income available to common stockholders:
  Net income
  $  22,322
  $    1,394
  $  23,716
  Original issue costs associated with redemption of preferred stock
  (2,619)
  -
  (2,619)
  Dividends on preferred stock
  (2,952)
  -
  (2,952)
  Dividends on convertible preferred stock
  (3,128)
  -
  (3,128)
  Net income available to common stockholders
  $  13,623
  $    1,394
  $  15,017
  Net income per common share:
  Basic
  $      1.38
  -
  $      1.48
  (6)
  Diluted
  $      1.36
  -
  $      1.45
  (6)
  Dividends per common share
  $      1.30
  -
  $      1.30
  Weighted average shares outstanding:
  Basic
  9,839
  312
  10,151
  (6)
  Diluted
  10,039
  312
  10,351
  (6)
  See accompanying notes
  PARKWAY PROPE
  RTIES, INC.
  Notes to Pro Forma Consolidated Financial Statements
  (Unaudited)
  1.       On August 1,
  2003, the Company sold its investment in the BB&T Financial Center in
  Winston-Salem, North Carolina to an unrelated third party for $27.5 million
  plus the assumption of future tenant improvements of approximately $500,000. 
  Parkway will continue to manage and lease the property under a ten-year
  management agreement and received an acquisition fee of $186,000.  The Company
  expects to record a gain for financial reporting purposes of approximately $5
  million on the sale in the third quarter of 2003.  The taxable gain from this
  transaction will be deferred through a Section 1031 like-kind exchange and,
  accordingly, no special dividend of the capital gain will be required. 
  Proceeds of $11,201,000 were applied toward the early extinguishment of the
  7.3% mortgage secured by the BB&T Financial Center and the remaining
  proceeds were applied toward the purchase of the Peachtree Dunwoody Pavilion.
  2.       On August
  28, 2003, the Company purchased the fee simple interest in the Peachtree
  Dunwoody Pavilion office building located at 5575 Peachtree Dunwoody Road NE in
  Atlanta, Georgia for $40 million.  The total purchase price, including closing
  costs, anticipated first year capital expenditures and leasing commissions, is
  expected to be approximately $42 million.
  3.        On
  September 12, 2003, the Company purchased the fee simple interest in the Wells
  Fargo Building located n the Northwest Freeway Corridor submarket of Houston,
  Texas for $12 million.  The total purchase price, including closing costs,
  anticipated first year capital expenditures and leasing commissions, is
  expected to be approximately $13 million.
  4.       The pro
  forma adjustments to the Consolidated Statement of Income for the year ended
  December 31, 2002 and six months ended June 30, 2003 set forth the effects of Parkway's
  purchase of the following buildings as if they had been consummated on January 1,
  2002.
  Date of
  Building
  Purchase
  Citrus
    Center
  02/11/03
  Peachtree
    Dunwoody Pavilion
  08/28/03
  Wells
    Fargo Building
  09/12/03
  These
  pro forma adjustments are detailed below for the year ended December 31, 2002
  and six months ended June 30, 2003.
  The
  effect on income and expenses from real estate properties is as follows (in
  thousands):
  (a)   For
  the year ended December 31, 2002:
  Revenue
  Expenses
  Income From
  Real Estate Owned
  Real Estate
  Operating
  Depreciation
  Properties
  Expense
  Expense
  Citrus
    Center
  $    6,033
  $  2,841
  $      741
  Sale
    of BB&T Financial Center
  (4,670)
  (1,586)
  (739)
  Peachtree
    Dunwoody Pavilion
  7,273
  3,198
  900
  Wells
    Fargo Building
  2,249
  1,096
  270
  $  10,885
  $  5,549
  $  1,172
  Depreciation is provided by the
  straight-line method over the estimated useful life (40 years for buildings and
  5 - 15 years for building improvements).
  (b)   For the six
  months ended June 30, 2003:
  Revenue
  Expenses
  Income From
  Real Estate Owned
  Real Estate
  Operating
  Depreciation
  Properties
  Expense
  Expense
  Citrus
    Center
  $     626
  $     159
  $    83
  Sale
    of BB&T Financial Center
  (2,268)
  (786)
  (373)
  Peachtree
    Dunwoody Pavilion
  3,391
  1,489
  450
  Wells
    Fargo Building
  1,141
  582
  135
  $  2,890
  $  1,444
  $  295
  Depreciation
  is provided by the straight-line method over the estimated useful life (40
  years for buildings and 5 - 15 years for building improvements).
  (c)   Pro
  forma interest expense on real estate owned reflects interest and loan cost
  amortization on non-recourse debt assumed upon purchase and the extinguishment
  of debt from the sale proceeds of the BB&T Financial Center as if in place
  January 1, 2002 and is detailed below (in thousands).
  Six
  Property/Placement
  Year Ended
  Months Ended
  Date/Rate
  Debt
  12/31/02
  06/30/03
  Debt assumed in Citrus Center purchase
  02/03    6.00%
  $    21,153
  $1,269
  $    143
  Proceeds from sale of BB&T Financial Center
  08/03    7.30%
  (11,201)
  (886)
  (421)
  $      9,952
  $   383
  $  (278)
  (d)   The
  pro forma effect of the Citrus Center Purchase and the Wells Fargo Building
  Purchase on interest expense on notes payable to banks was $298,000 for the
  year ended December 31, 2002 and $35,000 for the six months ended June 30, 2003.
  (e)   The
  pro forma effect of the sale of the BB&T Financial Center on gain on sale
  of real estate is $4,195,000 for the year ended December 31, 2002.  The pro
  forma effect of the acquisition fee earned on the sale of the BB&T Financial
  Center on management company income is $186,000 for the year ended December 31,
  2002.
  5.       No
  additional income tax expenses were provided because of the Company's net
  operating loss carryover and status as a REIT.
  6.       Diluted net income per share for
  the year ended December 31, 2002 and six months ended June 30, 2003 were $1.84
  and $1.36, respectively, based on diluted weighted average shares outstanding
  of 9,480,000 and 10,039,000, respectively.
  Pro Forma diluted
  net income per share for the year ended December 31, 2002 and the six months
  ended June 30, 2003 reflect the sale of 690,000 shares of common stock on March
  24, 2003 as if the shares had been sold on January 1, 2002 and was $2.49 and $1.45,
  respectively, based on pro forma diluted weighted average shares outstanding of
  10,170,000 and 10,351,000, respectively.
  F
  ORM 8-K
  PARKWAY PROPERTIES, INC.
  SIGNATURES
  Pursuant to
  the requirements of the Securities Exchange Act of 1934, the Registrant has
  duly caused this report to be signed on its behalf by the undersigned hereunto
  duly authorized.
  DATE:   October
    31, 2003
  PARKWAY
    PROPERTIES, INC.
  BY:
  /s/ Mandy
    M. Pope
  Mandy
    M. Pope, CPA
  Chief
    Accounting Officer