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  <title>UNITED STATES</title>
  
  
  
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  <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'><b>UNITED STATES</b></p>
  
  <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'><b>SECURITIES AND EXCHANGE COMMISSION</b></p>
  
  <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'>Washington, D.C. 20549</p>
  
  
  
  <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'><b><u>__________________________</u></b></p>
  
  
  
  <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'>&nbsp;</p>
  
  
  
  <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'><b>FORM 8-K</b></p>
  
  <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'><b>&nbsp;</b></p>
  
  <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'>Current Report</p>
  
  <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'>Pursuant to Section 13 or 15(d) of the Securities
  Exchange Act of 1934</p>
  
  
  
  
  
  <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'>&nbsp;</p>
  
  
  
  
  
  <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'>Date of Report (date of earliest event reported):&nbsp; January
  5, 2005</p>
  
  
  
  
  
  <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'>&nbsp;</p>
  
  
  
  
  
  <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'><b><u>PARKWAY PROPERTIES, INC</u></b><u>.</u></p>
  
  <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'>(Exact Name of Registrant as Specified in its Charter)</p>
  
  
  
  
  
  <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'>&nbsp;</p>
  
  
  
  
  
  <p class=MsoNormal style="margin-top: 0; margin-bottom: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Maryland</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>1-11533</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>74-2123597</u></p>
  
  <p class=MsoNormal style="margin-top: 0; margin-bottom: 0">&nbsp;&nbsp;&nbsp; (State or Other
  Jurisdiction &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (Commission File Number) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (IRS
  Employer</p>
  
  <p class=MsoNormal style="margin-top: 0; margin-bottom: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; of Incorporation)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Identification
  No.)</p>
  
  
  
  <p class=MsoNormal style="margin-top: 0; margin-bottom: 0">&nbsp;</p>
  
  
  
  <p class=MsoNormal align=center style='margin-left:4.5pt;text-align:center; margin-top:0; margin-bottom:0'><u>One Jackson Place, Suite 1000, 188 East Capitol
  Street, Jackson, MS 39225-4647</u></p>
  
  <p class=MsoNormal align=center style='margin-left:4.5pt;text-align:center; margin-top:0; margin-bottom:0'>(Address of Principal Executive Offices, including zip
  code)</p>
  
  
  
  <p class=MsoNormal align=center style='margin-left:4.5pt;text-align:center; margin-top:0; margin-bottom:0'>&nbsp;</p>
  
  
  
  <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'><u>(601) 948-4091</u></p>
  
  <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'>(Registrant's telephone number, including area code)</p>
  
  
  
  <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'>&nbsp;</p>
  
  
  
  <p class=MsoNormal align=center style='margin-left:4.5pt;text-align:center; margin-top:0; margin-bottom:0'><u>Not Applicable</u></p>
  
  <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'>(Former name or former address, if changed since last
  report)</p>
  
  
  
  <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'>&nbsp;</p>
  
  
  
  <p class=MsoNormal style='text-indent:.5in; margin-top:0; margin-bottom:0'>Check
  the appropriate box below if the Form 8-K filing is intended to simultaneously
  satisfy the filing obligation of the registrant under any of the following
  provisions (see General Instruction A.2. below):</p>
  
  
  
  <p class=MsoNormal style='text-indent:.5in; margin-top:0; margin-bottom:0'>&nbsp;</p>
  
  
  
  <p class=MsoNormal style='margin-left:.5in;text-indent:-.5in; margin-top:0; margin-bottom:0'>
  <font face="Wingdings">o</font>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Written
  communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</p>
  
  <p class=MsoNormal style='margin-left:.5in;text-indent:-.5in; margin-top:0; margin-bottom:0'>
  <font face="Wingdings">o</font>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Soliciting
  material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</p>
  
  <p class=MsoNormal style='margin-left:.5in;text-indent:-.5in; margin-top:0; margin-bottom:0'>
  <font face="Wingdings">o</font>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Pre-commencement
  communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
  240.14d-2(b))</p>
  
  <p class=MsoNormal style='margin-left:.5in;text-indent:-.5in; margin-top:0; margin-bottom:0'>
  <font face="Wingdings">o</font>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Pre-commencement
  communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
  240.13e-4(c))</p>
  
  
  
  <hr color="#000080">
  <p style="margin-top: 0; margin-bottom: 0"><br clear=all
  style='page-break-before:always'>
  
  
  </p>
  
  
  <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'><b>FORM 8-K<br>
  <br>
  PARKWAY PROPERTIES, INC.</b></p>
  
  <p class=MsoNormal style="margin-top: 0; margin-bottom: 0"><b><br>
  <br>
  Item 1.01.&nbsp; Entry into a Material Definitive Agreement</b></p>
  
  
  
  <p class=MsoNormal style="margin-top: 0; margin-bottom: 0">&nbsp;</p>
  
  
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; On
  January 5, 2005, Parkway Properties, Inc. (the &quot;Company&quot;) entered into an agreement
  to purchase the 70% interest held by Investcorp International, Inc., its joint
  venture partner, in the property known as 233
    North Michigan Avenue in Chicago, Illinois.
  Under the terms of the agreement Parkway will purchase the interest for a price
  equal to approximately $136 million.&nbsp; The Company will close the investment in
  two stages.&nbsp; The Company is scheduled to close 90% of the purchase in
  mid-January.&nbsp; The second closing will occur following lender and rating agency
  approval, which is expected within ninety days. At closing the Company will
  also earn a $400,000 incentive fee from Investcorp based upon the economic
  returns generated over the life of the partnership. The purchase will be funded
  via a combination of sources including the assumption of an existing first
  mortgage, borrowings on the Company's existing lines of credit, proceeds from a
  December 2004 joint venture sale and proceeds from the issuance of securities. </p>
  
  
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>&nbsp;</p>
  
  
  
  <p class=MsoBodyText style="margin-top: 0; margin-bottom: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The building contains 1,070,000 rentable
  square feet, which includes office, retail and storage space and an adjacent
  four-level structured parking garage.&nbsp; In connection with the purchase, Parkway
  will assume the first mortgage with a current balance of approximately $100 million,
  a fixed interest rate of 7.21% and a maturity date of July 2011.&nbsp; In accordance
  with generally accepted accounting principles the mortgage will be recorded to
  reflect the fair value of the financial instrument based on the approximate
  market rate of 4.9% on the date of purchase. An offset to the interest rate
  adjustment will be the amortization of the existing above market rental rates
  to current market. The Company expects these two financial entries to
  approximately offset one another for generally accepted accounting principle
  purposes in 2005.</p>
  
  
  
  <hr color="#000080">
  <p style="margin-top: 0; margin-bottom: 0"><br clear=all style='page-break-before:always'>
  
  
  </p>
  
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'><b>Item
  9.01.&nbsp; Financial Statements and Exhibits.</b></p>
  
  
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>&nbsp;</p>
  
  
  
  <table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=660
   style='width:495.05pt;border-collapse:collapse'>
   <tr>
    <td width=605 valign=top style='width:453.7pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Financial
    Statements</p>
    </td>
    <td width=55 valign=top style='width:41.35pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right; margin-top:0; margin-bottom:0'><b>&nbsp;</b></p>
    </td>
   </tr>
   <tr>
    <td width=605 valign=top style='width:453.7pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=55 valign=top style='width:41.35pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right; margin-top:0; margin-bottom:0'><b>&nbsp;</b></p>
    </td>
   </tr>
   <tr>
    <td width=605 valign=top style='width:453.7pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    following audited financial statement of 233 North Michigan for the year
    ended December 31, 2003 is attached hereto.&nbsp; Also included is the unaudited
    financial statement for the nine months ended September 30, 2004:</p>
    </td>
    <td width=55 valign=top style='width:41.35pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right; margin-top:0; margin-bottom:0'><b>&nbsp;</b></p>
    </td>
   </tr>
   <tr>
    <td width=605 valign=top style='width:453.7pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=55 valign=top style='width:41.35pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right; margin-top:0; margin-bottom:0'><b>Page</b></p>
    </td>
   </tr>
   <tr>
    <td width=605 valign=top style='width:453.7pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Report
    of Independent Auditors</p>
    </td>
    <td width=55 valign=top style='width:41.35pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right; margin-top:0; margin-bottom:0'>4</p>
    </td>
   </tr>
   <tr>
    <td width=605 valign=top style='width:453.7pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Statements
    of Rental Revenues and Direct Operating Expenses</p>
    </td>
    <td width=55 valign=top style='width:41.35pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right; margin-top:0; margin-bottom:0'>5</p>
    </td>
   </tr>
   <tr>
    <td width=605 valign=top style='width:453.7pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notes
    to Statements of Rental Revenues and Direct Operating Expenses</p>
    </td>
    <td width=55 valign=top style='width:41.35pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right; margin-top:0; margin-bottom:0'>6</p>
    </td>
   </tr>
   <tr>
    <td width=605 valign=top style='width:453.7pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=55 valign=top style='width:41.35pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right; margin-top:0; margin-bottom:0'><b>&nbsp;</b></p>
    </td>
   </tr>
   <tr>
    <td width=605 valign=top style='width:453.7pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    following unaudited Pro Forma Consolidated Financial Statements of Parkway
    for the year ended December 31, 2003 and the nine months ended September 30,
    2004 are attached hereto:</p>
    </td>
    <td width=55 valign=top style='width:41.35pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
   </tr>
   <tr>
    <td width=605 valign=top style='width:453.7pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=55 valign=top style='width:41.35pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right; margin-top:0; margin-bottom:0'><b>Page</b></p>
    </td>
   </tr>
   <tr>
    <td width=605 valign=top style='width:453.7pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pro
    Forma Consolidated Financial Statements (Unaudited)</p>
    </td>
    <td width=55 valign=top style='width:41.35pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right; margin-top:0; margin-bottom:0'>8</p>
    </td>
   </tr>
   <tr>
    <td width=605 valign=top style='width:453.7pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pro
    Forma Consolidated Balance Sheet (Unaudited) - As of September 30, 2004</p>
    </td>
    <td width=55 valign=top style='width:41.35pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right; margin-top:0; margin-bottom:0'>9</p>
    </td>
   </tr>
   <tr>
    <td width=605 valign=top style='width:453.7pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pro
    Forma Consolidated Statement of Income (Unaudited) - </p>
    </td>
    <td width=55 valign=top style='width:41.35pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
   </tr>
   <tr>
    <td width=605 valign=top style='width:453.7pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
    the Year Ended December 31, 2003</p>
    </td>
    <td width=55 valign=top style='width:41.35pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right; margin-top:0; margin-bottom:0'>10</p>
    </td>
   </tr>
   <tr>
    <td width=605 valign=top style='width:453.7pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pro
    Forma Consolidated Statement of Income (Unaudited) -</p>
    </td>
    <td width=55 valign=top style='width:41.35pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
   </tr>
   <tr>
    <td width=605 valign=top style='width:453.7pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
    the Nine Months Ended September 30, 2004</p>
    </td>
    <td width=55 valign=top style='width:41.35pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right; margin-top:0; margin-bottom:0'>11</p>
    </td>
   </tr>
   <tr>
    <td width=605 valign=top style='width:453.7pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notes
    to Pro Forma Consolidated Financial Statements (Unaudited)</p>
    </td>
    <td width=55 valign=top style='width:41.35pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right; margin-top:0; margin-bottom:0'>12</p>
    </td>
   </tr>
   <tr>
    <td width=605 valign=top style='width:453.7pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=55 valign=top style='width:41.35pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
   </tr>
   <tr>
    <td width=605 valign=top style='width:453.7pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exhibits</p>
    </td>
    <td width=55 valign=top style='width:41.35pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
   </tr>
   <tr>
    <td width=605 valign=top style='width:453.7pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1&nbsp;&nbsp;&nbsp;&nbsp;Purchase
    Agreement between Parkway Properties LP and 233 Chicagoinvest, Inc.</p>
    </td>
    <td width=55 valign=top style='width:41.35pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
   </tr>
   <tr>
    <td width=605 valign=top style='width:453.7pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.1&nbsp;&nbsp;&nbsp;&nbsp;Consent
    of Ernst &amp; Young LLP</p>
    </td>
    <td width=55 valign=top style='width:41.35pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
   </tr>
   <tr>
    <td width=605 valign=top style='width:453.7pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=55 valign=top style='width:41.35pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
   </tr>
  </table>
  
  <b><hr color="#000080">
  <p style="margin-top: 0; margin-bottom: 0"><br clear=all
  style='page-break-before:always'>
  </b>
  
  </p>
  
  <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'><b>&nbsp;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; margin-top:0; margin-bottom:0'><br>
  We have audited the accompanying statement of rental revenues and direct
  operating expenses of 233 North Michigan for the year ended December 31, 2003.&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; margin-top:0; margin-bottom:0'><br>
  We conducted our audit in accordance with auditing standards of the Public
  Company Accounting Oversight Board (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; margin-top:0; margin-bottom:0'><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 233 North Michigan's revenues and
  expenses. </p>
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'><br>
  In our opinion, the statement of rental revenues 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 233 North
  Michigan for the year ended December 31, 2003, in conformity with accounting principles generally accepted in the United States.</p>
  
  
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>&nbsp;</p>
  
  
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>The accompanying financial statements for 2004 were not
  audited by us and, accordingly, we do not express an opinion on them.</p>
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'><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">New
  Orleans, Louisiana</p>
  
  <p class=MsoNormal style="margin-top: 0; margin-bottom: 0">January
  3, 2005</p>
  
  <hr color="#000080">
  <p style="margin-top: 0; margin-bottom: 0"><br clear=all style='page-break-before:always'>
  
  
  </p>
  
  
  <p class=MsoEndnoteText align=center style='text-align:center;line-height:-100%; margin-top:0; margin-bottom:0'><b>233 North Michigan<br>
  <br>
  Statements of Rental Revenues<br>
  and Direct Operating Expenses</b></p>
  
  <p class=MsoEndnoteText align=center style='text-align:center;line-height:-100%; margin-top:0; margin-bottom:0'>(in thousands)</p>
  
  <p class=MsoNormal style='line-height:-100%; margin-top:0; margin-bottom:0'><b><br>
  <br>
  </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%; margin-top:0; margin-bottom:0'><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%; margin-top:0; margin-bottom:0'><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%; margin-top:0; margin-bottom:0'><b>
    <font size="2">Nine 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%; margin-top:0; margin-bottom:0'><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%; margin-top:0; margin-bottom:0'><b>
    <font size="2">December 31, 2003</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%; margin-top:0; margin-bottom:0'><b>
    <font size="2">September 30,
     2004</font></b></p>
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=145 valign=top style='width:108.75pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <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%; margin-top:0; margin-bottom:0'>
    <font size="2">Rental revenues:</font></p>
    </td>
    <td width=145 valign=top style='width:108.75pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <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:31.85pt;text-align:right;
    line-height:-100%; margin-top:0; margin-bottom:0'><font size="2">$&nbsp;&nbsp;20,767</font></p>
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:38.15pt;text-align:right;
    line-height:-100%; margin-top:0; margin-bottom:0'><font size="2">$&nbsp;&nbsp;13,956</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%; margin-top:0; margin-bottom:0'>
    <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:31.85pt;text-align:right;
    line-height:-100%; margin-top:0; margin-bottom:0'><font size="2">11,878</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:38.15pt;text-align:right;
    line-height:-100%; margin-top:0; margin-bottom:0'><font size="2">9,018</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%; margin-top:0; margin-bottom:0'>
    <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Parking income</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:31.85pt;text-align:right;
    line-height:-100%; margin-top:0; margin-bottom:0'><font size="2">1,488</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:38.15pt;text-align:right;
    line-height:-100%; margin-top:0; margin-bottom:0'><font size="2">1,130</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%; margin-top:0; margin-bottom:0'>
    <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:31.85pt;text-align:right;
    line-height:-100%; margin-top:0; margin-bottom:0'><font size="2">490</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:38.15pt;text-align:right;
    line-height:-100%; margin-top:0; margin-bottom:0'><font size="2">993</font></p>
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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:31.85pt;text-align:right;
    line-height:-100%; margin-top:0; margin-bottom:0'><font size="2">34,623</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:38.15pt;text-align:right;
    line-height:-100%; margin-top:0; margin-bottom:0'><font size="2">25,097</font></p>
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=145 valign=top style='width:108.75pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <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'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <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:31.85pt;text-align:right;
    line-height:-100%; margin-top:0; margin-bottom:0'><font size="2">373</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:38.15pt;text-align:right;
    line-height:-100%; margin-top:0; margin-bottom:0'><font size="2">377</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%; margin-top:0; margin-bottom:0'>
    <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:31.85pt;text-align:right;
    line-height:-100%; margin-top:0; margin-bottom:0'><font size="2">925</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:38.15pt;text-align:right;
    line-height:-100%; margin-top:0; margin-bottom:0'><font size="2">656</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%; margin-top:0; margin-bottom:0'>
    <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:31.85pt;text-align:right;
    line-height:-100%; margin-top:0; margin-bottom:0'><font size="2">1,610</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:38.15pt;text-align:right;
    line-height:-100%; margin-top:0; margin-bottom:0'><font size="2">1,212</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%; margin-top:0; margin-bottom:0'>
    <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:31.85pt;text-align:right;
    line-height:-100%; margin-top:0; margin-bottom:0'><font size="2">1,181</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:38.15pt;text-align:right;
    line-height:-100%; margin-top:0; margin-bottom:0'><font size="2">942</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%; margin-top:0; margin-bottom:0'>
    <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:31.85pt;text-align:right;
    line-height:-100%; margin-top:0; margin-bottom:0'><font size="2">1,091</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:38.15pt;text-align:right;
    line-height:-100%; margin-top:0; margin-bottom:0'><font size="2">775</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%; margin-top:0; margin-bottom:0'>
    <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:31.85pt;text-align:right;
    line-height:-100%; margin-top:0; margin-bottom:0'><font size="2">826</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:38.15pt;text-align:right;
    line-height:-100%; margin-top:0; margin-bottom:0'><font size="2">559</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%; margin-top:0; margin-bottom:0'>
    <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Insurance</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:31.85pt;text-align:right;
    line-height:-100%; margin-top:0; margin-bottom:0'><font size="2">518</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:38.15pt;text-align:right;
    line-height:-100%; margin-top:0; margin-bottom:0'><font size="2">406</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%; margin-top:0; margin-bottom:0'>
    <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:31.85pt;text-align:right;
    line-height:-100%; margin-top:0; margin-bottom:0'><font size="2">1,263</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:38.15pt;text-align:right;
    line-height:-100%; margin-top:0; margin-bottom:0'><font size="2">880</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%; margin-top:0; margin-bottom:0'>
    <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:31.85pt;text-align:right;
    line-height:-100%; margin-top:0; margin-bottom:0'><font size="2">7,640</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:38.15pt;text-align:right;
    line-height:-100%; margin-top:0; margin-bottom:0'><font size="2">5,508</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 style="margin-top: 0; margin-bottom: 0">
  
    </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:31.85pt;text-align:right;
    line-height:-100%; margin-top:0; margin-bottom:0'><font size="2">15,427</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:38.15pt;text-align:right;
    line-height:-100%; margin-top:0; margin-bottom:0'><font size="2">11,315</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%; margin-top:0; margin-bottom:0'>
    <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:31.85pt;text-align:right;
    line-height:-100%; margin-top:0; margin-bottom:0'><font size="2">$&nbsp;19,196</font></p>
    </td>
    <td width=164 valign=top style='width:123.3pt;border:none;border-bottom:double windowtext 1.5pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:38.15pt;text-align:right;
    line-height:-100%; margin-top:0; margin-bottom:0'><font size="2">$&nbsp;13,782</font></p>
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=145 valign=top style='width:108.75pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=164 valign=top style='width:123.3pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=145 valign=top style='width:108.75pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=145 valign=top style='width:108.75pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
   </tr>
   <tr>
    <td width=368 valign=top style='width:276.25pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=145 valign=top style='width:108.75pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=164 valign=top style='width:123.3pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
   </tr>
  </table>
  
  </div>
  
  
  
  <p class=MsoNormal align=center style='text-align:center;line-height:-100%; margin-top:0; margin-bottom:0'>
  <br>
  <br>
  <br>
  <br>
  <i>See report of
  independent auditors and accompanying notes.</i><hr color="#000080">
  <p style="margin-top: 0; margin-bottom: 0" align="center"><br clear=all style='page-break-before:always'>
  <b>233 North Michigan<br>
  Notes to Statements of Rental Revenues<br>
  and Direct Operating Expenses<br>
  </b><br>
  <b>December 31, 2003</b></p>
  <p style="margin-top: 0; margin-bottom: 0"></p>
  
  <p class=MsoNormal style="margin-top: 0; margin-bottom: 0"><br>
  <b>1.&nbsp;&nbsp;&nbsp;&nbsp;Organization and Significant Accounting Policies</b></p>
  
  <p class=MsoNormal style="margin-top: 0; margin-bottom: 0"><br>
  <b>Description of Property</b></p>
  
  <p class=MsoNormal style='text-align:justify;line-height:12.0pt; margin-top:0; margin-bottom:0'><br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
  January 5, 2005, Parkway Properties, Inc. (&quot;Parkway&quot;) entered into an
  agreement to acquire the remaining 70% interest in its investment in 233 North
  Michigan Avenue in Chicago (&quot;233 North Michigan&quot;) from Investcorp
  International, Inc., Parkway's joint venture partner.&nbsp; Under the terms of the
  agreement Parkway will purchase an equity interest in a subsidiary limited
  liability company that owns the property for a price equal to approximately $136
  million.&nbsp; The Company will close the
  investment in two stages.&nbsp; The Company is scheduled to close 90% of the
  purchase in mid-January.&nbsp; The second closing will occur following lender and
  rating agency approval, which is expected within ninety days. The building contains 1,070,000 rentable square feet,
  which includes office, retail and storage space and an adjacent four-level
  structured parking garage.&nbsp; In connection with the purchase, Parkway will
  assume the first mortgage with a current balance of approximately $100 million,
  a fixed interest rate of 7.21% and a maturity date of July 2011.&nbsp; &nbsp;Parkway plans
  to fund the purchase through its bank lines of credit, proceeds from a December
  2004 joint venture sale and proceeds from the issuance of securities.</p>
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>
  <b>Management's Use of Estimates</b></p>
  
  
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>&nbsp;</p>
  
  
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>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; margin-top:0; margin-bottom:0'>&nbsp;</p>
  
  
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'><b>Rental
  Revenue</b></p>
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'><br>
  Minimum rents from leases
  are recognized as revenue 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 style='text-align:justify; margin-top:0; margin-bottom:0'><br>
  The future minimum rents for 233 North Michigan's non-cancelable operating
  leases at December&nbsp;31, 2003 are as follows (in thousands):</p>
  
  
  
  <div align=center>
  
  <table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
   style='border-collapse:collapse'>
   <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; margin-top:0; margin-bottom:0'><b>Year</b></p>
    </td>
    <td width=77 valign=top style='width:57.8pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'><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; margin-top:0; margin-bottom:0'>2004</p>
    </td>
    <td width=77 valign=top style='width:57.8pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right; margin-top:0; margin-bottom:0'>$ &nbsp;19,870</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; margin-top:0; margin-bottom:0'>2005</p>
    </td>
    <td width=77 valign=top style='width:57.8pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right; margin-top:0; margin-bottom:0'>20,338</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; margin-top:0; margin-bottom:0'>2006</p>
    </td>
    <td width=77 valign=top style='width:57.8pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right; margin-top:0; margin-bottom:0'>18,932</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; margin-top:0; margin-bottom:0'>2007</p>
    </td>
    <td width=77 valign=top style='width:57.8pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right; margin-top:0; margin-bottom:0'>15,180</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; margin-top:0; margin-bottom:0'>2008</p>
    </td>
    <td width=77 valign=top style='width:57.8pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right; margin-top:0; margin-bottom:0'>15,216</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; margin-top:0; margin-bottom:0'>Thereafter</p>
    </td>
    <td width=77 valign=top style='width:57.8pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right; margin-top:0; margin-bottom:0'>46,581</p>
    </td>
   </tr>
   <tr>
    <td width=87 valign=top style='width:65.2pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=77 valign=top style='width:57.8pt;border:none;border-bottom:double windowtext 2.25pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right; margin-top:0; margin-bottom:0'>
    $136,117</p>
    </td>
   </tr>
  </table>
  
  </div>
  
  <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'><i>&nbsp;</i></p>
  
  <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'><i>See report of independent auditors.</i></p>
  
  </div>
  
  <hr color="#000080">
  <p style="margin-top: 0; margin-bottom: 0"><br clear=all style='page-break-before:always'>
  
  
  </p>
  
  
  <div class=Section2>
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>The above amounts do not include tenant reimbursements
  for utilities, taxes, insurance and common area maintenance.</p>
  
  
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>&nbsp;</p>
  
  
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>As of December 31, 2003, 233 North Michigan had six
  customers that occupied approximately 57% of the office space: The CIT Group,
  Inc., Seven Worldwide, Inc., Government Services Administration, United
  Healthcare Services, Young &amp; Rubicam, Inc. and Clear Channel Broadcasting,
  Inc.</p>
  
  
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>&nbsp;</p>
  
  
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'><b>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basis of Accounting</b></p>
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'><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 future operations of 233
  North Michigan such as depreciation and mortgage
  interest expense.&nbsp; Management is not aware of any material factors relating to 233
  North Michigan that would cause the reported
  financial information not to be necessarily indicative of future operating
  results.</p>
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'><br>
  <b>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management Fees</b></p>
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'><br>
  Management fees of approximately 4% of revenues received from the operations of
  233 North Michigan were paid to Parkway Realty Services, a wholly owned
  subsidiary of Parkway.&nbsp; Management fee expense for the year ended December 31,
  2003 and the nine months ended September 30, 2004 was $1,263,000 and $880,000,
  respectively.</p>
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'><i>&nbsp;</i></p>
  
  <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'><i>See report of independent auditors.</i></p>
  
  <hr noshade color="#000080">
  
  <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'><b>PARKWAY PROPERTIES, INC.</b></p>
  
  <p class=MsoNormal style="margin-top: 0; margin-bottom: 0"><b>&nbsp;</b></p>
  
  <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'><b>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; margin-top:0; margin-bottom:0'><br>
  <br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following unaudited pro forma
  consolidated balance sheet as of September 30, 2004 and pro forma consolidated
  statements of income of Parkway Properties, Inc. (&quot;Parkway&quot;) for the
  year ended December 31, 2003 and nine months ended September 30, 2004 give
  effect to the purchases by Parkway of certain properties 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; margin-top:0; margin-bottom:0'><br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The pro forma consolidated balance
  sheet sets forth the effect of Parkway's anticipated purchase of the 70%
  interest in 233 North Michigan as if the entire purchase had been consummated
  on September 30, 2004.</p>
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'><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, 2003.&nbsp; </p>
  
  
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>&nbsp;</p>
  
  
  
  <div align=center>
  
  <table class=MsoTableGrid border=1 cellspacing=0 cellpadding=0
   style='border-collapse:collapse' bordercolorlight="#FFFFFF" bordercolordark="#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; margin-top:0; margin-bottom:0'><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; margin-top:0; margin-bottom:0'><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'>Maitland 200</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'>01/29/04</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'>Capital City Plaza</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'>04/02/04</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'>Squaw Peak</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'>08/24/04</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'>233 North Michigan</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'>01/14/05</p>
    </td>
   </tr>
  </table>
  
  </div>
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'><br>
  &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, 2003.</p>
  
  
  
  <hr noshade color="#000080">
  <p style="margin-top: 0; margin-bottom: 0">
  
  
  
  <br
  clear=all style='page-break-before:always'>
  
  
  </p>
  
  
  <h1 align=center style='text-align:center; margin-top:0; margin-bottom:0'><b>
  <font size="2">PARKWAY PROPERTIES, INC.
  AND SUBSIDIARIES<br>
  PRO
  FORMA CONSOLIDATED BALANCE SHEET<br>
  SEPTEMBER 30, 2004<br>
  </font>
  </b><font size="2">(Unaudited)</font><b><font size="2"><br>
  <br>
  <br>
  </font>
  </b></h1>
  
  <div align=center>
  
  <table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=707
   style='width:530.1pt;border-collapse:collapse'>
   <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 style="margin-top: 0; margin-bottom: 0"><b><font size="2">&nbsp;</font></b></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)</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 style="margin-top: 0; margin-bottom: 0"><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 style="margin-top: 0; margin-bottom: 0"><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; margin-top:0; margin-bottom:0'>
    <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 style="margin-top: 0; margin-bottom: 0"><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 style="margin-top: 0; margin-bottom: 0"><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 style="margin-top: 0; margin-bottom: 0"><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; margin-top:0; margin-bottom:0'><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; margin-top:0; margin-bottom:0'><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 style="margin-top: 0; margin-bottom: 0"><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 style="margin-top: 0; margin-bottom: 0"><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; margin-top:0; margin-bottom:0'><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 style="margin-top: 0; margin-bottom: 0"><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 style="margin-top: 0; margin-bottom: 0"><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; margin-top:0; margin-bottom:0'>
    <font size="2">$1,024,942&nbsp;</font></p>
    </td>
    <td width=125 valign=top style='width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:16.95pt;text-align:right; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;185,847</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; margin-top:0; margin-bottom:0'>
    <font size="2">$1,210,789&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 style="margin-top: 0; margin-bottom: 0"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Parking
    development</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; margin-top:0; margin-bottom:0'>
    <font size="2">1,462&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='margin-right:16.95pt;text-align:right; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">1,462&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 style="margin-top: 0; margin-bottom: 0"><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; margin-top:0; margin-bottom:0'>
    <font size="2">(139,764)</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='margin-right:16.95pt;text-align:right; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">(139,764)</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 style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">886,640&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='margin-right:16.95pt;text-align:right; margin-top:0; margin-bottom:0'>
    <font size="2">185,847&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; margin-top:0; margin-bottom:0'>
    <font size="2">1,072,487&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 style="margin-top: 0; margin-bottom: 0"><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; margin-top:0; margin-bottom:0'>
    <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='margin-right:16.95pt;text-align:right; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <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;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style="margin-top: 0; margin-bottom: 0"><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; margin-top:0; margin-bottom:0'>
    <font size="2">19,950&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='margin-right:16.95pt;text-align:right; margin-top:0; margin-bottom:0'>
    <font size="2">(14,946)</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; margin-top:0; margin-bottom:0'>
    <font size="2">5,004&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 style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">910,118&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='margin-right:16.95pt;text-align:right; margin-top:0; margin-bottom:0'>
    <font size="2">170,901&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; margin-top:0; margin-bottom:0'>
    <font size="2">1,081,019&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 style="margin-top: 0; margin-bottom: 0"><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; margin-top:0; margin-bottom:0'>
    <font size="2">77,541&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='margin-right:16.95pt;text-align:right; margin-top:0; margin-bottom:0'>
    <font size="2">14,668&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; margin-top:0; margin-bottom:0'>
    <font size="2">92,209&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 style="margin-top: 0; margin-bottom: 0"><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; margin-top:0; margin-bottom:0'>
    <font size="2">1,579&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='margin-right:16.95pt;text-align:right; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">1,579&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 style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;989,238&nbsp;</font></p>
    </td>
    <td width=125 valign=top style='width:93.9pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:16.95pt;text-align:right; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;185,569&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; margin-top:0; margin-bottom:0'>
    <font size="2">$1,174,807&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 style="margin-top: 0; margin-bottom: 0"><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'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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 style="margin-top: 0; margin-bottom: 0">
  
    </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 style="margin-top: 0; margin-bottom: 0">
  
    </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 style="margin-top: 0; margin-bottom: 0"><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; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;151,758&nbsp;</font></p>
    </td>
    <td width=125 valign=top style='width:93.9pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:16.95pt;text-align:right; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,195&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; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;&nbsp;159,953&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 style="margin-top: 0; margin-bottom: 0"><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; margin-top:0; margin-bottom:0'>
    <font size="2">361,972&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='margin-right:16.95pt;text-align:right; margin-top:0; margin-bottom:0'>
    <font size="2">112,374&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; margin-top:0; margin-bottom:0'>
    <font size="2">474,346&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 style="margin-top: 0; margin-bottom: 0"><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; margin-top:0; margin-bottom:0'>
    <font size="2">46,892&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='margin-right:16.95pt;text-align:right; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">46,892&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'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">560,622&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='margin-right:16.95pt;text-align:right; margin-top:0; margin-bottom:0'>
    <font size="2">120,569&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; margin-top:0; margin-bottom:0'>
    <font size="2">681,191&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 style="margin-top: 0; margin-bottom: 0"><b><font size="2">Minority
    Interest</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 style="margin-top: 0; margin-bottom: 0">
  
    </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 style="margin-top: 0; margin-bottom: 0">
  
    </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 style="margin-top: 0; margin-bottom: 0">
  
    </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 style="margin-top: 0; margin-bottom: 0"><font size="2">Minority
    interest - unit holders</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; margin-top:0; margin-bottom:0'>
    <font size="2">40&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='margin-right:16.95pt;text-align:right; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">40&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 style="margin-top: 0; margin-bottom: 0"><font size="2">Minority
    interest - real estate partnerships</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; margin-top:0; margin-bottom:0'>
    <font size="2">3,769&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='margin-right:16.95pt;text-align:right; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">3,769&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 style="margin-top: 0; margin-bottom: 0"><b><font size="2">&nbsp;</font></b></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; margin-top:0; margin-bottom:0'>
    <font size="2">3,809&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='margin-right:16.95pt;text-align:right; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">3,809&nbsp;</font></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=402 valign=top style='width:301.2pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style="margin-top: 0; margin-bottom: 0"><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'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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 style="margin-top: 0; margin-bottom: 0">
  
    </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 style="margin-top: 0; margin-bottom: 0">
  
    </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 style="margin-top: 0; margin-bottom: 0"><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'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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 style="margin-top: 0; margin-bottom: 0">
  
    </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 style="margin-top: 0; margin-bottom: 0">
  
    </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 style="margin-top: 0; margin-bottom: 0"><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'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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 style="margin-top: 0; margin-bottom: 0">
  
    </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 style="margin-top: 0; margin-bottom: 0">
  
    </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 style="margin-top: 0; margin-bottom: 0"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,792,857
    shares 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; margin-top:0; margin-bottom:0'>
    <font size="2">62,750&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='margin-right:16.95pt;text-align:right; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">62,750&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 style="margin-top: 0; margin-bottom: 0"><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'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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 style="margin-top: 0; margin-bottom: 0">
  
    </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 style="margin-top: 0; margin-bottom: 0">
  
    </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 style="margin-top: 0; margin-bottom: 0"><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; margin-top:0; margin-bottom:0'>
    <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='margin-right:16.95pt;text-align:right; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <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 style="margin-top: 0; margin-bottom: 0"><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'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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 style="margin-top: 0; margin-bottom: 0">
  
    </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 style="margin-top: 0; margin-bottom: 0">
  
    </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 style="margin-top: 0; margin-bottom: 0"><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; margin-top:0; margin-bottom:0'>
    <font size="2">57,976&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='margin-right:16.95pt;text-align:right; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">57,976&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 style="margin-top: 0; margin-bottom: 0"><font size="2">Preferred
    membership interests</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; margin-top:0; margin-bottom:0'>
    <font size="2">10,741&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 style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">10,741&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 style="margin-top: 0; margin-bottom: 0"><font size="2">Common
    stock, $.001 par value, 65,057,143 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'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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 style="margin-top: 0; margin-bottom: 0">
  
    </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 style="margin-top: 0; margin-bottom: 0">
  
    </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 style="margin-top: 0; margin-bottom: 0"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11,430,812
    and 12,784,979 shares 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 style="margin-top: 0; margin-bottom: 0">
  
    </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 style="margin-top: 0; margin-bottom: 0">
  
    </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 style="margin-top: 0; margin-bottom: 0">
  
    </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 style="margin-top: 0; margin-bottom: 0"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;in
    2004 and pro forma, respectively</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; margin-top:0; margin-bottom:0'>
    <font size="2">11&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='margin-right:16.95pt;text-align:right; margin-top:0; margin-bottom:0'>
    <font size="2">1&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; margin-top:0; margin-bottom:0'>
    <font size="2">12&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 style="margin-top: 0; margin-bottom: 0"><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'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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 style="margin-top: 0; margin-bottom: 0">
  
    </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 style="margin-top: 0; margin-bottom: 0">
  
    </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 style="margin-top: 0; margin-bottom: 0"><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; margin-top:0; margin-bottom:0'>
    <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='margin-right:16.95pt;text-align:right; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <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 style="margin-top: 0; margin-bottom: 0"><font size="2">Common
    stock held in trust, at cost, 130,000 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; margin-top:0; margin-bottom:0'>
    <font size="2">(4,400)</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='margin-right:16.95pt;text-align:right; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">(4,400)</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 style="margin-top: 0; margin-bottom: 0"><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; margin-top:0; margin-bottom:0'>
    <font size="2">274,145&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='margin-right:16.95pt;text-align:right; margin-top:0; margin-bottom:0'>
    <font size="2">64,999&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; margin-top:0; margin-bottom:0'>
    <font size="2">339,144&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 style="margin-top: 0; margin-bottom: 0"><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; margin-top:0; margin-bottom:0'>
    <font size="2">(4,044)</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='margin-right:16.95pt;text-align:right; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">(4,044)</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 style="margin-top: 0; margin-bottom: 0"><font size="2">Accumulated
    other comprehensive income</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; margin-top:0; margin-bottom:0'>
    <font size="2">109&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='margin-right:16.95pt;text-align:right; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">109&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 style="margin-top: 0; margin-bottom: 0"><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; margin-top:0; margin-bottom:0'>
    <font size="2">27,519&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='margin-right:16.95pt;text-align:right; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">27,519&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 style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">424,807&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='margin-right:16.95pt;text-align:right; margin-top:0; margin-bottom:0'>
    <font size="2">65,000&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; margin-top:0; margin-bottom:0'>
    <font size="2">489,807&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 style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;989,238&nbsp;</font></p>
    </td>
    <td width=125 valign=top style='width:93.9pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:16.95pt;text-align:right; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;185,569&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; margin-top:0; margin-bottom:0'>
    <font size="2">$1,174,807&nbsp;</font></p>
    </td>
   </tr>
  </table>
  
  </div>
  
  <p class=MsoNormal align=center style='text-align:center;line-height:-100%; margin-top:0; margin-bottom:0'>
  <font size="2"><br>
  <br>
  </font>
  </p>
  
  <p class=MsoNormal align=center style='text-align:center;line-height:-100%; margin-top:0; margin-bottom:0'>
  <font size="2">See accompanying notes </font> </p>
  
  <b><hr color="#000080">
  <p style="margin-top: 0; margin-bottom: 0"><font size="2"><br clear=all style='page-break-before:always'>
  </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">PARKWAY PROPERTIES, INC. AND SUBSIDIARIES<br>
  PRO FORMA CONSOLIDATED STATEMENT OF INCOME<br>
  FOR THE YEAR ENDED DECEMBER
   31, 2003<br>
  </font> </b><font size="2">(Unaudited)</font></p>
  
  <p class=MsoNormal align=center style='text-align:center;line-height:10.0pt; margin-top:0; margin-bottom:0'>
  <font size="2"><br>
  <br>
  </font>
  </p>
  
  <div align=center>
  
  <table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=622
   style='width:466.6pt;border-collapse:collapse'>
   <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; margin-top:0; margin-bottom:0'><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=115 colspan=2 valign=top style='width:85.95pt;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 (2-3)</font></b></p>
    </td>
    <td width=85 colspan=2 valign=top style='width:63.9pt;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; margin-top:0; margin-bottom:0'><b>
    <font size="2">&nbsp;</font></b></p>
    </td>
    <td width=278 colspan=5 valign=top style='width:208.15pt;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; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'><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; margin-top:0; margin-bottom:0'><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; margin-top:0; margin-bottom:0'><b>
    <font size="2">&nbsp;</font></b></p>
    </td>
    <td width=45 valign=top style='width:34.0pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt; margin-top:0; margin-bottom:0'><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; margin-top:0; margin-bottom:0'><b>
    <font size="2">&nbsp;</font></b></p>
    </td>
    <td width=16 valign=top style='width:11.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt; margin-top:0; margin-bottom:0'><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; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">$142,196&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;50,948&nbsp;&nbsp;</font></p>
    </td>
    <td width=45 valign=top style='width:34.0pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">$193,144&nbsp;</font></p>
    </td>
    <td width=16 valign=top style='width:11.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">2,136&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; margin-top:0; margin-bottom:0'>
    <font size="2">(626)&nbsp;</font></p>
    </td>
    <td width=45 valign=top style='width:34.0pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">1,510&nbsp;</font></p>
    </td>
    <td width=16 valign=top style='width:11.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">819&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; margin-top:0; margin-bottom:0'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=45 valign=top style='width:34.0pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">819&nbsp;</font></p>
    </td>
    <td width=16 valign=top style='width:11.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">300&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; margin-top:0; margin-bottom:0'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=45 valign=top style='width:34.0pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">300&nbsp;</font></p>
    </td>
    <td width=16 valign=top style='width:11.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">599&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; margin-top:0; margin-bottom:0'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=45 valign=top style='width:34.0pt;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 style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">599&nbsp;</font></p>
    </td>
    <td width=16 valign=top style='width:11.8pt;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 style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">146,050&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; margin-top:0; margin-bottom:0'>
    <font size="2">50,322&nbsp;</font></p>
    </td>
    <td width=45 valign=top style='width:34.0pt;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 style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">196,372&nbsp;</font></p>
    </td>
    <td width=16 valign=top style='width:11.8pt;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 style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'><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'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=69 valign=top style='width:51.95pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=45 valign=top style='width:34.0pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=69 valign=top style='width:52.1pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=16 valign=top style='width:11.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <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'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=69 valign=top style='width:51.95pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=45 valign=top style='width:34.0pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=69 valign=top style='width:52.1pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=16 valign=top style='width:11.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">63,362&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; margin-top:0; margin-bottom:0'>
    <font size="2">23,215&nbsp;</font></p>
    </td>
    <td width=45 valign=top style='width:34.0pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">86,577&nbsp;</font></p>
    </td>
    <td width=16 valign=top style='width:11.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <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'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=69 valign=top style='width:51.95pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=45 valign=top style='width:34.0pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=69 valign=top style='width:52.1pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=16 valign=top style='width:11.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">16,026&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; margin-top:0; margin-bottom:0'>
    <font size="2">9,107&nbsp;</font></p>
    </td>
    <td width=45 valign=top style='width:34.0pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">25,133&nbsp;</font></p>
    </td>
    <td width=16 valign=top style='width:11.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">293&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; margin-top:0; margin-bottom:0'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=45 valign=top style='width:34.0pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">293&nbsp;</font></p>
    </td>
    <td width=16 valign=top style='width:11.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">28,030&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; margin-top:0; margin-bottom:0'>
    <font size="2">11,760&nbsp;</font></p>
    </td>
    <td width=45 valign=top style='width:34.0pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">39,790&nbsp;</font></p>
    </td>
    <td width=16 valign=top style='width:11.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">37&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; margin-top:0; margin-bottom:0'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=45 valign=top style='width:34.0pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">37&nbsp;</font></p>
    </td>
    <td width=16 valign=top style='width:11.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <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'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=69 valign=top style='width:51.95pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=45 valign=top style='width:34.0pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=69 valign=top style='width:52.1pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=16 valign=top style='width:11.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">2,834&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; margin-top:0; margin-bottom:0'>
    <font size="2">1,629&nbsp;</font></p>
    </td>
    <td width=45 valign=top style='width:34.0pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">4,463&nbsp;</font></p>
    </td>
    <td width=16 valign=top style='width:11.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">565&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; margin-top:0; margin-bottom:0'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=45 valign=top style='width:34.0pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">565&nbsp;</font></p>
    </td>
    <td width=16 valign=top style='width:11.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">391&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; margin-top:0; margin-bottom:0'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=45 valign=top style='width:34.0pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">391&nbsp;</font></p>
    </td>
    <td width=16 valign=top style='width:11.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">4,201&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; margin-top:0; margin-bottom:0'>
    <font size="2">(416)</font></p>
    </td>
    <td width=45 valign=top style='width:34.0pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">3,785&nbsp;</font></p>
    </td>
    <td width=16 valign=top style='width:11.8pt;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 style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">115,739&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; margin-top:0; margin-bottom:0'>
    <font size="2">45,295&nbsp;</font></p>
    </td>
    <td width=45 valign=top style='width:34.0pt;border:solid windowtext 1.0pt;
    border-left:none;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">161,034&nbsp;</font></p>
    </td>
    <td width=16 valign=top style='width:11.8pt;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 style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'><b>
    <font size="2">Income before equity in earnings,&nbsp; gain and minority
    interest</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; margin-top:0; margin-bottom:0'>
    <font size="2">30,311&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; margin-top:0; margin-bottom:0'>
    <font size="2">5,027&nbsp;</font></p>
    </td>
    <td width=45 valign=top style='width:34.0pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">35,338&nbsp;</font></p>
    </td>
    <td width=16 valign=top style='width:11.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">2,212&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; margin-top:0; margin-bottom:0'>
    <font size="2">(1,375)</font></p>
    </td>
    <td width=45 valign=top style='width:34.0pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt; margin-top:0; margin-bottom:0'>
    <font size="2">(f)</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; margin-top:0; margin-bottom:0'>
    <font size="2">837&nbsp;</font></p>
    </td>
    <td width=16 valign=top style='width:11.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">Gain 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; margin-top:0; margin-bottom:0'>
    <font size="2">10,661</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; margin-top:0; margin-bottom:0'>
    <font size="2">-</font></p>
    </td>
    <td width=45 valign=top style='width:34.0pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">10,661&nbsp;</font></p>
    </td>
    <td width=16 valign=top style='width:11.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">(3)</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; margin-top:0; margin-bottom:0'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=45 valign=top style='width:34.0pt;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 style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">(3)</font></p>
    </td>
    <td width=16 valign=top style='width:11.8pt;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 style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'><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; margin-top:0; margin-bottom:0'>
    <font size="2">43,181&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; margin-top:0; margin-bottom:0'>
    <font size="2">3,652&nbsp;</font></p>
    </td>
    <td width=45 valign=top style='width:34.0pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">46,833&nbsp;</font></p>
    </td>
    <td width=16 valign=top style='width:11.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">170&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; margin-top:0; margin-bottom:0'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=45 valign=top style='width:34.0pt;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 style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">170&nbsp;</font></p>
    </td>
    <td width=16 valign=top style='width:11.8pt;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 style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'><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; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;43,351&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;3,652&nbsp;</font></p>
    </td>
    <td width=45 valign=top style='width:34.0pt;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 style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;47,003&nbsp;</font></p>
    </td>
    <td width=16 valign=top style='width:11.8pt;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 style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'><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'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=69 valign=top style='width:51.95pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=45 valign=top style='width:34.0pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=69 valign=top style='width:52.1pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=16 valign=top style='width:11.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;43,181&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;3,652&nbsp;</font></p>
    </td>
    <td width=45 valign=top style='width:34.0pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;46,833&nbsp;</font></p>
    </td>
    <td width=16 valign=top style='width:11.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">Original issue costs associated with redemption or
    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; margin-top:0; margin-bottom:0'>
    <font size="2">(2,619)</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; margin-top:0; margin-bottom:0'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=45 valign=top style='width:34.0pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">(2,619)</font></p>
    </td>
    <td width=16 valign=top style='width:11.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">(5,352)</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; margin-top:0; margin-bottom:0'>
    <font size="2">(1,084)</font></p>
    </td>
    <td width=45 valign=top style='width:34.0pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:10.0pt; margin-top:0; margin-bottom:0'>
    <font size="2">(g)</font></p>
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">(6,436)</font></p>
    </td>
    <td width=16 valign=top style='width:11.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">(6,091)</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; margin-top:0; margin-bottom:0'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=45 valign=top style='width:34.0pt;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 style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">(6,091)</font></p>
    </td>
    <td width=16 valign=top style='width:11.8pt;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 style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'><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; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;29,119&nbsp;</font></p>
    </td>
    <td width=69 valign=top style='width:51.95pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:10.0pt; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;2,568&nbsp;</font></p>
    </td>
    <td width=45 valign=top style='width:34.0pt;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 style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;31,687&nbsp;</font></p>
    </td>
    <td width=16 valign=top style='width:11.8pt;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 style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'><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'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=69 valign=top style='width:51.95pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=45 valign=top style='width:34.0pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=69 valign=top style='width:52.1pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=16 valign=top style='width:11.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">Basic</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; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.85&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; margin-top:0; margin-bottom:0'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=45 valign=top style='width:34.0pt;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 style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.74&nbsp;</font></p>
    </td>
    <td width=16 valign=top style='width:11.8pt;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 style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">Diluted:</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; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.79&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; margin-top:0; margin-bottom:0'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=45 valign=top style='width:34.0pt;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 style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.69&nbsp;</font></p>
    </td>
    <td width=16 valign=top style='width:11.8pt;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 style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'><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; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.60&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; margin-top:0; margin-bottom:0'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=45 valign=top style='width:34.0pt;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 style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.60&nbsp;</font></p>
    </td>
    <td width=16 valign=top style='width:11.8pt;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 style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'><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'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=69 valign=top style='width:51.95pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=45 valign=top style='width:34.0pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=69 valign=top style='width:52.1pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=16 valign=top style='width:11.8pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">10,224&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; margin-top:0; margin-bottom:0'>
    <font size="2">1,354&nbsp;</font></p>
    </td>
    <td width=45 valign=top style='width:34.0pt;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 style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">11,578&nbsp;</font></p>
    </td>
    <td width=16 valign=top style='width:11.8pt;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 style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <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; margin-top:0; margin-bottom:0'>
    <font size="2">10,453&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; margin-top:0; margin-bottom:0'>
    <font size="2">1,354&nbsp;</font></p>
    </td>
    <td width=45 valign=top style='width:34.0pt;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 style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">11,807&nbsp;</font></p>
    </td>
    <td width=16 valign=top style='width:11.8pt;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 style="margin-top: 0; margin-bottom: 0">
  
    </td>
   </tr>
  </table>
  
  </div>
  
  <p class=MsoNormal align=center style='text-align:center;line-height:10.0pt; margin-top:0; margin-bottom:0'>
  <font size="2">
  <br>
  <br>
  <br>
  <br>
  <br>
  <br>
  <br>
  <br>
  </font>
  </p>
  
  <p class=MsoNormal align=center style='text-align:center;line-height:10.0pt; margin-top:0; margin-bottom:0'>
  <font size="2">See accompanying notes.</font><hr color="#000080">
  <p style="margin-top: 0; margin-bottom: 0" align="center"><font size="2"><br clear=all style='page-break-before:
  always'>
  <b>PARKWAY PROPERTIES, INC. AND SUBSIDIARIES<br>
  PRO FORMA CONSOLIDATED STATEMENT OF INCOME<br>
  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004<br>
  </b>(Unaudited)</font></p>
  <p style="margin-top: 0; margin-bottom: 0" align="center">&nbsp;</p>
  <p style="margin-top: 0; margin-bottom: 0"></p>
  
  
  
  
  
  <div align=center>
  
  <table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
   style='border-collapse:collapse'>
   <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%; margin-top:0; margin-bottom:0'><b>
    <font size="2">&nbsp;</font></b></p>
    </td>
    <td width=75 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=120 colspan=2 valign=top style='width:90.05pt;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 (2-3)</font></b></p>
    </td>
    <td width=93 colspan=2 valign=top style='width:69.65pt;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%; margin-top:0; margin-bottom:0'><b>
    <font size="2">&nbsp;</font></b></p>
    </td>
    <td width=288 colspan=5 valign=top style='width:216.1pt;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%; margin-top:0; margin-bottom:0'>
    <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%; margin-top:0; margin-bottom:0'><b>
    <font size="2">Revenues</font></b></p>
    </td>
    <td width=75 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%; margin-top:0; margin-bottom:0'><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%; margin-top:0; margin-bottom:0'><b>
    <font size="2">&nbsp;</font></b></p>
    </td>
    <td width=44 valign=top style='width:32.75pt;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%; margin-top:0; margin-bottom:0'><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%; margin-top:0; margin-bottom:0'><b>
    <font size="2">&nbsp;</font></b></p>
    </td>
    <td width=24 valign=top style='width:.25in;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%; margin-top:0; margin-bottom:0'><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%; margin-top:0; margin-bottom:0'>
    <font size="2">Income from office and parking&nbsp; properties</font></p>
    </td>
    <td width=75 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%; margin-top:0; margin-bottom:0'>
    <font size="2">$119,351&nbsp;</font></p>
    </td>
    <td width=76 valign=top style='width:57.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;29,913&nbsp;</font></p>
    </td>
    <td width=44 valign=top style='width:32.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%; margin-top:0; margin-bottom:0'>
    <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%; margin-top:0; margin-bottom:0'>
    <font size="2">$149,264&nbsp;</font></p>
    </td>
    <td width=24 valign=top style='width:.25in;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <font size="2">Management company income</font></p>
    </td>
    <td width=75 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%; margin-top:0; margin-bottom:0'>
    <font size="2">1,270&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%; margin-top:0; margin-bottom:0'>
    <font size="2">(628)</font></p>
    </td>
    <td width=44 valign=top style='width:32.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%; margin-top:0; margin-bottom:0'>
    <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%; margin-top:0; margin-bottom:0'>
    <font size="2">642&nbsp;</font></p>
    </td>
    <td width=24 valign=top style='width:.25in;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <font size="2">Other income and deferred gains</font></p>
    </td>
    <td width=75 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%; margin-top:0; margin-bottom:0'>
    <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%; margin-top:0; margin-bottom:0'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=44 valign=top style='width:32.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <font size="2">20&nbsp;</font></p>
    </td>
    <td width=24 valign=top style='width:.25in;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 style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <font size="2">Total Revenues</font></p>
    </td>
    <td width=75 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%; margin-top:0; margin-bottom:0'>
    <font size="2">120,641&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%; margin-top:0; margin-bottom:0'>
    <font size="2">29,285&nbsp;</font></p>
    </td>
    <td width=44 valign=top style='width:32.75pt;border:solid windowtext 1.0pt;
    border-left:none;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <font size="2">149,926&nbsp;</font></p>
    </td>
    <td width=24 valign=top style='width:.25in;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 style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'><b>
    <font size="2">Expenses</font></b></p>
    </td>
    <td width=75 valign=top style='width:56.4pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=76 valign=top style='width:57.3pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=44 valign=top style='width:32.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=69 valign=top style='width:51.65pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=24 valign=top style='width:.25in;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <font size="2">Office and parking properties:</font></p>
    </td>
    <td width=75 valign=top style='width:56.4pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=76 valign=top style='width:57.3pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=44 valign=top style='width:32.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=69 valign=top style='width:51.65pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=24 valign=top style='width:.25in;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating expense</font></p>
    </td>
    <td width=75 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; margin-top:0; margin-bottom:0'>
    <font size="2">55,662&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%; margin-top:0; margin-bottom:0'>
    <font size="2">13,913&nbsp;</font></p>
    </td>
    <td width=44 valign=top style='width:32.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%; margin-top:0; margin-bottom:0'>
    <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%; margin-top:0; margin-bottom:0'>
    <font size="2">69,575&nbsp;</font></p>
    </td>
    <td width=24 valign=top style='width:.25in;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense:</font></p>
    </td>
    <td width=75 valign=top style='width:56.4pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=76 valign=top style='width:57.3pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=44 valign=top style='width:32.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=69 valign=top style='width:51.65pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=24 valign=top style='width:.25in;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contractual</font></p>
    </td>
    <td width=75 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; margin-top:0; margin-bottom:0'>
    <font size="2">14,369&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%; margin-top:0; margin-bottom:0'>
    <font size="2">5,564&nbsp;</font></p>
    </td>
    <td width=44 valign=top style='width:32.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%; margin-top:0; margin-bottom:0'>
    <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%; margin-top:0; margin-bottom:0'>
    <font size="2">19,933&nbsp;</font></p>
    </td>
    <td width=24 valign=top style='width:.25in;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepayment expenses</font></p>
    </td>
    <td width=75 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; margin-top:0; margin-bottom:0'>
    <font size="2">130&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%; margin-top:0; margin-bottom:0'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=44 valign=top style='width:32.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <font size="2">130&nbsp;</font></p>
    </td>
    <td width=24 valign=top style='width:.25in;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <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 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; margin-top:0; margin-bottom:0'>
    <font size="2">407&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%; margin-top:0; margin-bottom:0'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=44 valign=top style='width:32.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <font size="2">407&nbsp;</font></p>
    </td>
    <td width=24 valign=top style='width:.25in;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and
    amortization</font></p>
    </td>
    <td width=75 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; margin-top:0; margin-bottom:0'>
    <font size="2">26,641&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%; margin-top:0; margin-bottom:0'>
    <font size="2">5,895&nbsp;</font></p>
    </td>
    <td width=44 valign=top style='width:32.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%; margin-top:0; margin-bottom:0'>
    <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%; margin-top:0; margin-bottom:0'>
    <font size="2">32,536&nbsp;</font></p>
    </td>
    <td width=24 valign=top style='width:.25in;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <font size="2">Operating expense for other real estate properties</font></p>
    </td>
    <td width=75 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; margin-top:0; margin-bottom:0'>
    <font size="2">18&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%; margin-top:0; margin-bottom:0'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=44 valign=top style='width:32.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <font size="2">18&nbsp;</font></p>
    </td>
    <td width=24 valign=top style='width:.25in;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <font size="2">Interest expense on bank notes:</font></p>
    </td>
    <td width=75 valign=top style='width:56.4pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=76 valign=top style='width:57.3pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=44 valign=top style='width:32.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=69 valign=top style='width:51.65pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=24 valign=top style='width:.25in;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contractual</font></p>
    </td>
    <td width=75 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; margin-top:0; margin-bottom:0'>
    <font size="2">2,696&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%; margin-top:0; margin-bottom:0'>
    <font size="2">525&nbsp;</font></p>
    </td>
    <td width=44 valign=top style='width:32.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%; margin-top:0; margin-bottom:0'>
    <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%; margin-top:0; margin-bottom:0'>
    <font size="2">3,221&nbsp;</font></p>
    </td>
    <td width=24 valign=top style='width:.25in;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <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 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; margin-top:0; margin-bottom:0'>
    <font size="2">329&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%; margin-top:0; margin-bottom:0'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=44 valign=top style='width:32.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">329&nbsp;</font></p>
    </td>
    <td width=24 valign=top style='width:.25in;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <font size="2">Management company expenses</font></p>
    </td>
    <td width=75 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; margin-top:0; margin-bottom:0'>
    <font size="2">259&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%; margin-top:0; margin-bottom:0'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=44 valign=top style='width:32.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">259&nbsp;</font></p>
    </td>
    <td width=24 valign=top style='width:.25in;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <font size="2">General and administrative</font></p>
    </td>
    <td width=75 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; margin-top:0; margin-bottom:0'>
    <font size="2">3,089&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%; margin-top:0; margin-bottom:0'>
    <font size="2">(700)</font></p>
    </td>
    <td width=44 valign=top style='width:32.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%; margin-top:0; margin-bottom:0'>
    <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%; margin-top:0; margin-bottom:0'>
    <font size="2">2,389&nbsp;</font></p>
    </td>
    <td width=24 valign=top style='width:.25in;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 style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <font size="2">Total Expenses</font></p>
    </td>
    <td width=75 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; margin-top:0; margin-bottom:0'>
    <font size="2">103,600&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%; margin-top:0; margin-bottom:0'>
    <font size="2">25,197&nbsp;</font></p>
    </td>
    <td width=44 valign=top style='width:32.75pt;border:solid windowtext 1.0pt;
    border-left:none;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <font size="2">128,797&nbsp;</font></p>
    </td>
    <td width=24 valign=top style='width:.25in;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 style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'><b>
    <font size="2">Income before equity in earnings, gain and </font> </b></p>
    </td>
    <td width=75 valign=top style='width:56.4pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=76 valign=top style='width:57.3pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=44 valign=top style='width:32.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=69 valign=top style='width:51.65pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=24 valign=top style='width:.25in;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><b><font size="2">minority interest
    </font> </b></p>
    </td>
    <td width=75 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; margin-top:0; margin-bottom:0'>
    <font size="2">17,041&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%; margin-top:0; margin-bottom:0'>
    <font size="2">4,088&nbsp;</font></p>
    </td>
    <td width=44 valign=top style='width:32.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <font size="2">21,129&nbsp;</font></p>
    </td>
    <td width=24 valign=top style='width:.25in;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <font size="2">Equity in earnings of unconsolidated joint ventures</font></p>
    </td>
    <td width=75 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; margin-top:0; margin-bottom:0'>
    <font size="2">1,469&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%; margin-top:0; margin-bottom:0'>
    <font size="2">(769)</font></p>
    </td>
    <td width=44 valign=top style='width:32.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style='line-height:-100%; margin-top:0; margin-bottom:0'>
    <font size="2">(f)</font></p>
    </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%; margin-top:0; margin-bottom:0'>
    <font size="2">700&nbsp;</font></p>
    </td>
    <td width=24 valign=top style='width:.25in;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <font size="2">Gain on note receivable</font></p>
    </td>
    <td width=75 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; margin-top:0; margin-bottom:0'>
    <font size="2">774&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%; margin-top:0; margin-bottom:0'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=44 valign=top style='width:32.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">774&nbsp;</font></p>
    </td>
    <td width=24 valign=top style='width:.25in;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <font size="2">Minority interest - unit holders</font></p>
    </td>
    <td width=75 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; margin-top:0; margin-bottom:0'>
    <font size="2">(2)</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%; margin-top:0; margin-bottom:0'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=44 valign=top style='width:32.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">(2)</font></p>
    </td>
    <td width=24 valign=top style='width:.25in;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <font size="2">Minority interest - real estate partnerships</font></p>
    </td>
    <td width=75 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; margin-top:0; margin-bottom:0'>
    <font size="2">92&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%; margin-top:0; margin-bottom:0'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=44 valign=top style='width:32.75pt;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'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">92&nbsp;</font></p>
    </td>
    <td width=24 valign=top style='width:.25in;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 style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'><b>
    <font size="2">Net Income</font></b></p>
    </td>
    <td width=75 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; margin-top:0; margin-bottom:0'>
    <font size="2">19,374&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%; margin-top:0; margin-bottom:0'>
    <font size="2">3,319&nbsp;</font></p>
    </td>
    <td width=44 valign=top style='width:32.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <font size="2">22,693&nbsp;</font></p>
    </td>
    <td width=24 valign=top style='width:.25in;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <font size="2">Change in market value of interest rate swap</font></p>
    </td>
    <td width=75 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; margin-top:0; margin-bottom:0'>
    <font size="2">109&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%; margin-top:0; margin-bottom:0'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=44 valign=top style='width:32.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <font size="2">109&nbsp;</font></p>
    </td>
    <td width=24 valign=top style='width:.25in;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 style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'><b>
    <font size="2">Comprehensive income</font></b></p>
    </td>
    <td width=75 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; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;19,483&nbsp;</font></p>
    </td>
    <td width=76 valign=top style='width:57.3pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;3,319&nbsp;</font></p>
    </td>
    <td width=44 valign=top style='width:32.75pt;border:solid windowtext 1.0pt;
    border-left:none;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;22,802&nbsp;</font></p>
    </td>
    <td width=24 valign=top style='width:.25in;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 style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'><b>
    <font size="2">Net income available to common stockholders:</font></b></p>
    </td>
    <td width=75 valign=top style='width:56.4pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=76 valign=top style='width:57.3pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=44 valign=top style='width:32.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=69 valign=top style='width:51.65pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=24 valign=top style='width:.25in;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <font size="2">Net income</font></p>
    </td>
    <td width=75 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; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;19,374&nbsp;</font></p>
    </td>
    <td width=76 valign=top style='width:57.3pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;3,319&nbsp;</font></p>
    </td>
    <td width=44 valign=top style='width:32.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;22,693&nbsp;</font></p>
    </td>
    <td width=24 valign=top style='width:.25in;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <font size="2">Dividends on preferred stock</font></p>
    </td>
    <td width=75 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; margin-top:0; margin-bottom:0'>
    <font size="2">(4,135)</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%; margin-top:0; margin-bottom:0'>
    <font size="2">(271)</font></p>
    </td>
    <td width=44 valign=top style='width:32.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt;height:13.05pt'>
    <p class=MsoNormal style='line-height:-100%; margin-top:0; margin-bottom:0'>
    <font size="2">(g)</font></p>
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">(4,406)</font></p>
    </td>
    <td width=24 valign=top style='width:.25in;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt;height:13.05pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <font size="2">Dividends on convertible preferred stock</font></p>
    </td>
    <td width=75 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; margin-top:0; margin-bottom:0'>
    <font size="2">(4,122)</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%; margin-top:0; margin-bottom:0'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=44 valign=top style='width:32.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">(4,122)</font></p>
    </td>
    <td width=24 valign=top style='width:.25in;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 style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'><b>
    <font size="2">Net income available to common stockholders</font></b></p>
    </td>
    <td width=75 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; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;11,117&nbsp;</font></p>
    </td>
    <td width=76 valign=top style='width:57.3pt;border-top:solid windowtext 1.0pt;
    border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='text-align:right;line-height:-100%; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;3,048&nbsp;</font></p>
    </td>
    <td width=44 valign=top style='width:32.75pt;border:solid windowtext 1.0pt;
    border-left:none;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;14,165&nbsp;</font></p>
    </td>
    <td width=24 valign=top style='width:.25in;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 style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'><b>
    <font size="2">Net income per common share:</font></b></p>
    </td>
    <td width=75 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'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=76 valign=top style='width:57.3pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=44 valign=top style='width:32.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=69 valign=top style='width:51.65pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=24 valign=top style='width:.25in;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic</font></p>
    </td>
    <td width=75 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; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.00&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%; margin-top:0; margin-bottom:0'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=44 valign=top style='width:32.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.14&nbsp;</font></p>
    </td>
    <td width=24 valign=top style='width:.25in;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 style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'><b>
    <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></b><font size="2">Diluted</font></p>
    </td>
    <td width=75 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; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.98&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%; margin-top:0; margin-bottom:0'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=44 valign=top style='width:32.75pt;border:solid windowtext 1.0pt;
    border-left:none;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.12&nbsp;</font></p>
    </td>
    <td width=24 valign=top style='width:.25in;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 style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'><b>
    <font size="2">Dividends per common share</font></b></p>
    </td>
    <td width=75 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; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.95&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%; margin-top:0; margin-bottom:0'>
    <font size="2">-&nbsp;</font></p>
    </td>
    <td width=44 valign=top style='width:32.75pt;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'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.95&nbsp;</font></p>
    </td>
    <td width=24 valign=top style='width:.25in;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 style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'><b>
    <font size="2">Weighted average shares outstanding:</font></b></p>
    </td>
    <td width=75 valign=top style='width:56.4pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=76 valign=top style='width:57.3pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=44 valign=top style='width:32.75pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=69 valign=top style='width:51.65pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=24 valign=top style='width:.25in;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'>
    <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic</font></p>
    </td>
    <td width=75 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; margin-top:0; margin-bottom:0'>
    <font size="2">11,094&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%; margin-top:0; margin-bottom:0'>
    <font size="2">1,354&nbsp;</font></p>
    </td>
    <td width=44 valign=top style='width:32.75pt;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'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">12,448&nbsp;</font></p>
    </td>
    <td width=24 valign=top style='width:.25in;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 style="margin-top: 0; margin-bottom: 0">
  
    </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%; margin-top:0; margin-bottom:0'><b>
    <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></b><font size="2">Diluted</font></p>
    </td>
    <td width=75 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; margin-top:0; margin-bottom:0'>
    <font size="2">11,299&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%; margin-top:0; margin-bottom:0'>
    <font size="2">1,354&nbsp;</font></p>
    </td>
    <td width=44 valign=top style='width:32.75pt;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'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>
    <font size="2">12,653&nbsp;</font></p>
    </td>
    <td width=24 valign=top style='width:.25in;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 style="margin-top: 0; margin-bottom: 0">
  
    </td>
   </tr>
  </table>
  
  </div>
  
  <p class=MsoNormal align=center style='text-align:center;line-height:-100%; margin-top:0; margin-bottom:0'>
  <font size="2"><br>
  <br>
  <br>
  See accompanying notes<br>
  </font>
  </p>
  
  <hr noshade color="#000080">
  
  <p class=MsoNormal align=center style='text-align:center;line-height:-100%; margin-top:0; margin-bottom:0'>
  <br>
  </p>
  
  <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'><b>PARKWAY PROPERTIES, INC.<br>
  Notes to Pro Forma Consolidated Financial Statements<br>
  </b>(Unaudited)<b><br>
  <br>
  </b></p>
  
  
  
  <p class=MsoNormal style='text-align:justify;line-height:12.0pt; margin-top:0; margin-bottom:0'>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On January 5, 2005, Parkway Properties,
  Inc. (&quot;Parkway&quot;) entered into an agreement to acquire the remaining
  70% interest in its investment in 233 North Michigan Avenue in Chicago
  (&quot;233 North Michigan&quot;) from Investcorp International, Inc., Parkway's
  joint venture partner.&nbsp; Under the terms of the agreement Parkway will purchase
  an equity interest in a subsidiary limited liability company that owns the
  property for a price equal to approximately $136 million.&nbsp; The Company will close the investment in two stages.&nbsp;
  The Company is scheduled to close 90% of the purchase in mid-January.&nbsp; The
  second closing will occur following lender and rating agency approval, which is
  expected within ninety days. The building
  contains 1,070,000 rentable square feet, which includes office, retail and
  storage space and an adjacent four-level structured parking garage.&nbsp; In
  connection with the purchase, Parkway will assume the first mortgage with a
  current balance of approximately $100 million, a fixed interest rate of 7.21%
  and a maturity date of July 2011.&nbsp;&nbsp; Parkway plans to fund the purchase through
  its bank lines of credit, proceeds from a December 2004 joint venture sale and
  proceeds from the issuance of securities.</p>
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'><br>
  2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The pro forma adjustments to the
  Consolidated Statement of Income for the year ended December 31, 2003 and nine
  months ended September 30, 2004 set forth the effects of Parkway's purchase of
  the following buildings as if they had been consummated on January 1, 2003.&nbsp; </p>
  
  
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>&nbsp;</p>
  
  
  
  <div align=center>
  
  <table class=MsoTableGrid border=1 cellspacing=0 cellpadding=0
   style='border-collapse:collapse;border:none'>
   <tr>
    <td width=219 valign=top style='width:164.6pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'><b>&nbsp;</b></p>
    </td>
    <td width=95 valign=top style='width:71.0pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'><b>Date of</b></p>
    </td>
   </tr>
   <tr>
    <td width=219 valign=top style='width:164.6pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'><b>Building</b></p>
    </td>
    <td width=95 valign=top style='width:71.0pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'><b>Purchase</b></p>
    </td>
   </tr>
   <tr>
    <td width=219 valign=top style='width:164.6pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style="margin-top: 0; margin-bottom: 0">Maitland
    200</p>
    </td>
    <td width=95 valign=top style='width:71.0pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'>01/29/04</p>
    </td>
   </tr>
   <tr>
    <td width=219 valign=top style='width:164.6pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style="margin-top: 0; margin-bottom: 0">Capital City Plaza</p>
    </td>
    <td width=95 valign=top style='width:71.0pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'>04/02/04</p>
    </td>
   </tr>
   <tr>
    <td width=219 valign=top style='width:164.6pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style="margin-top: 0; margin-bottom: 0">Squaw Peak</p>
    </td>
    <td width=95 valign=top style='width:71.0pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'>08/24/04</p>
    </td>
   </tr>
   <tr>
    <td width=219 valign=top style='width:164.6pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style="margin-top: 0; margin-bottom: 0">233
    North Michigan</p>
    </td>
    <td width=95 valign=top style='width:71.0pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'>01/14/05</p>
    </td>
   </tr>
  </table>
  
  </div>
  
  
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>&nbsp;</p>
  
  
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These
  pro forma adjustments are detailed below for the year ended December 31, 2003
  and nine months ended September 30, 2004.</p>
  
  
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>&nbsp;</p>
  
  
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>&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; margin-top:0; margin-bottom:0'>&nbsp;</p>
  
  
  
  <p class=MsoNormal style='margin-left:.5in;text-indent:-.5in; margin-top:0; margin-bottom:0'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;For
  the year ended December
   31, 2003:</p>
  
  
  
  <p class=MsoNormal style='margin-left:.5in;text-indent:-.5in; margin-top:0; margin-bottom:0'>&nbsp;</p>
  
  
  
  <div align=center>
  
  <table class=MsoNormalTable border=1 cellspacing=0 cellpadding=0
   style='border-collapse:collapse;border:none'>
   <tr style='page-break-inside:avoid'>
    <td width=145 valign=top style='width:108.8pt;border:none;border-bottom:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style="margin-top: 0; margin-bottom: 0"><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; margin-top:0; margin-bottom:0'><b>Revenue</b></p>
    </td>
    <td width=208 colspan=2 valign=top style='width:156.05pt;border:none;
    border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'><b>Expenses</b></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=145 valign=top style='width:108.8pt;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; margin-top:0; margin-bottom:0'><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; margin-top:0; margin-bottom:0'><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; margin-top:0; margin-bottom:0'><b>Real Estate Owned</b></p>
    </td>
   </tr>
   <tr>
    <td width=145 valign=top style='width:108.8pt;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; margin-top:0; margin-bottom:0'><b>Building</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; margin-top:0; margin-bottom:0'><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; margin-top:0; margin-bottom:0'><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; margin-top:0; margin-bottom:0'><b>Depreciation</b></p>
    </td>
   </tr>
   <tr>
    <td width=145 valign=top style='width:108.8pt;border:solid windowtext 1.0pt;
    border-top:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'><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; margin-top:0; margin-bottom:0'><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; margin-top:0; margin-bottom:0'><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; margin-top:0; margin-bottom:0'><b>Expense</b></p>
    </td>
   </tr>
   <tr>
    <td width=145 valign=top style='width:108.8pt;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="margin-top: 0; margin-bottom: 0">Maitland
    200</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; margin-top:0; margin-bottom:0'>$&nbsp;&nbsp;&nbsp;&nbsp;3,742</p>
    </td>
    <td width=100 valign=top style='width:75.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:12.1pt;text-align:right; margin-top:0; margin-bottom:0'>$&nbsp;&nbsp;&nbsp;1,561</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; margin-top:0; margin-bottom:0'>$&nbsp;&nbsp;&nbsp;&nbsp;1,226</p>
    </td>
   </tr>
   <tr>
    <td width=145 valign=top style='width:108.8pt;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="margin-top: 0; margin-bottom: 0">Capital City Plaza</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; margin-top:0; margin-bottom:0'>8,624</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; margin-top:0; margin-bottom:0'>4,186</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; margin-top:0; margin-bottom:0'>3,670</p>
    </td>
   </tr>
   <tr>
    <td width=145 valign=top style='width:108.8pt;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="margin-top: 0; margin-bottom: 0">Squaw Peak</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; margin-top:0; margin-bottom:0'>5,643</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; margin-top:0; margin-bottom:0'>2,041</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; margin-top:0; margin-bottom:0'>2,613</p>
    </td>
   </tr>
   <tr>
    <td width=145 valign=top style='width:108.8pt;border:solid windowtext 1.0pt;
    border-top:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style="margin-top: 0; margin-bottom: 0">233
    North Michigan</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; margin-top:0; margin-bottom:0'>32,939</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; margin-top:0; margin-bottom:0'>15,427</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; margin-top:0; margin-bottom:0'>4,251</p>
    </td>
   </tr>
   <tr>
    <td width=145 valign=top style='width:108.8pt;border:solid windowtext 1.0pt;
    border-top:none;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>$&nbsp;&nbsp;50,948</p>
    </td>
    <td width=100 valign=top style='width:75.05pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:12.1pt;text-align:right; margin-top:0; margin-bottom:0'>$&nbsp;23,215</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; margin-top:0; margin-bottom:0'>$&nbsp;&nbsp;11,760</p>
    </td>
   </tr>
  </table>
  
  </div>
  
  <hr noshade color="#000080">
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'><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%; margin-top:0; margin-bottom:0'><br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;For the nine
  months ended September 30, 2004:<br>
  <br>
  </p>
  
  <div align=center>
  
  <table class=MsoNormalTable border=1 cellspacing=0 cellpadding=0
   style='border-collapse:collapse;border:none'>
   <tr style='page-break-inside:avoid'>
    <td width=149 valign=top style='width:111.95pt;border:none;border-bottom:
    solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style="margin-top: 0; margin-bottom: 0"><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; margin-top:0; margin-bottom:0'><b>Revenue</b></p>
    </td>
    <td width=208 colspan=2 valign=top style='width:156.05pt;border:none;
    border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=center style='text-align:center; margin-top:0; margin-bottom:0'><b>Expenses</b></p>
    </td>
   </tr>
   <tr style='page-break-inside:avoid'>
    <td width=149 valign=top style='width:111.95pt;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="margin-top: 0; margin-bottom: 0"><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; margin-top:0; margin-bottom:0'><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; margin-top:0; margin-bottom:0'><b>Real Estate Owned</b></p>
    </td>
   </tr>
   <tr>
    <td width=149 valign=top style='width:111.95pt;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; margin-top:0; margin-bottom:0'><b>Building</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; margin-top:0; margin-bottom:0'><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; margin-top:0; margin-bottom:0'><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; margin-top:0; margin-bottom:0'><b>Depreciation</b></p>
    </td>
   </tr>
   <tr>
    <td width=149 valign=top style='width:111.95pt;border:solid windowtext 1.0pt;
    border-top:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style="margin-top: 0; margin-bottom: 0"><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; margin-top:0; margin-bottom:0'><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; margin-top:0; margin-bottom:0'><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; margin-top:0; margin-bottom:0'><b>Expense</b></p>
    </td>
   </tr>
   <tr>
    <td width=149 valign=top style='width:111.95pt;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="margin-top: 0; margin-bottom: 0">Maitland
    200</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; margin-top:0; margin-bottom:0'>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;278</p>
    </td>
    <td width=100 valign=top style='width:75.05pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:12.1pt;text-align:right; margin-top:0; margin-bottom:0'>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;116</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; margin-top:0; margin-bottom:0'>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;102</p>
    </td>
   </tr>
   <tr>
    <td width=149 valign=top style='width:111.95pt;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="margin-top: 0; margin-bottom: 0">Capital City Plaza</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; margin-top:0; margin-bottom:0'>2,001</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; margin-top:0; margin-bottom:0'>965</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; margin-top:0; margin-bottom:0'>917</p>
    </td>
   </tr>
   <tr>
    <td width=149 valign=top style='width:111.95pt;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="margin-top: 0; margin-bottom: 0">Squaw Peak</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; margin-top:0; margin-bottom:0'>3,796</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; margin-top:0; margin-bottom:0'>1,517</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; margin-top:0; margin-bottom:0'>1,687</p>
    </td>
   </tr>
   <tr>
    <td width=149 valign=top style='width:111.95pt;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="margin-top: 0; margin-bottom: 0">233
    North Michigan</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; margin-top:0; margin-bottom:0'>23,838</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; margin-top:0; margin-bottom:0'>11,315</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; margin-top:0; margin-bottom:0'>3,189</p>
    </td>
   </tr>
   <tr>
    <td width=149 valign=top style='width:111.95pt;border:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=113 valign=top style='width:84.8pt;border:solid windowtext 1.0pt;
    border-left:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:18.95pt;text-align:right; margin-top:0; margin-bottom:0'>$29,913</p>
    </td>
    <td width=100 valign=top style='width:75.05pt;border:solid windowtext 1.0pt;
    border-left:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:12.1pt;text-align:right; margin-top:0; margin-bottom:0'>$13,913</p>
    </td>
    <td width=108 valign=top style='width:81.0pt;border:solid windowtext 1.0pt;
    border-left:none;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:15.1pt;text-align:right; margin-top:0; margin-bottom:0'>$&nbsp;&nbsp;5,895</p>
    </td>
   </tr>
  </table>
  
  </div>
  
  
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>&nbsp;</p>
  
  
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>&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='text-align:justify; margin-top:0; margin-bottom:0'>&nbsp;</p>
  
  
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;Pro
  forma interest expense on real estate owned reflects interest on non-recourse
  debt assumed upon purchase as if in place January 1, 2003 and is detailed below (in
  thousands).</p>
  
  
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>&nbsp;</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; margin-top:0; margin-bottom:0'><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; margin-top:0; margin-bottom:0'><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; margin-top:0; margin-bottom:0'><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; margin-top:0; margin-bottom:0'><b>Nine</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; margin-top:0; margin-bottom:0'><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; margin-top:0; margin-bottom:0'><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; margin-top:0; margin-bottom:0'><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; margin-top:0; margin-bottom:0'><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; margin-top:0; margin-bottom:0'><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; margin-top:0; margin-bottom:0'><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; margin-top:0; margin-bottom:0'><b>12/31/03</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; margin-top:0; margin-bottom:0'><b>09/30/04</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; margin-top:0; margin-bottom:0'>Debt assumed in Capital City Plaza 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'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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 style="margin-top: 0; margin-bottom: 0">
  
    </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 style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>&nbsp;&nbsp;&nbsp;&nbsp;04/04&nbsp;&nbsp;&nbsp;&nbsp;3.67%</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:4.55pt;text-align:right; margin-top:0; margin-bottom:0'>$&nbsp;&nbsp;49,073</p>
    </td>
    <td width=102 valign=top style='width:76.85pt;border:none;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:15.1pt;text-align:right; margin-top:0; margin-bottom:0'>$&nbsp;&nbsp;1,796</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:23.75pt;text-align:right; margin-top:0; margin-bottom:0'>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;437</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; margin-top:0; margin-bottom:0'>Debt assumed in Squaw Peak
    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'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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 style="margin-top: 0; margin-bottom: 0">
  
    </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 style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>&nbsp;&nbsp;&nbsp;&nbsp;08/04&nbsp;&nbsp;&nbsp;&nbsp;4.92%</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:4.55pt;text-align:right; margin-top:0; margin-bottom:0'>39,604</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:15.1pt;text-align:right; margin-top:0; margin-bottom:0'>1,922</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:23.75pt;text-align:right; margin-top:0; margin-bottom:0'>1,208</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; margin-top:0; margin-bottom:0'>Debt assumed in 233 North Michigan 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'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </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 style="margin-top: 0; margin-bottom: 0">
  
    </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 style="margin-top: 0; margin-bottom: 0">
  
    </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; margin-top:0; margin-bottom:0'>&nbsp;&nbsp;&nbsp;&nbsp;01/05&nbsp;&nbsp;&nbsp;&nbsp;4.87%</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:4.55pt;text-align:right; margin-top:0; margin-bottom:0'>112,374</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:15.1pt;text-align:right; margin-top:0; margin-bottom:0'>5,389</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:23.75pt;text-align:right; margin-top:0; margin-bottom:0'>3,919</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 style="margin-top: 0; margin-bottom: 0">
  
    </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:4.55pt;text-align:right; margin-top:0; margin-bottom:0'>$201,051</p>
    </td>
    <td width=102 valign=top style='width:76.85pt;border-top:none;border-left:
    none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
    padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal align=right style='margin-right:15.1pt;text-align:right; margin-top:0; margin-bottom:0'>$&nbsp;&nbsp;9,107</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:23.75pt;text-align:right; margin-top:0; margin-bottom:0'>$&nbsp;&nbsp;5,564</p>
    </td>
   </tr>
  </table>
  
  </div>
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'><br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;The
  pro forma effect of the purchases on interest expense on notes payable to banks
  was $1,629,000 for the year ended December 31, 2003 and $525,000 for the nine
  months ended September 30, 2004.</p>
  
  
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;The
  net pro forma effect of the 233 North Michigan purchase on management company
  income and general and administrative expense is a reduction of $210,000 for
  the year ended December 31, 2003 and an increase of $72,000 for the nine months
  ended September 30, 2004.</p>
  
  
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>&nbsp;</p>
  
  
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;The
  pro forma effect of the 233 North Michigan purchase on equity in earnings of
  unconsolidated joint ventures for the year ended December 31, 2003 and nine
  months ended September 30, 2004 is a reduction of $1,375,000 and $769,000,
  respectively.</p>
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'><br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;The
  pro forma effect of the Capital City Plaza Purchase on dividends on preferred
  membership interests was $1,084,000 for the year ended December 31, 2003 and
  $271,000 for the nine months ended September 30, 2004.</p>
  
  <p class=MsoNormal style='text-align:justify;line-height:12.0pt; margin-top:0; margin-bottom:0'><br>
  3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The pro forma net income per share for the year ended
  December 31, 2003 and the nine months ended September 30, 2004 reflect the
  issuance of 1,354,000 shares of Parkway common stock.</p>
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'><br>
  4.&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; margin-top:0; margin-bottom:0'><br>
  5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted net income per share for
  the year ended December 31, 2003 and nine months ended September 30, 2004 was $2.79
  and $.98, respectively, based on diluted weighted average shares outstanding of
  10,453,000 and 11,299,000, respectively.</p>
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'><br>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pro
  forma diluted net income per share for the year ended December 31, 2003 and the
  nine months ended September 30, 2004 was $2.69 and $1.12, respectively, based
  on diluted weighted average shares outstanding of 11,807,000 and 12,653,000,
  respectively.</p>
  
  <hr color="#000080">
  <p style="margin-top: 0; margin-bottom: 0"><br clear=all style='page-break-before:always'>
  
  
  </p>
  
  
  <p class=MsoNormal align=center style='text-align:center;line-height:-100%; margin-top:0; margin-bottom:0'><b>SIGNATURES</b></p>
  
  <p class=MsoNormal style='text-align:justify; margin-top:0; margin-bottom:0'><br>
  <br>
  &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; margin-top:0; margin-bottom:0'><br>
  <br>
  </p>
  
  <table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
   style='border-collapse:collapse'>
   <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 style="margin-top: 0; margin-bottom: 0">DATE:&nbsp;&nbsp;&nbsp;January
    7, 2005</p>
    </td>
    <td width=312 colspan=2 valign=top style='width:3.25in;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style="margin-top: 0; margin-bottom: 0">PARKWAY
    PROPERTIES, INC.</p>
    </td>
   </tr>
   <tr>
    <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=48 valign=top style='width:.5in;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=264 valign=top style='width:2.75in;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
   </tr>
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    <p style="margin-top: 0; margin-bottom: 0">
  
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    <td width=48 valign=top style='width:.5in;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
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    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
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    <p style="margin-top: 0; margin-bottom: 0">
  
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    <td width=48 valign=top style='width:.5in;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=264 valign=top style='width:2.75in;padding:0in 5.4pt 0in 5.4pt'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
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    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=48 valign=top style='width:.5in;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style="margin-top: 0; margin-bottom: 0">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 style="margin-top: 0; margin-bottom: 0">/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'>
  
    <p style="margin-top: 0; margin-bottom: 0">
  
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    <p style="margin-top: 0; margin-bottom: 0">
  
    </td>
    <td width=264 valign=top style='width:2.75in;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style="margin-top: 0; margin-bottom: 0">Mandy
    M. Pope, CPA</p>
    </td>
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    <td width=264 valign=top style='width:2.75in;padding:0in 5.4pt 0in 5.4pt'>
    <p class=MsoNormal style="margin-top: 0; margin-bottom: 0">Chief
    Accounting Officer</p>
    </td>
   </tr>
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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": "05518713"}, "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, D.C. 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):  January
  5, 2005
  PARKWAY PROPERTIES, INC
  .
  (Exact Name of Registrant as Specified in its Charter)
  Maryland
  1-11533
  74-2123597
  (State or Other
  Jurisdiction             (Commission File Number)                      (IRS
  Employer
  of Incorporation)                                                                                 Identification
  No.)
  One Jackson Place, Suite 1000, 188 East Capitol
  Street, Jackson, MS 39225-4647
  (Address of Principal Executive Offices, including zip
  code)
  (601) 948-4091
  (Registrant's telephone number, including area code)
  Not Applicable
  (Former name or former address, if changed since last
  report)
  Check
  the appropriate box below if the Form 8-K filing is intended to simultaneously
  satisfy the filing obligation of the registrant under any of the following
  provisions (see General Instruction A.2. below):
  o
  Written
  communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
  o
  Soliciting
  material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
  o
  Pre-commencement
  communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
  240.14d-2(b))
  o
  Pre-commencement
  communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
  240.13e-4(c))
  FORM 8-K
  PARKWAY PROPERTIES, INC.
  Item 1.01.  Entry into a Material Definitive Agreement
  On
  January 5, 2005, Parkway Properties, Inc. (the "Company") entered into an agreement
  to purchase the 70% interest held by Investcorp International, Inc., its joint
  venture partner, in the property known as 233
    North Michigan Avenue in Chicago, Illinois.
  Under the terms of the agreement Parkway will purchase the interest for a price
  equal to approximately $136 million.  The Company will close the investment in
  two stages.  The Company is scheduled to close 90% of the purchase in
  mid-January.  The second closing will occur following lender and rating agency
  approval, which is expected within ninety days. At closing the Company will
  also earn a $400,000 incentive fee from Investcorp based upon the economic
  returns generated over the life of the partnership. The purchase will be funded
  via a combination of sources including the assumption of an existing first
  mortgage, borrowings on the Company's existing lines of credit, proceeds from a
  December 2004 joint venture sale and proceeds from the issuance of securities.
  The building contains 1,070,000 rentable
  square feet, which includes office, retail and storage space and an adjacent
  four-level structured parking garage.  In connection with the purchase, Parkway
  will assume the first mortgage with a current balance of approximately $100 million,
  a fixed interest rate of 7.21% and a maturity date of July 2011.  In accordance
  with generally accepted accounting principles the mortgage will be recorded to
  reflect the fair value of the financial instrument based on the approximate
  market rate of 4.9% on the date of purchase. An offset to the interest rate
  adjustment will be the amortization of the existing above market rental rates
  to current market. The Company expects these two financial entries to
  approximately offset one another for generally accepted accounting principle
  purposes in 2005.
  Item
  9.01.  Financial Statements and Exhibits.
  (a)    Financial
    Statements
  The
    following audited financial statement of 233 North Michigan for the year
    ended December 31, 2003 is attached hereto.  Also included is the unaudited
    financial statement for the nine months ended September 30, 2004:
  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 unaudited Pro Forma Consolidated Financial Statements of Parkway
    for the year ended December 31, 2003 and the nine months ended September 30,
    2004 are attached hereto:
  Page
  Pro
    Forma Consolidated Financial Statements (Unaudited)
  8
  Pro
    Forma Consolidated Balance Sheet (Unaudited) - As of September 30, 2004
  9
  Pro
    Forma Consolidated Statement of Income (Unaudited) -
  For
    the Year Ended December 31, 2003
  10
  Pro
    Forma Consolidated Statement of Income (Unaudited) -
  For
    the Nine Months Ended September 30, 2004
  11
  Notes
    to Pro Forma Consolidated Financial Statements (Unaudited)
  12
  (b)      Exhibits
  10.1    Purchase
    Agreement between Parkway Properties LP and 233 Chicagoinvest, Inc.
  23.1    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 233 North Michigan for the year ended December 31, 2003.  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 of the Public
  Company Accounting Oversight Board (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 233 North Michigan's revenues and
  expenses.
  In our opinion, the statement of rental revenues 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 233 North
  Michigan for the year ended December 31, 2003, in conformity with accounting principles generally accepted in the United States.
  The accompanying financial statements for 2004 were not
  audited by us and, accordingly, we do not express an opinion on them.
  Ernst &Young LLP
  New
  Orleans, Louisiana
  January
  3, 2005
  233 North Michigan
  Statements of Rental Revenues
  and Direct Operating Expenses
  (in thousands)
  Year Ended
  Nine Months
    Ended
  December 31, 2003
  September 30,
     2004
  (unaudited)
  Rental revenues:
  Minimum
    rents
  $  20,767
  $  13,956
  Reimbursed
    charges
  11,878
  9,018
  Parking income
  1,488
  1,130
  Other
    income
  490
  993
  34,623
  25,097
  Direct operating expenses:
  Administrative
    and miscellaneous expenses
  373
  377
  Salaries
    and wages
  925
  656
  Utilities
  1,610
  1,212
  Janitorial
    services and supplies
  1,181
  942
  Maintenance
    services and supplies
  1,091
  775
  Security
  826
  559
  Insurance
  518
  406
  Management
    fees
  1,263
  880
  Real
    estate taxes
  7,640
  5,508
  15,427
  11,315
  Excess of rental revenues over
    direct operating expenses
  $ 19,196
  $ 13,782
  See report of
  independent auditors and accompanying notes.
  233 North Michigan
  Notes to Statements of Rental Revenues
  and Direct Operating Expenses
  December 31, 2003
  1.    Organization and Significant Accounting Policies
  Description of Property
  On
  January 5, 2005, Parkway Properties, Inc. ("Parkway") entered into an
  agreement to acquire the remaining 70% interest in its investment in 233 North
  Michigan Avenue in Chicago ("233 North Michigan") from Investcorp
  International, Inc., Parkway's joint venture partner.  Under the terms of the
  agreement Parkway will purchase an equity interest in a subsidiary limited
  liability company that owns the property for a price equal to approximately $136
  million.  The Company will close the
  investment in two stages.  The Company is scheduled to close 90% of the
  purchase in mid-January.  The second closing will occur following lender and
  rating agency approval, which is expected within ninety days. The building contains 1,070,000 rentable square feet,
  which includes office, retail and storage space and an adjacent four-level
  structured parking garage.  In connection with the purchase, Parkway will
  assume the first mortgage with a current balance of approximately $100 million,
  a fixed interest rate of 7.21% and a maturity date of July 2011.   Parkway plans
  to fund the purchase through its bank lines of credit, proceeds from a December
  2004 joint venture sale and proceeds from the issuance of securities.
  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 recognized as revenue 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 for 233 North Michigan's non-cancelable operating
  leases at December 31, 2003 are as follows (in thousands):
  Year
  Amount
  2004
  $  19,870
  2005
  20,338
  2006
  18,932
  2007
  15,180
  2008
  15,216
  Thereafter
  46,581
  $136,117
  See report of independent auditors.
  The above amounts do not include tenant reimbursements
  for utilities, taxes, insurance and common area maintenance.
  As of December 31, 2003, 233 North Michigan had six
  customers that occupied approximately 57% of the office space: The CIT Group,
  Inc., Seven Worldwide, Inc., Government Services Administration, United
  Healthcare Services, Young & Rubicam, Inc. and Clear Channel Broadcasting,
  Inc.
  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 future operations of 233
  North Michigan such as depreciation and mortgage
  interest expense.  Management is not aware of any material factors relating to 233
  North Michigan that would cause the reported
  financial information not to be necessarily indicative of future operating
  results.
  3.     Management Fees
  Management fees of approximately 4% of revenues received from the operations of
  233 North Michigan were paid to Parkway Realty Services, a wholly owned
  subsidiary of Parkway.  Management fee expense for the year ended December 31,
  2003 and the nine months ended September 30, 2004 was $1,263,000 and $880,000,
  respectively.
  See report of independent auditors.
  PARKWAY PROPERTIES, INC.
  Pro Forma Consolidated Financial Statements
  (Unaudited)
  The following unaudited pro forma
  consolidated balance sheet as of September 30, 2004 and pro forma consolidated
  statements of income of Parkway Properties, Inc. ("Parkway") for the
  year ended December 31, 2003 and nine months ended September 30, 2004 give
  effect to the purchases by Parkway of certain properties 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 anticipated purchase of the 70%
  interest in 233 North Michigan as if the entire purchase had been consummated
  on September 30, 2004.
  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, 2003.
  Building
  Date of Purchase
  Maitland 200
  01/29/04
  Capital City Plaza
  04/02/04
  Squaw Peak
  08/24/04
  233 North Michigan
  01/14/05
  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, 2003.
  PARKWAY PROPERTIES, INC.
  AND SUBSIDIARIES
  PRO
  FORMA CONSOLIDATED BALANCE SHEET
  SEPTEMBER 30, 2004
  (Unaudited)
  Parkway
  Historical
  Pro Forma
  Adjustments (1)
  Parkway
  Pro Forma
  (In thousands)
  Assets
  Real
    estate related investments:
  Office
    and parking properties
  $1,024,942
  $    185,847
  $1,210,789
  Parking
    development
  1,462
  -
  1,462
  Accumulated
    depreciation
  (139,764)
  -
  (139,764)
  886,640
  185,847
  1,072,487
  Land
    held for sale
  3,528
  -
  3,528
  Investment
    in unconsolidated joint ventures
  19,950
  (14,946)
  5,004
  910,118
  170,901
  1,081,019
  Interest,
    rents receivable and other assets
  77,541
  14,668
  92,209
  Cash
    and cash equivalents
  1,579
  -
  1,579
  $  989,238
  $    185,569
  $1,174,807
  Liabilities
  Notes
    payable to banks
  $  151,758
  $        8,195
  $   159,953
  Mortgage
    notes payable without recourse
  361,972
  112,374
  474,346
  Accounts
    payable and other liabilities
  46,892
  -
  46,892
  560,622
  120,569
  681,191
  Minority
    Interest
  Minority
    interest - unit holders
  40
  -
  40
  Minority
    interest - real estate partnerships
  3,769
  -
  3,769
  3,809
  -
  3,809
  Stockholders'
    Equity
  8.34%
    Series B Cumulative Convertible Preferred
  stock,
    $.001 par value, 2,142,857 shares authorized,
  1,792,857
    shares issued and outstanding
  62,750
  -
  62,750
  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
  57,976
  -
  57,976
  Preferred
    membership interests
  10,741
  10,741
  Common
    stock, $.001 par value, 65,057,143 shares authorized,
  11,430,812
    and 12,784,979 shares issued and outstanding
  in
    2004 and pro forma, respectively
  11
  1
  12
  Excess
    stock, $.001 par value, 30,000,000 shares authorized,
  no
    shares issued
  -
  -
  -
  Common
    stock held in trust, at cost, 130,000 shares
  (4,400)
  -
  (4,400)
  Additional
    paid-in capital
  274,145
  64,999
  339,144
  Unearned
    compensation
  (4,044)
  -
  (4,044)
  Accumulated
    other comprehensive income
  109
  -
  109
  Retained
    earnings
  27,519
  -
  27,519
  424,807
  65,000
  489,807
  $  989,238
  $    185,569
  $1,174,807
  See accompanying notes
  PARKWAY PROPERTIES, INC. AND SUBSIDIARIES
  PRO FORMA CONSOLIDATED STATEMENT OF INCOME
  FOR THE YEAR ENDED DECEMBER
   31, 2003
  (Unaudited)
  Parkway
  Historical
  Pro Forma
  Adjustments (2-3)
  Parkway
  Pro Forma
  (In thousands, except per share
    data)
  Revenues
  Income from office and parking  properties
  $142,196
  $  50,948
  (a)
  $193,144
  Management company income
  2,136
  (626)
  (e)
  1,510
  Interest on note receivable from Moore Building
    Associates LP
  819
  -
  819
  Incentive management fee from Moore Building Associates
    LP
  300
  -
  300
  Other income and deferred gains
  599
  -
  599
  Total Revenues
  146,050
  50,322
  196,372
  Expenses
  Office and parking properties:
  Operating
    expense
  63,362
  23,215
  (a)
  86,577
  Interest
    expense:
  Contractual
  16,026
  9,107
  (c)
  25,133
  Amortization
    of loan costs
  293
  -
  293
  Depreciation
    and amortization
  28,030
  11,760
  (a)
  39,790
  Operating expense for other real estate properties
  37
  -
  37
  Interest expense on bank notes:
  Contractual
  2,834
  1,629
  (d)
  4,463
  Amortization
    of loan costs
  565
  -
  565
  Management company expenses
  391
  -
  391
  General and administrative
  4,201
  (416)
  (e)
  3,785
  Total Expenses
  115,739
  45,295
  161,034
  Income before equity in earnings,  gain and minority
    interest
  30,311
  5,027
  35,338
  Equity in earnings of unconsolidated joint ventures
  2,212
  (1,375)
  (f)
  837
  Gain on sale of joint venture interest and real estate
  10,661
  -
  10,661
  Minority interest - unit holders
  (3)
  -
  (3)
  Net Income
  43,181
  3,652
  46,833
  Change in market value of interest rate swap
  170
  -
  170
  Comprehensive income
  $  43,351
  $    3,652
  $  47,003
  Net income available to common stockholders:
  Net income
  $  43,181
  $    3,652
  $  46,833
  Original issue costs associated with redemption or
    preferred stock
  (2,619)
  -
  (2,619)
  Dividends on preferred stock
  (5,352)
  (1,084)
  (g)
  (6,436)
  Dividends on convertible preferred stock
  (6,091)
  -
  (6,091)
  Net income available to common stockholders
  $  29,119
  $    2,568
  $  31,687
  Net income per common share:
  Basic
  $      2.85
  -
  $      2.74
  Diluted:
  $      2.79
  -
  $      2.69
  Dividends per common share
  $      2.60
  -
  $      2.60
  Weighted average shares outstanding:
  Basic
  10,224
  1,354
  11,578
  Diluted
  10,453
  1,354
  11,807
  See accompanying notes.
  PARKWAY PROPERTIES, INC. AND SUBSIDIARIES
  PRO FORMA CONSOLIDATED STATEMENT OF INCOME
  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004
  (Unaudited)
  Parkway
  Historical
  Pro Forma
  Adjustments (2-3)
  Parkway
  Pro Forma
  (In thousands, except per share data)
  Revenues
  Income from office and parking  properties
  $119,351
  $  29,913
  (b)
  $149,264
  Management company income
  1,270
  (628)
  (e)
  642
  Other income and deferred gains
  20
  -
  20
  Total Revenues
  120,641
  29,285
  149,926
  Expenses
  Office and parking properties:
  Operating expense
  55,662
  13,913
  (b)
  69,575
  Interest expense:
  Contractual
  14,369
  5,564
  (c)
  19,933
  Prepayment expenses
  130
  -
  130
  Amortization
    of loan costs
  407
  -
  407
  Depreciation and
    amortization
  26,641
  5,895
  (b)
  32,536
  Operating expense for other real estate properties
  18
  -
  18
  Interest expense on bank notes:
  Contractual
  2,696
  525
  (d)
  3,221
  Amortization
    of loan costs
  329
  -
  329
  Management company expenses
  259
  -
  259
  General and administrative
  3,089
  (700)
  (e)
  2,389
  Total Expenses
  103,600
  25,197
  128,797
  Income before equity in earnings, gain and
  minority interest
  17,041
  4,088
  21,129
  Equity in earnings of unconsolidated joint ventures
  1,469
  (769)
  (f)
  700
  Gain on note receivable
  774
  -
  774
  Minority interest - unit holders
  (2)
  -
  (2)
  Minority interest - real estate partnerships
  92
  -
  92
  Net Income
  19,374
  3,319
  22,693
  Change in market value of interest rate swap
  109
  -
  109
  Comprehensive income
  $  19,483
  $    3,319
  $  22,802
  Net income available to common stockholders:
  Net income
  $  19,374
  $    3,319
  $  22,693
  Dividends on preferred stock
  (4,135)
  (271)
  (g)
  (4,406)
  Dividends on convertible preferred stock
  (4,122)
  -
  (4,122)
  Net income available to common stockholders
  $  11,117
  $    3,048
  $  14,165
  Net income per common share:
  Basic
  $      1.00
  -
  $     1.14
  Diluted
  $        .98
  -
  $     1.12
  Dividends per common share
  $      1.95
  -
  $     1.95
  Weighted average shares outstanding:
  Basic
  11,094
  1,354
  12,448
  Diluted
  11,299
  1,354
  12,653
  See accompanying notes
  PARKWAY PROPERTIES, INC.
  Notes to Pro Forma Consolidated Financial Statements
  (Unaudited)
  1.          On January 5, 2005, Parkway Properties,
  Inc. ("Parkway") entered into an agreement to acquire the remaining
  70% interest in its investment in 233 North Michigan Avenue in Chicago
  ("233 North Michigan") from Investcorp International, Inc., Parkway's
  joint venture partner.  Under the terms of the agreement Parkway will purchase
  an equity interest in a subsidiary limited liability company that owns the
  property for a price equal to approximately $136 million.  The Company will close the investment in two stages. 
  The Company is scheduled to close 90% of the purchase in mid-January.  The
  second closing will occur following lender and rating agency approval, which is
  expected within ninety days. The building
  contains 1,070,000 rentable square feet, which includes office, retail and
  storage space and an adjacent four-level structured parking garage.  In
  connection with the purchase, Parkway will assume the first mortgage with a
  current balance of approximately $100 million, a fixed interest rate of 7.21%
  and a maturity date of July 2011.   Parkway plans to fund the purchase through
  its bank lines of credit, proceeds from a December 2004 joint venture sale and
  proceeds from the issuance of securities.
  2.       The pro forma adjustments to the
  Consolidated Statement of Income for the year ended December 31, 2003 and nine
  months ended September 30, 2004 set forth the effects of Parkway's purchase of
  the following buildings as if they had been consummated on January 1, 2003.
  Date of
  Building
  Purchase
  Maitland
    200
  01/29/04
  Capital City Plaza
  04/02/04
  Squaw Peak
  08/24/04
  233
    North Michigan
  01/14/05
  These
  pro forma adjustments are detailed below for the year ended December 31, 2003
  and nine months ended September 30, 2004.
  The
  effect on income and expenses from real estate properties is as follows (in
  thousands):
  (a)   For
  the year ended December
   31, 2003:
  Revenue
  Expenses
  Income From
  Real Estate Owned
  Building
  Real Estate
  Operating
  Depreciation
  Properties
  Expense
  Expense
  Maitland
    200
  $    3,742
  $   1,561
  $    1,226
  Capital City Plaza
  8,624
  4,186
  3,670
  Squaw Peak
  5,643
  2,041
  2,613
  233
    North Michigan
  32,939
  15,427
  4,251
  $  50,948
  $ 23,215
  $  11,760
  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 nine
  months ended September 30, 2004:
  Revenue
  Expenses
  Income From
  Real Estate Owned
  Building
  Real Estate
  Operating
  Depreciation
  Properties
  Expense
  Expense
  Maitland
    200
  $     278
  $     116
  $     102
  Capital City Plaza
  2,001
  965
  917
  Squaw Peak
  3,796
  1,517
  1,687
  233
    North Michigan
  23,838
  11,315
  3,189
  $29,913
  $13,913
  $  5,895
  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 on non-recourse
  debt assumed upon purchase as if in place January 1, 2003 and is detailed below (in
  thousands).
  Nine
  Property/Placement
  Year Ended
  Months Ended
  Date/Rate
  Debt
  12/31/03
  09/30/04
  Debt assumed in Capital City Plaza purchase
  04/04    3.67%
  $  49,073
  $  1,796
  $      437
  Debt assumed in Squaw Peak
    purchase
  08/04    4.92%
  39,604
  1,922
  1,208
  Debt assumed in 233 North Michigan purchase
  01/05    4.87%
  112,374
  5,389
  3,919
  $201,051
  $  9,107
  $  5,564
  (d)   The
  pro forma effect of the purchases on interest expense on notes payable to banks
  was $1,629,000 for the year ended December 31, 2003 and $525,000 for the nine
  months ended September 30, 2004.
  (e)   The
  net pro forma effect of the 233 North Michigan purchase on management company
  income and general and administrative expense is a reduction of $210,000 for
  the year ended December 31, 2003 and an increase of $72,000 for the nine months
  ended September 30, 2004.
  (f)   The
  pro forma effect of the 233 North Michigan purchase on equity in earnings of
  unconsolidated joint ventures for the year ended December 31, 2003 and nine
  months ended September 30, 2004 is a reduction of $1,375,000 and $769,000,
  respectively.
  (g)   The
  pro forma effect of the Capital City Plaza Purchase on dividends on preferred
  membership interests was $1,084,000 for the year ended December 31, 2003 and
  $271,000 for the nine months ended September 30, 2004.
  3.       The pro forma net income per share for the year ended
  December 31, 2003 and the nine months ended September 30, 2004 reflect the
  issuance of 1,354,000 shares of Parkway common stock.
  4.       No additional income tax expenses
  were provided because of the Company's net operating loss carryover and status
  as a REIT.
  5.       Diluted net income per share for
  the year ended December 31, 2003 and nine months ended September 30, 2004 was $2.79
  and $.98, respectively, based on diluted weighted average shares outstanding of
  10,453,000 and 11,299,000, respectively.
  Pro
  forma diluted net income per share for the year ended December 31, 2003 and the
  nine months ended September 30, 2004 was $2.69 and $1.12, respectively, based
  on diluted weighted average shares outstanding of 11,807,000 and 12,653,000,
  respectively.
  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:   January
    7, 2005
  PARKWAY
    PROPERTIES, INC.
  BY:
  /s/ Mandy
    M. Pope
  Mandy
    M. Pope, CPA
  Chief
    Accounting Officer