content: UNITED STATES
  
                 SECURITIES AND EXCHANGE COMMISSION
                                  
                        WASHINGTON, DC  20549
                                  
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                              FORM 8-K
                                  
                                  
                           CURRENT REPORT
                                  
                                  
                   Pursuant to Section 13 or 15(d)
                               of the
                   Securities Exchange Act of 1934
  
  
  Date of Report (Date earliest event reported): February 23, 1998
                                                 -----------------
  
  
                            PARKWAY PROPERTIES, INC.
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        (Exact name of Registrant as specified in its charter)
  
  
  
  Maryland                    1-11533                   74-2123597
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  (State or other     (Commission File Number)       (IRS Employer
  jurisdiction of                                    Identification
  incorporation)                                         Number)
   
  One Jackson Place Suite 1000
    188 East Capitol Street
        P. O. Box 24647
       Jackson,  Mississippi                                 39225-
  4647
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  (Address of principal executive offices)               (Zip Code)
  
  
  Registrant's telephone number, including area code (601) 948-4091
                                                     ---------------
  ------------------------------------------------------------------
    (Former name or former address, if changed since last report)
  
  
                              FORM 8-K
                                  
                      PARKWAY PROPERTIES, INC.
  
  
  Item 5.   Other Events.
  
  On  February  23,  1998,  Parkway  Properties,  Inc.  closed  its
  previously  announced sale of 451,128 shares of its Common  Stock
  under  its  existing shelf registration statement at  a  purchase
  price  of $33.25 per share to A.G. Edwards & Sons, Inc.  The  net
  proceeds  of  the offering (approximately $14.2  million  net  of
  commissions  and  expenses) will be used  for  the  repayment  of
  approximately   $14.2  million  of  outstanding   variable   rate
  indebtedness.   Following  this  transaction,  the  Company   had
  10,221,424 shares of Common Stock outstanding.
  
  Item 7.   Financial Statements and Exhibits.
  
            (c)  Exhibits.
  
             (1)   Underwriting Agreement between  A.G.  Edwards  &
       Sons,  Inc., Parkway Properties, Inc. and Parkway Properties
       LP  dated  February  18, 1998.  Parkway  agrees  to  furnish
       supplementally to the Securities and Exchange Commission  on
       request  a copy of any omitted schedule or exhibit  to  this
       agreement.
  
                              FORM 8-K
                                  
                      PARKWAY PROPERTIES, INC.
                                  
                                  
                             SIGNATURES
  
  
  Pursuant  to the requirements of the Securities Exchange  Act  of
  1934, the Registrant has duly caused this report to be signed  on
  its behalf by the undersigned hereunto duly authorized.
  
  DATE:  February 23, 1998           PARKWAY PROPERTIES, INC.
  
                                     BY:  /s/Sarah P. Clark
                                          Sarah P. Clark
                                          Senior Vice President,
                                          Chief Financial Officer,
                                          Treasurer and Secretary
                                          
  
  
  
                                     February 18, 1998
  
  A.G. EDWARDS & SONS, INC.
  One North Jefferson Avenue
  St. Louis, Missouri 63103
       
       The   undersigned,  Parkway  Properties,  Inc.,  a  Maryland
  corporation (the "Company") and Parkway Properties LP, a Delaware
  limited  partnership (the "Operating Partnership"; such Operating
  Partnership together with the Company are hereinafter referred to
  as  the  "Transaction Entities"), hereby confirm their agreements
  with you (the "Underwriter") as follows:
  
        1.    Description of Shares.  The Company proposes to issue
  and  sell to you 451,128 shares of its Common Stock (the  "Common
  Stock"),  par value $.001 per share (the "Shares").   The  Shares
  are more fully described in the Prospectus hereinafter defined.
  
       2.   Purchase, Sale and Delivery of Shares.  On the basis of
  the  representations, warranties and agreements herein contained,
  but  subject  to the terms and conditions herein set  forth,  the
  Company agrees to sell to you, and you agree to purchase from the
  Company at a purchase price of $31.59 per share, 451,128 Shares.
       
       The  Company  will deliver definitive certificates  for  the
  Shares  at  the  office of A.G. Edwards & Sons,  Inc.,  77  Water
  Street,  New  York, New York ("Edwards' Office"), or  such  other
  place  as you and the Company may mutually agree upon (the "Place
  of  Closing"), for your account against payment to the Company of
  the purchase price for the Shares sold to you by wire transfer of
  immediately  available funds, at 10:00 a.m., St. Louis  time,  on
  February 23, 1998, or at such other time and date not later  than
  three  full  business days thereafter as you and the Company  may
  agree,  such  time and date of payment and delivery being  herein
  called the "Closing Date."
       
       The  certificates for the Shares so to be delivered will  be
  made  available to you for inspection at Edwards' Office (or such
  other  place as you and the Company may mutually agree  upon)  at
  least one full business day prior to the Closing Date and will be
  in  such names and denominations as you may request at least  one
  full business day prior to the Closing Date.
  
        3.    Representations,  Warranties and  Agreements  of  the
  Transaction  Entities. (a) The Transaction Entities, jointly  and
  severally, represent and warrant to and agree with you that:
       
           (i)   The Company meets the requirements for use of Form
       S-3  under  the  Securities Act of  1933,  as  amended  (the
       "Act");  a  registration  statement (Registration  No.  333-
       29259)  on Form S-3, including a prospectus relating to  the
       registration  of the Shares and such other securities  which
       may be offered from time to time in accordance with Rule 415
       under  the  Act,  and such amendments to  such  registration
       statement  as  may have been required to the  date  of  this
       Agreement,  has  been  carefully  prepared  by  the  Company
       pursuant to and in conformity with the requirements  of  the
       Act,   and  the  Rules  and  Regulations  (the  "Rules   and
       Regulations") of the Securities and Exchange Commission (the
       "Commission")  thereunder,  was filed  with  the  Commission
       under  the  Act  and  have been declared  effective  by  the
       Commission.    Copies   of   such  registration   statement,
       including  any amendments thereto, each related  preliminary
       prospectus   contained  therein,  the  exhibits,   financial
       statements  and schedules have heretofore been delivered  by
       the   Company   to   you.   A  prospectus  supplement   (the
       "Prospectus  Supplement") setting forth  the  terms  of  the
       offering,  sale and plan of distribution of the  Shares  and
       additional  information  concerning  the  Company  and   its
       business  has been or will be so prepared and will be  filed
       pursuant to Rule 424(b) of the Rules and Regulations  on  or
       before  the  second business day after the date  hereof  (or
       such  earlier  time  as may be required  by  the  Rules  and
       Regulations).   The  term "Registration Statement"  as  used
       herein  means  the  registration statement,  and  the  basic
       prospectus  included therein, as amended at the time  it  or
       any amendment thereto became effective under the Act, or  at
       the  time  any  Annual Report on Form 10-K is filed  by  the
       Company   with   the  Commission  (the  "Effective   Date"),
       including  financial  statements and all  exhibits  and  all
       documents incorporated by reference therein pursuant to Item
       12  of  Form S-3 under the Act.  Any document filed  by  the
       Company  under  the  Securities Exchange  Act  of  1934,  as
       amended (the "Exchange Act") after the effective date of the
       Registration  Statement  or  the  date  of  the   Prospectus
       Supplement  and incorporated by reference in the  Prospectus
       shall be deemed to be included in the Registration Statement
       and  the Prospectus as of the date of such filing.  The term
       "Prospectus"  as used herein means (i) the basic  prospectus
       included  in  the  Registration Statement at  the  Effective
       Date,  as supplemented by the Prospectus Supplement as first
       filed  with  the Commission pursuant to Rule 424(b)  of  the
       Rules and Regulations, except that, if such basic prospectus
       is amended or supplemented subsequent to the Effective Date,
       the term "Prospectus" shall refer to the basic prospectus as
       so  amended  or supplemented and as further supplemented  by
       the  Prospectus  Supplement or (ii) if  no  such  filing  is
       required,  the  form  of final prospectus  included  in  the
       Registration Statement at the Effective Date or (iii)  if  a
       Term  Sheet  or  Abbreviated Term Sheet (as such  terms  are
       defined  in  Rule  434(b) and 434(c), respectively,  of  the
       Rules and Regulations) is filed with the Commission pursuant
       to  Rule  424(b)(7) of the Rules and Regulations,  the  Term
       Sheet  or  Abbreviated Term Sheet and the  last  Preliminary
       Prospectus filed with the Commission prior to the  time  the
       Registration  Statement  became  effective,  taken  together
       (including,  in  each  case, the documents  incorporated  by
       reference therein pursuant to Item 12 of Form S-3 under  the
       Act).   The  term  "Preliminary Prospectus" as  used  herein
       shall mean a preliminary prospectus included at any time  in
       the Registration Statement.
       
           (ii)   The Commission has not issued, and is not to  the
       knowledge  of  the Company threatening to  issue,  an  order
       preventing   or  suspending  the  use  of  any   Preliminary
       Prospectus or the Prospectus nor instituted proceedings  for
       that  purpose.  Each Preliminary Prospectus at its  date  of
       issue, the Registration Statement at the Effective Date, and
       the  Prospectus at its date of issue and any  amendments  or
       supplements  thereto contains or will contain, as  the  case
       may  be,  all  statements which are required  to  be  stated
       therein  by,  and in all material respects conform  or  will
       conform, as the case may be, to the requirements of, the Act
       and  the  Rules  and Regulations.  Neither the  Registration
       Statement  nor  any amendment thereto, as of the  applicable
       effective   date,  and  neither  the  Prospectus   nor   any
       supplement thereto, as of its applicable issue date  or  the
       Closing Date, contains or will contain, as the case may  be,
       any  untrue  statement of a material fact or omits  or  will
       omit  to  state  any  material fact required  to  be  stated
       therein or necessary to make the statements therein, in  the
       light  of the circumstances under which they were made,  not
       misleading;  provided, however, that the  Company  makes  no
       representation or warranty as to information contained in or
       omitted  from the Registration Statement or the  Prospectus,
       or  any such amendment or supplement, in reliance upon,  and
       in  conforming  with, written information furnished  to  the
       Company  by  you  specifically for use  in  the  preparation
       thereof.
       
          (iii)    The documents incorporated by reference  in  the
       Prospectus pursuant to Item 12 of Form S-3 under the Act, at
       the  time  they were filed with the Commission, complied  in
       all  material respects with the requirements of the Exchange
       Act, and the rules and regulations adopted by the Commission
       thereunder (the "1934 Act Rules and Regulations"), and, when
       read  together  and  with  the  other  information  in   the
       Prospectus,  at  the time the Registration Statement  became
       effective and at the Closing Date, did not or will  not,  as
       the  case  may be, contain an untrue statement of a material
       fact  or omit to state a material fact required to be stated
       therein  or  necessary  to make the statements  therein  not
       misleading.
       
           (iv)   The filing of the Registration Statement and  the
       execution  and  delivery of this Agreement  have  been  duly
       authorized  by  the Board of Directors of the Company;  this
       Agreement constitutes a valid and legally binding obligation
       of   each   of  the  Transaction  Entities  enforceable   in
       accordance  with  its  terms  (except  to  the  extent   the
       enforceability  of  the  indemnification  and   contribution
       provisions  of  Section 6 hereof may be  limited  by  public
       policy  considerations as expressed in the Act as  construed
       by   courts   of  competent  jurisdiction,  and  except   as
       enforceability  may  be  limited by bankruptcy,  insolvency,
       reorganization,   moratorium  and   other   laws   affecting
       creditors'  rights  generally and by general  principles  of
       equity); the issue and sale of the Shares by the Company and
       the  performance  of this Agreement and the consummation  of
       the  transactions herein contemplated will not result  in  a
       violation  of  any of the Transaction Entities  articles  of
       incorporation  or  bylaws, partnership  agreement  or  other
       organizational documents, or result in a breach or violation
       of  any  of  the  terms and provisions of, or  constitute  a
       default  under, or result in the creation or  imposition  of
       any  lien,  charge  or encumbrance upon  any  properties  or
       assets  of  the  Transaction Entities or their  subsidiaries
       under,  any statute, or under any indenture, mortgage,  deed
       of   trust,   note,  loan  agreement,  sale  and   leaseback
       arrangement  or other agreement or instrument to  which  the
       Transaction Entities or any of their subsidiaries is a party
       or by which they are bound or to which any of the properties
       or  assets of the Transaction Entities or their subsidiaries
       is subject, or any order, rule or regulation of any court or
       governmental  agency  or body having jurisdiction  over  the
       Transaction   Entities  or  their  subsidiaries   or   their
       properties,  except  to such extent as does  not  materially
       adversely  affect  the business of the Transaction  Entities
       and  their  subsidiaries  taken  as  a  whole;  no  consent,
       approval,    authorization,    order,    registration     or
       qualification of or with any court or governmental agency or
       body  is  required for the consummation of the  transactions
       herein  contemplated, except such as may be required by  the
       National  Association  of  Securities  Dealers,  Inc.   (the
       "NASD")  or  under the Act or Rules and Regulations  or  any
       state securities laws.
       
             (v)     No   Transaction  Entity  nor  any  of   their
       subsidiaries  has  sustained since the date  of  the  latest
       audited  financial  statements included or  incorporated  by
       reference   in   the   Prospectus  any  material   loss   or
       interference  with its business from fire, explosion,  flood
       or  other calamity, whether or not covered by insurance,  or
       from  any  labor  dispute or court or  governmental  action,
       order  or decree.  Except as contemplated in the Prospectus,
       subsequent  to the respective dates as of which  information
       is  given  in the Registration Statement and the Prospectus,
       the  Transaction Entities and their subsidiaries taken as  a
       whole have not incurred any material liabilities or material
       obligations,  direct  or  contingent,  other  than  in   the
       ordinary  course of business, or entered into  any  material
       transactions  not  in the ordinary course of  business,  and
       there  has not been any material change in the capital stock
       or  long-term  debt  of the Transaction Entities  and  their
       subsidiaries taken as a whole or any material adverse change
       in  the condition (financial or other), net worth, business,
       affairs,  management, prospects or results of operations  of
       the  Transaction Entities and their subsidiaries taken as  a
       whole.  The Transaction Entities and their subsidiaries have
       filed  all  necessary federal, state and foreign income  and
       franchise  tax  returns  and paid all  taxes  shown  as  due
       thereon; all tax liabilities are adequately provided for  on
       the books of the Transaction Entities and their subsidiaries
       except  to  such  extent as would not  materially  adversely
       affect  the business of the Transaction Entities  and  their
       subsidiaries taken as a whole, the Transaction Entities  and
       their  subsidiaries  have  made all  necessary  payroll  tax
       payments  and are current and up-to-date as of the  date  of
       this  Agreement;  and  the Transaction  Entities  and  their
       subsidiaries  have  no knowledge of any  tax  proceeding  or
       action   pending  or  threatened  against  the   Transaction
       Entities   or  their  subsidiaries  which  might  materially
       adversely affect their business or property.
       
           (vi)    Except as described in the Prospectus, there  is
       not  now  pending  or, to the knowledge of  the  Transaction
       Entities,  threatened or contemplated, any action,  suit  or
       proceeding  to  which  the  Transaction  Entities  or  their
       subsidiaries  is a party before or by any court  or  public,
       regulatory  or  governmental agency or body which  might  be
       expected to result (individually or in the aggregate) in any
       material  adverse  change  in the  condition  (financial  or
       other),  business  or prospects of the Transaction  Entities
       and  their  subsidiaries  taken as  a  whole,  or  might  be
       expected to materially and adversely affect (individually or
       in  the  aggregate)  the properties or assets  thereof,  and
       there  are  no  contracts or documents  of  the  Transaction
       Entities or their subsidiaries which would be required to be
       filed  as exhibits to the Registration Statement by the  Act
       or by the Rules and Regulations which have not been filed as
       exhibits  to  the Registration Statement or incorporated  by
       reference therein.
       
          (vii)    The  Company  has  duly and  validly  authorized
       capital   stock   as  described  in  the   Prospectus;   all
       outstanding  shares of Common Stock of the Company  and  the
       Shares  conform,  or  when  issued  will  conform,  to   the
       description  thereof in the Prospectus and  have  been,  or,
       when  issued and paid for will be, duly authorized,  validly
       issued,  fully paid and nonassessable; and the  issuance  of
       the Shares to be purchased from the Company hereunder is not
       subject to preemptive rights.
       
         (viii)    Each  of  the  Transaction  Entities  and  their
       subsidiaries have been duly incorporated or formed,  as  the
       case  may be, and is a validly existing corporation, general
       or  limited partnership, or other legal entity, as the  case
       may  be,  in  good standing under the laws of the  state  or
       other jurisdiction in which it is incorporated or formed, as
       the  case  may  be.   The  Transaction  Entities  and  their
       subsidiaries  have full power and authority  (corporate  and
       other)  to  own,  lease  and operate  their  properties  and
       conduct  their  businesses as described in  the  Prospectus;
       each  of the Transaction Entities and their subsidiaries  is
       duly  qualified or registered to do business and is in  good
       standing  in each state or other jurisdiction in  which  its
       ownership  or  leasing of property or  conduct  of  business
       legally  requires  such  qualification,  except  where   the
       failure to be so qualified would not have a material adverse
       effect on the ability of the Transaction Entities and  their
       subsidiaries to conduct their business as described  in  the
       Prospectus; and the outstanding shares of capital  stock  or
       ownership  interests of the Transaction Entities  and  their
       subsidiaries  have been duly authorized and validly  issued,
       are  fully  paid  and nonassessable and  are  owned  by  the
       applicable  Transaction  Entity  free  and  clear   of   any
       mortgage, pledge, lien, encumbrance, charge or adverse claim
       and  are  not  the subject of any agreement or understanding
       with  any  person;  except  for  options  pursuant  to   the
       Company's  1994  Stock Option Plan and  the  Company's  1991
       Directors  Stock  Option  Plan,  as  amended,  no   options,
       warrants  or  other rights to purchase, agreement  or  other
       obligations  to  issue  or  other  rights  to  convert   any
       obligations  into  shares  of  capital  stock  or  ownership
       interest in the subsidiaries are outstanding.
       
           (ix)   Ernst & Young LLP, the accounting firm which  has
       certified   the   financial   statements   filed   with   or
       incorporated  by  reference  in  and  as  a  part   of   the
       Registration Statement, is an independent public  accounting
       firm  within  the  meaning of the  Act  and  the  Rules  and
       Regulations.
       
            (x)    The  consolidated financial  statements  of  the
       Company  together  with  the  related  schedules  and  notes
       thereto,  set forth or included or incorporated by reference
       in  the Registration Statement and Prospectus fairly present
       the  financial condition of the Company and its consolidated
       subsidiaries  as of the dates indicated and the  results  of
       operations,  changes  in  financial position,  shareholders'
       equity and cash flows for the periods therein specified,  in
       conformity  with  generally accepted  accounting  principles
       consistently applied throughout the periods involved (except
       as  otherwise  stated  therein).  The summary  and  selected
       financial  and statistical data included or incorporated  by
       reference  in the Registration Statement and the  Prospectus
       present  fairly the information shown therein  and,  to  the
       extent  based upon or derived from the financial statements,
       have  been compiled on a basis consistent with the financial
       statements  presented therein.  In addition, the  pro  forma
       financial  statements of the Company, and the related  notes
       thereto,  included  or  incorporated  by  reference  in  the
       Registration Statement and the Prospectus present fairly the
       information shown therein, have been prepared in  accordance
       with  the Commission's rules and guidelines with respect  to
       pro  forma  financial  statements  and  have  been  properly
       compiled on the basis described therein, and the assumptions
       used  in  the  preparation thereof are  reasonable  and  the
       adjustments used therein are appropriate to give  effect  to
       the  transactions  and  circumstances referred  to  therein.
       Furthermore, all financial statements required by Rule  3-14
       of  Regulation  S-X  ("Rule 3-14")  have  been  included  or
       incorporated by reference in the Registration Statement  and
       the  Prospectus  and any such financial  statements  are  in
       conformity  with the requirements of Rule  3-14.   No  other
       financial statements are required to be set forth or  to  be
       incorporated  by reference in the Registration Statement  or
       the  Prospectus  under the Act or the Rules and  Regulations
       thereunder.
       
           (xi)    No Transaction Entity nor any subsidiary  is  in
       default  with respect to any contract or agreement to  which
       it  is a party; provided that this representation shall  not
       apply  to defaults which in the aggregate are not materially
       adverse  to  the  condition,  financial  or  other,  or  the
       business or prospects of the Transaction Entities and  their
       subsidiaries taken as a whole.
       
          (xii)    No Transaction Entity nor any subsidiary  is  in
       violation  of  any  other laws, ordinances  or  governmental
       rules  or  regulations  to which it is  subject,  including,
       without limitation, Section 13 of the Exchange Act,  and  no
       Transaction Entity nor any subsidiary has failed  to  obtain
       any  license, permit, franchise, easement, consent, or other
       governmental  authorization  necessary  to  the   ownership,
       leasing and operation of its properties or to the conduct of
       its  business,  which violation or failure would  materially
       adversely   affect   the   business,  operations,   affairs,
       properties,  prospects, profits or condition  (financial  or
       other)  of  the Transaction Entities and their  subsidiaries
       taken  as a whole.  No Transaction Entity nor any subsidiary
       has,  at  any time during the past five years, (A) made  any
       unlawful  contributions to any candidate for  any  political
       office,  or  failed  fully to disclose any  contribution  in
       violation  of  law, or (B) made any payment  to  any  state,
       federal  or  foreign government official,  or  other  person
       charged with similar public or quasi-public duty (other than
       payment required or permitted by applicable law).
       
         (xiii)   Except as set forth on Schedule I, there  are  no
       holders  of  securities  of  the Company  having  rights  to
       registration thereof or preemptive rights to purchase Common
       Stock  of the Company except as disclosed in the Prospectus.
       Holders of registration rights have waived such rights  with
       respect to the offering being made by the Prospectus.
       
          (xiv)    Except  as  described  in  the  Prospectus,  the
       Transaction Entities and their subsidiaries own or  possess,
       or can acquire on reasonable terms, adequate patents, patent
       licenses,   trademarks,  service  marks  and   trade   names
       necessary to conduct the business now operated by them,  and
       no  Transaction Entity nor any subsidiary has  received  any
       notice  of infringement of or conflict with asserted  rights
       of  others  with  respect to any patents,  patent  licenses,
       trademarks, service marks or trade names which, singly or in
       the  aggregate,  if the subject of an unfavorable  decision,
       ruling  or finding, would have a material adverse effect  on
       the conduct of the business, operations, financial condition
       or income of the Transaction Entities and their subsidiaries
       taken as a whole.
       
           (xv)    The  Transaction  Entities  and  each  of  their
       subsidiaries has good and marketable title to all properties
       and  assets described in the Prospectus as owned by it, free
       and   clear   of   all  liens,  charges,   encumbrances   or
       restrictions,  except  such as  (i)  are  described  in  the
       Prospectus or (ii) are not material to the business  of  the
       Transaction  Entities  or  their subsidiaries,  taken  as  a
       whole.    The  Transaction  Entities  and  each   of   their
       subsidiaries  has  valid, subsisting and enforceable  leases
       for the properties described in the Prospectus as leased  by
       it,  with  such exceptions as are not material  and  do  not
       materially  interfere with the use made and proposed  to  be
       made of such properties by the Transaction Entities and such
       subsidiaries; no tenant under any of the leases pursuant  to
       which  any of the Transaction Entities leases its properties
       has  an  option  or right of first refusal to  purchase  the
       premises demised under such lease; the use and occupancy  of
       each  of the properties of the Transaction Entities complies
       in  all  material  respects with all  applicable  codes  and
       zoning  laws and regulations; the Transaction Entities  have
       no  knowledge  of any pending or threatened condemnation  or
       zoning  change that will in any material respect affect  the
       size of, use of, improvements of, construction on, or access
       to  any  of the properties of the Transaction Entities;  and
       the Transaction Entities have no knowledge of any pending or
       threatened  proceeding or action that  will  in  any  manner
       affect  the  size of, use of, improvements on,  construction
       on,  or  access to any of the properties of the  Transaction
       Entities.
       
         (xvi)   Title insurance in favor of the Transaction Entity
       (or  the  subsidiary) which holds title to such property  is
       maintained with respect to each of the properties  owned  by
       such  Transaction Entity in an amount at least equal to  the
       greater  of (i) the cost of acquisition of such property  or
       (ii)  the cost of construction by the Transaction Entity  of
       the  improvements located on such property (measured at  the
       time of such construction), except, in each case, where  the
       failure  to maintain such title insurance would not  have  a
       material  adverse  effect  on the  condition,  financial  or
       otherwise,  or  the earnings, business affairs  or  business
       prospects of the Transaction Entities and their subsidiaries
       taken as a whole.  Title insurance in favor of the mortgagee
       is  maintained in an amount equal to the maximum  commitment
       of the related loan.
       
         (xvii)    (a)  Except as disclosed in the Prospectus,  the
       Transaction  Entities have no knowledge of (i) the  presence
       of  any  hazardous  substances, hazardous  materials,  toxic
       substances,  pollutants  or waste  materials  (collectively,
       "Hazardous  Materials") on any of the  properties  owned  or
       operated  by the Transaction Entities and their subsidiaries
       (the  "Properties"), except that which is in compliance with
       all  Environmental  Laws or (ii) any spills,  releases,  dis
       charges  or  disposals  of  Hazardous  Materials  that  have
       occurred   or  are  presently  occurring  on  or  from   the
       Properties,  which presence or occurrence would individually
       or  in  the aggregate have a material adverse effect on  the
       conduct of the business, operations, financial condition  or
       income  of  the Transaction Entities and their  subsidiaries
       taken as a whole.
       
            (b)    Except  as  disclosed  in  the  Prospectus,  the
       Transaction   Entities,   their   subsidiaries   and   their
       Properties   (i)  are  in  compliance  with  any   and   all
       Environmental Laws, (ii) have received all permits, licenses
       or  other  approvals required under applicable Environmental
       Laws  to  conduct its business and (iii) are  in  compliance
       with all terms and conditions of any such permit, license or
       approval, except where such noncompliance with Environmental
       Laws, failure to receive required permits, licenses or other
       approvals or failure to comply with the terms and conditions
       of   such   permits,   licenses  or  approvals   would   not
       individually  or  in the aggregate have a  material  adverse
       effect on the conduct of the business, operations, financial
       condition  or income of the Transaction Entities  and  their
       subsidiaries taken as a whole.
       
            (c)    The  Transaction  Entities engage  environmental
       consultants   to   perform  phase   I   environmental   site
       assessments in accordance with the ASTM Standard to identify
       any  environmental conditions prior to the purchase of their
       properties.  On the basis of such phase I environmental site
       assessments, or such additional investigations as  may  have
       been   performed  based  on  the  findings  of  a  phase   I
       assessment, and, except as described in the Prospectus,  the
       Transaction Entities and their subsidiaries have  reasonably
       concluded that no such environmental conditions exist  which
       would,  individually or in the aggregate,  have  a  material
       adverse  effect on the conduct of the business,  operations,
       financial  condition  or income of the Transaction  Entities
       and their subsidiaries taken as a whole.
       
             (d)    As  used  herein,  "Hazardous  Material"  shall
       include,   without  limitation  any  flammable   explosives,
       radioactive   materials,  hazardous   materials,   hazardous
       wastes, hazardous or toxic substances, or related materials,
       asbestos,   polychlorinated  biphenyls  ("PCBs"),  petroleum
       products and by-products and substances defined or listed as
       "hazardous   substances,"  "toxic   substances,   "hazardous
       waste,"  or "hazardous materials" in any Federal,  state  or
       local Environmental Law.
       
           (e)   As used herein, "Environmental Law" shall mean all
       laws,  regulations  or ordinances of any Federal,  state  or
       local governmental authority having or claiming jurisdiction
       over any of the Properties (a "Governmental Authority") that
       are designed to protect public health and the environment or
       regulate  the  handling  of Hazardous Materials,  including,
       without    limitation,   the   Comprehensive   Environmental
       Response,  Compensation,  and  Liability  Act  of  1980,  as
       amended  (42  U.S.C. Section 9601 et seq.)  ("CERCLA"),  the
       Hazardous Material Transportation Act, as amended (49 U.S.C.
       Section  1801  et  seq.),  the  Resource  Conservation   and
       Recovery  Act, as amended (42 U.S.C. Section 6901 et  seq.),
       the  Federal  Water Pollution Control Act,  as  amended  (33
       U.S.C.  Section  1251 et seq.), and the Clean  Air  Act,  as
       amended  (42 U.S.C. Section 7401 et seq.), and any  and  all
       analogous future federal or present or future state or local
       laws.
       
       (xviii)   No labor disturbance exists with the employees  of
       the  Transaction  Entities  or  their  subsidiaries  or   is
       imminent which would have a material adverse effect  on  the
       Transaction  Entities  and their  subsidiaries  taken  as  a
       whole.
       
          (xix)    The  Company has not taken and  will  not  take,
       directly  or  indirectly, any action designed  to  or  which
       might   reasonably  be  expected  to  cause  or  result   in
       stabilization  or manipulation of the price  of  the  Common
       Stock, and the Company is not aware of any such action taken
       or to be taken by affiliates of the Company.
       
           (xx)   The Company is not an "investment company"  or  a
       company  "controlled" by an "investment company" within  the
       meaning of the Investment Company Act of 1940, as amended.
       
          (xxi)   The mortgages and deeds of trust encumbering  the
       properties  and assets described in the Prospectus  are  not
       convertible   nor  does  any  Transaction  Entity   hold   a
       participating interest therein.
       
         (xxii)   Property and casualty insurance in favor  of  the
       Company is maintained with respect to each of the properties
       owned  by the Transaction Entities in an amount and on  such
       terms as is reasonable and customary for businesses of  this
       type.
       
       (xxiii)    The  Company has continuously been organized  and
       operated   in   conformity   with   the   requirements   for
       qualification  as a real estate investment trust  under  the
       Internal  Revenue Code of 1986, as amended (the "Code")  for
       all  taxable  years commencing with its taxable  year  ended
       December 31, 1997.  The Company will file an election to  be
       taxed  as a real estate investment trust for the year  ended
       December 31,  1997.  The Company's method of operation will
       permit  it to continue to meet the requirements for taxation
       as  a  real  estate investment trust under  the  Code.   The
       Company  intends to continue to operate in  a  manner  which
       would permit it to qualify as a real estate investment trust
       under the Code.
       
        (xxiv)   Except as disclosed in the Prospectus, each entity
       identified in the Prospectus as a tenant of any property, or
       a subtenant thereof, has entered into a lease or a sublease,
       if  applicable, for the possession of such property;  except
       as  disclosed in the Prospectus, each such lease is in  full
       force  and effect and no Transaction Entity nor any  of  its
       subsidiaries has notice of any defense to the obligations of
       the tenant thereunder or any claim asserted or threatened by
       any  person or entity, which claim, if sustained, would have
       a  material  adverse effect on the conduct of the  business,
       operations, financial condition or income of the Transaction
       Entities or their subsidiaries taken as a whole; and  except
       as  disclosed in the Prospectus, the lessor under each lease
       has  complied with its obligations under such lease  in  all
       material respects and no Transaction Entity nor any  of  its
       subsidiaries  has notice of any default by the tenant  under
       such  lease  which,  individually or in the  aggregate  with
       other such defaults, would have a material adverse effect on
       the conduct of the business, operations, financial condition
       or  income of the Transaction Entities or their subsidiaries
       taken as a whole.
       
          (xxv)    Any  certificate signed by any  officer  of  the
       Company  and  delivered to you or to your counsel  shall  be
       deemed  a representation and warranty by the Company to  you
       as to the matters covered thereby.
       
         (xxvi)    A registration statement relating to the  Common
       Stock  of  the  Company has been declared effective  by  the
       Commission pursuant to the Exchange Act and the Common Stock
       of  the  Company is duly registered thereunder.  The  Shares
       have been listed on the New York Stock Exchange, subject  to
       notice  of issuance or sale of the Shares, as the  case  may
       be.
  
       4.   Additional Covenants.  The Company covenants and agrees
  with you that:
       
             (a)    The  Company  will  (i)  prepare  a  Prospectus
       Supplement  setting  forth  the  number  of  Shares  covered
       thereby  and  their  terms not otherwise  specified  in  the
       Prospectus  pursuant to which the Shares are  being  issued,
       the  name of the Underwriter and the number of Shares  which
       the  Underwriter has agreed to purchase, the price at  which
       the  Shares are to be purchased by the Underwriter from  the
       Company  and  such other information as the Underwriter  and
       the Company deem appropriate in connection with the offering
       of the Shares, and file the Prospectus in a form approved by
       you  pursuant to Rule 424(b) under the Act no later than the
       Commission's  close of business on the second  business  day
       following  the  date of the determination  of  the  offering
       price  of  the  Shares; (ii) not file any amendment  to  the
       Registration  Statement or supplement to the  Prospectus  of
       which  you  shall  not  previously  have  been  advised  and
       furnished  with a copy or to which you shall have reasonably
       objected  in writing or which is not in compliance with  the
       Rules  and Regulations; and (iii) promptly notify you  after
       it  shall have received notice thereof of the time when  any
       amendment to the Registration Statement becomes effective or
       when any supplement to the Prospectus has been filed.
       
            (b)    The  Company will advise you promptly, after  it
       shall  receive  notice or obtain knowledge thereof,  of  any
       request  of the Commission for amendment of the Registration
       Statement  or for supplement to the Prospectus  or  for  any
       additional information, or of the issuance by the Commission
       of  any  stop  order  suspending the  effectiveness  of  the
       Registration  Statement or the use of the Prospectus  or  of
       the  institution or threatening of any proceedings for  that
       purpose,  and  the  Company will use  its  best  efforts  to
       prevent  the  issuance of any such stop order preventing  or
       suspending the use of the Prospectus and to obtain  as  soon
       as possible the lifting thereof, if issued.
       
            (c)    The  Company will cooperate with  you  and  your
       counsel in endeavoring to qualify the Shares for sale  under
       the  securities laws of such jurisdictions as they may  have
       designated  and  will  make  such  applications,  file  such
       documents, and furnish such information as may be  necessary
       for that purpose, provided the Company shall not be required
       to  qualify  as a foreign corporation or to file  a  general
       consent  to service of process in any jurisdiction where  it
       is  not  now so qualified or required to file such a consent
       or  to  subject itself to taxation as doing business in  any
       jurisdiction  where  it is not now so  taxed.   The  Company
       will, from time to time, file such statements, reports,  and
       other documents, as are or may be required to continue  such
       qualifications  in effect for so long a period  as  you  may
       reasonably request.
       
           (d)   The Company will deliver to you, without charge as
       many  copies  of  the  Prospectus (including  all  documents
       incorporated by reference therein), or as it thereafter  may
       be  amended  or supplemented, as you may from time  to  time
       reasonably request.  The Company consents to the use of such
       Prospectus  by you, both in connection with the offering  or
       sale  of the Shares and for such other purposes and for such
       period  of time thereafter as the Prospectus is required  by
       law  to be delivered in connection with the offering or sale
       of the Shares.  The Company will deliver to you at or before
       the  Closing  Date two conformed copies of the  Registration
       Statement and all amendments thereto including all  exhibits
       filed therewith or incorporated by reference therein and all
       documents  incorporated by reference in the  Prospectus  and
       will   deliver  to  you  such  number  of  copies   of   the
       Registration  Statement,  without  exhibits,  and   of   all
       amendments thereto, as you may reasonably request.
       
            (e)    If,  during the period in which a prospectus  is
       required by law to be delivered by an underwriter or dealer,
       any  event shall occur as a result of which, in the judgment
       of the Company or in your judgment or in the opinion of your
       counsel,  it  becomes necessary to amend or  supplement  the
       Prospectus in order to make the statements therein, in light
       of  the circumstances existing at the time the Prospectus is
       delivered  to  a purchaser, not misleading,  or,  if  it  is
       necessary  at any time to amend or supplement the Prospectus
       to  comply  with any law, the Company promptly will  prepare
       and file with the Commission an appropriate amendment to the
       Registration  Statement or supplement to the  Prospectus  so
       that  the Prospectus as so amended or supplemented will not,
       in  the  light of the circumstances when it is so delivered,
       be  misleading, or so that the Prospectus will  comply  with
       law.
       
            (f)   The Company will make generally available to  its
       shareholders  and  will  file as  an  exhibit  in  a  report
       pursuant  to  the Exchange Act, as soon as it is practicable
       to  do  so, but in any event not later than 15 months  after
       the  effective  date  of  the  Registration  Statement,   an
       earnings  statement in reasonable detail, covering a  period
       of  at  least  12  consecutive months  beginning  after  the
       effective date of the Registration Statement, which earnings
       statement shall satisfy the requirements of Section 11(a) of
       the  Act and Rule 158 of the Rules and Regulations and  will
       advise  you in writing when such statement has been so  made
       available.
       
            (g)    The Company will, for a period of one year  from
       the Closing Date, deliver to you at your principal executive
       offices  a  reasonable number of copies of  annual  reports,
       quarterly  reports, current reports and copies of all  other
       documents, reports and information furnished by the  Company
       to  its  shareholders or filed with any securities  exchange
       pursuant  to the requirements of such exchange or  with  the
       Commission  pursuant to the Act or the  Exchange  Act.   The
       Company will deliver to you similar reports with respect  to
       any significant subsidiaries, as that term is defined in the
       Rules  and  Regulations, which are not consolidated  in  the
       Company financial statements.  Any report, document or other
       information  required to be furnished under  this  paragraph
       (g)  shall  be furnished as soon as practicable  after  such
       report, document or information becomes available.
       
            (h)   The Company will apply the proceeds from the sale
       of  the Shares as set forth in the description under "Use of
       Proceeds"  in the Prospectus, which description complies  in
       all respects with the requirements of Item 504 of Regulation
       S-K.
       
            (i)    The Company will supply you with copies  of  all
       correspondence to and from, and all documents issued to  and
       by,  the  Commission in connection with the registration  of
       the Shares under the Act.
       
            (j)    Prior  to  the Closing Date,  the  Company  will
       furnish  to you, as soon as they have been prepared,  copies
       of  any  unaudited interim consolidated financial statements
       of   the  Company  and  its  subsidiaries  for  any  periods
       subsequent   to   the  periods  covered  by  the   financial
       statements appearing in the Registration Statement  and  the
       Prospectus.
       
            (k)    Prior to the Closing Date, the Company will  not
       issue any press releases or other communications directly or
       indirectly  and will hold no press conference, with  respect
       to  the  Company or any of its subsidiaries,  the  financial
       condition,  results  of  operations,  business,  properties,
       assets  or  liabilities  of  the  Company  or  any  of   its
       subsidiaries,  or the offering of the Shares,  without  your
       prior written consent.
       
            (l)    The Company will use its best efforts to  obtain
       approval for, and maintain the listing of the Shares on, the
       New York Stock Exchange.
       
           (m)   The Company and its subsidiaries will maintain and
       keep accurate books and records reflecting their assets  and
       maintain   internal   accounting  controls   which   provide
       reasonable  assurance that (1) transactions are executed  in
       accordance with management's authorization, (2) transactions
       are  recorded as necessary to permit the preparation of  the
       Company's consolidated financial statements and to  maintain
       accountability  for  the  assets  of  the  Company  and  its
       subsidiaries,  (3) access to the assets of the  Company  and
       its  subsidiaries  is  permitted  only  in  accordance  with
       management's authorization, and (4) the recorded accounts of
       the  assets of the Company and its subsidiaries are compared
       with existing assets at reasonable intervals.
       
            (n)    During  any  period in  which  a  prospectus  is
       required by law to be delivered by an Underwriter or dealer,
       the Company will promptly file all documents required to  be
       filed  with the Commission pursuant to Sections  13,  14  or
       15(d) of the Exchange Act.
       
           (o)   The Company will continue to elect to qualify as a
       "real estate investment trust" under the Code, and will  use
       its  best  efforts to continue to meet the  requirements  to
       qualify as a "real estate investment trust."
  
         5.     Conditions   of  Underwriter's  Obligation.    Your
  obligations, as Underwriter to purchase and pay for  the  Shares,
  as  provided  herein,  shall be subject to the  accuracy  in  all
  material  respects, as of the date hereof and as of  the  Closing
  Date,  of  the representations and warranties of the  Transaction
  Entities  contained herein, to the performance  in  all  material
  respects  by  the  Transaction Entities of  their  covenants  and
  obligations   hereunder,   and  to   the   following   additional
  conditions:
       
            (a)   All filings required by Rule 424 of the Rules and
       egulations  shall have been made.  No stop order  suspending
       the  effectiveness of the Registration Statement, as amended
       from  time to time, shall have been issued and no proceeding
       for  that  purpose  shall have been initiated  or,  to  your
       knowledge  or  the knowledge of the Company,  threatened  or
       contemplated  by  the Commission, and  any  request  of  the
       Commission for additional information (to be included in the
       Registration Statement or the Prospectus or otherwise) shall
       have been complied with to your reasonable satisfaction.
       
            (b)    You shall not have disclosed in writing  to  the
       Company   on  or  prior  to  the  Closing  Date,  that   the
       Registration  Statement or Prospectus or  any  amendment  or
       supplement  thereto  contains an untrue  statement  of  fact
       which, in the opinion of your counsel, is material, or omits
       to  state  a fact which, in the opinion of such counsel,  is
       material  and  is  required  to  be  stated  therein  or  is
       necessary  to make the statements therein, in light  of  the
       circumstances under which they were made, not misleading.
       
            (c)   On the Closing Date, you shall have received  the
       opinion of Jaeckle Fleischmann & Mugel, LLP, counsel for the
       Company,  and  Piper  &  Marbury, L.L.P.,  special  Maryland
       counsel  for the Company (as to which Jaeckle Fleischmann  &
       Mugel, LLP and Chapman and Cutler may rely on) addressed  to
       you  and dated the Closing Date, as to the matters set forth
       in Schedule II attached hereto.
       
            (d)   You shall have received on the Closing Date, from
       Chapman  and Cutler, your counsel, such opinion or opinions,
       dated the Closing Date with respect to the incorporation  of
       the  Company,  the validity of the Shares, the  Registration
       Statement, the Prospectus and other related matters  as  you
       may reasonably require; the Company shall have furnished  to
       such  counsel such documents as they reasonably request  for
       the purpose of enabling them to pass on such matters.
       
           (e)   You shall have received at or prior to the Closing
       Date  from Chapman and Cutler a memorandum or memoranda,  in
       form and substance satisfactory to you, with respect to  the
       qualification  for offering and sale by you  of  the  Shares
       under   state   securities  or  Blue  Sky   laws   of   such
       jurisdictions as you may have designated to the Company.
       
            (f)    On the date of this Agreement and on the Closing
       Date,  you  shall have received from Ernst &  Young  LLP,  a
       letter or letters, dated the date of this Agreement and  the
       Closing   Date,   respectively,  in   form   and   substance
       satisfactory  to  you, confirming that they are  independent
       public  accountants with respect to the Company  within  the
       meaning  of the Act and the published Rules and Regulations,
       and stating to the effect set forth in Schedule III hereto.
       
            (g)   Except as contemplated in the Prospectus, (i)  no
       Transaction  Entity nor any of its subsidiaries  shall  have
       sustained  since  the date of the latest  audited  financial
       statements  included  or incorporated by  reference  in  the
       Prospectus  any loss or interference with its business  from
       fire,  explosion, flood or other calamity,  whether  or  not
       covered by insurance, or from any labor dispute or court  or
       governmental action, order or decree; and (ii) subsequent to
       the respective dates as of which information is given in the
       Registration  Statement and the Prospectus,  no  Transaction
       Entity  nor any of its subsidiaries shall have incurred  any
       liability  or obligation, direct or contingent,  or  entered
       into  transactions, and there shall not have been any change
       in  the  capital stock or long-term debt of the Company  and
       its  subsidiaries or any change in the condition  (financial
       or   other),   net  worth,  business,  affairs,  management,
       prospects  or  results  of  operations  of  the  Transaction
       Entities or their subsidiaries, the effect of which, in  any
       such  case  described  in clause (i) or  (ii),  is  in  your
       judgment  so material or adverse as to make it impracticable
       or  inadvisable to proceed with the public offering  or  the
       delivery  of the Shares being delivered on the Closing  Date
       on   the  terms  and  in  the  manner  contemplated  in  the
       Prospectus.
       
             (h)    There  shall  not  have  occurred  any  of  the
       following:  (i)  a  suspension  or  material  limitation  in
       trading  in  securities  generally on  the  New  York  Stock
       Exchange  or the American Stock Exchange or the establishing
       on  such exchanges by the Commission or by such exchanges of
       minimum or maximum prices which are not in force and  effect
       on  the date hereof; (ii) a general moratorium on commercial
       banking  activities  declared by  either  federal  or  state
       authorities; (iii) the outbreak or escalation of hostilities
       involving the United States or the declaration by the United
       States of a national emergency or war, if the effect of  any
       such  event specified in this clause (iii) in your  judgment
       makes  it  impracticable or inadvisable to proceed with  the
       public  offering or the delivery of the Shares in the manner
       contemplated in the Prospectus; (iv) any calamity or crisis,
       change  in national, international or world affairs, act  of
       God,  change  in the international or domestic  markets,  or
       change  in  the  existing financial, political  or  economic
       conditions in the United States or elsewhere, if the  effect
       of  any  such event specified in this clause (iv)  makes  it
       impracticable  or  inadvisable to proceed  with  the  public
       offering  or  the  delivery  of the  Shares  in  the  manner
       contemplated  in  the  Prospectus;  or  (v)  the  enactment,
       publication, decree, or other promulgation of any federal or
       state  statute, regulation, rule, or order of any  court  or
       other governmental authority, or the taking of any action by
       any  federal, state or local government or agency in respect
       of  fiscal  or monetary affairs, if the effect of  any  such
       event specified in this clause (v) in your judgment makes it
       impracticable  or  inadvisable to proceed  with  the  public
       offering  or  the  delivery  of the  Shares  in  the  manner
       contemplated in the Prospectus.
       
            (i)    You shall have received certificates, dated  the
       Closing  Date  and  signed by the President  and  the  Chief
       Executive Officer of the Company stating that (i) they  have
       carefully  examined  the  Registration  Statement  and   the
       Prospectus  as  amended or supplemented  and  all  documents
       incorporated by reference therein and nothing  has  come  to
       their  attention that would lead them to believe that either
       the   Registration  Statement  or  the  Prospectus,  or  any
       amendment   or   supplement   thereto   or   any   documents
       incorporated  by  reference therein as of  their  respective
       effective,  issue  or  filing  dates,  contained,  and   the
       Prospectus  as  amended or supplemented  and  all  documents
       incorporated  by  reference therein and when  read  together
       with the documents incorporated by reference therein, at the
       Closing  Date, contains any untrue statement of  a  material
       fact,  or  omits  to state a material fact  required  to  be
       stated  therein or necessary in order to make the statements
       therein, in light of the circumstances under which they were
       made, not misleading, and, that (ii) all representations and
       warranties  made herein by the Company are true and  correct
       in  all material respects at the Closing Date, with the same
       effect  as  if made on and as of the Closing Date,  and  all
       agreements herein to be performed by the Company on or prior
       to the Closing Date have been duly performed in all material
       respects.
       
            (j)    The  Company shall not have failed, refused,  or
       been  unable,  at  or  prior to the Closing  Date   to  have
       performed  in all material respects any agreement  on  their
       part  to  be  performed  or  any of  the  conditions  herein
       contained and required to be performed or satisfied by  them
       at or prior to the Closing Date.
       
            (k)    The Company shall have furnished to you  at  the
       Closing  Date  such  other  certificates  as  you  may  have
       reasonably requested as to the accuracy, on and  as  of  the
       Closing Date, of the representations and warranties  of  the
       Company  herein and as to the performance by the Company  of
       their obligations hereunder.
       
            (l)    The Shares shall have been approved for  trading
       upon  official  notice of issuance on  the  New  York  Stock
       Exchange.
       
       All  such opinions, certificates, letters and documents will
  be  in  compliance with the provisions hereof only  if  they  are
  reasonably  satisfactory to you and to Chapman and  Cutler,  your
  counsel.  The Company will furnish you with such conformed copies
  of  such opinions, certificates, letters and documents as you may
  request.
       
       If  any of the conditions specified above in this Section  5
  shall not have been satisfied at or prior to the Closing Date  or
  waived by you in writing, this Agreement may be terminated by you
  on notice to the Company.
  
        6.   Indemnification.  (a) The Transaction Entities jointly
  and  severally  shall indemnify and hold you  harmless  and  each
  person,  if any, who controls you within the meaning of the  Act,
  against  any  losses,  claims, damages or liabilities,  joint  or
  several,  to  which  you or such controlling  person  may  become
  subject,  under  the Act or otherwise, insofar  as  such  losses,
  claims,  damages  or liabilities (or actions in respect  thereof)
  arise  out  of or are based upon an untrue statement  or  alleged
  untrue statement of a material fact contained in the Registration
  Statement,  any  Preliminary Prospectus, the Prospectus,  or  any
  amendment  or supplement thereto, or in any blue sky  application
  or  other  document  executed by the  Company  or  based  on  any
  information  furnished in writing by the Company,  filed  in  any
  jurisdiction  in order to qualify any or all of the Shares  under
  the  securities laws thereof ("Blue Sky Application"),  or  arise
  out  of  or  are based upon the omission or alleged  omission  to
  state  therein a material fact required to be stated  therein  or
  necessary  to  make  the  statements therein,  in  light  of  the
  circumstances  under  which they were made, not  misleading;  and
  will reimburse you and each such controlling person for any legal
  or  other expenses reasonably incurred by you or such controlling
  person  in  connection with investigating or defending  any  such
  loss, claim, damage, liability or action; provided, however, that
  the Transaction Entities shall not be liable in any such case  to
  the  extent that any such loss, claim, damage or liability arises
  out  of  or  is based upon an untrue statement or alleged  untrue
  statement   or  omission  or  alleged  omission   made   in   the
  Registration  Statement,  such  Preliminary  Prospectus  or   the
  Prospectus,  or  such amendment or supplement, or  any  Blue  Sky
  Application  in  reliance  upon and in  conformity  with  written
  information furnished to the Company by you, specifically for use
  in  the  preparation thereof; and provided, further, that if  any
  Preliminary  Prospectus or the Prospectus contained  any  alleged
  untrue statement or allegedly omitted to state therein a material
  fact  required  to  be stated therein or necessary  to  make  the
  statements therein not misleading and such statement or  omission
  shall have been corrected in a revised Preliminary Prospectus  or
  in  the  Prospectus or in an amended or supplemented  Prospectus,
  the   Transaction  Entities  shall  not  be  liable  to  you   or
  controlling  persons under this subsection (a)  with  respect  to
  such  alleged untrue statement or alleged omission to the  extent
  that  any  such loss, claim, damage or liability of  such  person
  results  from the fact that you sold Shares to a person  to  whom
  there  was  not  sent  or  given, at  or  prior  to  the  written
  confirmation of such sale, such revised Preliminary Prospectus or
  Prospectus or amended or supplemented Prospectus.  In addition to
  its  other  obligations under this Section 6(a), the  Transaction
  Entities agree that, as an interim measure during the pendency of
  any  claim,  action, investigation, inquiry or  other  proceeding
  arising  out of or based upon any statement or omission,  or  any
  alleged  statement or omission, described in this  Section  6(a),
  the  Transaction Entities will reimburse you on a  monthly  basis
  for   all  reasonable  legal  and  other  expenses  incurred   in
  connection  with  investigating  or  defending  any  such  claim,
  action,  investigation,  inquiry  or  other  proceeding,  notwith
  standing  the  absence  of  a judicial determination  as  to  the
  propriety   and  enforceability  of  the  Transaction   Entities'
  obligation to reimburse you for such expenses and the possibility
  that such payments might later be held to have been improper by a
  court  of competent jurisdiction.  This indemnity agreement shall
  be  in addition to any liabilities which the Transaction Entities
  may otherwise have.
  
       (b)    You  will indemnify and hold harmless the Transaction
  Entities,  each  of their directors, each of their  officers  who
  have  signed the Registration Statement and each person, if  any,
  who  controls the Company within the meaning of the Act,  against
  any losses, claims, damages or liabilities, joint or several,  to
  which  the Transaction Entities or any such director, officer  or
  controlling  person  may  become  subject,  under  the   Act   or
  otherwise, insofar as such losses, claims, damages or liabilities
  (or  actions in respect thereof) arise out of or are  based  upon
  any  untrue statement or alleged untrue statement of any material
  fact  contained  in the Registration Statement,  any  Preliminary
  Prospectus, the Prospectus, any amendment or supplement  thereto,
  or any Blue Sky Application or arise out of or are based upon the
  omission or the alleged omission to state therein a material fact
  required to be stated therein or necessary to make the statements
  therein,  in  light of the circumstances under  which  they  were
  made, not misleading, in each case to the extent, but only to the
  extent, that such untrue statement or alleged untrue statement or
  omission  or  alleged  omission  was  made  in  the  Registration
  Statement,  such  Preliminary Prospectus or the Prospectus,  such
  amendment or supplement, or any Blue Sky Application in  reliance
  upon and in conformity with written information furnished to  the
  Company  by you specifically for use in the preparation  thereof;
  and  will  reimburse  any  legal  or  other  expenses  reasonably
  incurred  by  the  Transaction Entities  or  any  such  director,
  officer or controlling person in connection with investigating or
  defending any such loss, claim, damage, liability or action.   In
  addition  to your other obligations under this Section 6(b),  you
  agree  that,  as  an interim measure during the pendency  of  any
  claim, action, investigation, inquiry or other proceeding arising
  out  of  or based upon any statement or omission, or any  alleged
  statement or omission, described in this Section 6(b),  you  will
  reimburse  the  Transaction Entities on a monthly basis  for  all
  reasonable  legal and other expenses incurred in connection  with
  investigating or defending any such claim, action, investigation,
  inquiry  or  other proceeding, notwithstanding the absence  of  a
  judicial determination as to the propriety and enforceability  of
  your  obligation to reimburse the Company for such  expenses  and
  the  possibility that such payments might later be held  to  have
  been  improper  by  a  court  of  competent  jurisdiction.   This
  indemnity agreement shall be in addition to any liabilities which
  you may otherwise have.
  
       (c)    Any  party which proposes to assert the right  to  be
  indemnified  under this Section 6 shall, within  ten  days  after
  receipt  of  notice  of  commencement  of  any  action,  suit  or
  proceeding against such party in respect of which a claim  is  to
  be  made  against  an indemnifying party under  this  Section  6,
  notify  each such indemnifying party of the commencement of  such
  action,  suit  or  proceeding, enclosing a  copy  of  all  papers
  served, but the omission so to notify such indemnifying party  of
  any  such  action,  suit  or proceeding shall  not  relieve  such
  indemnifying party from any liability which it may  have  to  any
  indemnified party otherwise than under this Section 6.   In  case
  any  such action, suit or proceeding shall be brought against any
  indemnified party and it shall notify the indemnifying  party  of
  the  commencement  thereof,  the  indemnifying  party  shall   be
  entitled  to  participate in, and, to the extent  that  it  shall
  wish,   jointly  with  any  other  indemnifying  party  similarly
  notified,  to assume the defense thereof, with counsel reasonably
  satisfactory to such indemnified party, and after notice from the
  indemnifying party to such indemnified party of its  election  so
  to  assume the defense thereof, the indemnifying party shall  not
  be  liable  to  such  indemnified party for any  legal  or  other
  expenses,   other   than  reasonable  costs   of   investigation,
  subsequently  incurred by such indemnified  party  in  connection
  with  the defense thereof.  The indemnified party shall have  the
  right to employ its own counsel in any such action, but the  fees
  and  expenses  of  such counsel shall be at the expense  of  such
  indemnified  party unless (i) the employment of counsel  by  such
  indemnified  party at the expense of the indemnifying  party  has
  been  authorized by the indemnifying party, (ii) the  indemnified
  party  shall  have  been advised by such  counsel  in  a  written
  opinion  that  there  may be a conflict of interest  between  the
  indemnifying  party and the indemnified party in the  conduct  of
  the  defense, or certain aspects of the defense, of  such  action
  (in which case the indemnifying party shall not have the right to
  direct  the defense of such action with respect to those  matters
  or aspects of the defense on which a conflict exists or may exist
  on  behalf  of  the indemnified party) or (iii) the  indemnifying
  party  shall  not  in fact have employed counsel  to  assume  the
  defense  of  such action, in any of which events  such  fees  and
  expenses  to  the  extent  applicable  shall  be  borne  by   the
  indemnifying  party.  An indemnifying party shall not  be  liable
  for  any  settlement of any action or claim effected without  its
  consent.   Each  indemnified  party,  as  a  condition  of   such
  indemnity,  shall  cooperate in good faith with the  indemnifying
  party in the defense of any such action or claim.
  
       (d)   If the indemnification provided for in this Section  6
  is  for  any  reason, other than pursuant to the  terms  thereof,
  judicially determined (by the entry of a final judgment or decree
  by  a  court of competent jurisdiction and the expiration of time
  to  appeal  or  the  denial of the last right to  appeal)  to  be
  unavailable to an indemnified party under subsections (a) or  (b)
  above  in  respect of any losses, claims, damages or  liabilities
  (or  actions in respect thereof) referred to therein,  then  each
  indemnifying   party   shall,  in  lieu  of   indemnifying   such
  indemnified  party, contribute to the amount paid or  payable  by
  such  indemnified  party  as a result  of  such  losses,  claims,
  damages  or liabilities (or actions in respect thereof)  in  such
  proportion  as  is  appropriate to reflect the relative  benefits
  received by the Transaction Entities and you from the offering of
  the   Shares.   If,  however,  the  allocation  provided  by  the
  immediately  preceding  sentence is not permitted  by  applicable
  law, then each indemnifying party shall contribute to such amount
  paid  or payable by such indemnified party in such proportion  as
  is  appropriate  to reflect not only such relative  benefits  but
  also  the  relative  fault,  as applicable,  of  the  Transaction
  Entities  and you in connection with the statements or  omissions
  which resulted in such losses, claims, damages or liabilities (or
  actions  in respect thereof), as well as other relevant equitable
  considerations.    The   relative  benefits   received   by,   as
  applicable, the Transaction Entities and you shall be  deemed  to
  be  in  the  same proportion as the total net proceeds  from  the
  offering  (before deducting expenses) received by the Transaction
  Entities bear to the total underwriting discounts and commissions
  received  by you, in each case as set forth in the table  on  the
  cover  page  of  the  Prospectus.  The relative  fault  shall  be
  determined  by  reference  to, among other  things,  whether  the
  untrue  statement of a material fact or the omission  or  alleged
  omission to state a material fact relates to information supplied
  by  the  Transaction  Entities or you and the  parties'  relative
  intent,  knowledge,  access  to information  and  opportunity  to
  correct  or  prevent such statement or omission.  The Transaction
  Entities and you agree that it would not be just and equitable if
  contributions pursuant to this subsection (d) were determined  by
  pro  rata  allocation or by any other method of allocation  which
  does not take account of the equitable considerations referred to
  above  in this subsection (d).  The amount paid or payable by  an
  indemnified party as a result of the losses, claims,  damages  or
  liabilities (or actions in respect thereof) referred to above  in
  this subsection (d) shall be deemed to include any legal or other
  expenses  reasonably  incurred  by  such  indemnified  party   in
  connection  with investigating or defending any  such  action  or
  claim.   Notwithstanding the provisions of this  subsection  (d),
  you  shall not be required to contribute any amount in excess  of
  the  underwriting  discounts and commissions  applicable  to  the
  Shares   purchased  by  you.   No  person  guilty  of  fraudulent
  misrepresentation  (within the meaning of Section  11(f)  of  the
  Act)  shall be entitled to contribution from any person  who  was
  not guilty of such fraudulent misrepresentation.
  
        7.    Representations and Agreements to  Survive  Delivery.
  All   representations,   warranties,  and   agreements   of   the
  Transaction   Entities  contained  herein  or   in   certificates
  delivered  pursuant  hereto,  and your  agreements  contained  in
  Section  6  hereof, shall remain operative and in full force  and
  effect  regardless  of  any termination or cancellation  of  this
  Agreement or any investigation made by or on behalf of you or any
  controlling  person,  the Transaction  Entities  or  any  of  its
  officers, directors or any controlling persons, and shall survive
  delivery of the Shares to you hereunder.
  
        8.    Effective  Date and Termination.  (a) This  Agreement
  shall become effective upon execution.
  
       (b)   This Agreement may be terminated by you at any time at
  or  prior  to  the  Closing  Date by notice  to  the  Transaction
  Entities if any condition specified in Section 5 hereof shall not
  have  been satisfied on or prior to the Closing Date.   Any  such
  termination shall be without liability of any party to any  other
  party except as provided in Sections 6 and 9 hereof.
       
       If  you  terminate  this Agreement as provided  in  Sections
  8(b),  you  shall  notify the Company by telephone  or  telegram,
  confirmed by letter.
  
        9.    Cost and Expenses.  The Company will bear and pay the
  costs and expenses incident to the registration of the Shares and
  public  offering thereof, including, without limitation, (a)  the
  fees  and expenses of the Company's accountants and the fees  and
  expenses  of  counsel  for  the  Company,  (b)  the  preparation,
  printing,  filing,  delivery  and shipping  of  the  Registration
  Statement, each Preliminary Prospectus, the Prospectus,  and  any
  amendments or supplements thereto (c) the furnishing of copies of
  such  documents to you, (d) the registration or qualification  of
  the Shares for offering and sale under the securities laws of the
  various  states, including the reasonable fees and  disbursements
  of  your  counsel relating to such registration or qualification,
  (e)  the fees payable to the NASD (if any) and the Commission  in
  connection  with  their review of the proposed  offering  of  the
  Shares,   (f)  all  printing  and  engraving  costs  related   to
  preparation  of  the  certificates  for  the  Shares,   including
  transfer  agent  and  registrar fees, (g)  all  initial  transfer
  taxes,  if  any,  (h)  all  fees and  expenses  relating  to  the
  authorization  of the Shares for trading on the  New  York  Stock
  Exchange,  (i)  all  travel  expenses,  including  air  fare  and
  accommodation  expenses, of representatives  of  the  Company  in
  connection  with the offering of the Shares and (j)  all  of  the
  other  costs  and  expenses incident to the  performance  by  the
  Company of the registration and offering of the Shares; provided,
  however, that you will bear and pay the fees and expenses of your
  counsel  (other  than  fees  and disbursements  relating  to  the
  registration or qualification of the Shares for offering and sale
  under  the  securities laws of the various states), your  out-of-
  pocket  expenses, and any advertising costs and expenses incurred
  by you incident to the public offering of the Shares.
       
       If  this  Agreement is terminated by you in accordance  with
  the  provisions of Section 8(b), the Company shall reimburse  you
  for  all of your out-of-pocket expenses, including the reasonable
  fees and disbursements of your counsel.
  
       10.    Notices.   All  notices or communications  hereunder,
  except  as  herein otherwise specifically provided, shall  be  in
  writing  and if sent to you shall be mailed, delivered,  sent  by
  facsimile  transmission, or telegraphed and  confirmed  c/o  A.G.
  Edwards  &  Sons, Inc. at One North Jefferson Avenue, St.  Louis,
  Missouri 63103, Attention:  Syndicate, facsimile number (314) 289-
  7387,  or  if sent to the Transaction Entities shall  be  mailed,
  delivered,  sent  by facsimile transmission, or  telegraphed  and
  confirmed  to the Company at One Jackson Place, Suite  1000,  188
  East  Capitol  Street,  Jackson,  Mississippi  39201,  Attention:
  Steven G. Rogers, facsimile number (601) 949-4077.
  
       11.   Parties.  This Agreement shall inure to the benefit of
  and  be  binding  upon you and the Company and  their  respective
  successors and assigns.  Nothing expressed or mentioned  in  this
  Agreement  is intended or shall be construed to give any  person,
  corporation  or other entity, other than the parties  hereto  and
  their  respective  successors  and assigns  and  the  controlling
  persons,  officers and directors referred to in  Section  6,  any
  legal or equitable right, remedy or claim under or in respect  of
  this  Agreement or any provision herein contained; this Agreement
  and all conditions and provisions hereof being intended to be and
  being  for  the sole and exclusive benefit of the parties  hereto
  and  their respective successors and assigns and said controlling
  persons  and said officers and directors, and for the benefit  of
  no  other  person, corporation or other entity.  No purchaser  of
  any  of  the  Shares from you shall be construed a  successor  or
  assign by reason merely of such purchase.
  
       12.    Counterparts.  This Agreement may be executed by  any
  one  or more of the parties hereto in any number of counterparts,
  each  of  which shall be deemed to be an original, but  all  such
  counterparts   shall  together  constitute  one  and   the   same
  instrument.
  
       13.    Pronouns.  Whenever a pronoun of any gender or number
  is used herein, it shall, where appropriate, be deemed to include
  any other gender and number.
  
       14.   Applicable Law.  This Agreement shall be governed  by,
  and  construed  in  accordance with, the laws  of  the  State  of
  Missouri.
       
       If  the  foregoing is in accordance with your understanding,
  please  so indicate in the space provided below for that purpose,
  whereupon  this  letter  shall  constitute  a  binding  agreement
  between the Company, the Operating Partnership and you.
                                      
                                      
                                      PARKWAY PROPERTIES, INC.
                                      
                                      
                                      
                                      By:_________________________
                                      Name:_______________________
                                      Title:______________________
                                      
                                      
                                      PARKWAY PROPERTIES LP
                                      By: Parkway Properties
                                      General Partner, Inc.
                                      
                                      
                                      
                                      By:_________________________
                                      Title:______________________
  
  Accepted in St. Louis,
  Missouri as of the date
  first above written.
  
  A.G. EDWARDS & SONS, INC.
  
  
  
  By:________________________
  Name:______________________
  Title:______________________
  
                             SCHEDULE I
       
       
  Entities with Registration Rights
  
  1.   Delaware Group Dividend and Income Fund, Inc.
  2.   Delaware Pooled Trust, Inc. for the Real Estate Investment
       Trust Portfolio
  3.   Charter Oak Partners
  4.   Pennsylvania Public School Employees Retirement System
  5.   Morgan Stanley U.S. Real Estate (Retail)
  6.   Morgan Stanley Institutional Fund Real Estate Portfolio
  7.   MS SIVAC Real Estate
                                  
                             SCHEDULE II
                                  
             OPINION OF JAECKLE FLEISCHMANN & MUGEL, LLP
       
            (i)   Each Transaction Entity and its subsidiaries  has
       been duly incorporated or formed, as the case may be, and is
       validly  existing  as  a  corporation,  general  or  limited
       partnership, or other legal entity, as the case may  be,  in
       good  standing  under  the  laws  of  its  jurisdiction   of
       incorporation or formation, as the case may be, and has full
       power  (corporate  or other) and authority  to  conduct  its
       business  as  described  in the Registration  Statement  and
       Prospectus,  and  is  duly qualified  or  registered  to  do
       business  in  each jurisdiction in which it owns  or  leases
       real  property  or  in  which the conduct  of  its  business
       requires  such qualification or registration,  except  where
       the  failure  to be so qualified or registered,  considering
       all such cases in the aggregate, does not involve a material
       risk  to  the  business, properties, financial  position  or
       results of operations of the Transaction Entities and  their
       subsidiaries taken as a whole;
       
           (ii)    The  Company has authorized and  issued  capital
       stock  as set forth in its [Current Report on Form 8-K dated
       February  17, 1998] [Quarterly Report on Form 10-Q  for  the
       quarter  ended  September 30, 1997]; all of the  issued  and
       outstanding shares of capital stock of the Company have been
       duly  and  validly authorized and issued;  and  all  of  the
       issued  and  outstanding  shares of  capital  stock  of  the
       Company  are fully paid and nonassessable and none  of  them
       was  issued in violation of any preemptive or other  similar
       right.   The Shares have been duly authorized by the Company
       for issuance and sale; and when issued and sold pursuant  to
       this  Underwriting  Agreement,  will  be  duly  and  validly
       issued,  fully paid and nonassessable and none of them  will
       have  been  issued in violation of any preemptive  or  other
       similar  right.   Except as disclosed  in  the  Registration
       Statement  and  the  Prospectus,  there  is  no  outstanding
       option, warrant or other right calling for the issuance  of,
       and,  to the knowledge of such counsel, no commitment,  plan
       or  arrangement to issue, any share of capital stock of  the
       Company  or any security convertible into, exercisable  for,
       or exchangeable for capital stock of the Company.  Except as
       described  in Schedule I thereto, no holder of any  security
       of  the Company has the right to have any security owned  by
       such  holder  included for registration in the  Registration
       Statement or to demand registration of any security owned by
       such  holder  during the 180 days after  the  date  of  this
       Underwriting Agreement.  The issued and outstanding  capital
       stock  of  the  Company  and the  Shares  conform,  or  will
       conform,  in  all  material  respects  to  the  descriptions
       thereof  contained  in the Registration  Statement  and  the
       Prospectus.   The form of certificate used to  evidence  the
       Shares  is  in  due  and proper form and complies  with  all
       applicable   statutory  requirements,  with  any  applicable
       requirements  of the Company's organizational documents  and
       with the requirements of the NYSE.
       
          (iii)    The Registration Statement has become  effective
       under  the Act, the Prospectus Supplement has been filed  as
       required  by  this Underwriting Agreement, and to  the  best
       knowledge of such counsel, after due inquiry, no stop  order
       suspending  the effectiveness of the Registration  Statement
       has  been issued and no proceeding for that purpose has been
       instituted or threatened by the Commission;
       
          (iv)   Each part of the Registration Statement, when such
       part  became effective, and the Prospectus and any amendment
       or  supplement thereto, on the date of filing  thereof  with
       the  Commission and at the Closing Date, complied as to form
       in  all  material respects with the requirements of the  Act
       and  the  Rules  and Regulations, and such  counsel  has  no
       reason   to  believe  that  either  (i)  any  part  of   the
       Registration  Statement, when such part became effective  or
       was filed under the Act or Exchange Act, contained an untrue
       statement of a material fact or omitted to state a  material
       fact required to be stated therein or necessary to make  the
       statements therein not misleading or (ii) the Prospectus and
       any  amendment or supplement thereto, on the date of  filing
       thereof with the Commission or at the Closing Date, included
       an untrue statement of a material fact or omitted to state a
       material  fact necessary to make the statements therein,  in
       the  light of the circumstances under which they were  made,
       not  misleading; and the documents incorporated by reference
       in the Registration Statement or Prospectus or any amendment
       or  supplement thereto, when they became effective under the
       Act  or  were  filed with the Commission under  the  Act  or
       Exchange Act, as the case may be, complied as to form in all
       material  respects with the requirements of the Act  or  the
       Exchange  Act, as applicable, and the rules and  regulations
       of  the Commission thereunder; it being understood that such
       counsel   need  express  no  opinion  as  to  the  financial
       statements  or other financial data included  in  any  other
       documents mentioned in this clause;
       
           (v)   The descriptions in the Registration Statement and
       Prospectus  of statutes, legal and governmental proceedings,
       contracts  and  other  documents  are  accurate  and  fairly
       present  the  information required to  be  shown;  and  such
       counsel   does  not  know  of  any  statutes  or  legal   or
       governmental  proceedings required to be  described  in  the
       Prospectus  that are not described as required,  or  of  any
       contracts  or  documents  of  a  character  required  to  be
       described  in  the Registration Statement or Prospectus  (or
       required  to  be filed under the Exchange Act if  upon  such
       filing  they would be incorporated by reference therein)  or
       to  be filed as exhibits to the Registration Statement  that
       are not described and filed as required;  The information in
       the  Prospectus  under  "Description of  Common  Stock"  and
       "Federal  Income  Tax  Considerations",  to  the  extent  it
       constitutes matters of law, summaries of legal matters,  the
       Company's  charter and by-laws, legal proceedings  or  legal
       conclusions, has been reviewed by us and is correct  in  all
       material respects;
       
            (vi)    This  Underwriting  Agreement  has  been   duly
       authorized,  executed  and  delivered  by  each  Transaction
       Entity;  the  execution, delivery and  performance  of  this
       Underwriting   Agreement  and  the   consummation   of   the
       transactions contemplated herein will not result in a breach
       or  violation  of  any of the terms and  provisions  of,  or
       constitute  a  default  under, (a) any  statute,  indenture,
       mortgage,  deed  of  trust,  voting  trust  agreement,  loan
       agreement,  bond, debenture, note agreement or  evidence  of
       indebtedness,   lease  contract  or   other   agreement   or
       instrument  known to such counsel to which  the  Transaction
       Entities or their subsidiaries are a party or by which  they
       are bound or to which any of the property or other assets of
       the  Transaction Entities or their subsidiaries is  subject,
       (b)  the articles of incorporation, by-laws, certificate  of
       general  or  limited partnership, partnership agreement,  or
       other organizational document of the Transaction Entities or
       any  of their subsidiaries, as applicable, or (c) any order,
       rule  or  regulation known to such counsel of any  court  or
       governmental  agency  or body having jurisdiction  over  the
       Transaction Entities or their subsidiaries or any  of  their
       properties  or  other  assets;  and  no  consent,  approval,
       authorization,  notice to, order of,  or  filing  with,  any
       court  or  governmental agency or body is required  for  the
       consummation  of  the  transactions  contemplated  by   this
       Underwriting  Agreement in connection with the  issuance  or
       sale  of the Shares by the Company, except such as have been
       obtained under the Act or from the NYSE and the NASD;
       
           (vii)    Commencing  with  the  taxable  year  beginning
       January 1, 1997, the Company has continuously been organized
       and   operated  in  conformity  with  the  requirements  for
       qualification as a "real estate investment trust" under  the
       Code.   The Company's method of operation will permit it  to
       continue  to meet the requirements for taxation as  a  "real
       estate investment trust" under the Code;
       
         (viii)    To  the  best  of such counsel's  knowledge,  no
       Transaction  Entity  nor  any  of  its  subsidiaries  is  in
       violation  of  any  term or provision  of  their  respective
       articles of incorporation, bylaws, certificate of general or
       limited   partnership,  partnership   agreement   or   other
       organizational document, as applicable, or in  violation  of
       or  default  under any indenture, mortgage, deed  of  trust,
       voting  trust  agreement, loan agreement,  bond,  debenture,
       note agreement or evidence of indebtedness, lease, contract,
       permit,   judgment,   decree,  order,   statute,   rule   or
       regulation;
       
           (ix)   To the best of such counsel's knowledge, there is
       no   litigation  or  governmental  or  other  proceeding  or
       investigation  before any court or before or by  any  public
       body  or  board pending or threatened against, or  involving
       the  assets,  properties or businesses of,  the  Transaction
       Entities  or  any  of  their  subsidiaries,  involving   the
       Transaction Entities or any of their subsidiaries'  officers
       or  directors or to which any of the Transaction Entities or
       any  of  their subsidiaries' properties or other  assets  is
       subject  which would have a material effect upon the  assets
       or properties, business, results of operations, prospects or
       condition   (financial  or  otherwise)  of  the  Transaction
       Entities and their subsidiaries taken as a whole; and
       
           (x)   Neither the Company nor any of its subsidiaries is
       an "investment company" within the meaning of the Investment
       Company Act of 1940, as amended.
                                  
                  OPINION OF PIPER & MARBURY L.L.P.
       
            (i)    The  Company has been duly incorporated  and  is
       validly  existing in good standing under  the  laws  of  the
       State of Maryland, with full power, corporate or other,  and
       authority  to  conduct  its business  as  described  in  its
       Charter.
       
           (ii)    All the shares of Common Stock outstanding prior
       to  the issuance of the Shares have been duly authorized and
       validly  issued, are fully paid and nonassessable, and  have
       not  been  issued in violation of any preemptive or  similar
       right contained in the Company's Charter.
       
          (iii)    The  Shares have been duly authorized  and  when
       issued  and  delivered  to the Underwriter  against  payment
       therefor  in  accordance with the terms of the  Underwriting
       Agreement, will be duly and validly issued, fully  paid  and
       nonassessable  and  free  of  any  preemptive  or,  to   our
       knowledge, similar rights contained in the Company's Charter
       that  entitle or will entitle any person to acquire  any  of
       the Shares upon the issuance thereof by the Company.
       
           (iv)    The issued and outstanding Common Stock  of  the
       Company  and  the  Shares conform, or will conform,  in  all
       material  respects  as to legal matters to  the  description
       thereof  contained  in  the  Prospectus  under  the  caption
       "Description of Common Stock."
       
            (v)    The form of certificates for the Shares conforms
       to the requirements of the Maryland General Corporation Law.
       
          (vi)   The statements in the Prospectus under the caption
       "Description  of  Common Stock," insofar as such  statements
       constitute  summaries  of the legal matters,  documents,  or
       proceedings  referred to therein, are accurate and  fair  in
       all material respects.
       
          (vii)   The Company has corporate power and authority  to
       enter  into  the Underwriting Agreement and to issue,  sell,
       and deliver the Shares to the Underwriter as provided in the
       Underwriting Agreement.  The Underwriting Agreement has been
       duly  authorized  and,  assuming it has  been  executed  and
       delivered  by  the appropriate officer or  officers  of  the
       Company, duly executed and delivered by the Company.
       
        (viii)   Neither the issuance and sale of the Shares by the
       Company,  the  execution, delivery, or  performance  of  the
       Underwriting  Agreement by the Company nor the  consummation
       by the Company of the transactions contemplated thereby will
       result  in a breach or violation of the terms and provisions
       of, or constitute a default under, (a) any Maryland statute,
       or (b) the Charter or By-Laws of the Company.
       
           (ix)    To our knowledge, the Company is not in material
       violation of its Charter or By-Laws.
                                  
                                  
                                  
                                  
                                  
                            SCHEDULE III
       
       Pursuant  to  Section  5(f) of the  Underwriting  Agreement,
  Ernst  &  Young  LLP shall furnish letters to you to  the  effect
  that:
       
            (i)   They are independent certified public accountants
       with respect to the Company and its subsidiaries within  the
       meaning  of the Act and the applicable Rules and Regulations
       thereunder.
       
          (ii)   In their opinion, the financial statements and any
       supplementary  financial information and  schedules  audited
       (and, if applicable, prospective financial statements and/or
       pro  forma  financial  information  examined)  by  them  and
       included  or incorporated by reference in the Prospectus  or
       the Registration Statement comply as to form in all material
       respects with the applicable accounting requirements of  the
       Act and the applicable Rules and Regulations with respect to
       registration  statements on Form S-3;  and,  if  applicable,
       they  have  made  a  review  in  accordance  with  standards
       established  by  the American Institute of Certified  Public
       Accountants of the unaudited consolidated interim  financial
       statements,  selected financial data,  pro  forma  financial
       information,   prospective   financial   statements   and/or
       condensed   financial   statements  derived   from   audited
       financial   statements  of  the  Company  for  the   periods
       specified  in  such letter, as indicated  in  their  reports
       thereon, copies of which have been furnished to you.
       
           (iii)     On  the  basis  of  limited  procedures,   not
       constituting an audit in accordance with generally  accepted
       auditing standards, consisting of a reading of the unaudited
       financial  statements  and  other  information  referred  to
       below, performing the procedures specified by the AICPA  for
       a  review  of interim financial information as discussed  in
       SAS  No.  71, Interim Financial Information, on  the  latest
       available  interim financial statements of the  Company  and
       its  subsidiaries,  inspection of the minute  books  of  the
       Company  and its subsidiaries since the date of  the  latest
       audited  financial  statements included in  the  Prospectus,
       inquiries  of  officials of the Company and its subsidiaries
       responsible  for financial and accounting matters  and  such
       other  inquiries and procedures as may be specified in  such
       letter, nothing came to their attention that caused them  to
       believe that:
            
                 (A)   any material modifications should be made to
            the   unaudited  statements  of  consolidated   income,
            statements  of  consolidated  financial  position   and
            statements of consolidated cash flows included  in  the
            Prospectus for them to be in conformity with  generally
            accepted   accounting  principles,  or  the   unaudited
            statements   of  consolidated  income,  statements   of
            consolidated  financial  position  and  statements   of
            consolidated  cash flows included in the Prospectus  do
            not comply as to form in all material respects with the
            applicable accounting requirements of the Act  and  the
            related published Rules and Regulations thereunder.
            
                (B)   any other unaudited income statement data and
            balance sheet items included in the Prospectus  do  not
            agree  with  the corresponding items in  the  unaudited
            consolidated financial statements from which such  data
            and items were derived, and any such unaudited data and
            items  were  not  determined on a  basis  substantially
            consistent with the basis for the corresponding amounts
            in   the   audited  consolidated  financial  statements
            included in the Prospectus.
            
                (C)   the unaudited financial statements which were
            not  included  in  the Prospectus but from  which  were
            derived  any  unaudited condensed financial  statements
            referred  to  in  Clause (A) and any  unaudited  income
            statement data and balance sheet items included in  the
            Prospectus  and  referred to in  Clause  (B)  were  not
            determined on a basis substantially consistent with the
            basis for the audited consolidated financial statements
            included in the Prospectus.
            
                  (D)     any   unaudited  pro  forma  consolidated
            condensed   financial  statements   included   in   the
            Prospectus  do  not comply as to form in  all  material
            respects with the applicable accounting requirements of
            the   Act  and  the  published  rules  and  regulations
            thereunder or the pro forma adjustments have  not  been
            properly  applied  to  the historical  amounts  in  the
            compilation of those statements.
            
                 (E)    as  of a specified date not more than  five
            days  prior to the date of such letter, there have been
            any  changes in the consolidated capital stock  or  any
            increase  in  the consolidated long-term  debt  of  the
            Company  and  its  subsidiaries, or  any  decreases  in
            consolidated working capital, net current assets or net
            assets, or any changes in any other items specified  by
            you, in each case as compared with amounts shown in the
            latest balance sheet included in the Prospectus, except
            in  each case for changes, increases or decreases which
            the Prospectus discloses have occurred or may occur  or
            which are described in such letter.
            
                 (F)    for the period from the date of the  latest
            financial statements included in the Prospectus to  the
            specified date referred to in Clause (E) there were any
            decreases  in  consolidated net revenues  or  operating
            profit   or   the  total  or  per  share   amounts   of
            consolidated  net income or any changes  in  any  other
            items  specified by you, in each case as compared  with
            the  comparable period of the preceding year  and  with
            any  other period of corresponding length specified  by
            you,  except  in  each case for changes,  decreases  or
            increases which the Prospectus discloses have  occurred
            or may occur or which are described in such letter.
       
           (iv)    In  addition to the audit referred to  in  their
       report(s)  included  or incorporated  by  reference  in  the
       Prospectus and the limited procedures, inspection of  minute
       books,  inquiries  and  other  procedures  referred  to   in
       paragraph  (iii)  above,  they  have  carried  out   certain
       specified   procedures,  not  constituting   an   audit   in
       accordance with generally accepted auditing standards,  with
       respect   to  certain  amounts,  percentages  and  financial
       information  specified by you, which are  derived  from  the
       general   accounting  records  of  the   Company   and   its
       subsidiaries  for the periods covered by their  reports  and
       any interim or other periods since the latest period covered
       by their reports, which appear in the Prospectus, or in Part
       II  of,  or  in  exhibits and schedules to, the Registration
       Statement  specified  by you, and have compared  certain  of
       such amounts, percentages and financial information with the
       accounting  records of the Company and its subsidiaries  and
       have found them to be in agreement.
  
  _______________________________
  1
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metadata_filer: {"company-data": {"conformed-name": "PARKWAY PROPERTIES INC", "cik": "0000729237", "assigned-sic": "6512", "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": "98547590"}, "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": "P O BOX 22728", "street2": "P O BOX 22728", "city": "JACKSON", "state": "MS", "zip": "39201"}, "former-company": {"former-conformed-name": "PARKWAY CO", "date-changed": "19951018"}}
text: UNITED STATES
  
                 SECURITIES AND EXCHANGE COMMISSION
                                  
                        WASHINGTON, DC  20549
                                  
                 ----------------------------------
                                  
                              FORM 8-K
                                  
                                  
                           CURRENT REPORT
                                  
                                  
                   Pursuant to Section 13 or 15(d)
                               of the
                   Securities Exchange Act of 1934
  
  Date of Report (Date earliest event reported): February 23, 1998
                                                 -----------------
  
                            PARKWAY PROPERTIES, INC.
  ------------------------------------------------------------------
        (Exact name of Registrant as specified in its charter)
  
  Maryland                    1-11533                   74-2123597
  ------------------------------------------------------------------
  (State or other     (Commission File Number)       (IRS Employer
  jurisdiction of                                    Identification
  incorporation)                                         Number)
   
  One Jackson Place Suite 1000
    188 East Capitol Street
        P. O. Box 24647
       Jackson,  Mississippi                                 39225-
  4647
  ------------------------------------------------------------------
  (Address of principal executive offices)               (Zip Code)
  
  Registrant's telephone number, including area code (601) 948-4091
                                                     ---------------
  ------------------------------------------------------------------
    (Former name or former address, if changed since last report)
  
                              FORM 8-K
                                  
                      PARKWAY PROPERTIES, INC.
  
  Item 5.   Other Events.
  
  On  February  23,  1998,  Parkway  Properties,  Inc.  closed  its
  previously  announced sale of 451,128 shares of its Common  Stock
  under  its  existing shelf registration statement at  a  purchase
  price  of $33.25 per share to A.G. Edwards & Sons, Inc.  The  net
  proceeds  of  the offering (approximately $14.2  million  net  of
  commissions  and  expenses) will be used  for  the  repayment  of
  approximately   $14.2  million  of  outstanding   variable   rate
  indebtedness.   Following  this  transaction,  the  Company   had
  10,221,424 shares of Common Stock outstanding.
  
  Item 7.   Financial Statements and Exhibits.
  
            (c)  Exhibits.
  
             (1)   Underwriting Agreement between  A.G.  Edwards  &
       Sons,  Inc., Parkway Properties, Inc. and Parkway Properties
       LP  dated  February  18, 1998.  Parkway  agrees  to  furnish
       supplementally to the Securities and Exchange Commission  on
       request  a copy of any omitted schedule or exhibit  to  this
       agreement.
  
                              FORM 8-K
                                  
                      PARKWAY PROPERTIES, INC.
                                  
                                  
                             SIGNATURES
  
  Pursuant  to the requirements of the Securities Exchange  Act  of
  1934, the Registrant has duly caused this report to be signed  on
  its behalf by the undersigned hereunto duly authorized.
  
  DATE:  February 23, 1998           PARKWAY PROPERTIES, INC.
  
                                     BY:  /s/Sarah P. Clark
                                          Sarah P. Clark
                                          Senior Vice President,
                                          Chief Financial Officer,
                                          Treasurer and Secretary
                                          
  
                                     February 18, 1998
  
  A.G. EDWARDS & SONS, INC.
  One North Jefferson Avenue
  St. Louis, Missouri 63103
       
       The   undersigned,  Parkway  Properties,  Inc.,  a  Maryland
  corporation (the "Company") and Parkway Properties LP, a Delaware
  limited  partnership (the "Operating Partnership"; such Operating
  Partnership together with the Company are hereinafter referred to
  as  the  "Transaction Entities"), hereby confirm their agreements
  with you (the "Underwriter") as follows:
  
        1.    Description of Shares.  The Company proposes to issue
  and  sell to you 451,128 shares of its Common Stock (the  "Common
  Stock"),  par value $.001 per share (the "Shares").   The  Shares
  are more fully described in the Prospectus hereinafter defined.
  
       2.   Purchase, Sale and Delivery of Shares.  On the basis of
  the  representations, warranties and agreements herein contained,
  but  subject  to the terms and conditions herein set  forth,  the
  Company agrees to sell to you, and you agree to purchase from the
  Company at a purchase price of $31.59 per share, 451,128 Shares.
       
       The  Company  will deliver definitive certificates  for  the
  Shares  at  the  office of A.G. Edwards & Sons,  Inc.,  77  Water
  Street,  New  York, New York ("Edwards' Office"), or  such  other
  place  as you and the Company may mutually agree upon (the "Place
  of  Closing"), for your account against payment to the Company of
  the purchase price for the Shares sold to you by wire transfer of
  immediately  available funds, at 10:00 a.m., St. Louis  time,  on
  February 23, 1998, or at such other time and date not later  than
  three  full  business days thereafter as you and the Company  may
  agree,  such  time and date of payment and delivery being  herein
  called the "Closing Date."
       
       The  certificates for the Shares so to be delivered will  be
  made  available to you for inspection at Edwards' Office (or such
  other  place as you and the Company may mutually agree  upon)  at
  least one full business day prior to the Closing Date and will be
  in  such names and denominations as you may request at least  one
  full business day prior to the Closing Date.
  
        3.    Representations,  Warranties and  Agreements  of  the
  Transaction  Entities. (a) The Transaction Entities, jointly  and
  severally, represent and warrant to and agree with you that:
       
           (i)   The Company meets the requirements for use of Form
       S-3  under  the  Securities Act of  1933,  as  amended  (the
       "Act");  a  registration  statement (Registration  No.  333-
       29259)  on Form S-3, including a prospectus relating to  the
       registration  of the Shares and such other securities  which
       may be offered from time to time in accordance with Rule 415
       under  the  Act,  and such amendments to  such  registration
       statement  as  may have been required to the  date  of  this
       Agreement,  has  been  carefully  prepared  by  the  Company
       pursuant to and in conformity with the requirements  of  the
       Act,   and  the  Rules  and  Regulations  (the  "Rules   and
       Regulations") of the Securities and Exchange Commission (the
       "Commission")  thereunder,  was filed  with  the  Commission
       under  the  Act  and  have been declared  effective  by  the
       Commission.    Copies   of   such  registration   statement,
       including  any amendments thereto, each related  preliminary
       prospectus   contained  therein,  the  exhibits,   financial
       statements  and schedules have heretofore been delivered  by
       the   Company   to   you.   A  prospectus  supplement   (the
       "Prospectus  Supplement") setting forth  the  terms  of  the
       offering,  sale and plan of distribution of the  Shares  and
       additional  information  concerning  the  Company  and   its
       business  has been or will be so prepared and will be  filed
       pursuant to Rule 424(b) of the Rules and Regulations  on  or
       before  the  second business day after the date  hereof  (or
       such  earlier  time  as may be required  by  the  Rules  and
       Regulations).   The  term "Registration Statement"  as  used
       herein  means  the  registration statement,  and  the  basic
       prospectus  included therein, as amended at the time  it  or
       any amendment thereto became effective under the Act, or  at
       the  time  any  Annual Report on Form 10-K is filed  by  the
       Company   with   the  Commission  (the  "Effective   Date"),
       including  financial  statements and all  exhibits  and  all
       documents incorporated by reference therein pursuant to Item
       12  of  Form S-3 under the Act.  Any document filed  by  the
       Company  under  the  Securities Exchange  Act  of  1934,  as
       amended (the "Exchange Act") after the effective date of the
       Registration  Statement  or  the  date  of  the   Prospectus
       Supplement  and incorporated by reference in the  Prospectus
       shall be deemed to be included in the Registration Statement
       and  the Prospectus as of the date of such filing.  The term
       "Prospectus"  as used herein means (i) the basic  prospectus
       included  in  the  Registration Statement at  the  Effective
       Date,  as supplemented by the Prospectus Supplement as first
       filed  with  the Commission pursuant to Rule 424(b)  of  the
       Rules and Regulations, except that, if such basic prospectus
       is amended or supplemented subsequent to the Effective Date,
       the term "Prospectus" shall refer to the basic prospectus as
       so  amended  or supplemented and as further supplemented  by
       the  Prospectus  Supplement or (ii) if  no  such  filing  is
       required,  the  form  of final prospectus  included  in  the
       Registration Statement at the Effective Date or (iii)  if  a
       Term  Sheet  or  Abbreviated Term Sheet (as such  terms  are
       defined  in  Rule  434(b) and 434(c), respectively,  of  the
       Rules and Regulations) is filed with the Commission pursuant
       to  Rule  424(b)(7) of the Rules and Regulations,  the  Term
       Sheet  or  Abbreviated Term Sheet and the  last  Preliminary
       Prospectus filed with the Commission prior to the  time  the
       Registration  Statement  became  effective,  taken  together
       (including,  in  each  case, the documents  incorporated  by
       reference therein pursuant to Item 12 of Form S-3 under  the
       Act).   The  term  "Preliminary Prospectus" as  used  herein
       shall mean a preliminary prospectus included at any time  in
       the Registration Statement.
       
           (ii)   The Commission has not issued, and is not to  the
       knowledge  of  the Company threatening to  issue,  an  order
       preventing   or  suspending  the  use  of  any   Preliminary
       Prospectus or the Prospectus nor instituted proceedings  for
       that  purpose.  Each Preliminary Prospectus at its  date  of
       issue, the Registration Statement at the Effective Date, and
       the  Prospectus at its date of issue and any  amendments  or
       supplements  thereto contains or will contain, as  the  case
       may  be,  all  statements which are required  to  be  stated
       therein  by,  and in all material respects conform  or  will
       conform, as the case may be, to the requirements of, the Act
       and  the  Rules  and Regulations.  Neither the  Registration
       Statement  nor  any amendment thereto, as of the  applicable
       effective   date,  and  neither  the  Prospectus   nor   any
       supplement thereto, as of its applicable issue date  or  the
       Closing Date, contains or will contain, as the case may  be,
       any  untrue  statement of a material fact or omits  or  will
       omit  to  state  any  material fact required  to  be  stated
       therein or necessary to make the statements therein, in  the
       light  of the circumstances under which they were made,  not
       misleading;  provided, however, that the  Company  makes  no
       representation or warranty as to information contained in or
       omitted  from the Registration Statement or the  Prospectus,
       or  any such amendment or supplement, in reliance upon,  and
       in  conforming  with, written information furnished  to  the
       Company  by  you  specifically for use  in  the  preparation
       thereof.
       
          (iii)    The documents incorporated by reference  in  the
       Prospectus pursuant to Item 12 of Form S-3 under the Act, at
       the  time  they were filed with the Commission, complied  in
       all  material respects with the requirements of the Exchange
       Act, and the rules and regulations adopted by the Commission
       thereunder (the "1934 Act Rules and Regulations"), and, when
       read  together  and  with  the  other  information  in   the
       Prospectus,  at  the time the Registration Statement  became
       effective and at the Closing Date, did not or will  not,  as
       the  case  may be, contain an untrue statement of a material
       fact  or omit to state a material fact required to be stated
       therein  or  necessary  to make the statements  therein  not
       misleading.
       
           (iv)   The filing of the Registration Statement and  the
       execution  and  delivery of this Agreement  have  been  duly
       authorized  by  the Board of Directors of the Company;  this
       Agreement constitutes a valid and legally binding obligation
       of   each   of  the  Transaction  Entities  enforceable   in
       accordance  with  its  terms  (except  to  the  extent   the
       enforceability  of  the  indemnification  and   contribution
       provisions  of  Section 6 hereof may be  limited  by  public
       policy  considerations as expressed in the Act as  construed
       by   courts   of  competent  jurisdiction,  and  except   as
       enforceability  may  be  limited by bankruptcy,  insolvency,
       reorganization,   moratorium  and   other   laws   affecting
       creditors'  rights  generally and by general  principles  of
       equity); the issue and sale of the Shares by the Company and
       the  performance  of this Agreement and the consummation  of
       the  transactions herein contemplated will not result  in  a
       violation  of  any of the Transaction Entities  articles  of
       incorporation  or  bylaws, partnership  agreement  or  other
       organizational documents, or result in a breach or violation
       of  any  of  the  terms and provisions of, or  constitute  a
       default  under, or result in the creation or  imposition  of
       any  lien,  charge  or encumbrance upon  any  properties  or
       assets  of  the  Transaction Entities or their  subsidiaries
       under,  any statute, or under any indenture, mortgage,  deed
       of   trust,   note,  loan  agreement,  sale  and   leaseback
       arrangement  or other agreement or instrument to  which  the
       Transaction Entities or any of their subsidiaries is a party
       or by which they are bound or to which any of the properties
       or  assets of the Transaction Entities or their subsidiaries
       is subject, or any order, rule or regulation of any court or
       governmental  agency  or body having jurisdiction  over  the
       Transaction   Entities  or  their  subsidiaries   or   their
       properties,  except  to such extent as does  not  materially
       adversely  affect  the business of the Transaction  Entities
       and  their  subsidiaries  taken  as  a  whole;  no  consent,
       approval,    authorization,    order,    registration     or
       qualification of or with any court or governmental agency or
       body  is  required for the consummation of the  transactions
       herein  contemplated, except such as may be required by  the
       National  Association  of  Securities  Dealers,  Inc.   (the
       "NASD")  or  under the Act or Rules and Regulations  or  any
       state securities laws.
       
             (v)     No   Transaction  Entity  nor  any  of   their
       subsidiaries  has  sustained since the date  of  the  latest
       audited  financial  statements included or  incorporated  by
       reference   in   the   Prospectus  any  material   loss   or
       interference  with its business from fire, explosion,  flood
       or  other calamity, whether or not covered by insurance,  or
       from  any  labor  dispute or court or  governmental  action,
       order  or decree.  Except as contemplated in the Prospectus,
       subsequent  to the respective dates as of which  information
       is  given  in the Registration Statement and the Prospectus,
       the  Transaction Entities and their subsidiaries taken as  a
       whole have not incurred any material liabilities or material
       obligations,  direct  or  contingent,  other  than  in   the
       ordinary  course of business, or entered into  any  material
       transactions  not  in the ordinary course of  business,  and
       there  has not been any material change in the capital stock
       or  long-term  debt  of the Transaction Entities  and  their
       subsidiaries taken as a whole or any material adverse change
       in  the condition (financial or other), net worth, business,
       affairs,  management, prospects or results of operations  of
       the  Transaction Entities and their subsidiaries taken as  a
       whole.  The Transaction Entities and their subsidiaries have
       filed  all  necessary federal, state and foreign income  and
       franchise  tax  returns  and paid all  taxes  shown  as  due
       thereon; all tax liabilities are adequately provided for  on
       the books of the Transaction Entities and their subsidiaries
       except  to  such  extent as would not  materially  adversely
       affect  the business of the Transaction Entities  and  their
       subsidiaries taken as a whole, the Transaction Entities  and
       their  subsidiaries  have  made all  necessary  payroll  tax
       payments  and are current and up-to-date as of the  date  of
       this  Agreement;  and  the Transaction  Entities  and  their
       subsidiaries  have  no knowledge of any  tax  proceeding  or
       action   pending  or  threatened  against  the   Transaction
       Entities   or  their  subsidiaries  which  might  materially
       adversely affect their business or property.
       
           (vi)    Except as described in the Prospectus, there  is
       not  now  pending  or, to the knowledge of  the  Transaction
       Entities,  threatened or contemplated, any action,  suit  or
       proceeding  to  which  the  Transaction  Entities  or  their
       subsidiaries  is a party before or by any court  or  public,
       regulatory  or  governmental agency or body which  might  be
       expected to result (individually or in the aggregate) in any
       material  adverse  change  in the  condition  (financial  or
       other),  business  or prospects of the Transaction  Entities
       and  their  subsidiaries  taken as  a  whole,  or  might  be
       expected to materially and adversely affect (individually or
       in  the  aggregate)  the properties or assets  thereof,  and
       there  are  no  contracts or documents  of  the  Transaction
       Entities or their subsidiaries which would be required to be
       filed  as exhibits to the Registration Statement by the  Act
       or by the Rules and Regulations which have not been filed as
       exhibits  to  the Registration Statement or incorporated  by
       reference therein.
       
          (vii)    The  Company  has  duly and  validly  authorized
       capital   stock   as  described  in  the   Prospectus;   all
       outstanding  shares of Common Stock of the Company  and  the
       Shares  conform,  or  when  issued  will  conform,  to   the
       description  thereof in the Prospectus and  have  been,  or,
       when  issued and paid for will be, duly authorized,  validly
       issued,  fully paid and nonassessable; and the  issuance  of
       the Shares to be purchased from the Company hereunder is not
       subject to preemptive rights.
       
         (viii)    Each  of  the  Transaction  Entities  and  their
       subsidiaries have been duly incorporated or formed,  as  the
       case  may be, and is a validly existing corporation, general
       or  limited partnership, or other legal entity, as the  case
       may  be,  in  good standing under the laws of the  state  or
       other jurisdiction in which it is incorporated or formed, as
       the  case  may  be.   The  Transaction  Entities  and  their
       subsidiaries  have full power and authority  (corporate  and
       other)  to  own,  lease  and operate  their  properties  and
       conduct  their  businesses as described in  the  Prospectus;
       each  of the Transaction Entities and their subsidiaries  is
       duly  qualified or registered to do business and is in  good
       standing  in each state or other jurisdiction in  which  its
       ownership  or  leasing of property or  conduct  of  business
       legally  requires  such  qualification,  except  where   the
       failure to be so qualified would not have a material adverse
       effect on the ability of the Transaction Entities and  their
       subsidiaries to conduct their business as described  in  the
       Prospectus; and the outstanding shares of capital  stock  or
       ownership  interests of the Transaction Entities  and  their
       subsidiaries  have been duly authorized and validly  issued,
       are  fully  paid  and nonassessable and  are  owned  by  the
       applicable  Transaction  Entity  free  and  clear   of   any
       mortgage, pledge, lien, encumbrance, charge or adverse claim
       and  are  not  the subject of any agreement or understanding
       with  any  person;  except  for  options  pursuant  to   the
       Company's  1994  Stock Option Plan and  the  Company's  1991
       Directors  Stock  Option  Plan,  as  amended,  no   options,
       warrants  or  other rights to purchase, agreement  or  other
       obligations  to  issue  or  other  rights  to  convert   any
       obligations  into  shares  of  capital  stock  or  ownership
       interest in the subsidiaries are outstanding.
       
           (ix)   Ernst & Young LLP, the accounting firm which  has
       certified   the   financial   statements   filed   with   or
       incorporated  by  reference  in  and  as  a  part   of   the
       Registration Statement, is an independent public  accounting
       firm  within  the  meaning of the  Act  and  the  Rules  and
       Regulations.
       
            (x)    The  consolidated financial  statements  of  the
       Company  together  with  the  related  schedules  and  notes
       thereto,  set forth or included or incorporated by reference
       in  the Registration Statement and Prospectus fairly present
       the  financial condition of the Company and its consolidated
       subsidiaries  as of the dates indicated and the  results  of
       operations,  changes  in  financial position,  shareholders'
       equity and cash flows for the periods therein specified,  in
       conformity  with  generally accepted  accounting  principles
       consistently applied throughout the periods involved (except
       as  otherwise  stated  therein).  The summary  and  selected
       financial  and statistical data included or incorporated  by
       reference  in the Registration Statement and the  Prospectus
       present  fairly the information shown therein  and,  to  the
       extent  based upon or derived from the financial statements,
       have  been compiled on a basis consistent with the financial
       statements  presented therein.  In addition, the  pro  forma
       financial  statements of the Company, and the related  notes
       thereto,  included  or  incorporated  by  reference  in  the
       Registration Statement and the Prospectus present fairly the
       information shown therein, have been prepared in  accordance
       with  the Commission's rules and guidelines with respect  to
       pro  forma  financial  statements  and  have  been  properly
       compiled on the basis described therein, and the assumptions
       used  in  the  preparation thereof are  reasonable  and  the
       adjustments used therein are appropriate to give  effect  to
       the  transactions  and  circumstances referred  to  therein.
       Furthermore, all financial statements required by Rule  3-14
       of  Regulation  S-X  ("Rule 3-14")  have  been  included  or
       incorporated by reference in the Registration Statement  and
       the  Prospectus  and any such financial  statements  are  in
       conformity  with the requirements of Rule  3-14.   No  other
       financial statements are required to be set forth or  to  be
       incorporated  by reference in the Registration Statement  or
       the  Prospectus  under the Act or the Rules and  Regulations
       thereunder.
       
           (xi)    No Transaction Entity nor any subsidiary  is  in
       default  with respect to any contract or agreement to  which
       it  is a party; provided that this representation shall  not
       apply  to defaults which in the aggregate are not materially
       adverse  to  the  condition,  financial  or  other,  or  the
       business or prospects of the Transaction Entities and  their
       subsidiaries taken as a whole.
       
          (xii)    No Transaction Entity nor any subsidiary  is  in
       violation  of  any  other laws, ordinances  or  governmental
       rules  or  regulations  to which it is  subject,  including,
       without limitation, Section 13 of the Exchange Act,  and  no
       Transaction Entity nor any subsidiary has failed  to  obtain
       any  license, permit, franchise, easement, consent, or other
       governmental  authorization  necessary  to  the   ownership,
       leasing and operation of its properties or to the conduct of
       its  business,  which violation or failure would  materially
       adversely   affect   the   business,  operations,   affairs,
       properties,  prospects, profits or condition  (financial  or
       other)  of  the Transaction Entities and their  subsidiaries
       taken  as a whole.  No Transaction Entity nor any subsidiary
       has,  at  any time during the past five years, (A) made  any
       unlawful  contributions to any candidate for  any  political
       office,  or  failed  fully to disclose any  contribution  in
       violation  of  law, or (B) made any payment  to  any  state,
       federal  or  foreign government official,  or  other  person
       charged with similar public or quasi-public duty (other than
       payment required or permitted by applicable law).
       
         (xiii)   Except as set forth on Schedule I, there  are  no
       holders  of  securities  of  the Company  having  rights  to
       registration thereof or preemptive rights to purchase Common
       Stock  of the Company except as disclosed in the Prospectus.
       Holders of registration rights have waived such rights  with
       respect to the offering being made by the Prospectus.
       
          (xiv)    Except  as  described  in  the  Prospectus,  the
       Transaction Entities and their subsidiaries own or  possess,
       or can acquire on reasonable terms, adequate patents, patent
       licenses,   trademarks,  service  marks  and   trade   names
       necessary to conduct the business now operated by them,  and
       no  Transaction Entity nor any subsidiary has  received  any
       notice  of infringement of or conflict with asserted  rights
       of  others  with  respect to any patents,  patent  licenses,
       trademarks, service marks or trade names which, singly or in
       the  aggregate,  if the subject of an unfavorable  decision,
       ruling  or finding, would have a material adverse effect  on
       the conduct of the business, operations, financial condition
       or income of the Transaction Entities and their subsidiaries
       taken as a whole.
       
           (xv)    The  Transaction  Entities  and  each  of  their
       subsidiaries has good and marketable title to all properties
       and  assets described in the Prospectus as owned by it, free
       and   clear   of   all  liens,  charges,   encumbrances   or
       restrictions,  except  such as  (i)  are  described  in  the
       Prospectus or (ii) are not material to the business  of  the
       Transaction  Entities  or  their subsidiaries,  taken  as  a
       whole.    The  Transaction  Entities  and  each   of   their
       subsidiaries  has  valid, subsisting and enforceable  leases
       for the properties described in the Prospectus as leased  by
       it,  with  such exceptions as are not material  and  do  not
       materially  interfere with the use made and proposed  to  be
       made of such properties by the Transaction Entities and such
       subsidiaries; no tenant under any of the leases pursuant  to
       which  any of the Transaction Entities leases its properties
       has  an  option  or right of first refusal to  purchase  the
       premises demised under such lease; the use and occupancy  of
       each  of the properties of the Transaction Entities complies
       in  all  material  respects with all  applicable  codes  and
       zoning  laws and regulations; the Transaction Entities  have
       no  knowledge  of any pending or threatened condemnation  or
       zoning  change that will in any material respect affect  the
       size of, use of, improvements of, construction on, or access
       to  any  of the properties of the Transaction Entities;  and
       the Transaction Entities have no knowledge of any pending or
       threatened  proceeding or action that  will  in  any  manner
       affect  the  size of, use of, improvements on,  construction
       on,  or  access to any of the properties of the  Transaction
       Entities.
       
         (xvi)   Title insurance in favor of the Transaction Entity
       (or  the  subsidiary) which holds title to such property  is
       maintained with respect to each of the properties  owned  by
       such  Transaction Entity in an amount at least equal to  the
       greater  of (i) the cost of acquisition of such property  or
       (ii)  the cost of construction by the Transaction Entity  of
       the  improvements located on such property (measured at  the
       time of such construction), except, in each case, where  the
       failure  to maintain such title insurance would not  have  a
       material  adverse  effect  on the  condition,  financial  or
       otherwise,  or  the earnings, business affairs  or  business
       prospects of the Transaction Entities and their subsidiaries
       taken as a whole.  Title insurance in favor of the mortgagee
       is  maintained in an amount equal to the maximum  commitment
       of the related loan.
       
         (xvii)    (a)  Except as disclosed in the Prospectus,  the
       Transaction  Entities have no knowledge of (i) the  presence
       of  any  hazardous  substances, hazardous  materials,  toxic
       substances,  pollutants  or waste  materials  (collectively,
       "Hazardous  Materials") on any of the  properties  owned  or
       operated  by the Transaction Entities and their subsidiaries
       (the  "Properties"), except that which is in compliance with
       all  Environmental  Laws or (ii) any spills,  releases,  dis
       charges  or  disposals  of  Hazardous  Materials  that  have
       occurred   or  are  presently  occurring  on  or  from   the
       Properties,  which presence or occurrence would individually
       or  in  the aggregate have a material adverse effect on  the
       conduct of the business, operations, financial condition  or
       income  of  the Transaction Entities and their  subsidiaries
       taken as a whole.
       
            (b)    Except  as  disclosed  in  the  Prospectus,  the
       Transaction   Entities,   their   subsidiaries   and   their
       Properties   (i)  are  in  compliance  with  any   and   all
       Environmental Laws, (ii) have received all permits, licenses
       or  other  approvals required under applicable Environmental
       Laws  to  conduct its business and (iii) are  in  compliance
       with all terms and conditions of any such permit, license or
       approval, except where such noncompliance with Environmental
       Laws, failure to receive required permits, licenses or other
       approvals or failure to comply with the terms and conditions
       of   such   permits,   licenses  or  approvals   would   not
       individually  or  in the aggregate have a  material  adverse
       effect on the conduct of the business, operations, financial
       condition  or income of the Transaction Entities  and  their
       subsidiaries taken as a whole.
       
            (c)    The  Transaction  Entities engage  environmental
       consultants   to   perform  phase   I   environmental   site
       assessments in accordance with the ASTM Standard to identify
       any  environmental conditions prior to the purchase of their
       properties.  On the basis of such phase I environmental site
       assessments, or such additional investigations as  may  have
       been   performed  based  on  the  findings  of  a  phase   I
       assessment, and, except as described in the Prospectus,  the
       Transaction Entities and their subsidiaries have  reasonably
       concluded that no such environmental conditions exist  which
       would,  individually or in the aggregate,  have  a  material
       adverse  effect on the conduct of the business,  operations,
       financial  condition  or income of the Transaction  Entities
       and their subsidiaries taken as a whole.
       
             (d)    As  used  herein,  "Hazardous  Material"  shall
       include,   without  limitation  any  flammable   explosives,
       radioactive   materials,  hazardous   materials,   hazardous
       wastes, hazardous or toxic substances, or related materials,
       asbestos,   polychlorinated  biphenyls  ("PCBs"),  petroleum
       products and by-products and substances defined or listed as
       "hazardous   substances,"  "toxic   substances,   "hazardous
       waste,"  or "hazardous materials" in any Federal,  state  or
       local Environmental Law.
       
           (e)   As used herein, "Environmental Law" shall mean all
       laws,  regulations  or ordinances of any Federal,  state  or
       local governmental authority having or claiming jurisdiction
       over any of the Properties (a "Governmental Authority") that
       are designed to protect public health and the environment or
       regulate  the  handling  of Hazardous Materials,  including,
       without    limitation,   the   Comprehensive   Environmental
       Response,  Compensation,  and  Liability  Act  of  1980,  as
       amended  (42  U.S.C. Section 9601 et seq.)  ("CERCLA"),  the
       Hazardous Material Transportation Act, as amended (49 U.S.C.
       Section  1801  et  seq.),  the  Resource  Conservation   and
       Recovery  Act, as amended (42 U.S.C. Section 6901 et  seq.),
       the  Federal  Water Pollution Control Act,  as  amended  (33
       U.S.C.  Section  1251 et seq.), and the Clean  Air  Act,  as
       amended  (42 U.S.C. Section 7401 et seq.), and any  and  all
       analogous future federal or present or future state or local
       laws.
       
       (xviii)   No labor disturbance exists with the employees  of
       the  Transaction  Entities  or  their  subsidiaries  or   is
       imminent which would have a material adverse effect  on  the
       Transaction  Entities  and their  subsidiaries  taken  as  a
       whole.
       
          (xix)    The  Company has not taken and  will  not  take,
       directly  or  indirectly, any action designed  to  or  which
       might   reasonably  be  expected  to  cause  or  result   in
       stabilization  or manipulation of the price  of  the  Common
       Stock, and the Company is not aware of any such action taken
       or to be taken by affiliates of the Company.
       
           (xx)   The Company is not an "investment company"  or  a
       company  "controlled" by an "investment company" within  the
       meaning of the Investment Company Act of 1940, as amended.
       
          (xxi)   The mortgages and deeds of trust encumbering  the
       properties  and assets described in the Prospectus  are  not
       convertible   nor  does  any  Transaction  Entity   hold   a
       participating interest therein.
       
         (xxii)   Property and casualty insurance in favor  of  the
       Company is maintained with respect to each of the properties
       owned  by the Transaction Entities in an amount and on  such
       terms as is reasonable and customary for businesses of  this
       type.
       
       (xxiii)    The  Company has continuously been organized  and
       operated   in   conformity   with   the   requirements   for
       qualification  as a real estate investment trust  under  the
       Internal  Revenue Code of 1986, as amended (the "Code")  for
       all  taxable  years commencing with its taxable  year  ended
       December 31, 1997.  The Company will file an election to  be
       taxed  as a real estate investment trust for the year  ended
       December 31,  1997.  The Company's method of operation will
       permit  it to continue to meet the requirements for taxation
       as  a  real  estate investment trust under  the  Code.   The
       Company  intends to continue to operate in  a  manner  which
       would permit it to qualify as a real estate investment trust
       under the Code.
       
        (xxiv)   Except as disclosed in the Prospectus, each entity
       identified in the Prospectus as a tenant of any property, or
       a subtenant thereof, has entered into a lease or a sublease,
       if  applicable, for the possession of such property;  except
       as  disclosed in the Prospectus, each such lease is in  full
       force  and effect and no Transaction Entity nor any  of  its
       subsidiaries has notice of any defense to the obligations of
       the tenant thereunder or any claim asserted or threatened by
       any  person or entity, which claim, if sustained, would have
       a  material  adverse effect on the conduct of the  business,
       operations, financial condition or income of the Transaction
       Entities or their subsidiaries taken as a whole; and  except
       as  disclosed in the Prospectus, the lessor under each lease
       has  complied with its obligations under such lease  in  all
       material respects and no Transaction Entity nor any  of  its
       subsidiaries  has notice of any default by the tenant  under
       such  lease  which,  individually or in the  aggregate  with
       other such defaults, would have a material adverse effect on
       the conduct of the business, operations, financial condition
       or  income of the Transaction Entities or their subsidiaries
       taken as a whole.
       
          (xxv)    Any  certificate signed by any  officer  of  the
       Company  and  delivered to you or to your counsel  shall  be
       deemed  a representation and warranty by the Company to  you
       as to the matters covered thereby.
       
         (xxvi)    A registration statement relating to the  Common
       Stock  of  the  Company has been declared effective  by  the
       Commission pursuant to the Exchange Act and the Common Stock
       of  the  Company is duly registered thereunder.  The  Shares
       have been listed on the New York Stock Exchange, subject  to
       notice  of issuance or sale of the Shares, as the  case  may
       be.
  
       4.   Additional Covenants.  The Company covenants and agrees
  with you that:
       
             (a)    The  Company  will  (i)  prepare  a  Prospectus
       Supplement  setting  forth  the  number  of  Shares  covered
       thereby  and  their  terms not otherwise  specified  in  the
       Prospectus  pursuant to which the Shares are  being  issued,
       the  name of the Underwriter and the number of Shares  which
       the  Underwriter has agreed to purchase, the price at  which
       the  Shares are to be purchased by the Underwriter from  the
       Company  and  such other information as the Underwriter  and
       the Company deem appropriate in connection with the offering
       of the Shares, and file the Prospectus in a form approved by
       you  pursuant to Rule 424(b) under the Act no later than the
       Commission's  close of business on the second  business  day
       following  the  date of the determination  of  the  offering
       price  of  the  Shares; (ii) not file any amendment  to  the
       Registration  Statement or supplement to the  Prospectus  of
       which  you  shall  not  previously  have  been  advised  and
       furnished  with a copy or to which you shall have reasonably
       objected  in writing or which is not in compliance with  the
       Rules  and Regulations; and (iii) promptly notify you  after
       it  shall have received notice thereof of the time when  any
       amendment to the Registration Statement becomes effective or
       when any supplement to the Prospectus has been filed.
       
            (b)    The  Company will advise you promptly, after  it
       shall  receive  notice or obtain knowledge thereof,  of  any
       request  of the Commission for amendment of the Registration
       Statement  or for supplement to the Prospectus  or  for  any
       additional information, or of the issuance by the Commission
       of  any  stop  order  suspending the  effectiveness  of  the
       Registration  Statement or the use of the Prospectus  or  of
       the  institution or threatening of any proceedings for  that
       purpose,  and  the  Company will use  its  best  efforts  to
       prevent  the  issuance of any such stop order preventing  or
       suspending the use of the Prospectus and to obtain  as  soon
       as possible the lifting thereof, if issued.
       
            (c)    The  Company will cooperate with  you  and  your
       counsel in endeavoring to qualify the Shares for sale  under
       the  securities laws of such jurisdictions as they may  have
       designated  and  will  make  such  applications,  file  such
       documents, and furnish such information as may be  necessary
       for that purpose, provided the Company shall not be required
       to  qualify  as a foreign corporation or to file  a  general
       consent  to service of process in any jurisdiction where  it
       is  not  now so qualified or required to file such a consent
       or  to  subject itself to taxation as doing business in  any
       jurisdiction  where  it is not now so  taxed.   The  Company
       will, from time to time, file such statements, reports,  and
       other documents, as are or may be required to continue  such
       qualifications  in effect for so long a period  as  you  may
       reasonably request.
       
           (d)   The Company will deliver to you, without charge as
       many  copies  of  the  Prospectus (including  all  documents
       incorporated by reference therein), or as it thereafter  may
       be  amended  or supplemented, as you may from time  to  time
       reasonably request.  The Company consents to the use of such
       Prospectus  by you, both in connection with the offering  or
       sale  of the Shares and for such other purposes and for such
       period  of time thereafter as the Prospectus is required  by
       law  to be delivered in connection with the offering or sale
       of the Shares.  The Company will deliver to you at or before
       the  Closing  Date two conformed copies of the  Registration
       Statement and all amendments thereto including all  exhibits
       filed therewith or incorporated by reference therein and all
       documents  incorporated by reference in the  Prospectus  and
       will   deliver  to  you  such  number  of  copies   of   the
       Registration  Statement,  without  exhibits,  and   of   all
       amendments thereto, as you may reasonably request.
       
            (e)    If,  during the period in which a prospectus  is
       required by law to be delivered by an underwriter or dealer,
       any  event shall occur as a result of which, in the judgment
       of the Company or in your judgment or in the opinion of your
       counsel,  it  becomes necessary to amend or  supplement  the
       Prospectus in order to make the statements therein, in light
       of  the circumstances existing at the time the Prospectus is
       delivered  to  a purchaser, not misleading,  or,  if  it  is
       necessary  at any time to amend or supplement the Prospectus
       to  comply  with any law, the Company promptly will  prepare
       and file with the Commission an appropriate amendment to the
       Registration  Statement or supplement to the  Prospectus  so
       that  the Prospectus as so amended or supplemented will not,
       in  the  light of the circumstances when it is so delivered,
       be  misleading, or so that the Prospectus will  comply  with
       law.
       
            (f)   The Company will make generally available to  its
       shareholders  and  will  file as  an  exhibit  in  a  report
       pursuant  to  the Exchange Act, as soon as it is practicable
       to  do  so, but in any event not later than 15 months  after
       the  effective  date  of  the  Registration  Statement,   an
       earnings  statement in reasonable detail, covering a  period
       of  at  least  12  consecutive months  beginning  after  the
       effective date of the Registration Statement, which earnings
       statement shall satisfy the requirements of Section 11(a) of
       the  Act and Rule 158 of the Rules and Regulations and  will
       advise  you in writing when such statement has been so  made
       available.
       
            (g)    The Company will, for a period of one year  from
       the Closing Date, deliver to you at your principal executive
       offices  a  reasonable number of copies of  annual  reports,
       quarterly  reports, current reports and copies of all  other
       documents, reports and information furnished by the  Company
       to  its  shareholders or filed with any securities  exchange
       pursuant  to the requirements of such exchange or  with  the
       Commission  pursuant to the Act or the  Exchange  Act.   The
       Company will deliver to you similar reports with respect  to
       any significant subsidiaries, as that term is defined in the
       Rules  and  Regulations, which are not consolidated  in  the
       Company financial statements.  Any report, document or other
       information  required to be furnished under  this  paragraph
       (g)  shall  be furnished as soon as practicable  after  such
       report, document or information becomes available.
       
            (h)   The Company will apply the proceeds from the sale
       of  the Shares as set forth in the description under "Use of
       Proceeds"  in the Prospectus, which description complies  in
       all respects with the requirements of Item 504 of Regulation
       S-K.
       
            (i)    The Company will supply you with copies  of  all
       correspondence to and from, and all documents issued to  and
       by,  the  Commission in connection with the registration  of
       the Shares under the Act.
       
            (j)    Prior  to  the Closing Date,  the  Company  will
       furnish  to you, as soon as they have been prepared,  copies
       of  any  unaudited interim consolidated financial statements
       of   the  Company  and  its  subsidiaries  for  any  periods
       subsequent   to   the  periods  covered  by  the   financial
       statements appearing in the Registration Statement  and  the
       Prospectus.
       
            (k)    Prior to the Closing Date, the Company will  not
       issue any press releases or other communications directly or
       indirectly  and will hold no press conference, with  respect
       to  the  Company or any of its subsidiaries,  the  financial
       condition,  results  of  operations,  business,  properties,
       assets  or  liabilities  of  the  Company  or  any  of   its
       subsidiaries,  or the offering of the Shares,  without  your
       prior written consent.
       
            (l)    The Company will use its best efforts to  obtain
       approval for, and maintain the listing of the Shares on, the
       New York Stock Exchange.
       
           (m)   The Company and its subsidiaries will maintain and
       keep accurate books and records reflecting their assets  and
       maintain   internal   accounting  controls   which   provide
       reasonable  assurance that (1) transactions are executed  in
       accordance with management's authorization, (2) transactions
       are  recorded as necessary to permit the preparation of  the
       Company's consolidated financial statements and to  maintain
       accountability  for  the  assets  of  the  Company  and  its
       subsidiaries,  (3) access to the assets of the  Company  and
       its  subsidiaries  is  permitted  only  in  accordance  with
       management's authorization, and (4) the recorded accounts of
       the  assets of the Company and its subsidiaries are compared
       with existing assets at reasonable intervals.
       
            (n)    During  any  period in  which  a  prospectus  is
       required by law to be delivered by an Underwriter or dealer,
       the Company will promptly file all documents required to  be
       filed  with the Commission pursuant to Sections  13,  14  or
       15(d) of the Exchange Act.
       
           (o)   The Company will continue to elect to qualify as a
       "real estate investment trust" under the Code, and will  use
       its  best  efforts to continue to meet the  requirements  to
       qualify as a "real estate investment trust."
  
         5.     Conditions   of  Underwriter's  Obligation.    Your
  obligations, as Underwriter to purchase and pay for  the  Shares,
  as  provided  herein,  shall be subject to the  accuracy  in  all
  material  respects, as of the date hereof and as of  the  Closing
  Date,  of  the representations and warranties of the  Transaction
  Entities  contained herein, to the performance  in  all  material
  respects  by  the  Transaction Entities of  their  covenants  and
  obligations   hereunder,   and  to   the   following   additional
  conditions:
       
            (a)   All filings required by Rule 424 of the Rules and
       egulations  shall have been made.  No stop order  suspending
       the  effectiveness of the Registration Statement, as amended
       from  time to time, shall have been issued and no proceeding
       for  that  purpose  shall have been initiated  or,  to  your
       knowledge  or  the knowledge of the Company,  threatened  or
       contemplated  by  the Commission, and  any  request  of  the
       Commission for additional information (to be included in the
       Registration Statement or the Prospectus or otherwise) shall
       have been complied with to your reasonable satisfaction.
       
            (b)    You shall not have disclosed in writing  to  the
       Company   on  or  prior  to  the  Closing  Date,  that   the
       Registration  Statement or Prospectus or  any  amendment  or
       supplement  thereto  contains an untrue  statement  of  fact
       which, in the opinion of your counsel, is material, or omits
       to  state  a fact which, in the opinion of such counsel,  is
       material  and  is  required  to  be  stated  therein  or  is
       necessary  to make the statements therein, in light  of  the
       circumstances under which they were made, not misleading.
       
            (c)   On the Closing Date, you shall have received  the
       opinion of Jaeckle Fleischmann & Mugel, LLP, counsel for the
       Company,  and  Piper  &  Marbury, L.L.P.,  special  Maryland
       counsel  for the Company (as to which Jaeckle Fleischmann  &
       Mugel, LLP and Chapman and Cutler may rely on) addressed  to
       you  and dated the Closing Date, as to the matters set forth
       in Schedule II attached hereto.
       
            (d)   You shall have received on the Closing Date, from
       Chapman  and Cutler, your counsel, such opinion or opinions,
       dated the Closing Date with respect to the incorporation  of
       the  Company,  the validity of the Shares, the  Registration
       Statement, the Prospectus and other related matters  as  you
       may reasonably require; the Company shall have furnished  to
       such  counsel such documents as they reasonably request  for
       the purpose of enabling them to pass on such matters.
       
           (e)   You shall have received at or prior to the Closing
       Date  from Chapman and Cutler a memorandum or memoranda,  in
       form and substance satisfactory to you, with respect to  the
       qualification  for offering and sale by you  of  the  Shares
       under   state   securities  or  Blue  Sky   laws   of   such
       jurisdictions as you may have designated to the Company.
       
            (f)    On the date of this Agreement and on the Closing
       Date,  you  shall have received from Ernst &  Young  LLP,  a
       letter or letters, dated the date of this Agreement and  the
       Closing   Date,   respectively,  in   form   and   substance
       satisfactory  to  you, confirming that they are  independent
       public  accountants with respect to the Company  within  the
       meaning  of the Act and the published Rules and Regulations,
       and stating to the effect set forth in Schedule III hereto.
       
            (g)   Except as contemplated in the Prospectus, (i)  no
       Transaction  Entity nor any of its subsidiaries  shall  have
       sustained  since  the date of the latest  audited  financial
       statements  included  or incorporated by  reference  in  the
       Prospectus  any loss or interference with its business  from
       fire,  explosion, flood or other calamity,  whether  or  not
       covered by insurance, or from any labor dispute or court  or
       governmental action, order or decree; and (ii) subsequent to
       the respective dates as of which information is given in the
       Registration  Statement and the Prospectus,  no  Transaction
       Entity  nor any of its subsidiaries shall have incurred  any
       liability  or obligation, direct or contingent,  or  entered
       into  transactions, and there shall not have been any change
       in  the  capital stock or long-term debt of the Company  and
       its  subsidiaries or any change in the condition  (financial
       or   other),   net  worth,  business,  affairs,  management,
       prospects  or  results  of  operations  of  the  Transaction
       Entities or their subsidiaries, the effect of which, in  any
       such  case  described  in clause (i) or  (ii),  is  in  your
       judgment  so material or adverse as to make it impracticable
       or  inadvisable to proceed with the public offering  or  the
       delivery  of the Shares being delivered on the Closing  Date
       on   the  terms  and  in  the  manner  contemplated  in  the
       Prospectus.
       
             (h)    There  shall  not  have  occurred  any  of  the
       following:  (i)  a  suspension  or  material  limitation  in
       trading  in  securities  generally on  the  New  York  Stock
       Exchange  or the American Stock Exchange or the establishing
       on  such exchanges by the Commission or by such exchanges of
       minimum or maximum prices which are not in force and  effect
       on  the date hereof; (ii) a general moratorium on commercial
       banking  activities  declared by  either  federal  or  state
       authorities; (iii) the outbreak or escalation of hostilities
       involving the United States or the declaration by the United
       States of a national emergency or war, if the effect of  any
       such  event specified in this clause (iii) in your  judgment
       makes  it  impracticable or inadvisable to proceed with  the
       public  offering or the delivery of the Shares in the manner
       contemplated in the Prospectus; (iv) any calamity or crisis,
       change  in national, international or world affairs, act  of
       God,  change  in the international or domestic  markets,  or
       change  in  the  existing financial, political  or  economic
       conditions in the United States or elsewhere, if the  effect
       of  any  such event specified in this clause (iv)  makes  it
       impracticable  or  inadvisable to proceed  with  the  public
       offering  or  the  delivery  of the  Shares  in  the  manner
       contemplated  in  the  Prospectus;  or  (v)  the  enactment,
       publication, decree, or other promulgation of any federal or
       state  statute, regulation, rule, or order of any  court  or
       other governmental authority, or the taking of any action by
       any  federal, state or local government or agency in respect
       of  fiscal  or monetary affairs, if the effect of  any  such
       event specified in this clause (v) in your judgment makes it
       impracticable  or  inadvisable to proceed  with  the  public
       offering  or  the  delivery  of the  Shares  in  the  manner
       contemplated in the Prospectus.
       
            (i)    You shall have received certificates, dated  the
       Closing  Date  and  signed by the President  and  the  Chief
       Executive Officer of the Company stating that (i) they  have
       carefully  examined  the  Registration  Statement  and   the
       Prospectus  as  amended or supplemented  and  all  documents
       incorporated by reference therein and nothing  has  come  to
       their  attention that would lead them to believe that either
       the   Registration  Statement  or  the  Prospectus,  or  any
       amendment   or   supplement   thereto   or   any   documents
       incorporated  by  reference therein as of  their  respective
       effective,  issue  or  filing  dates,  contained,  and   the
       Prospectus  as  amended or supplemented  and  all  documents
       incorporated  by  reference therein and when  read  together
       with the documents incorporated by reference therein, at the
       Closing  Date, contains any untrue statement of  a  material
       fact,  or  omits  to state a material fact  required  to  be
       stated  therein or necessary in order to make the statements
       therein, in light of the circumstances under which they were
       made, not misleading, and, that (ii) all representations and
       warranties  made herein by the Company are true and  correct
       in  all material respects at the Closing Date, with the same
       effect  as  if made on and as of the Closing Date,  and  all
       agreements herein to be performed by the Company on or prior
       to the Closing Date have been duly performed in all material
       respects.
       
            (j)    The  Company shall not have failed, refused,  or
       been  unable,  at  or  prior to the Closing  Date   to  have
       performed  in all material respects any agreement  on  their
       part  to  be  performed  or  any of  the  conditions  herein
       contained and required to be performed or satisfied by  them
       at or prior to the Closing Date.
       
            (k)    The Company shall have furnished to you  at  the
       Closing  Date  such  other  certificates  as  you  may  have
       reasonably requested as to the accuracy, on and  as  of  the
       Closing Date, of the representations and warranties  of  the
       Company  herein and as to the performance by the Company  of
       their obligations hereunder.
       
            (l)    The Shares shall have been approved for  trading
       upon  official  notice of issuance on  the  New  York  Stock
       Exchange.
       
       All  such opinions, certificates, letters and documents will
  be  in  compliance with the provisions hereof only  if  they  are
  reasonably  satisfactory to you and to Chapman and  Cutler,  your
  counsel.  The Company will furnish you with such conformed copies
  of  such opinions, certificates, letters and documents as you may
  request.
       
       If  any of the conditions specified above in this Section  5
  shall not have been satisfied at or prior to the Closing Date  or
  waived by you in writing, this Agreement may be terminated by you
  on notice to the Company.
  
        6.   Indemnification.  (a) The Transaction Entities jointly
  and  severally  shall indemnify and hold you  harmless  and  each
  person,  if any, who controls you within the meaning of the  Act,
  against  any  losses,  claims, damages or liabilities,  joint  or
  several,  to  which  you or such controlling  person  may  become
  subject,  under  the Act or otherwise, insofar  as  such  losses,
  claims,  damages  or liabilities (or actions in respect  thereof)
  arise  out  of or are based upon an untrue statement  or  alleged
  untrue statement of a material fact contained in the Registration
  Statement,  any  Preliminary Prospectus, the Prospectus,  or  any
  amendment  or supplement thereto, or in any blue sky  application
  or  other  document  executed by the  Company  or  based  on  any
  information  furnished in writing by the Company,  filed  in  any
  jurisdiction  in order to qualify any or all of the Shares  under
  the  securities laws thereof ("Blue Sky Application"),  or  arise
  out  of  or  are based upon the omission or alleged  omission  to
  state  therein a material fact required to be stated  therein  or
  necessary  to  make  the  statements therein,  in  light  of  the
  circumstances  under  which they were made, not  misleading;  and
  will reimburse you and each such controlling person for any legal
  or  other expenses reasonably incurred by you or such controlling
  person  in  connection with investigating or defending  any  such
  loss, claim, damage, liability or action; provided, however, that
  the Transaction Entities shall not be liable in any such case  to
  the  extent that any such loss, claim, damage or liability arises
  out  of  or  is based upon an untrue statement or alleged  untrue
  statement   or  omission  or  alleged  omission   made   in   the
  Registration  Statement,  such  Preliminary  Prospectus  or   the
  Prospectus,  or  such amendment or supplement, or  any  Blue  Sky
  Application  in  reliance  upon and in  conformity  with  written
  information furnished to the Company by you, specifically for use
  in  the  preparation thereof; and provided, further, that if  any
  Preliminary  Prospectus or the Prospectus contained  any  alleged
  untrue statement or allegedly omitted to state therein a material
  fact  required  to  be stated therein or necessary  to  make  the
  statements therein not misleading and such statement or  omission
  shall have been corrected in a revised Preliminary Prospectus  or
  in  the  Prospectus or in an amended or supplemented  Prospectus,
  the   Transaction  Entities  shall  not  be  liable  to  you   or
  controlling  persons under this subsection (a)  with  respect  to
  such  alleged untrue statement or alleged omission to the  extent
  that  any  such loss, claim, damage or liability of  such  person
  results  from the fact that you sold Shares to a person  to  whom
  there  was  not  sent  or  given, at  or  prior  to  the  written
  confirmation of such sale, such revised Preliminary Prospectus or
  Prospectus or amended or supplemented Prospectus.  In addition to
  its  other  obligations under this Section 6(a), the  Transaction
  Entities agree that, as an interim measure during the pendency of
  any  claim,  action, investigation, inquiry or  other  proceeding
  arising  out of or based upon any statement or omission,  or  any
  alleged  statement or omission, described in this  Section  6(a),
  the  Transaction Entities will reimburse you on a  monthly  basis
  for   all  reasonable  legal  and  other  expenses  incurred   in
  connection  with  investigating  or  defending  any  such  claim,
  action,  investigation,  inquiry  or  other  proceeding,  notwith
  standing  the  absence  of  a judicial determination  as  to  the
  propriety   and  enforceability  of  the  Transaction   Entities'
  obligation to reimburse you for such expenses and the possibility
  that such payments might later be held to have been improper by a
  court  of competent jurisdiction.  This indemnity agreement shall
  be  in addition to any liabilities which the Transaction Entities
  may otherwise have.
  
       (b)    You  will indemnify and hold harmless the Transaction
  Entities,  each  of their directors, each of their  officers  who
  have  signed the Registration Statement and each person, if  any,
  who  controls the Company within the meaning of the Act,  against
  any losses, claims, damages or liabilities, joint or several,  to
  which  the Transaction Entities or any such director, officer  or
  controlling  person  may  become  subject,  under  the   Act   or
  otherwise, insofar as such losses, claims, damages or liabilities
  (or  actions in respect thereof) arise out of or are  based  upon
  any  untrue statement or alleged untrue statement of any material
  fact  contained  in the Registration Statement,  any  Preliminary
  Prospectus, the Prospectus, any amendment or supplement  thereto,
  or any Blue Sky Application or arise out of or are based upon the
  omission or the alleged omission to state therein a material fact
  required to be stated therein or necessary to make the statements
  therein,  in  light of the circumstances under  which  they  were
  made, not misleading, in each case to the extent, but only to the
  extent, that such untrue statement or alleged untrue statement or
  omission  or  alleged  omission  was  made  in  the  Registration
  Statement,  such  Preliminary Prospectus or the Prospectus,  such
  amendment or supplement, or any Blue Sky Application in  reliance
  upon and in conformity with written information furnished to  the
  Company  by you specifically for use in the preparation  thereof;
  and  will  reimburse  any  legal  or  other  expenses  reasonably
  incurred  by  the  Transaction Entities  or  any  such  director,
  officer or controlling person in connection with investigating or
  defending any such loss, claim, damage, liability or action.   In
  addition  to your other obligations under this Section 6(b),  you
  agree  that,  as  an interim measure during the pendency  of  any
  claim, action, investigation, inquiry or other proceeding arising
  out  of  or based upon any statement or omission, or any  alleged
  statement or omission, described in this Section 6(b),  you  will
  reimburse  the  Transaction Entities on a monthly basis  for  all
  reasonable  legal and other expenses incurred in connection  with
  investigating or defending any such claim, action, investigation,
  inquiry  or  other proceeding, notwithstanding the absence  of  a
  judicial determination as to the propriety and enforceability  of
  your  obligation to reimburse the Company for such  expenses  and
  the  possibility that such payments might later be held  to  have
  been  improper  by  a  court  of  competent  jurisdiction.   This
  indemnity agreement shall be in addition to any liabilities which
  you may otherwise have.
  
       (c)    Any  party which proposes to assert the right  to  be
  indemnified  under this Section 6 shall, within  ten  days  after
  receipt  of  notice  of  commencement  of  any  action,  suit  or
  proceeding against such party in respect of which a claim  is  to
  be  made  against  an indemnifying party under  this  Section  6,
  notify  each such indemnifying party of the commencement of  such
  action,  suit  or  proceeding, enclosing a  copy  of  all  papers
  served, but the omission so to notify such indemnifying party  of
  any  such  action,  suit  or proceeding shall  not  relieve  such
  indemnifying party from any liability which it may  have  to  any
  indemnified party otherwise than under this Section 6.   In  case
  any  such action, suit or proceeding shall be brought against any
  indemnified party and it shall notify the indemnifying  party  of
  the  commencement  thereof,  the  indemnifying  party  shall   be
  entitled  to  participate in, and, to the extent  that  it  shall
  wish,   jointly  with  any  other  indemnifying  party  similarly
  notified,  to assume the defense thereof, with counsel reasonably
  satisfactory to such indemnified party, and after notice from the
  indemnifying party to such indemnified party of its  election  so
  to  assume the defense thereof, the indemnifying party shall  not
  be  liable  to  such  indemnified party for any  legal  or  other
  expenses,   other   than  reasonable  costs   of   investigation,
  subsequently  incurred by such indemnified  party  in  connection
  with  the defense thereof.  The indemnified party shall have  the
  right to employ its own counsel in any such action, but the  fees
  and  expenses  of  such counsel shall be at the expense  of  such
  indemnified  party unless (i) the employment of counsel  by  such
  indemnified  party at the expense of the indemnifying  party  has
  been  authorized by the indemnifying party, (ii) the  indemnified
  party  shall  have  been advised by such  counsel  in  a  written
  opinion  that  there  may be a conflict of interest  between  the
  indemnifying  party and the indemnified party in the  conduct  of
  the  defense, or certain aspects of the defense, of  such  action
  (in which case the indemnifying party shall not have the right to
  direct  the defense of such action with respect to those  matters
  or aspects of the defense on which a conflict exists or may exist
  on  behalf  of  the indemnified party) or (iii) the  indemnifying
  party  shall  not  in fact have employed counsel  to  assume  the
  defense  of  such action, in any of which events  such  fees  and
  expenses  to  the  extent  applicable  shall  be  borne  by   the
  indemnifying  party.  An indemnifying party shall not  be  liable
  for  any  settlement of any action or claim effected without  its
  consent.   Each  indemnified  party,  as  a  condition  of   such
  indemnity,  shall  cooperate in good faith with the  indemnifying
  party in the defense of any such action or claim.
  
       (d)   If the indemnification provided for in this Section  6
  is  for  any  reason, other than pursuant to the  terms  thereof,
  judicially determined (by the entry of a final judgment or decree
  by  a  court of competent jurisdiction and the expiration of time
  to  appeal  or  the  denial of the last right to  appeal)  to  be
  unavailable to an indemnified party under subsections (a) or  (b)
  above  in  respect of any losses, claims, damages or  liabilities
  (or  actions in respect thereof) referred to therein,  then  each
  indemnifying   party   shall,  in  lieu  of   indemnifying   such
  indemnified  party, contribute to the amount paid or  payable  by
  such  indemnified  party  as a result  of  such  losses,  claims,
  damages  or liabilities (or actions in respect thereof)  in  such
  proportion  as  is  appropriate to reflect the relative  benefits
  received by the Transaction Entities and you from the offering of
  the   Shares.   If,  however,  the  allocation  provided  by  the
  immediately  preceding  sentence is not permitted  by  applicable
  law, then each indemnifying party shall contribute to such amount
  paid  or payable by such indemnified party in such proportion  as
  is  appropriate  to reflect not only such relative  benefits  but
  also  the  relative  fault,  as applicable,  of  the  Transaction
  Entities  and you in connection with the statements or  omissions
  which resulted in such losses, claims, damages or liabilities (or
  actions  in respect thereof), as well as other relevant equitable
  considerations.    The   relative  benefits   received   by,   as
  applicable, the Transaction Entities and you shall be  deemed  to
  be  in  the  same proportion as the total net proceeds  from  the
  offering  (before deducting expenses) received by the Transaction
  Entities bear to the total underwriting discounts and commissions
  received  by you, in each case as set forth in the table  on  the
  cover  page  of  the  Prospectus.  The relative  fault  shall  be
  determined  by  reference  to, among other  things,  whether  the
  untrue  statement of a material fact or the omission  or  alleged
  omission to state a material fact relates to information supplied
  by  the  Transaction  Entities or you and the  parties'  relative
  intent,  knowledge,  access  to information  and  opportunity  to
  correct  or  prevent such statement or omission.  The Transaction
  Entities and you agree that it would not be just and equitable if
  contributions pursuant to this subsection (d) were determined  by
  pro  rata  allocation or by any other method of allocation  which
  does not take account of the equitable considerations referred to
  above  in this subsection (d).  The amount paid or payable by  an
  indemnified party as a result of the losses, claims,  damages  or
  liabilities (or actions in respect thereof) referred to above  in
  this subsection (d) shall be deemed to include any legal or other
  expenses  reasonably  incurred  by  such  indemnified  party   in
  connection  with investigating or defending any  such  action  or
  claim.   Notwithstanding the provisions of this  subsection  (d),
  you  shall not be required to contribute any amount in excess  of
  the  underwriting  discounts and commissions  applicable  to  the
  Shares   purchased  by  you.   No  person  guilty  of  fraudulent
  misrepresentation  (within the meaning of Section  11(f)  of  the
  Act)  shall be entitled to contribution from any person  who  was
  not guilty of such fraudulent misrepresentation.
  
        7.    Representations and Agreements to  Survive  Delivery.
  All   representations,   warranties,  and   agreements   of   the
  Transaction   Entities  contained  herein  or   in   certificates
  delivered  pursuant  hereto,  and your  agreements  contained  in
  Section  6  hereof, shall remain operative and in full force  and
  effect  regardless  of  any termination or cancellation  of  this
  Agreement or any investigation made by or on behalf of you or any
  controlling  person,  the Transaction  Entities  or  any  of  its
  officers, directors or any controlling persons, and shall survive
  delivery of the Shares to you hereunder.
  
        8.    Effective  Date and Termination.  (a) This  Agreement
  shall become effective upon execution.
  
       (b)   This Agreement may be terminated by you at any time at
  or  prior  to  the  Closing  Date by notice  to  the  Transaction
  Entities if any condition specified in Section 5 hereof shall not
  have  been satisfied on or prior to the Closing Date.   Any  such
  termination shall be without liability of any party to any  other
  party except as provided in Sections 6 and 9 hereof.
       
       If  you  terminate  this Agreement as provided  in  Sections
  8(b),  you  shall  notify the Company by telephone  or  telegram,
  confirmed by letter.
  
        9.    Cost and Expenses.  The Company will bear and pay the
  costs and expenses incident to the registration of the Shares and
  public  offering thereof, including, without limitation, (a)  the
  fees  and expenses of the Company's accountants and the fees  and
  expenses  of  counsel  for  the  Company,  (b)  the  preparation,
  printing,  filing,  delivery  and shipping  of  the  Registration
  Statement, each Preliminary Prospectus, the Prospectus,  and  any
  amendments or supplements thereto (c) the furnishing of copies of
  such  documents to you, (d) the registration or qualification  of
  the Shares for offering and sale under the securities laws of the
  various  states, including the reasonable fees and  disbursements
  of  your  counsel relating to such registration or qualification,
  (e)  the fees payable to the NASD (if any) and the Commission  in
  connection  with  their review of the proposed  offering  of  the
  Shares,   (f)  all  printing  and  engraving  costs  related   to
  preparation  of  the  certificates  for  the  Shares,   including
  transfer  agent  and  registrar fees, (g)  all  initial  transfer
  taxes,  if  any,  (h)  all  fees and  expenses  relating  to  the
  authorization  of the Shares for trading on the  New  York  Stock
  Exchange,  (i)  all  travel  expenses,  including  air  fare  and
  accommodation  expenses, of representatives  of  the  Company  in
  connection  with the offering of the Shares and (j)  all  of  the
  other  costs  and  expenses incident to the  performance  by  the
  Company of the registration and offering of the Shares; provided,
  however, that you will bear and pay the fees and expenses of your
  counsel  (other  than  fees  and disbursements  relating  to  the
  registration or qualification of the Shares for offering and sale
  under  the  securities laws of the various states), your  out-of-
  pocket  expenses, and any advertising costs and expenses incurred
  by you incident to the public offering of the Shares.
       
       If  this  Agreement is terminated by you in accordance  with
  the  provisions of Section 8(b), the Company shall reimburse  you
  for  all of your out-of-pocket expenses, including the reasonable
  fees and disbursements of your counsel.
  
       10.    Notices.   All  notices or communications  hereunder,
  except  as  herein otherwise specifically provided, shall  be  in
  writing  and if sent to you shall be mailed, delivered,  sent  by
  facsimile  transmission, or telegraphed and  confirmed  c/o  A.G.
  Edwards  &  Sons, Inc. at One North Jefferson Avenue, St.  Louis,
  Missouri 63103, Attention:  Syndicate, facsimile number (314) 289-
  7387,  or  if sent to the Transaction Entities shall  be  mailed,
  delivered,  sent  by facsimile transmission, or  telegraphed  and
  confirmed  to the Company at One Jackson Place, Suite  1000,  188
  East  Capitol  Street,  Jackson,  Mississippi  39201,  Attention:
  Steven G. Rogers, facsimile number (601) 949-4077.
  
       11.   Parties.  This Agreement shall inure to the benefit of
  and  be  binding  upon you and the Company and  their  respective
  successors and assigns.  Nothing expressed or mentioned  in  this
  Agreement  is intended or shall be construed to give any  person,
  corporation  or other entity, other than the parties  hereto  and
  their  respective  successors  and assigns  and  the  controlling
  persons,  officers and directors referred to in  Section  6,  any
  legal or equitable right, remedy or claim under or in respect  of
  this  Agreement or any provision herein contained; this Agreement
  and all conditions and provisions hereof being intended to be and
  being  for  the sole and exclusive benefit of the parties  hereto
  and  their respective successors and assigns and said controlling
  persons  and said officers and directors, and for the benefit  of
  no  other  person, corporation or other entity.  No purchaser  of
  any  of  the  Shares from you shall be construed a  successor  or
  assign by reason merely of such purchase.
  
       12.    Counterparts.  This Agreement may be executed by  any
  one  or more of the parties hereto in any number of counterparts,
  each  of  which shall be deemed to be an original, but  all  such
  counterparts   shall  together  constitute  one  and   the   same
  instrument.
  
       13.    Pronouns.  Whenever a pronoun of any gender or number
  is used herein, it shall, where appropriate, be deemed to include
  any other gender and number.
  
       14.   Applicable Law.  This Agreement shall be governed  by,
  and  construed  in  accordance with, the laws  of  the  State  of
  Missouri.
       
       If  the  foregoing is in accordance with your understanding,
  please  so indicate in the space provided below for that purpose,
  whereupon  this  letter  shall  constitute  a  binding  agreement
  between the Company, the Operating Partnership and you.
                                      
                                      
                                      PARKWAY PROPERTIES, INC.
                                      
                                      
                                      
                                      By:_________________________
                                      Name:_______________________
                                      Title:______________________
                                      
                                      
                                      PARKWAY PROPERTIES LP
                                      By: Parkway Properties
                                      General Partner, Inc.
                                      
                                      
                                      
                                      By:_________________________
                                      Title:______________________
  
  Accepted in St. Louis,
  Missouri as of the date
  first above written.
  
  A.G. EDWARDS & SONS, INC.
  
  By:________________________
  Name:______________________
  Title:______________________
  
                             SCHEDULE I
       
       
  Entities with Registration Rights
  
  1.   Delaware Group Dividend and Income Fund, Inc.
  2.   Delaware Pooled Trust, Inc. for the Real Estate Investment
       Trust Portfolio
  3.   Charter Oak Partners
  4.   Pennsylvania Public School Employees Retirement System
  5.   Morgan Stanley U.S. Real Estate (Retail)
  6.   Morgan Stanley Institutional Fund Real Estate Portfolio
  7.   MS SIVAC Real Estate
                                  
                             SCHEDULE II
                                  
             OPINION OF JAECKLE FLEISCHMANN & MUGEL, LLP
       
            (i)   Each Transaction Entity and its subsidiaries  has
       been duly incorporated or formed, as the case may be, and is
       validly  existing  as  a  corporation,  general  or  limited
       partnership, or other legal entity, as the case may  be,  in
       good  standing  under  the  laws  of  its  jurisdiction   of
       incorporation or formation, as the case may be, and has full
       power  (corporate  or other) and authority  to  conduct  its
       business  as  described  in the Registration  Statement  and
       Prospectus,  and  is  duly qualified  or  registered  to  do
       business  in  each jurisdiction in which it owns  or  leases
       real  property  or  in  which the conduct  of  its  business
       requires  such qualification or registration,  except  where
       the  failure  to be so qualified or registered,  considering
       all such cases in the aggregate, does not involve a material
       risk  to  the  business, properties, financial  position  or
       results of operations of the Transaction Entities and  their
       subsidiaries taken as a whole;
       
           (ii)    The  Company has authorized and  issued  capital
       stock  as set forth in its [Current Report on Form 8-K dated
       February  17, 1998] [Quarterly Report on Form 10-Q  for  the
       quarter  ended  September 30, 1997]; all of the  issued  and
       outstanding shares of capital stock of the Company have been
       duly  and  validly authorized and issued;  and  all  of  the
       issued  and  outstanding  shares of  capital  stock  of  the
       Company  are fully paid and nonassessable and none  of  them
       was  issued in violation of any preemptive or other  similar
       right.   The Shares have been duly authorized by the Company
       for issuance and sale; and when issued and sold pursuant  to
       this  Underwriting  Agreement,  will  be  duly  and  validly
       issued,  fully paid and nonassessable and none of them  will
       have  been  issued in violation of any preemptive  or  other
       similar  right.   Except as disclosed  in  the  Registration
       Statement  and  the  Prospectus,  there  is  no  outstanding
       option, warrant or other right calling for the issuance  of,
       and,  to the knowledge of such counsel, no commitment,  plan
       or  arrangement to issue, any share of capital stock of  the
       Company  or any security convertible into, exercisable  for,
       or exchangeable for capital stock of the Company.  Except as
       described  in Schedule I thereto, no holder of any  security
       of  the Company has the right to have any security owned  by
       such  holder  included for registration in the  Registration
       Statement or to demand registration of any security owned by
       such  holder  during the 180 days after  the  date  of  this
       Underwriting Agreement.  The issued and outstanding  capital
       stock  of  the  Company  and the  Shares  conform,  or  will
       conform,  in  all  material  respects  to  the  descriptions
       thereof  contained  in the Registration  Statement  and  the
       Prospectus.   The form of certificate used to  evidence  the
       Shares  is  in  due  and proper form and complies  with  all
       applicable   statutory  requirements,  with  any  applicable
       requirements  of the Company's organizational documents  and
       with the requirements of the NYSE.
       
          (iii)    The Registration Statement has become  effective
       under  the Act, the Prospectus Supplement has been filed  as
       required  by  this Underwriting Agreement, and to  the  best
       knowledge of such counsel, after due inquiry, no stop  order
       suspending  the effectiveness of the Registration  Statement
       has  been issued and no proceeding for that purpose has been
       instituted or threatened by the Commission;
       
          (iv)   Each part of the Registration Statement, when such
       part  became effective, and the Prospectus and any amendment
       or  supplement thereto, on the date of filing  thereof  with
       the  Commission and at the Closing Date, complied as to form
       in  all  material respects with the requirements of the  Act
       and  the  Rules  and Regulations, and such  counsel  has  no
       reason   to  believe  that  either  (i)  any  part  of   the
       Registration  Statement, when such part became effective  or
       was filed under the Act or Exchange Act, contained an untrue
       statement of a material fact or omitted to state a  material
       fact required to be stated therein or necessary to make  the
       statements therein not misleading or (ii) the Prospectus and
       any  amendment or supplement thereto, on the date of  filing
       thereof with the Commission or at the Closing Date, included
       an untrue statement of a material fact or omitted to state a
       material  fact necessary to make the statements therein,  in
       the  light of the circumstances under which they were  made,
       not  misleading; and the documents incorporated by reference
       in the Registration Statement or Prospectus or any amendment
       or  supplement thereto, when they became effective under the
       Act  or  were  filed with the Commission under  the  Act  or
       Exchange Act, as the case may be, complied as to form in all
       material  respects with the requirements of the Act  or  the
       Exchange  Act, as applicable, and the rules and  regulations
       of  the Commission thereunder; it being understood that such
       counsel   need  express  no  opinion  as  to  the  financial
       statements  or other financial data included  in  any  other
       documents mentioned in this clause;
       
           (v)   The descriptions in the Registration Statement and
       Prospectus  of statutes, legal and governmental proceedings,
       contracts  and  other  documents  are  accurate  and  fairly
       present  the  information required to  be  shown;  and  such
       counsel   does  not  know  of  any  statutes  or  legal   or
       governmental  proceedings required to be  described  in  the
       Prospectus  that are not described as required,  or  of  any
       contracts  or  documents  of  a  character  required  to  be
       described  in  the Registration Statement or Prospectus  (or
       required  to  be filed under the Exchange Act if  upon  such
       filing  they would be incorporated by reference therein)  or
       to  be filed as exhibits to the Registration Statement  that
       are not described and filed as required;  The information in
       the  Prospectus  under  "Description of  Common  Stock"  and
       "Federal  Income  Tax  Considerations",  to  the  extent  it
       constitutes matters of law, summaries of legal matters,  the
       Company's  charter and by-laws, legal proceedings  or  legal
       conclusions, has been reviewed by us and is correct  in  all
       material respects;
       
            (vi)    This  Underwriting  Agreement  has  been   duly
       authorized,  executed  and  delivered  by  each  Transaction
       Entity;  the  execution, delivery and  performance  of  this
       Underwriting   Agreement  and  the   consummation   of   the
       transactions contemplated herein will not result in a breach
       or  violation  of  any of the terms and  provisions  of,  or
       constitute  a  default  under, (a) any  statute,  indenture,
       mortgage,  deed  of  trust,  voting  trust  agreement,  loan
       agreement,  bond, debenture, note agreement or  evidence  of
       indebtedness,   lease  contract  or   other   agreement   or
       instrument  known to such counsel to which  the  Transaction
       Entities or their subsidiaries are a party or by which  they
       are bound or to which any of the property or other assets of
       the  Transaction Entities or their subsidiaries is  subject,
       (b)  the articles of incorporation, by-laws, certificate  of
       general  or  limited partnership, partnership agreement,  or
       other organizational document of the Transaction Entities or
       any  of their subsidiaries, as applicable, or (c) any order,
       rule  or  regulation known to such counsel of any  court  or
       governmental  agency  or body having jurisdiction  over  the
       Transaction Entities or their subsidiaries or any  of  their
       properties  or  other  assets;  and  no  consent,  approval,
       authorization,  notice to, order of,  or  filing  with,  any
       court  or  governmental agency or body is required  for  the
       consummation  of  the  transactions  contemplated  by   this
       Underwriting  Agreement in connection with the  issuance  or
       sale  of the Shares by the Company, except such as have been
       obtained under the Act or from the NYSE and the NASD;
       
           (vii)    Commencing  with  the  taxable  year  beginning
       January 1, 1997, the Company has continuously been organized
       and   operated  in  conformity  with  the  requirements  for
       qualification as a "real estate investment trust" under  the
       Code.   The Company's method of operation will permit it  to
       continue  to meet the requirements for taxation as  a  "real
       estate investment trust" under the Code;
       
         (viii)    To  the  best  of such counsel's  knowledge,  no
       Transaction  Entity  nor  any  of  its  subsidiaries  is  in
       violation  of  any  term or provision  of  their  respective
       articles of incorporation, bylaws, certificate of general or
       limited   partnership,  partnership   agreement   or   other
       organizational document, as applicable, or in  violation  of
       or  default  under any indenture, mortgage, deed  of  trust,
       voting  trust  agreement, loan agreement,  bond,  debenture,
       note agreement or evidence of indebtedness, lease, contract,
       permit,   judgment,   decree,  order,   statute,   rule   or
       regulation;
       
           (ix)   To the best of such counsel's knowledge, there is
       no   litigation  or  governmental  or  other  proceeding  or
       investigation  before any court or before or by  any  public
       body  or  board pending or threatened against, or  involving
       the  assets,  properties or businesses of,  the  Transaction
       Entities  or  any  of  their  subsidiaries,  involving   the
       Transaction Entities or any of their subsidiaries'  officers
       or  directors or to which any of the Transaction Entities or
       any  of  their subsidiaries' properties or other  assets  is
       subject  which would have a material effect upon the  assets
       or properties, business, results of operations, prospects or
       condition   (financial  or  otherwise)  of  the  Transaction
       Entities and their subsidiaries taken as a whole; and
       
           (x)   Neither the Company nor any of its subsidiaries is
       an "investment company" within the meaning of the Investment
       Company Act of 1940, as amended.
                                  
                  OPINION OF PIPER & MARBURY L.L.P.
       
            (i)    The  Company has been duly incorporated  and  is
       validly  existing in good standing under  the  laws  of  the
       State of Maryland, with full power, corporate or other,  and
       authority  to  conduct  its business  as  described  in  its
       Charter.
       
           (ii)    All the shares of Common Stock outstanding prior
       to  the issuance of the Shares have been duly authorized and
       validly  issued, are fully paid and nonassessable, and  have
       not  been  issued in violation of any preemptive or  similar
       right contained in the Company's Charter.
       
          (iii)    The  Shares have been duly authorized  and  when
       issued  and  delivered  to the Underwriter  against  payment
       therefor  in  accordance with the terms of the  Underwriting
       Agreement, will be duly and validly issued, fully  paid  and
       nonassessable  and  free  of  any  preemptive  or,  to   our
       knowledge, similar rights contained in the Company's Charter
       that  entitle or will entitle any person to acquire  any  of
       the Shares upon the issuance thereof by the Company.
       
           (iv)    The issued and outstanding Common Stock  of  the
       Company  and  the  Shares conform, or will conform,  in  all
       material  respects  as to legal matters to  the  description
       thereof  contained  in  the  Prospectus  under  the  caption
       "Description of Common Stock."
       
            (v)    The form of certificates for the Shares conforms
       to the requirements of the Maryland General Corporation Law.
       
          (vi)   The statements in the Prospectus under the caption
       "Description  of  Common Stock," insofar as such  statements
       constitute  summaries  of the legal matters,  documents,  or
       proceedings  referred to therein, are accurate and  fair  in
       all material respects.
       
          (vii)   The Company has corporate power and authority  to
       enter  into  the Underwriting Agreement and to issue,  sell,
       and deliver the Shares to the Underwriter as provided in the
       Underwriting Agreement.  The Underwriting Agreement has been
       duly  authorized  and,  assuming it has  been  executed  and
       delivered  by  the appropriate officer or  officers  of  the
       Company, duly executed and delivered by the Company.
       
        (viii)   Neither the issuance and sale of the Shares by the
       Company,  the  execution, delivery, or  performance  of  the
       Underwriting  Agreement by the Company nor the  consummation
       by the Company of the transactions contemplated thereby will
       result  in a breach or violation of the terms and provisions
       of, or constitute a default under, (a) any Maryland statute,
       or (b) the Charter or By-Laws of the Company.
       
           (ix)    To our knowledge, the Company is not in material
       violation of its Charter or By-Laws.
                                  
                                  
                                  
                                  
                                  
                            SCHEDULE III
       
       Pursuant  to  Section  5(f) of the  Underwriting  Agreement,
  Ernst  &  Young  LLP shall furnish letters to you to  the  effect
  that:
       
            (i)   They are independent certified public accountants
       with respect to the Company and its subsidiaries within  the
       meaning  of the Act and the applicable Rules and Regulations
       thereunder.
       
          (ii)   In their opinion, the financial statements and any
       supplementary  financial information and  schedules  audited
       (and, if applicable, prospective financial statements and/or
       pro  forma  financial  information  examined)  by  them  and
       included  or incorporated by reference in the Prospectus  or
       the Registration Statement comply as to form in all material
       respects with the applicable accounting requirements of  the
       Act and the applicable Rules and Regulations with respect to
       registration  statements on Form S-3;  and,  if  applicable,
       they  have  made  a  review  in  accordance  with  standards
       established  by  the American Institute of Certified  Public
       Accountants of the unaudited consolidated interim  financial
       statements,  selected financial data,  pro  forma  financial
       information,   prospective   financial   statements   and/or
       condensed   financial   statements  derived   from   audited
       financial   statements  of  the  Company  for  the   periods
       specified  in  such letter, as indicated  in  their  reports
       thereon, copies of which have been furnished to you.
       
           (iii)     On  the  basis  of  limited  procedures,   not
       constituting an audit in accordance with generally  accepted
       auditing standards, consisting of a reading of the unaudited
       financial  statements  and  other  information  referred  to
       below, performing the procedures specified by the AICPA  for
       a  review  of interim financial information as discussed  in
       SAS  No.  71, Interim Financial Information, on  the  latest
       available  interim financial statements of the  Company  and
       its  subsidiaries,  inspection of the minute  books  of  the
       Company  and its subsidiaries since the date of  the  latest
       audited  financial  statements included in  the  Prospectus,
       inquiries  of  officials of the Company and its subsidiaries
       responsible  for financial and accounting matters  and  such
       other  inquiries and procedures as may be specified in  such
       letter, nothing came to their attention that caused them  to
       believe that:
            
                 (A)   any material modifications should be made to
            the   unaudited  statements  of  consolidated   income,
            statements  of  consolidated  financial  position   and
            statements of consolidated cash flows included  in  the
            Prospectus for them to be in conformity with  generally
            accepted   accounting  principles,  or  the   unaudited
            statements   of  consolidated  income,  statements   of
            consolidated  financial  position  and  statements   of
            consolidated  cash flows included in the Prospectus  do
            not comply as to form in all material respects with the
            applicable accounting requirements of the Act  and  the
            related published Rules and Regulations thereunder.
            
                (B)   any other unaudited income statement data and
            balance sheet items included in the Prospectus  do  not
            agree  with  the corresponding items in  the  unaudited
            consolidated financial statements from which such  data
            and items were derived, and any such unaudited data and
            items  were  not  determined on a  basis  substantially
            consistent with the basis for the corresponding amounts
            in   the   audited  consolidated  financial  statements
            included in the Prospectus.
            
                (C)   the unaudited financial statements which were
            not  included  in  the Prospectus but from  which  were
            derived  any  unaudited condensed financial  statements
            referred  to  in  Clause (A) and any  unaudited  income
            statement data and balance sheet items included in  the
            Prospectus  and  referred to in  Clause  (B)  were  not
            determined on a basis substantially consistent with the
            basis for the audited consolidated financial statements
            included in the Prospectus.
            
                  (D)     any   unaudited  pro  forma  consolidated
            condensed   financial  statements   included   in   the
            Prospectus  do  not comply as to form in  all  material
            respects with the applicable accounting requirements of
            the   Act  and  the  published  rules  and  regulations
            thereunder or the pro forma adjustments have  not  been
            properly  applied  to  the historical  amounts  in  the
            compilation of those statements.
            
                 (E)    as  of a specified date not more than  five
            days  prior to the date of such letter, there have been
            any  changes in the consolidated capital stock  or  any
            increase  in  the consolidated long-term  debt  of  the
            Company  and  its  subsidiaries, or  any  decreases  in
            consolidated working capital, net current assets or net
            assets, or any changes in any other items specified  by
            you, in each case as compared with amounts shown in the
            latest balance sheet included in the Prospectus, except
            in  each case for changes, increases or decreases which
            the Prospectus discloses have occurred or may occur  or
            which are described in such letter.
            
                 (F)    for the period from the date of the  latest
            financial statements included in the Prospectus to  the
            specified date referred to in Clause (E) there were any
            decreases  in  consolidated net revenues  or  operating
            profit   or   the  total  or  per  share   amounts   of
            consolidated  net income or any changes  in  any  other
            items  specified by you, in each case as compared  with
            the  comparable period of the preceding year  and  with
            any  other period of corresponding length specified  by
            you,  except  in  each case for changes,  decreases  or
            increases which the Prospectus discloses have  occurred
            or may occur or which are described in such letter.
       
           (iv)    In  addition to the audit referred to  in  their
       report(s)  included  or incorporated  by  reference  in  the
       Prospectus and the limited procedures, inspection of  minute
       books,  inquiries  and  other  procedures  referred  to   in
       paragraph  (iii)  above,  they  have  carried  out   certain
       specified   procedures,  not  constituting   an   audit   in
       accordance with generally accepted auditing standards,  with
       respect   to  certain  amounts,  percentages  and  financial
       information  specified by you, which are  derived  from  the
       general   accounting  records  of  the   Company   and   its
       subsidiaries  for the periods covered by their  reports  and
       any interim or other periods since the latest period covered
       by their reports, which appear in the Prospectus, or in Part
       II  of,  or  in  exhibits and schedules to, the Registration
       Statement  specified  by you, and have compared  certain  of
       such amounts, percentages and financial information with the
       accounting  records of the Company and its subsidiaries  and
       have found them to be in agreement.
  
  _______________________________
  1