Parkway Properties, a real estate investment trust with holdings throughout the southern U.S., has turned to Hogan Lovells to advise on its expansion plans into Texas via a $1.1 billion stock-and-debt purchase of Thomas Properties Group.
The deal, announced Thursday, will see Parkway give up $294 million in stock and assume $752 million in Thomas Properties debt in order to move forward with the merger. GlobeSt, a sibling publication, reports that Parkway will shed some of that debt by reaching an agreement on a related $382.8 million sale of three properties in Philadelphia and Austin held by Thomas Properties to Brandywine Realty Trust.
Michael Friedman, cochair of the commercial department at Pepper Hamilton and former chair of the firm’s corporate and securities practice, is serving as M&A counsel to Brandywine on its purchase of the Thomas Properties assets being sold by Parkway. Brandywine’s general counsel Brad Molotsky and counsel Jennifer Rice are handling matters in-house for the REIT.
J. Warren Gorrell Jr., co–CEO of Hogan Lovells, is leading a team from the firm advising Parkway on its acquisition of Thomas Properties that includes equity and debt capital markets head David Bonser, corporate finance partner Bruce Gilchrist, tax partner Prentiss Feagles, real estate partner Lee Berner, employee benefits partner Carin Carithers, tax counsel Stephen Giordano, finance counsel Matt Thomson Jr., and associates Katherine Brown, Margaret McIntyre, and Jan Shanklin.
Hogan Lovells previously represented privately held real estate firm Eola Capital on its $462 million merger with Parkway in early 2011. Eola had earlier filed for a $675 million initial public offering in late 2010 but ended up withdrawing the listing due to unfavorable market conditions. SEC filings show that Gorrell and Bonser led a Hogan Lovells team advising Eola on the aborted IPO. (Hunton & Williams, Forman Perry Krutz & Tardy, and Buffalo’s Jaeckle Fleischmann & Mugel represented Parkway on its merger with Eola.)
Fort Worth–based private equity TPG Capital, which was cofounded by onetime Arnold & Porter partner David Bonderman, paid $200 million last year for a 43 percent stake in Parkway. Former TPG in-house attorney Jeremy Dorsett was subsequently named Parkway’s new general counsel and company secretary, as the private equity firm also appointed four executives to Parkway’s board of directors.
SEC filings related to Parkway’s purchase this week of Thomas Properties show that Ropes & Gray private equity transactions head Alfred Rose and private equity funds partner Carl Marcellino are advising TPG on the deal. TPG’s general counsel is Ronald Cami, a former corporate partner at Cravath, Swaine & Moore who joined the private equity firm in 2010.
Brian McCarthy, a corporate partner and head of the Los Angeles office at Skadden, Arps, Slate, Meagher & Flom, is leading a team from his firm advising Los Angeles–based Thomas Properties that includes corporate partner Jonathan Friedman, tax partner Michael Beinus, corporate counsel Andrew Garelick, and associates Edgar Cho and Matthew Hutchins.
Latham & Watkins corporate partner Charles Ruck, named a Dealmaker of the Year by The American Lawyer for his role representing Quest Software last year on its $2.4 billion sale to Dell, is counseling Morgan Stanley as financial adviser to Thomas Properties on its sale to Parkway, along with associate Michael Young.
Paul Rutter, a cofounder of Los Angeles–based real estate law firm Gilchrist & Rutter, is co–COO and general counsel of Thomas Properties. Rutter once practiced law with Thomas Properties founder and CEO James Thomas—who owned the National Basketball Association’s Sacramento Kings from 1992 to 1999—before going on to found Gilchrist & Rutter in 1983. He served as managing partner of the firm until 2006, and has since retired from its partnership but remains of counsel.
Norton Rose Fulbright, a 3,800-lawyer global legal giant formed in June following the merger between London-based Norton Rose and Fulbright & Jaworski, is advising James Thomas as a selling stockholder in Thomas Properties through corporate of counsel David Ebershoff and associate Daniel Kim, according to SEC filings. Thomas will use proceeds from the sale to complete a property swap with the California State Teachers’ Retirement System, through which Thomas Properties shared ownership of several office properties.
Before its merger with Norton Rose, Fulbright had signed leases for office space in buildings owned by Thomas Properties in Austin and Los Angeles. Thomas himself is a well-known real estate developer in Southern California, having formed Thomas Properties a decade ago after the breakup of Maguire Thomas Properties, after the breakup of Maguire Thomas Properties, the latter of which became Maguire Properties before adopting the name MPG Office Trust in 2010. (Latham is currently advising Brookfield Office Properties on its bid to acquire MPG Office Trust in a deal valued at $2.1 billion, including debt.)
The sale of Thomas Properties to Parkway is expected to close by the end of this year. Reuters reports that Parkway will add seven properties in Austin and Houston through its acquisition of Thomas Properties, as well as additional office holdings in Northern Virginia.