----

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| R                                                                                                                                                                                                                                                                                                                                 | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934  |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------|
| For Quarterly Period Ended March 31, 2011                                                                                                                                                                                                                                                                                         |
|                                                                                                                                                                                                                                                                                                                              | or                                                                                       |
|  £                                                                                                                                                                                                                                                                                                                      | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
| For the Transition Period from                           to                       |

| Maryland                        |   | 74-2123597                        |
|---------------------------------|--------|-----------------------------------|
| (State or other jurisdiction of |   | (IRS Employer Identification No.) |
| incorporation or organization)  |   |                              |

|   | P.O. Box 24647 |
|--------|----------------|

|   | Registrant’s telephone number, including area code (601) 948-4091 |
|--------|-------------------------------------------------------------------------|

|   | Registrant’s web site www.pky.com |
|--------|-----------------------------------------|

| Large accelerated filer £ | Accelerated filer R | Non-accelerated filer £                  | Smaller reporting company £ |
|--------------------------------|---------------------|-----------------------------------------------|----------------------------------|
|                           |                | (Do not check if a smaller reporting company) |                             |

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|                          |   |                                                                                        | Page   |
|-------------------------------|--------|---------------------------------------------------------------------------------------------|--------|
| Part I. Financial Information |
| Item 1.                       |   | Financial Statements                                                                        |   |
|                          |   |                                                                                        |   |
|                          |   | Consolidated Balance Sheets, March 31, 2011 and December 31, 2010                           | 3      |
|                          |   |                                                                                        |   |
|                          |   | Consolidated Statements of Operations for the Three Months Ended                            |   |
|                          |   | March 31, 2011 and 2010                                                                     | 4      |
|                          |   |                                                                                        |   |
|                          |   | Consolidated Statement of Changes in Equity for the Three Months Ended                      |   |
|                          |   | March 31, 2011                                                                              | 5      |
|                          |   |                                                                                        |   |
|                          |   | Consolidated Statements of Cash Flows for the Three Months Ended                            |   |
|                          |   | March 31, 2011 and 2010                                                                     | 6      |
|                          |   |                                                                                        |   |
|                          |   | Notes to Consolidated Financial Statements                                                  | 7      |
|                          |   |                                                                                        |   |
| Item 2.                       |   | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 20     |
|                          |   |                                                                                        |   |
| Item 3.                       |   | Quantitative and Qualitative Disclosures About Market Risk                                  | 35     |
|                          |   |                                                                                        |   |
| Item 4.                       |   | Controls and Procedures                                                                     | 35     |
|                          |   |                                                                                        |   |
|                          |   |                                                                                        |   |
| Part II. Other Information    |
|                          |   |                                                                                        |   |
|                          |   |                                                                                        |   |
| Item 1.                       |   | Legal Proceedings                                                                           | 35     |
|                          |   |                                                                                        |   |
| Item 1A.                      |   | Risk Factors                                                                                | 35     |
|                          |   |                                                                                        |   |
| Item 2.                       |   | Unregistered Sales of Equity Securities and Use of Proceeds                                 | 36     |
|                          |   |                                                                                        |   |
| Item 6.                       |   | Exhibits                                                                                    | 36     |
|                          |   |                                                                                        |   |
|                          |   |                                                                                        |   |
| Signatures                    |
|                          |   |                                                                                        |   |
| Authorized Signatures         | 37     |

----

|                                                                                                      | March 31        |            | December 31     |
|-----------------------------------------------------------------------------------------------------------|-----------------|-----------------|-----------------|
|                                                                                                      | 2011            |            | 2010            |
|                                                                                                      | (Unaudited)     |            |            |
| Assets                                                                                                    |            |            |            |
| Real estate related investments:                                                                          |            |            |            |
| Office and parking properties                                                                             |  $         | 1,917,773  |            |  $ | 1,755,310  |
| Land held for development                                                                                 | 609        |            | 609        |
| Accumulated depreciation                                                                                  | (380,490)       |            | (366,152)       |
|                                                                                                      | 1,537,892  |            | 1,389,767  |
|                                                                                                      |            |            |            |
| Land available for sale                                                                                   | 750        |            | 750        |
| Mortgage loans                                                                                            | 10,533     |            | 10,336     |
| Investment in unconsolidated joint ventures                                                               | 1,767      |            | 2,892      |
|                                                                                                      | 1,550,942  |            | 1,403,745  |
|                                                                                                      |            |            |            |
| Rents receivable and other assets                                                                         | 138,100    |            | 129,638    |
| Intangible assets, net                                                                                    | 61,613     |            | 50,629     |
| Cash and cash equivalents                                                                                 | 74,160     |            | 19,670     |
|                                                                                                      |  $         | 1,824,815  |            |  $ | 1,603,682  |
|                                                                                                      |            |            |            |
|                                                                                                      |            |            |            |
| Liabilities                                                                                               |            |            |            |
| Notes payable to banks                                                                                    |  $         | 166,581    |            |  $ | 110,839  |
| Mortgage notes payable                                                                                    | 876,617    |            | 773,535    |
| Accounts payable and other liabilities                                                                    | 79,275     |            | 98,818     |
|                                                                                                      | 1,122,473  |            | 983,192    |
|                                                                                                      |            |            |            |
|                                                                                                      |            |            |            |
| Equity                                                                                                    |            |            |            |
| Parkway Properties, Inc. stockholders’ equity:                                                      |            |            |            |
| 8.00% Series D Preferred stock,  $.001 par value,                                               |            |            |            |
|      4,374,896 shares authorized, issued and outstanding                         | 102,787    |            | 102,787    |
| Common stock, $.001 par value, 65,625,104 shares authorized, 21,962,564                                   |            |            |            |
|      and 21,923,610 shares issued and outstanding in 2011 and 2010, respectively | 22         |            | 22         |
| Common stock held in trust, at cost, 10,009 and 58,134 shares in 2011 and                                 |            |            |            |
|      2010, respectively                                                          | (271)           |            | (1,896)         |
| Additional paid-in capital                                                                                | 516,275    |            | 516,167    |
| Accumulated other comprehensive loss                                                                      | (1,914)         |            | (3,003)         |
| Accumulated deficit                                                                                       | (136,004)       |            | (127,575)       |
| Total Parkway Properties, Inc. stockholders’ equity                                                 | 480,895    |            | 486,502    |
| Noncontrolling interest - real estate partnerships                                                        | 221,447    |            | 133,988    |
| Total equity                                                                                              | 702,342    |            | 620,490    |
|                                                                                                      |  $         | 1,824,815  |            |  $ | 1,603,682  |

----

|                                                                                                            | Three Months Ended |
|-----------------------------------------------------------------------------------------------------------------|--------------------|
|                                                                                                            |  March 31     |
|                                                                                                            | 2011               |   | 2010 |
|                                                                                                            | (Unaudited)        |
| Revenues                                                                                                        |               |   |   |
| Income from office and parking properties                                                                       |  $            | 67,180  |   |  $ | 68,911  |
| Management company income                                                                                       | 338           |   | 410  |
|      Total revenues                                                                    | 67,518        |   | 69,321  |
|                                                                                                            |               |   |   |
| Expenses                                                                                                        |               |   |   |
| Property operating expenses                                                                                     | 31,010        |   | 30,951  |
| Depreciation and amortization                                                                                   | 24,900        |   | 22,622  |
| Management company expenses                                                                                     | 877           |   | 744  |
| General and administrative                                                                                      | 1,807         |   | 2,008  |
| Acquisition costs                                                                                               | 2,349         |   | -   |
| Total expenses                                                                                                  | 60,943        |   | 56,325  |
|                                                                                                            |               |   |   |
| Operating income                                                                                                | 6,575         |   | 12,996  |
|                                                                                                            |               |   |   |
| Other income and expenses                                                                                       |               |   |   |
| Interest and other income                                                                                       | 324           |   | 385  |
| Equity in earnings of unconsolidated joint ventures                                                             | 35            |   | 105  |
| Interest expense                                                                                                | (14,724)           |   | (13,695) |
|                                                                                                            |               |   |   |
| Loss from continuing operations                                                                                 | (7,790)            |   | (209) |
| Discontinued operations:                                                                                        |               |   |   |
|      Income from discontinued operations                                               | -        |   | 165  |
| Net loss                                                                                                        | (7,790)            |   | (44) |
| Net loss attributable to noncontrolling interest – real estate partnerships                               | 3,195         |   | 2,587  |
|                                                                                                            |               |   |   |
| Net income (loss) for Parkway Properties, Inc.                                                                  | (4,595)            |   | 2,543  |
| Dividends on preferred stock                                                                                    | (2,187)            |   | (1,200) |
| Net income (loss) attributable to common stockholders                                                           |  $            | (6,782) |   |  $ | 1,343  |
|                                                                                                            |               |   |   |
| Net income (loss) per common share attributable to Parkway Properties, Inc.:                                    |               |   |   |
| Basic:                                                                                                          |               |   |   |
|      Income (loss) from continuing operations attributable to Parkway Properties, Inc. |  $            | (0.32) |   |  $ | 0.05  |
|      Discontinued operations                                                           | -        |   | 0.01  |
|      Basic net income (loss) attributable to Parkway Properties, Inc.                  |  $            | (0.32) |   |  $ | 0.06  |
| Diluted:                                                                                                        |               |   |   |
|      Income (loss) from continuing operations attributable to Parkway Properties, Inc. |  $            | (0.32) |   |  $ | 0.05  |
|      Discontinued operations                                                           | -        |   | 0.01  |
|      Diluted net income (loss) attributable to Parkway Properties, Inc.                |  $            | (0.32) |   |  $ | 0.06  |
|                                                                                                            |               |   |   |
| Weighted average shares outstanding:                                                                            |               |   |   |
| Basic                                                                                                           | 21,476        |   | 21,390  |
| Diluted                                                                                                         | 21,476        |   | 21,509  |

----

|                                | Parkway Properties, Inc. Stockholders |          |          |    |          |   |          |
|-------------------------------------|---------------------------------------|---------------|---------------|---------|---------------|--------|---------------|
|                                |                                  |          |          |    |          |   |          |   | Accumulated |   |   |   | Noncontrolling |   |   |
|                                |                                  |          |          |    | Common        |   | Additional    |   | Other |   |   |   | Interest – |   |   |
|                                | Preferred                             |          | Common        |    | Stock Held    |   | Paid-In       |   | Comprehensive |   | Accumulated |   | Real Estate |   | Total |
|                                | Stock                                 |          | Stock         |    | in Trust      |   | Capital       |   | Loss |   | Deficit |   | Partnerships |   | Equity |
| Balance at December 31, 2010        |  $                               | 102,787  |          |  $ | 22       |   |  $       | (1,896) |   |  $ | 516,167  |   |  $ | (3,003) |   |  $ | (127,575) |   |  $ | 133,988  |   |  $ | 620,490  |
| Comprehensive loss                  |                                  |          |          |    |          |   |          |   |   |   |   |   |   |   |   |
| Net loss                            | -                           |          | -   |    | -   |   | -   |   | -   |   | (4,595) |   | (3,195) |   | (7,790) |
| Change in fair value of interest    |                                  |          |          |    |          |   |          |   |   |   |   |   |   |   |   |
| rate swaps                          | -                           |          | -   |    | -   |   | -   |   | 1,089  |   | -   |   | -   |   | 1,089  |
| Total comprehensive loss            | -                           |          | -   |    | -   |   | -   |   | -   |   | -   |   | -   |   | (6,701) |
| Common dividends declared -         |                                  |          |          |    |          |   |          |   |   |   |   |   |   |   |   |
| $0.075 per share                    | -                           |          | -   |    | -   |   | -   |   | -   |   | (1,647) |   | -   |   | (1,647) |
| Preferred dividends declared -      |                                  |          |          |    |          |   |          |   |   |   |   |   |   |   |   |
| $0.50 per share                     | -                           |          | -   |    | -   |   | -   |   | -   |   | (2,187) |   | -   |   | (2,187) |
| Share-based compensation            | -                           |          | -   |    | -   |   | 407      |   | -   |   | -   |   | -   |   | 407  |
| 16,688 and 11 shares withheld to    |                                  |          |          |    |          |   |          |   |   |   |   |   |   |   |   |
| satisfy tax withholding obligation  |                                  |          |          |    |          |   |          |   |   |   |   |   |   |   |   |
| in connection with the vesting      |                                  |          |          |    |          |   |          |   |   |   |   |   |   |   |   |
| of restricted stock and deferred    |                                  |          |          |    |          |   |          |   |   |   |   |   |   |   |   |
| incentive share units, respectively | -                           |          | -   |    | -   |   | (299)         |   | -   |   | -   |   | -   |   | (299) |
| Distribution of 48,125 shares of    |                                  |          |          |    |          |   |          |   |   |   |   |   |   |   |   |
| common stock from deferred          |                                  |          |          |    |          |   |          |   |   |   |   |   |   |   |   |
| compensation plan                   | -                           |          | -   |    | 1,625    |   | -   |   | -   |   | -   |   | -   |   | 1,625  |
| Contribution of capital by          |                                  |          |          |    |          |   |          |   |   |   |   |   |   |   |   |
| noncontrolling interest             | -                           |          | -   |    | -   |   | -   |   | -   |   | -   |   | 96,285  |   | 96,285  |
| Distribution of capital to          |                                  |          |          |    |          |   |          |   |   |   |   |   |   |   |   |
| noncontrolling interest             | -                           |          | -   |    | -   |   | -   |   | -   |   | -   |   | (5,631) |   | (5,631) |
| Balance at March 31, 2011           |  $                               | 102,787  |          |  $ | 22       |   |  $       | (271) |   |  $ | 516,275  |   |  $ | (1,914) |   |  $ | (136,004) |   |  $ | 221,447  |   |  $ | 702,342  |

----

|                                                                                  | Three Months Ended |
|---------------------------------------------------------------------------------------|--------------------|
|                                                                                  | March 31           |
|                                                                                  | 2011               |   | 2010 |
|                                                                                  | (Unaudited)        |
| Operating activities                                                                  |               |   |   |
| Net loss                                                                              |  $            | (7,790) |   |  $ | (44) |
| Adjustments to reconcile net loss to cash (used in) provided by operating activities: |               |   |   |
| Depreciation and amortization                                                         | 24,900        |   | 22,622  |
| Depreciation and amortization – discontinued operations                         | -        |   | 120  |
| Amortization of above (below) market leases                                           | (300)              |   | 103  |
| Amortization of loan costs                                                            | 479           |   | 509  |
| Amortization of mortgage loan discount                                                | (197)              |   | (169) |
| Share-based compensation expense                                                      | 407           |   | 63  |
| Operating distributions from unconsolidated joint ventures                            | 465           |   | -   |
| Equity in earnings of unconsolidated joint ventures                                   | (35)               |   | (105) |
| Increase in deferred leasing costs                                                    | (3,579)            |   | (1,058) |
| Changes in operating assets and liabilities:                                          |               |   |   |
| Change in receivables and other assets                                                | (1,362)            |   | 1,900  |
| Change in accounts payable and other liabilities                                      | (18,135)           |   | (15,593) |
|                                                                                  |               |   |   |
| Cash (used in) provided by operating activities                                       | (5,147)            |   | 8,348  |
|                                                                                  |               |   |   |
| Investing activities                                                                  |               |   |   |
| Distributions from unconsolidated joint ventures                                      | 135           |   | -   |
| Investment in real estate                                                             | (89,401)           |   | -   |
| Improvements to real estate                                                           | (5,915)            |   | (5,142) |
|                                                                                  |               |   |   |
| Cash used in investing activities                                                     | (95,181)           |   | (5,142) |
|                                                                                  |               |   |   |
| Financing activities                                                                  |               |   |   |
| Principal payments on mortgage notes payable                                          | (3,393)            |   | (63,593) |
| Proceeds from long-term financing                                                     | 19,250        |   | 35,000  |
| Proceeds from bank borrowings                                                         | 89,386        |   | 43,410  |
| Payments on bank borrowings                                                           | (33,644)           |   | (17,287) |
| Debt financing costs                                                                  | (3,294)            |   | (338) |
| Purchase of Company stock                                                             | (299)              |   | (677) |
| Dividends paid on common stock                                                        | (1,655)            |   | (1,611) |
| Dividends paid on preferred stock                                                     | (2,187)            |   | (1,200) |
| Contributions from noncontrolling interest partners                                   | 96,285        |   | -   |
| Distributions to noncontrolling interest partners                                     | (5,631)            |   | -   |
|                                                                                  |               |   |   |
| Cash provided by (used in) financing activities                                       | 154,818       |   | (6,296) |
|                                                                                  |               |   |   |
| Change in cash and cash equivalents                                                   | 54,490        |   | (3,090) |
|                                                                                  |               |   |   |
| Cash and cash equivalents at beginning of period                                      | 19,670        |   | 20,697  |
|                                                                                  |               |   |   |
| Cash and cash equivalents at end of period                                            |  $            | 74,160  |   |  $ | 17,607  |

----

----

|                                                                                                 |   |   | Three Months Ended |
|------------------------------------------------------------------------------------------------------|--------|--------|--------------------|
|                                                                                                 |   |   | March 31           |
|                                                                                                 |   |   | 2011               |   | 2010 |
| Numerator:                                                                                           |   |   |               |   |   |
|     Basic and diluted net income (loss)                                          |   |   |               |   |   |
|        attributable to common stockholders                        |   |   |  $            | (6,782) |   |  $ | 1,343  |
|                                                                                                 |   |   |               |   |   |
| Denominator:                                                                                         |   |   |               |   |   |
|     Basic weighted average shares                                                |   |   | 21,476        |   | 21,390  |
|     Effect of employee stock options, deferred incentive                         |   |   |               |   |   |
|        share units and restricted shares                          |   |   | -        |   | 119  |
|     Dilutive weighted average shares                                             |   |   | 21,476        |   | 21,509  |
|     Diluted net income (loss) per share attributable to Parkway Properties, Inc. |   |   |  $            | (0.32) |   |  $ | 0.06  |

|                                                                    | Three Months Ended |
|-------------------------------------------------------------------------|--------------------|
|                                                                    | March 31           |
|                                                                    | 2011               |   | 2010 |
|                                                                    | (in thousands)     |
| Supplemental cash flow information:                                     |               |   |   |
| Cash paid for interest                                                  |  $            | 13,401  |   |  $ | 13,125  |
| Supplemental schedule of non-cash investing and financing activity:     |               |   |   |
| Restricted shares and deferred incentive share units issued (forfeited) | 726           |   | (586) |
| Mortgage loan assumed in purchase                                       | 87,225        |   | -   |

----

|                 |          |         | WeightedAverage Life |
|----------------------|---------------|--------------|----------------------|
|                 | Amount        |         |
| Land                 |  $       | 14,190  |                 | N/A |
| Building             | 136,180  |         | 40                   |
| Tenant improvements  | 9,888    |         | 7                    |
| Lease commissions    | 9,836    |         | 7                    |
| Lease in place value | 9,228    |         | 7                    |
| Above market leases  | 5,655    |         | 9                    |
| Below market leases  | (1,914)       |         | 8                    |
| Liabilities assumed  | (2,388)       |         | 7                    |
| Mortgage assumed     | (87,225)      |         | 7                    |

|                                                          | Three Months Ended |
|---------------------------------------------------------------|--------------------|
|                                                          | March 31           |
|                                                          | 2011               |   | 2010 |
| Revenues                                                      |  $            | 69,266  |   |  $ | 74,397  |
| Net income (loss) attributable to common stockholders         |  $            | (6,641) |   |  $ | 1,378  |
| Basic net income (loss) attributable to common stockholders   |  $            | (0.31) |   |  $ | 0.06  |
| Diluted net income (loss) attributable to common stockholders |  $            | (0.31) |   |  $ | 0.06  |

----

----

| Office Property |   | Location       |   | SquareFeet |   | Date ofSale |   | Net SalesPrice |         | Net BookValue ofReal Estate |    | Gain onSale |
|-----------------|--------|----------------|--------|------------|--------|-------------|--------|----------------|--------------|-----------------------------|---------|-------------|
| One Park Ten    |   | Houston, Texas |   | 163        |   | 04/15/10    |   |  $        | 14,924  |                        |  $ | 6,406  |   |  $ | 8,518  |

|                                      | Three Months Ended |
|-------------------------------------------|--------------------|
|                                      | March 31           |
|                                      | 2011               |   | 2010 |
| Income statement:                         |               |   |   |
| Revenues                                  |               |   |   |
| Income from office and parking properties |  $            | -   |   |  $ | 858  |
|                                      | -        |   | 858  |
|                                      |               |   |   |
| Expenses                                  |               |   |   |
| Office and parking properties:            |               |   |   |
| Operating expense                         | -        |   | 415  |
| Interest expense                          | -        |   | 158  |
| Depreciation and amortization             | -        |   | 120  |
|                                      | -        |   | 693  |
| Income from discontinued operations       |  $            | -   |   |  $ | 165  |

----

|                                                  |   |                    |   |        |   | Parkway’s |      |       |
|-------------------------------------------------------|--------|-------------------------|--------|-------------|--------|-----------------|-----------|------------|
|                                                  |   |                    |   |        |   | Ownership       | Square    | Percentage |
| Joint Venture Entity                                  |   | Property Name           |   | Location    |   | Interest        | Feet      | Leased     |
| Parkway Joint Venture, LLC (“Jackson JV”) |   | UBS Building/River Oaks |   | Jackson, MS |   | 20.0%           | 167  | 84.0%      |
| RubiconPark II, LLC (“Maitland JV”) (1)   |   | Maitland 200            |   | Orlando, FL |   | 20.0%           | 205  | 91.6%      |
|                                                  |   |                    |   |        |   |            | 372  | 88.2%      |

| (1)   | As a result of the Company’s partner, Rubicon US REIT, filing for Chapter 11 bankruptcy, new partners were admitted into the Maitland JV.  The new partners are JP Morgan Chase, Kaufman Jacobs, LLC and Starwood Capital Group Global, LP. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|        | Parkway’s | Monthly  |     | Loan    |        | Loan          |
|-------------|-----------------|----------|----------|---------|-------------|---------------|
|        | Type of         | Interest |     | Share   | Debt        |          | Balance |   | Balance |
| Description | Debt Service    | Rate     | Maturity | of Debt | Service     |          | 3/31/11 |   | 12/31/10 |
| Maitland JV | Amortizing      | 4.39%    | 06/01/11 | 0.00%   |  $     | -   |   |  $ | -   |   |  $ | -   |
| Jackson JV  | Amortizing      | 5.84%    | 07/01/15 | 20.00%  | 12     |          | 2,466  |   | 2,474  |
|        |  $         | 12  |     |  $ | 2,466  |          |  $ | 2,474  |
|        | 5.84%           |     | 5.84%    |

| Schedule of Mortgage Maturities by Year:                                                                                                                | Maitland JV   | JacksonJV     | Total       |
|---------------------------------------------------------------------------------------------------------------------------------------------------------|---------------|---------------|-------------|
|                      2011 (remaining 9 months) |  $       | -   |  $     | 26  |  $ | 26  |
|                      2012                      | -   | 37       | 37     |
|                      2013                      | -   | 39       | 39     |
|                      2014                      | -   | 41       | 41     |
|                      2015                      | -   | 2,323    | 2,323  |
|                                                                                                                                                    |  $       | -   |  $     | 2,466  |  $ | 2,466  |

----

----

|                                        | Parkway’s |             | Square Feet |
|---------------------------------------------|-----------------|------------------|-------------|
| Joint Venture Entity and Property Name      |            | Location         |        | Ownership % |   | (In thousands) |
| Parkway Properties Office Fund, LP          |            |             |        |   |   |   |
| Desert Ridge Corporate Center               |            | Phoenix, AZ      |        | 26.50% |   | 293 |
| Maitland 100                                |            | Orlando, FL      |        | 25.00% |   | 128 |
| 555 Winderley                               |            | Orlando, FL      |        | 25.00% |   | 102 |
| Gateway Center                              |            | Orlando, FL      |        | 25.00% |   | 229 |
| BellSouth Building                          |            | Jacksonville, FL |        | 25.00% |   | 92 |
| Centurion Centre                            |            | Jacksonville, FL |        | 25.00% |   | 88 |
| 100 Ashford Center                          |            | Atlanta, GA      |        | 25.00% |   | 160 |
| Peachtree Ridge                             |            | Atlanta, GA      |        | 25.00% |   | 161 |
| Overlook II                                 |            | Atlanta, GA      |        | 25.00% |   | 260 |
| U.S. Cellular Plaza                         |            | Chicago, IL      |        | 40.00% |   | 608 |
| Chatham Centre                              |            | Schaumburg, IL   |        | 25.00% |   | 206 |
| Renaissance Center                          |            | Memphis, TN      |        | 25.00% |   | 190 |
| 1401 Enclave Parkway                        |            | Houston, TX      |        | 25.00% |   | 209 |
| Total Parkway Properties Office Fund, LP    |            |             |        |   |   | 2,726 |
|                                        |            |             |        |   |   |   |
| Parkway Properties Office Fund II, LP (1)   |            |             |        |   |   |   |
|     Falls Pointe        |            | Atlanta, GA      |        | 30.00% |   | 107 |
|     Lakewood II         |            | Atlanta, GA      |        | 30.00% |   | 128 |
|     Carmel Crossing     |            | Charlotte, NC    |        | 30.00% |   | 326 |
|     3344 Peachtree      |            | Atlanta, GA      |        | 33.03% |   | 483 |
|     245 Riverside       |            | Jacksonville, FL |        | 30.00% |   | 135 |
| Total Parkway Properties Office Fund II, LP |            |             |        |   |   | 1,179 |
|                                        |            |             |        |   |   |   |
| Total Consolidated Joint Ventures           |            |             |        |   |   | 3,905 |

| (1)   | On April 8, 2011, Fund II purchased Corporate Center Four located in the Westshore submarket of Tampa, Florida.  Corporate Center Four contains approximately 250,000 square feet of office space.  Upon the completion of the purchase of Corporate Center Four, the Company had a total of approximately 4.2 million square feet of joint ventures included in its consolidated financial statements of which, Fund II had approximately 1.4 million square feet. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                 | Threshold     | Target        | Maximum       |
|----------------------|---------------|---------------|---------------|
| Absolute Return Goal | 10%           | 12%           | 14%           |
| Relative Return Goal | RMS + 100 bps | RMS + 200 bps | RMS + 300 bps |

|                |          |   | Weighted      |        |          |         | Weighted      |
|---------------------|---------------|--------|---------------|-------------|---------------|--------------|---------------|
|                |          |   | Average       |        | Deferred      |         | Average       |
|                | Restricted    |   | Grant-Date    |        | Incentive     |         | Grant-Date    |
|                | Shares        |   | Fair Value    |        | Share Units   |         | Fair Value    |
| Balance at 12/31/10 | 479,930  |   |  $       | 12.81  |          | 15,640  |          |  $ | 25.71  |
| Issued              | 55,623   |   | 13.23    |        | -   |         | -   |
| Vested              | (53,060)      |   | 34.47    |        | (30)          |         | 52.36    |
| Forfeited           | -   |   | -   |        | (555)         |         | 18.74    |
| Balance at 03/31/11 | 482,493  |   |  $       | 10.47  |          | 15,055  |          |  $ | 25.91  |

----

----

----

|                                                                             | At or for the three months ended |            | At or for the three months ended |
|----------------------------------------------------------------------------------|----------------------------------|-----------------|----------------------------------|
|                                                                             | March 31, 2011                   |            | March 31, 2010                   |
|                                                                             | Office                           |            | Unallocated                      |   |   |   | Office |   | Unallocated |   |   |
|                                                                             | Properties                       |            | and Other                        |   | Consolidated |   | Properties |   | and Other |   | Consolidated |
|                                                                             | (in thousands)                   |            | (in thousands)                   |
|                                                                             | (Unaudited)                      |
|                                                                             |                             |            |                             |   |   |   |   |   |   |
| Income from office and parking properties(a)                                     |  $                          | 67,180     |                             |  $ | -   |   |  $ | 67,180  |   |  $ | 68,911  |   |  $ | -   |   |  $ | 68,911  |
| Management company income                                                        | -                      |            | 338                         |   | 338  |   | -   |   | 410  |   | 410  |
| Property operating expenses (b)                                                  | (31,010)                         |            | -                      |   | (31,010) |   | (30,951) |   | -   |   | (30,951) |
| Depreciation and amortization                                                    | (24,900)                         |            | -                      |   | (24,900) |   | (22,622) |   | -   |   | (22,622) |
| Management company expenses                                                      | -                      |            | (877)                            |   | (877) |   | -   |   | (744) |   | (744) |
| General and administrative expenses                                              | -                      |            | (1,807)                          |   | (1,807) |   | -   |   | (2,008) |   | (2,008) |
| Acquisition costs                                                                |                             |            | (2,349)                          |   | (2,349) |   | -   |   | -   |   | -   |
| Other income                                                                     | -                      |            | 324                         |   | 324  |   | -   |   | 385  |   | 385  |
| Equity in earnings of unconsolidated                                             |                             |            |                             |   |   |   |   |   |   |   |   |
| joint ventures                                                                   | 35                          |            | -                      |   | 35  |   | 105  |   | -   |   | 105  |
| Interest expense(c)                                                              | (12,618)                         |            | (2,106)                          |   | (14,724) |   | (12,159) |   | (1,536) |   | (13,695) |
| Adjustment for noncontrolling interest                                           |                             |            |                             |   |   |   |   |   |   |   |   |
| -real estate partnerships                                                        | 3,195                       |            | -                      |   | 3,195  |   | 2,587  |   | -   |   | 2,587  |
| Income from discontinued operations                                              | -                      |            | -                      |   | -   |   | 165  |   | -   |   | 165  |
| Dividends on preferred stock                                                     | -                      |            | (2,187)                          |   | (2,187) |   | -   |   | (1,200) |   | (1,200) |
| Net income (loss) attributable to                                                |                             |            |                             |   |   |   |   |   |   |   |   |
| common stockholders                                                              | 1,882                       |            | (8,664)                          |   | (6,782) |   | 6,036  |   | (4,693) |   | 1,343  |
|                                                                             |                             |            |                             |   |   |   |   |   |   |   |   |
| Depreciation and amortization                                                    | 24,900                      |            | -                      |   | 24,900  |   | 22,622  |   | -   |   | 22,622  |
| Depreciation and amortization – discontinued                               |                             |            |                             |   |   |   |   |   |   |   |   |
| operations                                                                       | -                      |            | -                      |   | -   |   | 120  |   | -   |   | 120  |
| Depreciation and amortization-                                                   |                             |            |                             |   |   |   |   |   |   |   |   |
|     noncontrolling interest – real estate partnerships | (5,563)                          |            | -                      |   | (5,563) |   | (4,346) |   | -   |   | (4,346) |
| Adjustment for depreciation and                                                  |                             |            |                             |   |   |   |   |   |   |   |   |
|     amortization-unconsolidated joint                        |                             |            |                             |   |   |   |   |   |   |   |   |
|     ventures                                                 | 88                          |            | -                      |   | 88  |   | 83  |   | -   |   | 83  |
| Funds from operations attributable to                                            |                             |            |                             |   |   |   |   |   |   |   |   |
|       common stockholders                          |  $                          | 21,307     |                             |  $ | (8,664) |   |  $ | 12,643  |   |  $ | 24,515  |   |  $ | (4,693) |   |  $ | 19,822  |
| Total assets                                                                     |  $                          | 1,816,751  |                             |  $ | 8,064  |   |  $ | 1,824,815  |   |  $ | 1,579,148  |   |  $ | 10,786  |   |  $ | 1,589,934  |
| Office and parking properties                                                    |  $                          | 1,537,892  |                             |  $ | -   |   |  $ | 1,537,892  |   |  $ | 1,390,248  |   |  $ | -   |   |  $ | 1,390,248  |
| Investment in unconsolidated joint ventures                                      |  $                          | 1,767      |                             |  $ | -   |   |  $ | 1,767  |   |  $ | 2,630  |   |  $ | -   |   |  $ | 2,630  |
| Capital expenditures (d)                                                         |  $                          | 9,494      |                             |  $ | -   |   |  $ | 9,494  |   |  $ | 6,200  |   |  $ | -   |   |  $ | 6,200  |

| (a) | Included in property operating revenues are rental revenues, customer reimbursements, parking income and other income. |
|-----|------------------------------------------------------------------------------------------------------------------------|

| (b) | Included in property operating expenses are real estate taxes, insurance, contract services, repairs and maintenance and other property operating expenses. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c) | Interest expense for office properties represents interest expense on property secured mortgage debt.  It does not include interest expense on the Company’s unsecured line of credit, which is included in “Unallocated and Other”. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d) | Capital expenditures include building improvements, tenant improvements and deferred leasing costs. |
|-----|-----------------------------------------------------------------------------------------------------|

----

----

| ·   | Fund and Fund-Like Investments.  The Company believes that fund and fund-like investments have the highest priority of the Company’s capital allocation, because it gives Parkway’s stockholders the highest risk adjusted return as measured by internal rate of return, capitalization rate and accretion per share. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Operator-Owner.  The Company plans to make a full transformation to an operator-owner, with the goal of being a majority operator/owner by the end of the Plan.  This has been a goal for several years and will continue to be a core strategy as Parkway seeks to increase fee income and maximize its return on equity and accretion per share.  Additionally, the Company will continue to expand PRS, which offers expert real estate management guidance, professional property management services and strategic marketing and leasing services aimed at increasing net operating income and maximizing profit upon exit. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Capital Allocation Discipline.  The Company’s overall capital structure goal is to achieve a net debt to gross asset value ratio of 50%, as determined by using a capitalization rate of 8.5%, and a net debt to EBITDA multiple of 6.5 times or less.  Beyond the balance sheet, capital allocation refers to the Company’s goal to exit non-strategic markets through the continuation of its Asset Recycling program.  Most of the properties identified for sale are smaller assets or assets located in smaller markets where Parkway does not have a significant presence.  By the end of the Plan, the Company’s goal is to be invested in larger, higher-quality properties located in higher-rent growth markets through fund and fund-like investments.  The Company will continue to seek to maintain discipline as it relates to managing the balance sheet and the acquisition and disposition of assets. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Uncompromising Focus on Operations.  Parkway believes that its uncompromising focus on operations is what sets it apart from other office property owners.  An important goal of the Plan is to move decision-making authority to the regional office level.  The Company’s market leaders already have the responsibility of setting rents, increasing net operating income margins and maintaining a consistent standard of operations and will be given more profit and loss responsibility and investment authority going forward.  It is important that  we know our markets, which is best achieved when Parkway’s people live and work within the market.  An integral part of the Plan is a program referred to as “We Know…City.”  These three words imply that Parkway employees know more than just how to manage real estate, but that they have a deep understanding of a city’s history, economics, infrastructure, politics and much more.  By truly knowing the cities where the Company is invested, we are better positioned for leasing, active asset management, recruitment and investments. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Shareholder Returns.  All of the previously mentioned goals funnel to the ultimate goal of the FOCUS Plan, which is to maximize total return to Parkway’s stockholders.  The Company has set a goal of achieving a 12% annual compounded total return to its shareholders for the three-year period starting July 1, 2010. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

----

|                                                                     | Three Months Ended |
|--------------------------------------------------------------------------|--------------------|
|                                                                     | March 31           |
|                                                                     | 2011               |   | 2010 |
|                                                                     | (Unaudited)        |
| Net income (loss) for Parkway Properties, Inc.                           |  $            | (4,595) |   |  $ | 2,543  |
| Adjustments to net income (loss) for Parkway Properties, Inc.:           |               |   |   |
| Interest expense                                                         | 14,245        |   | 13,291  |
| Amortization of financing costs                                          | 479           |   | 509  |
| Loss on early extinguishment of debt                                     | -        |   | 53  |
| Depreciation and amortization                                            | 24,900        |   | 22,742  |
| Amortization of share-based compensation                                 | 407           |   | 63  |
| Tax expense                                                              | -        |   | 17  |
| EBITDA adjustments - unconsolidated joint ventures                       | 124           |   | 120  |
| EBITDA adjustments - noncontrolling interest in real estate partnerships | (9,274)            |   | (7,466) |
| EBITDA (1)                                                               |  $            | 26,286  |   |  $ | 31,872  |
|                                                                     |               |   |   |
| Interest coverage ratio:                                                 |               |   |   |
| EBITDA                                                                   |  $            | 26,286  |   |  $ | 31,872  |
| Interest expense:                                                        |               |   |   |
| Interest expense                                                         |  $            | 14,245  |   |  $ | 13,291  |
| Interest expense - unconsolidated joint ventures                         | 36            |   | 37  |
| Interest expense - noncontrolling interest in real estate partnerships   | (3,634)            |   | (3,051) |
| Total interest expense                                                   |  $            | 10,647  |   |  $ | 10,277  |
| Interest coverage ratio                                                  | 2.47          |   | 3.10  |
|                                                                     |               |   |   |
| Fixed charge coverage ratio:                                             |               |   |   |
| EBITDA                                                                   |  $            | 26,286  |   |  $ | 31,872  |
| Fixed charges:                                                           |               |   |   |
| Interest expense                                                         |  $            | 10,647  |   |  $ | 10,277  |
| Preferred dividends                                                      | 2,187         |   | 1,200  |
| Principal payments (excluding early extinguishment of debt)              | 3,393         |   | 3,593  |
| Principal payments - unconsolidated joint ventures                       | 8             |   | 8  |
| Principal payments - noncontrolling interest in real estate partnerships | (518)              |   | (295) |
| Total fixed charges                                                      |  $            | 15,717  |   |  $ | 14,783  |
| Fixed charge coverage ratio                                              | 1.67          |   | 2.16  |
|                                                                     |               |   |   |
| Modified fixed charge coverage ratio:                                    |               |   |   |
| EBITDA                                                                   |  $            | 26,286  |   |  $ | 31,872  |
| Modified fixed charges:                                                  |               |   |   |
| Interest expense                                                         |  $            | 10,647  |   |  $ | 10,277  |
| Preferred dividends                                                      | 2,187         |   | 1,200  |
| Total modified fixed charges                                             |  $            | 12,834  |   |  $ | 11,477  |
| Modified fixed charge coverage ratio                                     | 2.05          |   | 2.78  |
|                                                                     |               |   |   |
| Debt to EBITDA multiple:                                                 |               |   |   |
| EBITDA - trailing 12 months                                              |  $            | 106,503  |   |  $ | 119,141  |
| Adjustment to annualize investing activities                             | 4,613         |   | -   |
| Adjusted EBITDA - trailing 12 months                                     |  $            | 111,116  |   |  $ | 119,141  |
| Mortgage notes payable                                                   |  $            | 876,617  |   |  $ | 824,107  |
| Notes payable to banks                                                   | 166,581       |   | 126,123  |
| Adjustments for unconsolidated joint ventures                            | 2,466         |   | 2,499  |
| Adjustments for noncontrolling interest in real estate partnerships      | (283,208)          |   | (212,648) |
| Parkway’s share of total debt                                      | 762,456       |   | 740,081  |
| Less:  Parkway’s share of cash                           | (25,947)           |   | (8,551) |
| Parkway’s share of net debt                                        |  $            | 736,509  |   |  $ | 731,530  |
| Debt to EBITDA multiple                                                  | 6.63          |   | 6.14  |

----

|                                                       | Three Months Ended |
|------------------------------------------------------------|--------------------|
|                                                       | March 31           |
|                                                       | 2011               |   | 2010 |
|                                                       | (Unaudited)        |
| Cash flows provided by (used in) operating activities      |  $            | (5,147) |   | $ | 8,348  |
| Amortization of (above) below market leases                | 300           |   | (103) |
| Amortization of mortgage loan discount                     | 197           |   | 169  |
| Operating distributions from unconsolidated joint ventures | (465)              |   | -   |
| Interest expense                                           | 14,245        |   | 13,291  |
| Loss on early extinguishment of debt                       | -        |   | 53  |
| Tax expense                                                | -        |   | 17  |
| Change in deferred leasing costs                           | 3,579         |   | 1,058  |
| Change in receivables and other assets                     | 1,362         |   | (1,900) |
| Change in accounts payable and other liabilities           | 18,135        |   | 15,593  |
| Adjustments for noncontrolling interests                   | (6,079)            |   | (4,879) |
| Adjustments for unconsolidated joint ventures              | 159           |   | 225  |
| EBITDA                                                     |  $            | 26,286  |   | $ | 31,872  |

|                                                                                                                    | Increase     |
|-------------------------------------------------------------------------------------------------------------------------|--------------|
|                                                                                                                    | (Decrease)   |
|                                                                                                                    | (Unaudited)  |
| Net loss attributable to Parkway Properties, Inc.                                                                       |  $      | (4,595) |
| Net loss attributable to noncontrolling interests                                                                       | (3,195)      |
| Net loss                                                                                                                | (7,790)      |
| Change in market value of interest rate swaps                                                                           | 1,089   |
| Comprehensive loss                                                                                                      | (6,701)      |
| Common stock dividends declared                                                                                         | (1,647)      |
| Preferred stock dividends declared                                                                                      | (2,187)      |
| Share-based compensation                                                                                                | 407     |
| Shares withheld to satisfy tax withholding obligation on vesting of restricted stock and deferred incentive share units | (299)        |
| Net shares distributed from deferred compensation plan                                                                  | 1,625   |
| Contribution of capital by noncontrolling interest                                                                      | 96,285  |
| Distribution of capital to noncontrolling interest                                                                      | (5,631)      |
|                                                                                                                    | $            | 81,852  |

----

|                                          |   |   |   | Three Months Ended March 31 |
|-----------------------------------------------|--------|--------|--------|-----------------------------|
|                                          |   |   |   |                        |   | Increase | % |
|                                          |   |   |   | 2011                        | 2010 | (Decrease) | Change |
| Revenue for office and parking                |   |   |   |                        |   |   |   |
|     properties:           |   |   |   |                        |   |   |   |
|     Same-store properties |   |   |   |  $                     | 63,866  |  $ | 68,913  |  $ | (5,047) | -7.3% |
|     Properties acquired   |   |   |   | 3,314                  | -   | 3,314  | N/M* |
|     Properties disposed   |   |   |   | -                 | (2) | 2  | N/M* |
| Total revenue from office and                 |   |   |   |                        |   |   |   |
|     parking properties    |   |   |   |  $                     | 67,180  |  $ | 68,911  |  $ | (1,731) | -2.5% |
| *N/M – not meaningful                   |   |   |   |                        |   |   |   |   |   |   |

|                                            |   |   |   | Three Months Ended March 31 |
|-------------------------------------------------|--------|--------|--------|-----------------------------|
|                                            |   |   |   |                        |   | Increase | % |
|                                            |   |   |   | 2011                        | 2010 | (Decrease) | Change |
| Expenses from office                            |   |   |   |                        |   |   |   |
|     and parking properties: |   |   |   |                        |   |   |   |
|     Same-store properties   |   |   |   |  $                     | 30,243  |  $ | 30,992  | (749) | -2.4% |
|     Properties acquired     |   |   |   | 768                    | -   | 768  | N/M* |
|     Properties disposed     |   |   |   | (1)                         | (41) | 40  | -97.6% |
| Total expenses from office                      |   |   |   |                        |   |   |   |
|     and parking properties  |   |   |   |  $                     | 31,010  |  $ | 30,951  |  $ | 59  | 0.2% |
| *N/M – not  meaningful          |   |   |   |                        |   |   |   |   |   |   |

----

|                 | Threshold     | Target        | Maximum       |
|----------------------|---------------|---------------|---------------|
| Absolute Return Goal | 10%           | 12%           | 14%           |
| Relative Return Goal | RMS + 100 bps | RMS + 200 bps | RMS + 300 bps |

----

|                                                               |   |   |   | Three Months Ended March 31 |
|--------------------------------------------------------------------|--------|--------|--------|-----------------------------|
|                                                               |   |   |   |                        |   | Increase | % |
|                                                               |   |   |   | 2011                        | 2010 | (Decrease) | Change |
| Interest expense:                                                  |   |   |   |                        |   |   |   |
|      Mortgage interest expense            |   |   |   |  $                     | 12,393  |  $ | 11,868  |  $ | 525  | 4.4% |
|      Credit facility interest expense     |   |   |   | 1,852                  | 1,269  | 583  | 45.9% |
|      Loss on early extinguishment of debt |   |   |   | -                 | 53  | (53) | -100.0% |
|      Mortgage loan cost amortization           |   |   |   | 225                    | 238  | (13) | -5.5% |
|      Credit facility cost amortization    |   |   |   | 254                    | 267  | (13) | -4.9% |
|                                                               |   |   |   |                        |   |   |   |
| Total interest expense                                             |   |   |   |  $                     | 14,724  |  $ | 13,695  |  $ | 1,029  | 7.5% |

----

|                                                                |   |        |   | Interest |   |     |   | Outstanding |
|---------------------------------------------------------------------|--------|-------------|--------|----------|--------|----------|--------|-------------|
| Line of Credit                                                      |   | Lender      |   | Rate     |   | Maturity |   | Balance     |
| $10 Million Unsecured Working Capital Revolving Credit Facility (1) |   | PNC Bank    |   | 3.5%     |   | 01/31/14 |   |  $     | 2,581  |
| $190.0 Million Unsecured Revolving Credit Facility (1)              |   | Wells Fargo |   | 5.6%     |   | 01/31/14 |   |        | 164,000  |
|                                                                |   |        |   | 5.6%     |   |     |   |  $     | 166,581  |

|    |                  |     |          |           |          | Fair Market Value |
|---------|-----------------------|----------|---------------|----------------|---------------|-------------------|
|    |                  |     |          |           |          | Liability         |
| Type of | Balance Sheet         | Notional | Maturity      |           | Fixed         | March 31          |
| Hedge   | Location              | Amount   | Date          | Reference Rate | Rate          | 2011              | 2010 |
| Swap    | Accounts payable      |     |          |           |          |              |   |
|    | and other liabilities |  $  | 100,000  | 03/31/11       | 1-month LIBOR | 4.785%            |  $ | -   |  $ | (3,170) |
| Swap    | Accounts payable      |     |          |           |          |              |   |
|    | and other liabilities |  $  | 23,500   | 12/01/14       | 1-month LIBOR | 5.800%            | (1,914) | (1,622) |
| Swap    | Accounts payable      |     |          |           |          |              |   |
|    | and other liabilities | $        | 9,250    | 09/30/18       | 1-month LIBOR | 5.245%            | -   | -   |
|    |                  |     |          |           |          |  $           | (1,914) |  $ | (4,792) |

----

|                                      | Total         |          |          |   | Recurring     |
|-------------------------------------------|---------------|---------------|---------------|--------|---------------|
|                                      | Mortgage      |          | Balloon       |   | Principal     |
|                                      | Maturities    |          | Payments      |   | Amortization  |
| Schedule of Mortgage Maturities by Years: |          |          |          |   |          |
| 2011*                                     |  $       | 111,681  |          | $      | 102,694  |   | $ | 8,987  |
| 2012                                      | 59,365   |          | 48,408   |   | 10,957   |
| 2013                                      | 11,346   |          | -   |   | 11,346   |
| 2014                                      | 12,157   |          | -   |   | 12,157   |
| 2015                                      | 39,662   |          | 26,891   |   | 12,771   |
| 2016                                      | 400,477  |          | 393,875  |   | 6,602    |
| Thereafter                                | 241,929  |          | 231,939  |   | 9,990    |
| Total                                     |  $       | 876,617  |          | $      | 803,807  |   | $ | 72,810  |
| Fair value at 03/31/11                    |  $       | 830,034  |          |   |          |   |

| *Remaining nine months |
|------------------------|

----

----

|                                                          |   |   | Three Months Ended |
|---------------------------------------------------------------|--------|--------|--------------------|
|                                                          |   |   | March 31           |
|                                                          |   |   |               |   | 2011 |   | 2010 |
| Net income (loss) for Parkway Properties, Inc.                |   |   |               |   |  $ | (4,595) |   |  $ | 2,543  |
| Adjustments to derive funds from operations:                  |   |   |               |   |   |   |   |
| Depreciation and amortization                                 |   |   |               |   | 24,900  |   | 22,622  |
| Depreciation and amortization – discontinued operations |   |   |               |   | -   |   | 120  |
| Noncontrolling interest depreciation and amortization         |   |   |               |   | (5,563) |   | (4,346) |
| Adjustments for unconsolidated joint ventures                 |   |   |               |   | 88  |   | 83  |
| Preferred dividends                                           |   |   |               |   | (2,187) |   | (1,200) |
| Funds from operations attributable to common stockholders (1) |   |   |               |   | $ | 12,643  |   |  $ | 19,822  |

| (1) | Funds from operations attributable to common stockholders for the three months ended March 31, 2011 and 2010 include the following items (in thousands): |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                   | Three Months Ended |
|--------------------------------------------------------|--------------------|
|                                                   | March 31           |
|                                                   | 2011               |   | 2010 |
| Loss on extinguishment of debt                         |               |   |   |   | $ | -   |   | $ | (53) |
| Acquisition costs – combination                  |               |   |   |   | (1,404) |   | -   |
| Acquisition costs – office property acquisitions |               |   |   |   | (263) |   | -   |
| Expenses related to litigation                         |               |   |   |   | 31  |   | (545) |
| Non-recurring lease termination fee income             |               |   |   |   | 1,521  |   | 5,864  |

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| ·   | when we are able to locate a desired property, competition from other real estate investors may significantly increase the purchase price; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | acquired properties and business combinations may fail to perform as expected; |
|--------------------|--------------------------------------------------------------------------------|

| ·   | acquired properties or management contracts may be located in new markets where we face risks associated with an incomplete knowledge or understanding of the local market, a limited number of established business relationships in the area and a relative unfamiliarity with local governmental and permitting procedures; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | we may be unable to quickly and efficiently integrate new acquisitions into existing operations, and results of operations and financial condition could be adversely affected. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                 | Total Number        | Maximum Number |
|----------------------|---------------------|----------------|
|                 | of Shares Purchased | of Shares that |
|                 | Total Number        | Average        | as Part of Publicly | May Yet Be |
|                 | Of Shares           | Price Paid     | Announced Plans | Purchased Under |
| Period               | Purchased           | per Share      | or Programs | the Plans or Programs |
|                 |                |           |   |   |
| 01/01/11 to 01/31/11 | 16,699(1)           |  $        | 17.91  | - | - |
| 02/01/11 to 02/28/11 | -         | -    | - | - |
| 03/01/11 to 03/31/11 | -         | -    | - | - |
| Total                | 16,699         |  $        | 17.91  | - | - |

| (1) | As permitted under the Company’s equity compensation plan, these shares were withheld by the Company to satisfy tax withholding obligations for employees in connection with the vesting of stock.  Shares withheld for tax withholding obligations do not affect the total number of shares available for repurchase under any approved common stock repurchase plan.  At March 31, 2011, the Company did not have an authorized stock repurchase plan in place. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                    |   PARKWAY PROPERTIES, INC. |                     |
|-------------------------|--------------------------------------|--------------------------|
|                    |                                 |                     |   |
| Date:  May 6, 2011 | By:                                  | /s/ Mandy M. Pope   |   |
|                    |                                 | Mandy M. Pope, CPA  |   |
|                    |                                 | Chief Accounting Officer |   |
|                    |                                 |                     |   |

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