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BETHESDA, MD-First Potomac Realty Trust has acquired a 415,839-sf portfolio of flex/office properties from the Landmark Co. for $31 million in a cash-and-debt transaction. The cash portion of the purchase--$18.2 million--was funded with a combination of proceeds from the recent sale of 6600 Business Parkway in Elkridge, MD, through a 1031 like-kind exchange and the company's recently completed private placement of unsecured notes totaling $75 million. The company assumed $12.8 billion in debt secured by the properties.

The portfolio includes 10 buildings totaling 232,242 sf in Airpark Business Center and Chesterfield Business Center in Chesterfield County, south of Richmond and four buildings totaling 183,612 sf in Ashland Business Park in Hanover County, north of the city. The Chesterfield County properties are currently 98% leased with 56 tenants including government-related tenants and private service companies. The Hanover County properties are currently 91% leased to 26 tenants, which include a mix of service and health care-related companies. Based on the leases in place, the property is expected to generate a first-year unleveraged return on the purchase price of approximately 8.1% on a cash basis and 9.0% on an accrual basis, according to First Potomac.

This transaction solidifies First Potomac's presence in the Richmond market, Charles Place, an analyst at Ferris, Baker Watts, Inc., tells GlobeSt.com."They have been very successful in growing their portfolio through acquisitions. I view this deal as a positive." Place notes that First Potomac has been concentrating on three markets: Norfolk, VA, Richmond and Northern Virginia/DC. "They have been making acquisitions selectively in those markets when the opportunities arise, at a price that makes sense for them." The occupancy levels for Landmark acquisition are higher than previous transactions, Place adds. "But they clearly feel there is some ability to bring new tenants in at better rates."