Two DC-Area REITs Sell Shares to Repay Debts

BETHESDA, MD-Two REITs, First Potomac Realty in Bethesda, Md., and Corporate Office Properties Trust (COPT) in Columbia, Md., have turned to the stock market in recent days to raise funds to repay credit lines, and in the case of First Potomac, to also fund pending acquisitions in the DC area and Mid-Atlantic area.

First Potomac Realty is selling 3 million shares of common stock. Net proceeds are expected to be $83.4 million, according to an SEC filing. First Potomac also expects to grant the underwriters a 30-day option to purchase an additional 450,000 shares to cover over-allotments, if any. KeyBanc Capital Markets, a division of McDonald Investments Inc., is the sole book-running manager for the offering, with Wachovia Capital Markets, LLC acting as co-lead manager. Besides repaying a revolving credit line, First Potomac is also using the proceeds to fund acquisitions in the region, it said.

A few days earlier, Corporate Office Properties Trust priced 3 million preferred shares in a $75 million public offering. It, too, will use the proceeds to repay an unsecured revolving credit facility. Separately, on Monday COPT announced it is moving its headquarters to 6711 Columbia Gateway Dr., a building in the Columbia Gateway Business Park. COPT owns 26 buildings totaling more than 2.0 million sf in this development; the most recent being a $78 million acquisition this month of Renaissance, a 611,379 sf office/warehouse building. It funded the purchase through its credit line and a $38 million loan.