First Potomac also plans to use nearby properties it already owns to gain operating leverage, company CIO Nicholas R. Smith says in a statement. "These acquisitions extend our presence in several key markets that we targeted for expansion," he says.Park Central I, II and V are located in northern Richmond, in Mechanicsville. Eight tenants are leasing space in the 204,280-sf property, leaving the buildings with a 22% vacancy rate. First Potomac paid $21.7 million for the complex, including the assumption of $10.9 million in first mortgage debt on two of the buildings. The existing leases at Park Central are expected to generate an unleveraged return of approximately 7% for First Potomac on a cash basis and 7.3% on an accrual basis.

Owings Mills Commerce Center, a 132,765-sf, two-building flex/office property in northwestern Baltimore has an occupancy rate of 83%. First Potomac paid for this asset in cash, for a purchase price of $16.6 million. Owings Mills Commerce Center is expected to generate an unleveraged return of 6.7% on a cash basis and 6.9% on an accrual basis, according to First Potomac.

First Potomac's third acquisition was a fully occupied flex/office property in the Norfolk, VA, market in a business park next to the Norfolk International Airport. Gateway II is a 42,429-sf flex/office building occupied by four tenants. The $3.6-million purchase price was paid for in cash. This asset will generate an unleveraged return of 8% on both a cash and accrual basis.