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First Potomac Closes on Three Deals

WASHINGTON, DC-The REIT pays $42 million for the three office/flex assets, only one of which is 100% leased.

By Erika Morphy | Updated on November 20, 2006

WASHINGTON, DC-First Potomac Realty Trust reports it has completed three separate trades of office/flex assets in Maryland and Virginia, paying out a total of $42 million. Two of the newly acquired properties, both of which were sourced off market, represent lease opportunities for the REIT, as their occupancies are below 83%. The third property is 100% occupied.

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.

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