WASHINGTON, DC—First Potomac Realty Trust has sold the Newington Business Park Center in Lorton, VA, for $32.5 million. An affiliate of Velsor Properties LLC is the buyer of the seven-building, 256,000-square foot park.
HFF's Bruce Strasburg repped the seller in the transaction.
The REIT plans to use the proceeds to fund a share buy back it announced last week.
The company plans to sell at least $200 million in assets as part of its repositioning, according to the new CEO, Robert Milkovich.
Milkovich became the CEO last month when the former CEO Doug Donatelli left per the request of the Board of Directors. The REIT has been executing a strategic repositioning of its portfolio and investment strategy since 2013, focusing on urban core assets while selling off non-core assets in outlying areas. Its stock price has dropped a few percentage points year to date, but then, most REITs' stock market performance have suffered this year.
Besides the stock buyback and continuing asset sales, the REIT has consolidated its credit lines with a new $300 million revolving facility with a 4-year term, and a $300 million unsecured term loan agreement.
The new credit agreement gives the company more flexibility, such as supporting the stock buyback, says CFO Andy Blocher. It also reduces the capitalization rates used to calculate gross asset value for the financial covenants and reduce First Potomac's borrowing costs, he said.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
