This month, he said, First Potomac entered into a contract that is subject to a study period to sell Storey Park, the site in NoMa that it acquired in 2011 with Perseus Realty for $47 million. That sale as well is expected to close in the first half of 2016.

In September of 2015, First Potomac announced it was selling nine assets for a total of 1.2-million square feet.

The properties that are trading are:

Enterprise Center, a 188,933-square-foot office property in Chantilly;

Gateway Center Manassas, a 102,446-square-foot business park in Manassas;

Herndon Corporate Center, a 128,359-square-foot office property in Herndon;

Linden Business Center, a 109,809-square-foot business park in Manassas;

Prosperity Business Center, a 71,373-square-foot business park in Merrifield;

Reston Business Campus, an 82,378-square-foot office property in Reston;

Van Buren Office Park, a 106,683-square-foot office property in Herndon; and

Windsor at Battlefield, a 155,511-square-foot office property in Manassas.

Originally First Potomac had put a total of nine properties in Northern Virginia on the market. In December of 2015 one of them traded — the Newington Business Park Center in Lorton, VA, for $32.5 million. An affiliate of Velsor Properties LLC acquired the seven-building park.

These assets were acquired eleven or so years ago in various purchases. Enterprise Center, for example, was acquired in April 2005 for $25.4 million; Herndon Corporate Center was picked up for $20.5 million in April 2004. Windsor at Battlefield traded for $15.3 million.

The $91 million sales price was, at least to one analyst on the call, a bit lower than earlier assumptions about the portfolio's value. That discrepancy was due to the gap in investor interest in DC proper assets and assets located further out, Milkovich responded. “Obviously something downtown would have a lot of demand, demand inherently pushes pricing and as you get further out your buyer pools thins out.”

More Non-core Sales

Milkovich also discussed the REIT's plan to streamline its operations and portfolio. It plans to sell another $150 million of properties, including One Fair Oaks in Fairfax, VA, which CACI International is planning on vacating at year's end.

It is also planning some strategic redevelopment on some key assets, including, he said, possibly adding value at both 11 Dupont Circle and 1401 K St.

Finally, it is reducing its monthly dividend by 20 cents to 40 cents per share starting next quarter.

WASHINGTON, DC—Following the somewhat deflating news that First Potomac Realty Trust's market cap had dropped below $700 million, the REIT announced this week it has found buyers for the non-core assets it put on the market last year. It also plans to put another $150 million of non-core assets on the market, under a strategic plan that CEO Robert Milkovich announced during the REIT's fourth quarter earnings call.

$91M for Non-core Northern Virginia Assets

First Potomac entered into a binding contract to sell the Northern Virginia portfolio in January. It expects to receive net proceeds of $90.6 million from the sale. First Potomac also recorded an impairment charge of $26.9 million in its fourth quarter results because of the sale, which is expected to close in the first half of 2016, according to Milkovich.

First Potomac also expects to lose between $5 million to $7 million of NOI from the sale – a reflection of “a partial years ownership of the asset in 2016,” Milkovich said.

This month, he said, First Potomac entered into a contract that is subject to a study period to sell Storey Park, the site in NoMa that it acquired in 2011 with Perseus Realty for $47 million. That sale as well is expected to close in the first half of 2016.

In September of 2015, First Potomac announced it was selling nine assets for a total of 1.2-million square feet.

The properties that are trading are:

Enterprise Center, a 188,933-square-foot office property in Chantilly;

Gateway Center Manassas, a 102,446-square-foot business park in Manassas;

Herndon Corporate Center, a 128,359-square-foot office property in Herndon;

Linden Business Center, a 109,809-square-foot business park in Manassas;

Prosperity Business Center, a 71,373-square-foot business park in Merrifield;

Reston Business Campus, an 82,378-square-foot office property in Reston;

Van Buren Office Park, a 106,683-square-foot office property in Herndon; and

Windsor at Battlefield, a 155,511-square-foot office property in Manassas.

Originally First Potomac had put a total of nine properties in Northern Virginia on the market. In December of 2015 one of them traded — the Newington Business Park Center in Lorton, VA, for $32.5 million. An affiliate of Velsor Properties LLC acquired the seven-building park.

These assets were acquired eleven or so years ago in various purchases. Enterprise Center, for example, was acquired in April 2005 for $25.4 million; Herndon Corporate Center was picked up for $20.5 million in April 2004. Windsor at Battlefield traded for $15.3 million.

The $91 million sales price was, at least to one analyst on the call, a bit lower than earlier assumptions about the portfolio's value. That discrepancy was due to the gap in investor interest in DC proper assets and assets located further out, Milkovich responded. “Obviously something downtown would have a lot of demand, demand inherently pushes pricing and as you get further out your buyer pools thins out.”

More Non-core Sales