WASHINGTON, DC–Government Properties Income Trust has closed on its acquisition of First Potomac Realty Trust, bringing into its fold the REIT's 39 local office properties that total some 6.5 million square feet.
First Potomac's shareholders approved the deal, which was first announced in June, late last month.
Government Properties has acquired the REIT for a total value of $1.4 billion, including the assumption of $418 million in overall debt and approximately $232 million of outstanding mortgage debt. Government Properties acquired all of the outstanding shares of First Potomac, paying its shareholders $11.15 in cash per share at the transaction's close, or approximately $652 million. That represents a premium of 9.3% to First Potomac's share price on April 24, when the market began speculating that a deal was underway.
Newton, Mass-based Government Properties is acquiring First Potomac to expand its portfolio mix beyond properties occupied by government tenants. It wants a greater footprint in the Washington DC market — specifically in complementary buildings that have private sector tenants.
“The metropolitan Washington, DC market area is one of the largest office markets in the US and the nation's largest beneficiary of spending by the US government, Government Properties COO David Blackman said in a prepared statement when the acquisition was first announced. “Outside of the metropolitan Washington, D.C. market area, GOV will continue to focus on acquiring, owning and operating office properties that are majority leased to government tenants.”
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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.
