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First Potomac Realty Trust Purchases Office Building Adjacent to Union Station in Washington, D.C.

^{Published on 2011-03-28 13:10:21 - Market Wire}
 

WASHINGTON--([ BUSINESS WIRE ])--First Potomac Realty Trust (NYSE:FPO), a leading owner of office and industrial properties in the greater Washington, D.C. region, today announced that it has acquired 840 First Street, NE, a fully-leased, Class A office building adjacent to Union Station in Washington, D.C. This is the fourteenth property the firm has acquired since late 2009.

"We were able to acquire 840 First Street in an off-market transaction at below replacement cost, once again demonstrating how our local market expertise and relationships allow us to execute on high-quality transactions that strengthen our portfolio and deliver long-term value to our shareholders."

aThis strategically located, fully leased office building is a very attractive investment opportunity for First Potomac,a said Nicholas R. Smith, Chief Investment Officer of First Potomac Realty Trust. aWe were able to acquire 840 First Street in an off-market transaction at below replacement cost, once again demonstrating how our local market expertise and relationships allow us to execute on high-quality transactions that strengthen our portfolio and deliver long-term value to our shareholders.a

The 248,576-square-foot, 12-story building was constructed in 2003. The property is ideally situated in the burgeoning NoMa (North of Massachusetts Avenue) submarket, a thriving mixed-use neighborhood anchored by Union Station. The property is fully leased to Group Hospitalization and Medical Services, Inc., an independent licensee of the Blue Cross and Blue Shield Association. The health care insurer is the buildinga™s original tenant and has sole access and control of the buildinga™s facilities, including its 222 underground parking spaces and cafeteria.

The Company acquired the property from the Stephen A. Goldberg Company for $90 million, with up to $10 million of additional consideration payable depending on the terms of any lease renewal by the existing tenant or re-tenanting of the Property. The Company financed the purchase through the assumption of a $57.2 million mortgage with an interest rate of 5.2% and a remaining term of 2.5 years, the issuance of approximately 1.4 million operating partnership units and a draw on its line of credit. The company expects the property to generate an initial unleveraged return of 8.6% on a cash basis.

About First Potomac Realty Trust

Headquartered in Bethesda, Md., First Potomac Realty Trust is a self-administered, self-managed real estate investment trust that focuses on owning, operating, developing and redeveloping office and industrial properties in the greater Washington, D.C. region. The Company's portfolio totals approximately 13 million square feet. The Company's largest tenant is the U.S. Government, which along with government contractors, accounts for more than 20 percent of the Company's revenue. For more information, please visit [ www.first-potomac.com ].

Forward Looking Statements

The forward-looking statements contained in this press release are subject to various risks and uncertainties. Although the Company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, there can be no assurance that its expectations will be achieved. Certain factors that could cause actual results to differ materially from the Companya™s expectations include the repayment in full of the loan, the ability of the Company to successfully enforce its remedies under the loan and related documents, changes in general or regional economic conditions; the Companya™s ability to timely lease or re-lease space at current or anticipated rents; changes in interest rates; changes in operating costs; the Companya™s ability to complete acquisitions on acceptable terms and successfully integrate such acquisitions into the Companya™s portfolio; the Companya™s ability to manage its current debt levels and repay or refinance its indebtedness upon maturity or other required payment dates; the Companya™s ability to obtain debt and/or financing on attractive terms, or at all; changes in the assumptions underlying the Companya™s expected rates of return on acquisitions and other risks detailed in the Companya™s Annual Report on Form 10-K and described from time to time in the Companya™s filings with the SEC. Many of these factors are beyond the Companya™s ability to control or predict. Forward-looking statements are not guarantees of performance. For forward-looking statements herein, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.