BETHESDA, MD. —First Potomac Realty Trust (NYSE: FPO), an owner of office and business parks in the greater Washington, D.C. area, has closed the sale of an industrial portfolio to an affiliate of Blackstone Real Estate Partners VII for $241.5 million. First Potomac also sold an industrial property in Haymarket, Va., to Corporate Office Properties Trust for $17.5 million, bringing the aggregate sales price to $259 million.
The portfolio sold to Blackstone includes 23 properties totaling 4 million square feet, with 16 properties located in southern Virginia and the remaining seven located in Baltimore and Washington, D.C. IndCor Properties, Blackstone’s national industrial portfolio manager, will manage the 23 properties.
I-66 Commerce Center, the facility that First Potomac sold to Corporate Office Properties Trust, is a 236,000-square-foot industrial property that was vacant at the time of the sale. Engineering Solutions previously occupied the center through the end of May.
The $259 million disposition is part of First Potomac’s strategy to sell the majority of its industrial portfolio. First Potomac’s holdings now consist primarily of office properties in northern Virginia. The company also owns two industrial properties in northern Virginia that weren’t included in the sale.
First Potomac plans to use the proceeds to acquire high-quality office properties in Washington, D.C., as well as repay outstanding debt. The company also plans to place $29 million with an intermediary for a potential 1031 tax-deferred exchange, in the event the firm identifies an acquisition opportunity.
“We are extremely pleased with the execution of the industrial portfolio sale, which represents a very important step in our evolution as we continue to focus on high-quality office properties in the region,” says Douglas Donatelli, chairman and CEO of First Potomac Realty Trust. “We believe the sale significantly strengthens our balance sheet, streamlines the company's focus, and provides capital to support continued growth in office properties in the greater Washington, D.C., office sector.”
First Potomac Realty Trust’s stock price closed Tuesday at $13.66 per share, up from $12.28 per share this time last year.
— John Nelson