First Potomac Assumes Control of Redland Corporate Center with $30M Acquisition
- Oct 13, 2013
First Potomac Realty Trust announced this week the acquisition of Redland I, the third building at Rockville’s Redland Corporate Center. Redland I cost First Potomac $30 million and marks the first acquisition the company has completed since late 2011.
Redland I is a 133,895-square-foot, Class A office building. It is located in a strong submarket and is currently fully leased to the Department of Health and Human Services through early 2018. Good news for the company, as the office vacancy in the Washington, D.C., metro area is currently on the rise. According to Marcus & Millichap Real Estate Investment Services, the availability rate reached 18.8 percent in the third quarter of 2013, and is expected to push up to 19.2 percent this year. In order to acquire the multi-story building, First Potomac used the 1031 exchange proceeds from the sale of its industrial portfolio earlier this year, as well as cash on hand and the company’s line of credit.
First Potomac already owns the other two buildings in the three-building complex. The Bethesda-based company acquired Redland II and III in late 2010, in a joint venture with Perseus Realty L.L.C. The purchase of the two buildings was First Potomac’s first value-add acquisition. The company announced in June it managed to fully lease Redland II. The building was empty when acquired.
Conveniently located in the I-270 corridor of Montgomery County, Maryland, the 483,000-square-foot Redland Corporate Center includes such amenities as a state-of-the-art fitness center, on-site deli and shuttle service to the Shady Grove Metro station on the red line. First Potomac now has full control of the fully leased office park. It plans to achieve either an Energy Star or LEED certification for Redland I. Redland II and III are both LEED Gold certified.
“The acquisition of the third building at Redland Corporate Center demonstrates our disciplined approach to growing the company and illustrates our commitment to well-located, high-quality, multi-story office assets in vibrant submarkets where we have a competitive advantage,” said Douglas Donatelli, First Potomac’s chairman & CEO, in a statement for the press. “Redland I further strengthens our portfolio with a stable, cash-flowing asset in a location where we already have operating efficiencies and have been successful in leasing up vacancy, and it gives us the opportunity to expand existing tenants in the future.”Photo credits: First Potomac Realty Charts courtesy of Marcus & Millichap Real Estate Investment Services