First Potomac Realty Trust announced on May 20 that it has entered into two separate contracts to sell a portfolio of 24 industrial properties for a total of $259 million. The sale is part of a strategic plan the company made public in late January to achieve a higher concentration of high-quality office properties in the greater Washington, D.C., area. The proceeds will also be used to repay debt, improve balance sheet flexibility and acquire high-quality office properties in the Washington, D.C., region.
The portfolio consists of 4.3 million square feet. Most of it — 23 of the properties — was acquired by an affiliate of Blackstone Real Estate Partners VII for $241.5 million. The 23 properties represent 4 million square feet, with 16 of them, totaling almost 2.6 million square feet, located in Southern Virginia and the rest in Baltimore and Washington, D.C.
Blackstone secured the contract with a $15 million deposit. The transaction is expected to close by the end of the second quarter, subject to customary closing conditions. IndCor Properties – Blackstone’s national industrial portfolio company — will manage the properties.
Separately, First Potomac sold the I-66 Commerce Center in Haymarket, Va., to Corporate Office Properties Trust. The 236,000-square-foot, single-story building is located on 28.3 acres of land. It was sold on May 7 for $17.5 million. Engineering Solutions occupied the I-66 Commerce Center through March 31, 2013. At the time of the sale, the property was vacant.
“The sale of the industrial portfolio is the most critical step in our strategy of repositioning our portfolio to focus on high-quality office properties in the region,” said Douglas Donatelli, First Potomac’s chairman & CEO. “We believe the sale, combined with the targeted portfolio management initiatives we have implemented, positions us well for continued growth in the greater Washington, D.C., office sector.”
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Photo credits: First Potomac Realty Trust