First Potomac Realty Trust
) recently accomplished the sale of a significant part of its
industrial portfolio to an affiliate of Blackstone Real Estate
Partners VII and Corporate Office Properties Trust. The sell-offs
have helped the company reap $259 million in total.
First Potomac can now enjoy greater financial flexibility, a
streamlined portfolio and have sufficient funds to acquire
high-quality office properties in the Washington, D.C. region.
In particular, the divested portfolio to the Blackstone affiliate
for $241.5 million included 23 institutional-quality properties
spanning over 4.0 million square feet. Of them, 16 are positioned
in Southern Virginia while the rest are located in the Baltimore,
MD and Washington, D.C. submarkets.
In addition, First Potomac vended a property -- I-66 Commerce
Center in Haymarket, VA to Corporate Office Properties Trust in
early May for $17.5 million.
The sell-offs have resulted in First Potomac retaining in its
portfolio, mainly office and business park properties in the
greater Washington, D.C. market. Also, two industrial properties
in the Northern Virginia market are present in its current
Moreover, recently, the company generated net proceeds of
approximately $104.9 million from an equity offering of nearly
7.5 million shares. The move came as part of its efforts to
infuse capital and repay debt.
Presently, we await the company's second-quarter 2013 earnings
that are scheduled to release in late July for an update on the
full-year 2013 core FFO guidance, following the sale of these
assets and the recently completed public offering.
Finally, we believe that the increase in financial flexibility
through asset sale and the stock offering would poise the company
well for investment and acquisition prospects in the greater
Washington D.C. office sector and hence we remain encouraged.
This is expected to go a long way in strengthening the company's
Currently, First Potomac carries a Zacks Rank #3 (Hold). A number
of other REITs that are performing well and deserve a look
DCT Industrial Trust Inc.
Extra Space Storage Inc.
), all carrying a Zacks Rank #2.
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FIRST POTOMAC (FPO): Free Stock Analysis
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