In order to raise capital, Bethesda-based real estate investment
First Potomac Realty Trust
) recently sold its full 95% ownership stake in the development
project 1200 17th Street, NW, located in Washington D.C. The
property was sold to Mitsui Fudosan America, Inc. (MFA) for $43.7
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First Potomac intends to utilize the proceeds from the transaction
on its other development holdings. The company has been interested
in exploring opportunities to sell the planned development sites
for other core projects such as redevelopment of 440 First Street,
NW, also in DC. The property is slated for completion in mid-2013.
1200 17th Street is strategically located in close proximity to the
Red, Blue and Orange Metro Lines. The building is currently under
demolition and will be redeveloped as a 170,000 square-foot
free-standing structure. The construction is slated to be completed
by the fourth quarter of 2014.
The new owner of the property, MFA, is the U.S. subsidiary of
Japanese real estate company
Mitsui Fudosan Co. Ltd.
). The company engages in investment and development of real estate
properties and has invested in prestigious U.S. markets in Los
Angeles, San Francisco, Washington, DC and New York.
In 2011, First Potomac acquired 95% interest in the property in
collaboration with its joint venture partner Akridge. The property
was previously owned by the National Restaurant Association.
Akridge is a full service real estate firm also based in Washington
DC. It provides leasing, acquisition, development, construction
management, property management and other services. Akridge will
continue the development of the 1200 17th Street, NW property with
the new owner.
First Potomac owns, develops, redevelops and operates business
parks and industrial properties in the metropolitan area of
Washington, DC and other submarkets of Maryland and Virginia. As of
June 30, 2012, the company's portfolio comprises more than 14
million square feet of space and consists of 42% office, 22%
industrial properties and 36% business parks.
The company recently reported second-quarter 2012 core FFO (funds
from Operations) of 32 cents, beating the Zacks Consensus Estimate
by 7 cents. We presently have a long-term Neutral recommendation on
the stock. Also, it carries a Zacks #3 Rank (short-term Hold
Note: FFO, a widely accepted and reported measure of the
performance of REITs, is derived by adding depreciation,
amortization and other non-cash expenses to net income.