Bethesda, Maryland-based First Potomac Realty Trust (FPO), a leading real estate investment trust (:REIT), recently announced the signing of four new lease agreements for 49,308 square feet of space in Oakton, Virginia.
The lease agreements were signed for the 181,400 square-foot office property, Three Flint Hill, located at 3201 Jermantown Road in Oakton, Virginia. In April 2010, First Potomac acquired the 8-story office property for $13.6 million and has now completed an extensive redevelopment of the property for $10 million.
The building is the first renovated office building in the Virginia submarket region to gain LEED Gold certification. Three Flint Hill is currently occupied by renowned tenants like CDM, Leap Frog Solutions and The Susan Hicks Group PC.
After the agreement, the property will now have four more renowned firms as its tenants. These include Ameriprise Financial Inc. (AMP), Stratford University, A. J. Dwoskin & Associates and Chadwick, Washington, Moriarty, Elmore & Bunn, P.C. They are leased 3,056 square-feet, 14,312 square-feet, 14,300 square-feet and 17,640 square-feet of space, respectively.
Management believes First Potomac will benefit from the agreement as it will increase the company’s rental revenue in the coming quarters. The company expects that the established and efficient tenants will likely deliver a strong base for the long-term success of the agreement.
However, the Virginian market is not free of competition. One of the company’s peers, Washington Real Estate Investment Trust (WRE) recently acquired a 147,000 square foot office building named ‘Fairgate at Ballston’ in Arlington, Virginia, for $52.25 million.
First Potomac owns, develops, redevelops and operates business parks and industrial properties in the metropolitan area of Washington, D.C., and other submarkets of Maryland and Virginia. As of March 31, 2012, the company's portfolio comprises more than 14 million square feet of space and consists of 43% office, 21% industrial properties and 36% business parks.
The company will likely release its second quarter 2012 earnings on July 23, 2012. The Zacks Consensus Estimate for second quarter 2012 FFO per share (fund from operations) is pegged at 27 cents. We presently have long-term Neutral recommendation and a Zacks #3 Rank for First Potomac, implying a short-term Hold rating.
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