9 Big Properties That Could—Or Already Have—Hit The Market In First Potomac's Selloff
First Potomac recently announced it plans to sell $150M worth of properties to “reposition the company and maximize its value,” CEO Bob Milkovich said in an earnings call this week. That’s on top of the $200M the REIT already has on the market.
The move comes after Bob was tapped to lead the firm and take it in another direction last November, following the abrupt resignation of former CEO Doug Donatelli (snapped right, with brother Chris) and chief investment officer Nikolas Smith. Analysts haven’t been wowed by the new plan, but it does mean a lot of property is now on the market in the DC suburbs.
Here’s a look at nine of the biggest sites that could be affected by the shake-up. The first three are either under contract or on the block, while some of the other six could be put up for sale as First Potomac mulls its options in the months ahead.
1. Storey Park
Where: Washington, DC
What: Office/Retail
Size: 712k SF
This mixed-use site will include 350k SF of Class-A office space, 65k SF of retail, 300 residential units and 600 parking spots. It will also feature one of NoMa’s only public parks. First Potomac announced last year it was putting the property on the market, and Bob said on the company's earnings call that it's under contract. The development is a JV with Perseus Realty; they're still looking for an office anchor before construction begins.
2. One Fair Oaks
Where: Fairfax, VA
What: Office
Size: 214k SF
A single, multi-story Class-A office building comprises this site, which First Potomac picked up in 2011 for $60M. GlobeSt and the Washington Business Journal previously reported First Potomac plans to sell the site when the lease for its anchor tenant, CACI International, expires late this year. FP spokesperson Vikki Kayne, however, tells Bisnow the firm has made no definite plans for the site and that all options are on the table.
3. Non-Core NoVa Portfolio
Where: NoVA
What: Various
Size: Roughly 1.2M SF
First Potomac announced last September it was selling off nine NoVa assets for roughly $91M. One of those, the Newington Business Park Center in Lorton, VA, has already sold for to an affiliate of Velsor Properties.
The other sites, now under contract to an undisclosed buyer, are:
Enterprise Center (pictured), a 188k SF office site in Chantilly
Windsor at Battlefield, a 155k SF office site in Manassas
Herndon Corporate Center, a 128k SF office site in Herndon
Linden Business Center, a 109k SF business park in Manassas
Van Buren Office Park, a 106k SF office site in Reston
Gateway Center Manassas, a 102k SF business park in Manassas
Reston Business Campus, an 82k SF office site in Reston
Prosperity Business Center, and a 71k SF business park in Merrifield.
First Potomac also completed the sale of Cedar Hill I and III, in Tysons, VA, for a total of $27M in January. The two three-story office buildings have a total of 102k SF and were fully occupied.
4. Plaza 500
Where: Alexandria, VA
What: Industrial
Size: 500k SF
This industrial park sits on roughly 34 acres and consists of two two-story flex buildings. Smoot Lumber occupies 172k SF, roughly a third of the total space, and signed a lease in 2008 that extends to 2017.
5. Redlands Corporate Center
Where: Rockville, MD
What: Office
Size: 483k SF
This site consists of three multi-story Class-A office buildings, all LEED Gold and Energy Star certified. First Potomac bought Redlands I from an affiliate of Federal Partners and II and III from Perseus Realty for $12M in 2010, which jointly developed them with First Potomac. As of 2013 the site was fully leased, and different sections are listed as either "strategic hold" or "reposition"--meaning FP is actively investing in the site, to the tune of $8M in this case--in a strategy document released this month, all of which mean the property is less likely to sell than others in FP's portfolio.
6. Sterling Park Business Center
Where: Sterling, VA
What: Business Park
Size: 471k SF
Seven multi-tenant office and light industrial buildings sit on this roughly 65-acre site. Of that, only 33 are developed, leaving any buyers 32 acres available for future construction. First Potomac bought the property for $30M in cash in 2006, and developed the existing buildings itself, breaking ground in 2007. The site is listed as "non-core" in the strategy document, meaning it could very well hit the block as FP mulls its options in the months ahead.
7. Prosperity Metro Plaza
Where: Fairfax, VA
What: Office
Size: 326k SF
This site consists of two multi-story Class-A office buildings, and was voted one of Virginia’s “Best Workplaces for Commuters" by BestWorkPlaces.org. First Potomac acquired the site in 2011 in a JV with the Coakley family, and it's primarily leased to the US government and government contractors. Because it's a JV however, FP's Vikki Kayne says the firm is less likely to consider selling its stake.
8. Ammendale Commerce Center
Where: Beltsville, MD
What: Business Park
Size: 312k SF
Three single-story flex buildings occupy this unassuming site. First Potomac picked up the property in 2007 for $10M in cash, a price at-the-time CIO Nicholas Smith called "well-below replacement cost" in a statement. Ammendale is also listed as "non-core" in the strategy document, making a future sale well within the realm of possibility.
9. RiversPark
Where: Columbia, MD
What: Office
Size: 307k SF
This site consists of six, single-story flex buildings and warehouses. First Potomac bought the site for $42M in 2008 from affiliates of General Growth Properties, and Nicholas said then he expected the property to benefit from the expansion of the NSA and Fort Meade. The property is a JV with AEW Value Investors II however, and because of that Vikki says FP is less likely to sell RiversPark than other sites it owns outright.
