WASHINGTON, DC-All in all, First Potomac Realty Trust ended the year with strong leasing momentum, according to Douglas J. Donatelli, Chairman and CEO of the REIT. The company “brought our total new leasing to 921,000 square feet, which exceeded our goal of 850,000 square feet for the year,” he says in a prepared statement when the company released its latest figures last week. “We realized solid NOI growth in the quarter as we focused on strengthening our core portfolio performance.”
Of course, the big news at the REIT was its decision to put its industrial portfolio on the market. The company believes that a portfolio sale of its industrial properties will be the most efficient means of de-levering its balance sheet with the potential proceeds largely to be used to repay outstanding debt.
The numbers for the three and twelve months ending December 31, 2012 also show the REIT is moving to clean up its outstanding debt as much as possible ahead of the sale.
- On January 2, 2013, First Potomac repaid a $3.2 million mortgage loan that encumbered Prosperity Business Center with proceeds from a draw under its unsecured revolving credit facility.
- On February 7, 2013, it entered into a senior secured multi-tranche term loan facility with KeyBank National Association. It then borrowed $30 million under the bridge loan to repay a $15.4 million mortgage loan that encumbered Cedar Hill and a $13.3 million mortgage loan that encumbered the Merrill Lynch Building. The bridge loan has a borrowing capacity of up to $40 million, which can be drawn in four separate tranches before March 31, 2013.
Next month, the REIT intends to use proceeds from a draw under the bridge loan to repay a $7.6 million mortgage loan that encumbers Crossways Commerce Center.
- On February 8, 2013, First Potomac and its bank lenders amended its unsecured revolving credit facility and existing term loans to provide increased flexibility on a short-term basis under certain financial covenants. The changes were made with an eye to “the impact that the potential industrial portfolio sale would have on the covenants relating to tangible net worth and dispositions as a percentage of gross asset value,” it said.