The buildings, located at 601 and 701 South 12th streets off I-395, are strategically situated near the Ronald Reagan National Airport, and, of course, the Pentagon. They were built in the early 1980s and have since undergone significant renovations. Commercial Net's impending multi-million refurbishment will upgrade the property to class A status. In addition to the property's location-based value, the complex offers significant, solid tenant income for several years to come. TSA, the new government entity responsible for aviation security, signed a long-term lease to occupy the entire two-structure property in late December. The federal organization's agreement is not up for renewal until 2014. The deal was one of the three largest lease agreements in Northern Virginia in all of 2002, and at a reported $37.25 per sf, is valued at an annual $18 million.

"It doesn't surprise me," Advantis GVA director of research David Masters tells GlobeSt.com, referring to the pricetag on the deal. "This is the pricing, north of $300 per-sf, for a fully-leased building in Pentagon City. With a government tenant, it's as great a credit worthiness as you're going to get in the marketplace." For Commercial Net, which traditionally had focused on single-tenant retail properties, the acquisition represents an expansion and refocus of the company's strategy. "Increasing the size of the potential acquisition pie is a fundamental opportunity for the company," Commercial Net CEO James M. Seneff Jr. tells us. "We believe strongly in diversification--our 350 properties span 39 states--and by adding the office and industrial sectors, we further increase our diversification. We're a public dividend REIT and our mission in life is to promote safe and growing dividends."