WASHINGTON, DC-First Potomac Realty Trust posted an increased in FFO, an important metric for REITs, for the third quarter of 2013. However, for the first nine months of the year, the REIT experienced a decline in FFO, compared to the same period in 2011. The REIT cited its internal investigation as the reason. For Q3, it reported that FFO rose to $19.93 million from $13.75 million in the year ago quarter. Net income was $4.10 million, compared to net loss of $5.68 million in the same quarter last year.

Douglas J. Donatelli, chairman and CEO, listed the progress the REIT made over the quarter--accomplishments that included continued execution of its capital strategy, leasing its office portfolio and improving its liquidity position. "With the sale of 1200 17th Street, NW, we were able to monetize an investment after adding value in just a short time, bringing our year-to-date dispositions to $56 million, and in turn lowering our debt-to-EBITDA ratio," he said in a prepared statement.

First Potomac acquired 1200 17th St., NW in October 2011 via a joint venture with Akridge for $37.6 million. Not a year later, the REIT sold its 95% interest in the building for $43.7 million to an unknown buyer. The buyers' original plan was to raze the building and then build a trophy asset on the high-demand site, but then First Potomac received an offer for its stake and decided to take it.

First Potomac's FFO for the first nine months of 2012, however, declined compared to the same period in 2011, due to its internal investigation of certain financial issues and remedial measures it took in response.

Several months ago First Potomac notified shareholders that a material weakness had been identified. The Audit Committee of the Board of Trustees made several recommendations, which have been or are in the process of being adopted, such as the hiring of a new chief financial officer and the engagement of a new third-party accounting firm.