GAITHERSBURG, MD-Finmarc Management has acquired a nine-building portfolio here from First Potomac Realty. The 342,000-square foot portfolio traded for $33 million in a 1031 exchange with Finmarc using the proceeds from last week's sale of the 58-acre Port Covington retail development to fund this transaction.

The 82%-leased portfolio is a mix of flex/office, commercial office, retail and warehouse space. It consists of Girard Place, approximately 175,000 square feet of flex/office and warehouse space, situated at 602, 620, 630 and 640 East Diamond Ave. There is an additional 123,000 square feet of flex/office and warehouse space at Girard Business Center, located at 200 and 220 Girard St. and 504 E. Diamond Ave. Gateway Center is a 45,000 square foot two-building office and retail project situated at 811 and 831 Russell Ave.

"We were attracted to this portfolio because it satisfied each criteria we utilize to evaluate acquisition opportunities," says Marc F. Solomon, principal with Finmarc, in a prepared statement. "In addition, we have an extremely high regard for the First Potomac Realty Trust asset management and operational team, and are confident we have acquired a properly-maintained portfolio that complements our suburban Maryland property footprint."

Cushman Wakefield notes that the Montgomery County flex/office market is slightly over 11% vacant and has experienced positive absorption over the past nine months. Rates in this category have risen 7% over the past two years.

Eric Berkman, Steve Gichner and Gideon Gil of Cushman Wakefield represented the former owner in this transaction.

Finmarc has shown a propensity to use 1031 tax-free exchanges--and an affinity for office/flex in Montgomery County. Last year Finmarc Management acquired the former Smith Litho building in Rockville, MD, an 80,000 square foot flex building, for $5.87 million. That transaction was funded in part with proceeds from a retail sale in Silver Spring.

Instant Insights /

Finmarc Buys $33M Gaithersburg Portfolio in 1031

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