RIVERDALE, MD—Government Properties Income Trust has sold a 324,415-square foot office building here to the building's main tenant, the federal government. The property traded for $30.1 million under a pre-agreed purchase option that was part of the property's lease and represents a purchase price well below its recent appraised value. 

Calls to Government Properties Income Trust and GSA were not returned by press time.

The 6-story build-to-suit building, located at 4700 River Rd., last traded in 2010 for $41.7 million, records show. It was originally developed in 1994 for the US Department of Agriculture, which continues to occupy the property.

GSA exercised its option to buy the building because it would be cheaper than continuing to pay rent, which was set to rise, according to the agency's prospectus on the purchase. At the time of the purchase the government was making annual net lease payments of approximately $8.2 million. It expected that the annual lease payments would rise by $2.5 million.

It also noted in the prospectus that the option to purchase the building for $31 million or so was well below the current market rate for buildings of comparable size. In 2010, GSA completed a fair market value appraisal, which indicated the building's value to be approximately $45 million.