SHIRLINGTON, VA—Dallas-based private equity manager Velocis just made its second acquisition in the area, and like its earlier purchase, it is an office in the Northern Virginia area.

Other than that the two properties -- Shirlington Tower in Arlington, VA, which it just acquired and two Class A office buildings in the Loudoun Gateway Business Park -- bear little similarity to each other even though they are being financed via the same fund. Shirlington Tower is a lease-up play, while the Loudoun properties are a cash-flow play with significant upside, Paul Smith, a Velocis principal, told GlobeSt.com.

Well, there is one other commonality between the two: they both were reasonably priced. A few years ago, when Velocis was looking for investments for a prior fund, the Northern Virginia market was included in the target cities. "We felt that the impact of sequestration and BRAC had not been fully absorbed by the market then," Smith says. "In addition, we didn't see much job growth either." Now, however, he said it is clear that the DC area has bottomed and prices have adjusted.

Of course, another reason why Velocis might not have found just the right Northern Virginia asset for Fund I was that the company is "incredibly picky," Smith says.

For Fund I the company underwrote 700 assets in order to winnow down the selection to the 16 it ultimately acquired.

This processes hasn't changed for Fund II, which is still in the middle of an equity raise. So far the company has purchased four buildings, two of which from Northern Virginia, after underwriting 300 possible acquisitions.

Fund II is seeking to raise $300 million and expects to lever that to $850 million in purchasing power. It is targeting opportunities in office, medical office and retail assets have a "value-add orientation," Smith said. It is focusing on 10 target markets.

For its latest acquisition in the area, Velocis teamed up with the Bethesda-based Moore & Associates to purchase Shirlington Tower, a 233,446-square-foot office that is only 48% leased. It is the company's third deal with Moore & Associates, which will be managing and leasing the building. "The institutional owner did an excellent job maintaining the property and we were intrigued with its quality and location," Smith said.

The Loudoun Gateway Business Park assets were a different story, Smith said. "We saw the buildings as having an attractive going-in cap rate with an interesting tenancy."

"Then as we dug into story there we thought we had a good chance to complete the lease up that the seller had started."

The two interconnected buildings are currently more than 90% leased by government contractors.