First Potomac Snags 204,000 SF Early Renewal at NoMa Office

(Mark your Calendars: RealShare NEW YORK at the Marriott Marquis on October 12.)

WASHINGTON, DC-CareFirst BlueCross BlueShield is renewing its headquarters lease in a building owned by First Potomac Realty Trust. The 204,000-square foot, 10-year lease at 840 First Street, NE has been the insurance company’s home since it was delivered in 2003 as a build-to-suit.

First Potomac acquired the 12-story building earlier this year from the Stephen A. Goldberg Co., for $90 million. The contract left room for an additional $10 million of consideration payable depending on the terms of any lease renewal by the existing tenant or if First Potomac had to re-tenant the property. The REIT did not return a call to GlobeSt.com in time for publication, but in an earlier interview, CIO Nicholas R. Smith said the building was acquired at below replacement cost, and that the company expects the property to generate an initial unleveraged return of 8.6% on a cash basis.

“We are very pleased that CareFirst has made the decision to renew its lease early,” says Douglas J. Donatelli, chairman and CEO of First Potomac Realty Trust, in a prepared statement.  The lease was due to expire in 2013. The building was developed as a part a five-acre site known as Union Center Plaza, which contains five office buildings totaling approximately 1.45 million square feet. It is currently 96% leased.