First Potomac Sells 1200 17th St. for $44M

WASHINGTON, DC-First Potomac Realty Trust is known for its buy-and-hold approach to acquisitions. It made an exception, clearly, for 1200 17th St., NW, which it acquired in October 2011 via a joint venture with Akridge. Not a year later, the REIT has sold its 95% interest in the building for $43.7 million to an unknown buyer. It was acquired for $37.6 million from the National Restaurant Association.

The original plan for the building was to raze it and then build a trophy asset on the high-demand site. It is a good plan and Akridge, which is now the developer, will move forward with it, First Potomac CEO Doug Donatelli tells GlobeSt.com. “We saw the opportunity to take a profit and we decided that was what was best for our shareholders," he says."

The REIT has an active development pipeline and will use the proceeds from the sale for those activities. Its Redlands project in Gaithersburg, MD, for instance, is near stabilization, Donatelli says. The REIT will also focus on stable income-producing assets for its next series of acquisitions. “We don’t have anything on the books but that is what we'll be concentrating on. We'll be putting out feelers in the fourth quarter.”

Donatelli says that acquisition opportunities will be better, for an acquirer, toward the end of the year and the beginning of 2013 in the DC area. “The pricing will make more sense and there will be more opportunities.” The leasing market is slow in DC right now, he observers, “and whenever you have a situation like that it tends to get sellers off the sidelines.”