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BETHESDA, MD-First Potomac Realty Trust has wrapped up the acquisition of a 14-property mixed-use portfolio located predominantly in Suburban Maryland. The REIT closed the $123-million deal just days ago, walking away with possession of 1.4 million sf of flex, industrial, office and retail space to add to its existing collection of mostly industrial and flex buildings. About $45 million in cash from a recent follow-on offering contributed to the funding of the purchase from Butera Properties, with the remainder of the financing coming from First Potomac’s assumption of a $78-million first mortgage loan on the portfolio.

The newest members of First Potomac’s rapidly growing portfolio are located in Maryland’s I-270 Corridor–which spans Rockville, North Rockville, Gaithersburg, Germantown, Clarksburg and Frederick–with the exception of the one retail property in West Virginia. Accounting for half the newly acquired portfolio are seven flex facilities totaling 700,000 sf, while three industrial properties bring the total take up by an additional 370,000 sf. A three-structure site accounts for 130,000 sf of office space, and the one 200,000-sf retail destination brings the portfolio’s tally up to the 1.4-million-sf mark.

“The closing of this transaction establishes First Potomac as a leading owner and acquirer of flex and industrial properties in our markets,” First Potomac CEO Douglas J. Donatelli says. “This transaction will significantly increase our funds from operations and is tremendously accretive to our earnings. We believe we will see continued improvement in the operating results of these properties through our aggressive leasing and management approach.”

While the US government is the leading tenant among First Potomac’s properties, it does not have a large presence in the newly acquired, 94% occupied Suburban Maryland portfolio. But that is not seen as a drawback to the REIT. “We view that as an opportunity for us–getting more government tenants in this portfolio,” First Potomac’s Barry Bass tells GlobeSt.com.

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