First Potomac also plans to use nearby properties it alreadyowns to gain operating leverage, company CIO Nicholas R. Smith saysin a statement. "These acquisitions extend our presence in severalkey markets that we targeted for expansion," he says.Park CentralI, II and V are located in northern Richmond, in Mechanicsville.Eight tenants are leasing space in the 204,280-sf property, leavingthe buildings with a 22% vacancy rate. First Potomac paid $21.7million for the complex, including the assumption of $10.9 millionin first mortgage debt on two of the buildings. The existing leasesat Park Central are expected to generate an unleveraged return ofapproximately 7% for First Potomac on a cash basis and 7.3% on anaccrual basis.

Owings Mills Commerce Center, a 132,765-sf, two-buildingflex/office property in northwestern Baltimore has an occupancyrate of 83%. First Potomac paid for this asset in cash, for apurchase price of $16.6 million. Owings Mills Commerce Center isexpected to generate an unleveraged return of 6.7% on a cash basisand 6.9% on an accrual basis, according to First Potomac.

First Potomac's third acquisition was a fully occupiedflex/office property in the Norfolk, VA, market in a business parknext to the Norfolk International Airport. Gateway II is a42,429-sf flex/office building occupied by four tenants. The$3.6-million purchase price was paid for in cash. This asset willgenerate an unleveraged return of 8% on both a cash and accrualbasis.