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FAIRFAX, VA- St. James, NY-based based Gyrodyne Co. is making its first acquisition in the DC area. It has inked an agreement to purchase Fairfax Medical Center, a 59,108-square-foot medical office property located at 10721 Main Street from an LLC of local investors. The facility will trade for approximately $13.2 million no later than April 30 once due diligence is complete.

The company is acquiring the facility for tax reasons: the medical facility qualifies for tax deferral treatment under Section 1033 of the Internal Revenue Code, according to CEO Stephen V. Maroney. Purchasing it “will get us over the finish line for investing in a tax-efficient manner within required time limits the $26 million advance payment for property condemned by the State of New York,” he says in a prepared statement.

The company is also acquiring the facility because it likes the DC area’s fundamentals as well, COO Peter Pitsiokos, tells GlobeSt.com. He declines to say whether the firm will acquire additional properties here, as it wants to see how this investment performs. The center itself is also a solid asset, he adds, located in an attractive infill area next to a surgical center owned by Hospital Corporation of America and near Inova Health System’s Fairfax and Fair Oaks hospitals.

Fairfax Medical Center’s current occupancy rate is 84%, or 28 medical tenants. The previous owners had stopped lease renewals to accommodate a condo conversion, and was not renewing leases in many cases, Pitsiokos says. “We are already in discussions with existing tenants that want to expand the space.

The property includes two four-story buildings on approximately 3.5 acres. Gyrodyne will continue to operate Fairfax Medical Center as a rental asset.

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