First Potomac Acquires Ashburn Office for $14M

ASHBURN, VA-Fresh on the heels of a debt restructuring, First PotomacRealty Trust has acquired a newly-built, three building, class Abusiness park here for $14 million. Called Ashburn Center, FirstPotomac acquired it from MRP Realty, which negotiated a discountedpayoff of its construction loan as part of the transaction.

The purchase price of $72 per square foot is a 45% discount toestimated replacement cost. MRP Realty will be paid additionalconsideration if certain returns are achieved over the next fiveyears. The 194,183-square-foot property is located five miles north ofDulles Airport – close to First Potomac’s Sterling Park BusinessCenter. Ashburn Center has been partially built out as a data center,and is currently 45% leased to three technology and data storagetenants.

First Potomac, whose chairman and CEO is Doug Dontatelli, financed the acquisition through a draw on its recently expanded line of credit and available cash. It expects to spend anadditional $6 million to bring the property to stabilization, at whichpoint it is expected to generate a 13% yield on invested capital.

This week First Potomac also announced that it restructured anunsecured revolving credit facility and a bank term loan to extend itsmaturity by three years, as well as its capacity, by $10 million. Itclosed on a new $175 million unsecured revolving credit facility toreplace its $125 million facility, which was scheduled to mature inApril 2010. The new facility matures in January 2013 with anadditional one-year extension option.