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Real Estate Bisnow
October 6, 2008
The Deal Sheet
(our more serious side)

Investment Sales

First Potomac is back in acquisition mode: the REIT acquired two properties recently for a total of $46.8 million. One is a fully-leased, 306,656 SF, six-building, flex/office complex called Rivers Park I & II. First Potomac bought the Columbia-based assets from affiliates of General Growth Properties for $42.3 million, securing a $28 million mortgage loan from U.S. Bank National Association as part of the transaction. The loan has an initial term of three years with two one-year extension options. First Potomac entered into a swap agreement that effectively fixes the rate on the loan at 5.97% for its initial three-year term. Rivers Park I & II are located on Guilford Rd. less than one mile from I-95 and Route 29, very close to the National Security Agency and Fort Meade.

First Potomac also acquired Triangle Business Center, a 68% leased, four-building, 73,456 SF flex/office property in Baltimore for $4.5 million in cash in late August, again from affiliates of General Growth Properties. Both properties are expected to generate a first-year un-leveraged cash return of approximately 8% with a projected stabilized yield of 9.1%.

Last month, First Potomac reaped proceeds of $38.2 million from the public offering of 2.5 million common shares that priced at $16 per share. The company will be considering other acquisitions now that more opportunities to buy are coming to market, says CIO Nicholas Smith.


As we reported last week in our regular editions last week, NPR has sold its headquarters at 635 Mass Ave. to Boston Properties for a reported $119.5 million, or $788 SF. Boston Properties will also be redeveloping NRP's intended headquarters at 1111 N. Capitol St. in NoMA, which it acquired earlier this year. Studley's Art Greenberg, Vernon Knarr, Julie Rayfield, David Perlstein, Parker Lange, Collin Wheeler, Adam Schindler and Angela Cordovez repped NPR in both transactions.


Republic Properties has closed on a $212 million recap package with assistance from Cassidy & Pinkard Colliers' David Webb, John Campanella and Jamie Butler. The refinancing is a senior debt and mezz loan combo for the Portals III, a 505,631 SF office at 1201 Maryland Ave., SW. A West Coast commercial bank provided the senior loan; a national pension fund advisor provided the mezzanine tranche in the two-tiered structure. Three and even four-tiered structures were considered but the deal came together with these two lenders. A two-year-old building, Portals III is 45% leased. It is located in the Portals development, a $1 billion mixed-use project near the waterfront.


PNC ARCS, a multifamily lender, provided a total of $82 million in financing to National Capital Properties III, LP, an affiliate of Quadrangle Development, for the acquisition of Fields Crossing and Shelburne Crossing, formerly Archstone Gaithersburg Apartments.  The two garden-style apartment communities total 648 units.  The loan was originated by PNC ARCS through Fannie Mae.


A Bozzuto-led venture has completed financing and begun construction on The Fitzgerald at UB Midtown, a mixed-use community in Baltimore. The financing consists of a $52 million construction loan provided by Bank of America and RBS Citizens, as well as $23 million in equity funded primarily by New York State Teachers' Retirement System. The Fitzgerald is a joint venture between the Bozzuto Group, Gould Property Company, NYSTRS and former Baltimore Raven Michael McCrary. The project sits on 4.6 acres of land owned by the University of Baltimore that is part of a redevelopment effort by the University and surrounding community.

Miller & Smith   Goulston & Storrs



Quadrangle Development is topping out one of the two spec offices in Tysons Corner under construction: the 13-story, 295,000 SF building at 1850 Towers Crescent Plaza. Quadrangle is developing the building for affiliates of Quadrangle and GM Asset Management, which is being advised by AEW Capital Management. JLL is leasing the office space; Asadorian Retail Solutions is leasing the ground floor retail space. According to Bob VeShancey of JLL, there are already 200,000 SF of lease proposals in the pipeline.

The building will connect to the future metro stop there, via a covered pedestrian bridge that links to the shopping center. When it delivers next Fall, 1850 Towers Crescent will be the last of four buildings in the Towers Crescent mixed-use development. Last November, Fairfax County approved a plan to build 900 apartments in three towers in the remaining developable space, instead of building out additional offices under the original plan. Development of these units will begin when 1850 Towers Crescent Plaza delivers.


Perseus Realty and the YMCA of Metropolitan Washington broke ground on a $97 million, 46,000 SF Y at 14th and W, NW; the project will also include 231 rental apartments and 12,200 SF of ground-level retail space. Perseus Realty is partnering with DC-based FLGA Real Estate Group and Capmark Investments in the 263,000 SF project, which will deliver by December of 2010. HOK and Davis Carter Scott are the project architects.


WRIT has inked two leases totaling 154,000 SF at Dulles Station West, Phase I. IBM will occupy 123,000 SF and National Student Clearinghouse will occupy 31,000 SF in the Herndon office, bringing the building to a 86% occupancy rate. The six-story, 180,000 SF, Class A office building delivered in Q3 of 2007. It is located on the Dulles Toll Road, adjacent to the future Route 28 metro station.


Westat is leasing close to 17,000 SF at 1445-1455 Research Blvd. in Rockville. TA Associates Realty owns the 225,000 SF, five-story office. Robert Dickman and Brian McCarthy of McShea & Co. repped TA Associates in the transaction.

Lease Assignments

Cassidy & Pinkard Colliers has been tapped by BPG Properties to lease Potomac Gateway in Crystal City. Todd Brinkman and Spencer Stouffer will spearhead the private sector marketing and leasing effort; the company's Government Service Group will market the two, 179,000 SF, ten-story office buildings to public sector tenants.


Colliers Pinkard has been selected by Opus East to lease the Government and Technology Enterprise (GATE) at Aberdeen Proving Ground. Opus East received the right to develop more than two million sf of office, lab, and R&D space there under the Army's Enhanced Use Lease program — the only EUL at Aberdeen and one of the largest in the country. The first building in phase one is close to delivery — a 60,000 SF, single-story R&D facility for which CACI has signed a seven-year lease. Two 80,000 SF, three-story multi-tenant office buildings are also under construction as part of phase one; these will meet Department of Defense Minimum Antiterrorism Standards.

Colliers Pinkard has teamed with Colliers Houston & Co. in New Jersey for the assignment. David Gillece, Stuart Rienhoff, Doug Brinkley and Lizzy Sweeney with Colliers Pinkard, and Doug Twyman and Gary O'Sullivan with Colliers Houston & Co. will represent Opus.


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