Investors are beginning to devalue First Potomac Realty Trust, one of DC's largest REITs, after a major analyst downgraded its stock from hold to sell.

First Potomac's stock had dropped 6.1% as of 12:20 p.m. since the market opened Tuesday to $10.58 per share after Stifel's John Guinee recommended selling the stock and set its target price at $9.50.

Guinee said the property owner's net asset value was eroding and an equity infusion of $200M would be needed to maintain operations, growth and investor interest.

Reports about First Potomac exploring a potential sale brought the REIT's stock up above $11.20 last week, but that momentum reversed Tuesday with a significant drop. In his analysis, Guinee described the merger and acquisitions conversations as "rope-a-dope."

On First Potomac's quarterly earnings call Friday, CEO Bob Milkovich said he could not comment on the market rumors and said the REIT is continuing to work on deleveraging its portfolio through asset sales.

Analysts who study the REIT do not expect it to sell its portfolio, and instead expect First Potomac to partner with private capital and raise equity to help deleverage and improve its growth trajectory. The analyst also said First Potomac has outperformed since the November election and is not surprised to see its stock fall.

First Potomac's numbers are still good year-over-year. Its stock price in May 2016 hovered between $8 and $9. Its same-property net operating income for Q1 2017 increased 1.2% compared to the same period in 2016, thanks in part to its pursuit of a strategy of disposing assets. It has sold $314M of its stated $350M goal. In Q1 it sold two Maryland office properties in Glen Burnie and Columbia.