In a previously announced strategic realignment to provide capital to improve its balance sheet's flexibility while supporting future growth initiatives, real estate investment trust First Potomac Realty Trust (NYSE:FPO) announced that it has entered into two separate contracts to sell a portfolio of 24 industrial properties for a total consideration of $259 million.
The properties represent approximately 4.3 million square feet, but the majority of the industrial space, or approximately 4 million square feet, is being sold to an affiliate of Blackstone Real Estate Partners VII for $241.5 million. That transaction is expected to close by the end of the second quarter of 2013 and is subject to customary closing conditions.
First Potomac Realty Trust Chief Investment Officer Nicholas Smith said, "Thus far, the process has met all our expectations in regards to pricing, as well as secured a well-capitalized, quality buyer with the ability to close in a short period of time with limited contingencies."
The REIT announced the plan to sell the majority of its industrial portfolio in late January and will allow its portfolio to have a greater concentration of high-quality office properties in the Washington, D.C., metropolitan area. It intends to use the proceeds from the sale to repay outstanding debt, improve balance sheet flexibility, and even make more office acquisitions in the D.C. region.
Chairman and CEO Douglas J. Donatelli concluded: "The sale of the industrial portfolio is the most critical step in our strategy of repositioning our portfolio to focus on high-quality office properties in the region."
As of March 31, First Potomac Realty Trust's portfolio totaled approximately 14 million square feet consisting of 43% office properties, 34% business parks, and 23% industrial properties.