WASHINGTON — Bethesda, Maryland-based First Potomac Trust, whose real estate tenants include dozens of federal government agencies in the D.C. area, will be acquired in a deal worth $1.4 billion.
Newton, Massachusetts-based Government Properties Income Trust, which leases space to government agencies across the country, says the cash and debt acquisition is expected to close before the end of 2017.
Government Properties says the acquisition of First Potomac expands its strategy to own and operate office properties leased to both government and private sector tenants in the D.C. market. It notes that Washington is the nation’s largest beneficiary of U.S. government spending.
First Potomac owns 74 buildings with 6.5 million square feet of space, including properties in the District, Virginia and Maryland suburbs, 92 percent of its buildings are leased.
The office vacancy rate in the first quarter in DC was 10.3 percent, according to Colliers International. The vacancy rates in Northern Virginia and suburban Maryland were 17.4 percent and 15.4 percent respectively.
The deal still requires approval of First Potomac shareholders.
A map of First Potomac properties in D.C. can be seen here: