Bethesda, Maryland-based First Potomac Realty Trust (FPO - Snapshot Report), a leading real estate investment trust (REIT), recently inked a lease expansion deal with Windspeed Logistics, LLC. As per the deal, First Potomac leased an extra space of 33,150 square feet at the company’s industrial property - Diamond Hill Distribution Center – located in Chesapeake, Virginia.
Diamond Hill Distribution Center comprises of four industrial buildings and spans a total area of 712,500 square feet. The property is located off the Bainbridge Submarket and around three miles away from the company’s other properties in Chesapeake. With the lease expansion agreement, the distribution center is now 95% leased.
Windspeed logistics deals in providing premium services in warehousing, cross-docking, container drayage, distribution, consolidation, import and export and truck brokerage. The company first became a tenant of First Potomac when it leased an initial 27,000 square feet in November 2004 at the distribution center. With the agreement, Windspeed will now occupy over 133,600 square feet of space at the Diamond Hill Distribution Center.
First Potomac is likely to benefit from the agreement as it will increase the company’s rental revenues in the coming quarters. The company expects that the transaction will likely deliver a strong base for the long-term success of the agreement going forward. As a matter of fact, the company has achieved one of the highest tenant retention rates in the industry by providing better quality services to its clients.
First Potomac focuses on ownership, management, development and redevelopment of office and industrial properties in the greater Washington D.C. and Norfolk regions. As of June 30, 2012, the company's consolidated portfolio totaled approximately 14 million square feet comprising of 42% office, 22% industrial properties and 36% business parks. The properties are leased to over 600 tenants, which includes several high class tenants such as Ameriprise Financial Inc. (AMP - Analyst Report), Stratford University and A. J. Dwoskin & Associates.
The company, which competes with the likes of First Industrial Realty Trust Inc. (FR - Snapshot Report), is expected to release its third-quarter 2012 results on October 25. The Zacks Consensus Estimate for third quarter FFO (fund from operations) is currently pegged at 28 cents per share.
We currently have a long-term Neutral recommendation on First Potomac. It also carries a short-term Zacks #3 Rank (Hold).
Note: FFO, a widely accepted and reported measure of the performance of REITs is derived by adding depreciation, amortization and other non-cash expenses to net income.