REIT Buys Ashburn Data Center Campus

First Potomac Realty Trust (FPO) has acquired a three-building campus in Ashburn, Virginia that houses several data center facilities, the company said today. First Potomac says it acquired Corporate Campus at Ashburn Center from MRP Realty for $14 million on Dec. 31.

The 194,183 square-foot property is located approximately five miles north of Dulles Airport, and features three buildings. Forty five percent of the space is currently leased to three tenants that specialize in technology and data storage. Those include Pryme Technology, which offers hosting space in a 72,000 square foot building in the complex.

First Potomac is a large real estate investment trust (REIT) that focuses on the Washington, D.C. area whose largest tenant is the U.S. government. It's not clear whether the deal reflects growing interest in data centers from the REIT sector. The Silicon Valley REIT Mission West recently said it is planning to build several data centers in Oregon.

There are two REITs that specialize in the data center sector, Digital Realty Trust (DLR) and DuPont Fabros Technology (DFT). Digital Realty has been among the best performers as the REIT sector has struggled in a brutal credit environment, while shares of DuPont Fabros posted stellar gains in 2009.

Both Digital Realty and DuPont Fabros operate large data center campuses in Ashburn. Last month Digital Realty recently bought an additional fully-leased data center and 10 acres of land in Ashburn.

"We especially like the property's location in this growing market for technology companies and its proximity to George Mason University's future Loudoun campus and a future Metro station," said Nicholas Smith, chief investment officer of First Potomac Realty Trust. "Ashburn Center is another example of our ability to take advantage of our market knowledge and relationships to directly source attractive off-market opportunities."

First Potomac says MRP Realty negotiated a discounted payoff of its construction loan as part of the transaction. MRP Realty will be paid additional consideration if certain returns are achieved over the next five years. The purchase price of $72 per square foot is a 45% discount to estimated replacement cost, FPO said.