First Potomac Realty Trust, a Bethesda-based real estate firm, announced Thursday that it had formed a partnership that would purchase the Greyhound bus terminal in Northeast Washington for $46.75 million.
Greyhound plans to move its Washington bus operations into a reconfigured bus deck within Union Station, under an agreement reached earlier in the week with the Union Station Redevelopment Corp. The agreement freed the bus company to sell its existing property, a 1.6-acre site at 1005 First St. NE that it will lease back until its move into Union Station is complete.
First Potomac Realty Trust partnered with District-based Perseus Realty, with First Potomac providing 97 percent of the equity. The site can accommodate 712,000 square feet of development without any zoning changes, making it one of the last major development sites in the Neighborhood North of Massachusetts Avenue. That area — called NoMa — has attracted a slew of federal government agencies interested in locating near the Capitol and Union Station in recent years, including the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Department of Justice. The Greyhound station, built in 1983, now is located amidst newly constructed office and apartment towers.
First Potomac is in the midst of a furious buying spree of Washington real estate, having purchased or agreed to purchase 22 properties for $746.6 million since 2009. In an interview, Nicholas Smith, First Potomac’s chief investment officer, said the company will spend the next two years formulating plans, but that the site would primarily be pegged for new office buildings.
Smith said that part of what made the Washington market so attractive was its public transportation options, including Virginia Railway Express and Maryland Area Regional Commuter train lines.
“The attraction of being downtown and utilizing Metro and VRE and MARC and all the other transportation options, it’s just such a great place to invest,” Smith said.
Smith said the company, a publicly traded real estate investment trust, was aiming to strike a balance between properties with existing, rent-paying tenants and development sites that could produce new buildings.
“In this case, not only do we get the land and the ability to develop it, [but] because we know Greyhound is moving, they’re going to be paying rent to us for the next couple years,” he said.
First Potomac has a construction unit but has been partnering with local developers on long-term projects. For 1200 17th St. NW, an office building that First Potomac is acquiring, it will rely on D.C.-based Akridge as a development partner.