Compounding this uncertainty is the increasing likelihood that the fiscal 2013 defense budget will not be passed before the November elections. Ultimately we expect to see our markets benefit by continued growth in support of cyber and priority programs as well as the remaining contractor tail following the recent government BRAC moves.
In the meantime we will keep working hard for every deal in each of our markets. The good news is that everything we hear regarding potential budget cuts to defense in fiscal 2013 indicates the primary affected areas will be large weapon systems and force structure. Program cuts to intelligence activities are expected to be minimal by comparison and we believe cyber initiatives will grow.
We expect the agencies that have moved to locations near our parks as a result of BRAC to create a trail of contractors that will follow them through to 2014. While the defense pie is likely to modestly shrink in 2013 our tenants portion is likely to grow.
Additional a potential slowdown in DOD building acquisitions and construction or mil con ultimately may lead to additional leasing demand by the government. Our piece of dispositions through the Strategic Reallocation Plan or SRP we launched in April 2011 is in line with our expectation. First quarter sales totaled $63 million gross and $61 million after closing cost. These sales were comprised of 7 stabilized operating properties at a weighted average cap rate of 7.4% for net proceeds of $23 million. These buildings contained 63 leases and were 80% leased.We also sold two non-revenue producing building at Century Gateway and San Antonio in Candlewood and Hanover, Maryland and some land in San Antonio for net proceeds of $38 million. Since announcing the $562 million SRP we have executed $139 million or property sales which is approximately 25% of the overall plan. The sales included $100 million of operating properties at an average exit cap rate of 7.8% with the balance comprised of non-operating property.Read the rest of this transcript for free on seekingalpha.com
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