First Potomac Realty Trust (NYSE: FPO) today announced that it is postponing the release of its financial results for the first quarter ended March 31, 2012, originally scheduled for release today. The Company currently expects, subject to the timing of the internal investigation described below, to release its earnings for the first quarter after the markets close on May 10, 2012. As a result, the Company has rescheduled its conference call from tomorrow, April 27, 2012, to May 11, 2012 at 9:00 a.m. ET. In addition, the Company announced over 576,000 square feet of leases signed in the first quarter, and is providing the operating performance of its properties below. As previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 (the “Form 10-K”), management identified a material weakness in the Company’s internal control over financial reporting as of December 31, 2011. Specifically, management determined that the Company did not effectively maintain and operate controls over the monitoring and oversight of compliance with financial covenants under its debt agreements, including the communication of financial covenant compliance matters with the Board of Trustees and the Audit Committee, which resulted in the Company failing to identify potential exceptions to covenant compliance and to provide related financial statement disclosures regarding potential financial covenant risks or violations under its debt agreements. In response to the material weakness identified above, in late March, the Company’s Board of Trustees appointed a special committee of independent trustees to review the facts and circumstances relating to the material weakness determination and the Company’s processes surrounding the monitoring and oversight of compliance with financial covenants. The Board of Trustees has determined that a more detailed, internal investigation of these matters should be undertaken by independent outside professionals reporting to the Audit Committee of the Board of Trustees, which investigation is ongoing.
The Company is delaying the release of its results for the first quarter ended March 31, 2012 in order to conclude the internal investigation. The Company is unable to predict the ultimate outcome of the investigation or the timing of its completion.Operating Information During the first quarter, the Company executed 576,000 square feet of leases, which consisted of 340,000 square feet of new leases and 236,000 square feet of renewal leases. Significant new leases included 37,000 square feet at Gateway 270 West, 32,000 square feet at Frederick Industrial Park, 28,500 square feet at Campus at Metro Park North and 24,000 square feet at Redland Corporate Center, which are all located in the Company’s Maryland region and 35,000 square feet at River’s Bend Center in the Company’s Southern Virginia region. Rent from these new leases is expected to commence by the end of the third quarter of 2012. The 243,000 square feet of renewal leases in the quarter reflects a 51% retention rate. Renewal leases during the quarter included 54,000 square feet at Gateway 270 West, 35,000 square feet at Worman’s Mill Court and 32,500 square feet at Cavalier Industrial Park. The Company’s consolidated portfolio was 84.9% leased and 83.0% occupied at March 31, 2012 compared with 84.3% leased and 81.8% occupied at December 31, 2011. Dispositions On March 22, 2012, the Company sold Airpark Place Business Center, a three-building, 82,400 square foot business park in Gaithersburg, Maryland. In April 2012, the Company entered into a binding contract to sell Woodlands Business Center, a 38,000 square foot office building in Largo, Maryland that the Company acquired as part of a portfolio acquisition in 2004. The sale is expected to be completed in May 2012. Rescheduled Investor Conference Call and Webcast First Potomac Realty Trust currently intends, subject to the completion of the internal investigation discussed above, to host a conference call on Friday, May 11, 2012 at 9:00 a.m. ET, to discuss first quarter results. The conference call can be accessed by dialing (877) 407-3982 or (201) 493-6780 for international participants. A replay of the conference call will be available from 12:00 Noon ET on Friday May 11, 2012 until midnight ET on May 18, 2012. The replay can be accessed by dialing (877) 870-5176 or (858) 384-5517 for international callers, and entering pin number 391181.
A live broadcast of the conference call will also be available online and can be accessed from the Investor Information page of the Company's website, www.first-potomac.com, on Friday, May 11, 2012, beginning at 9:00 a.m. ET. An online replay will be available on the above site shortly after the call and will continue for 90 days.Forward Looking Statements The forward-looking statements contained in this press release are subject to various risks and uncertainties. Although the Company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, there can be no assurance that its expectations will be achieved. Certain factors that could cause actual results to differ materially from the Company’s expectations include changes in general or regional economic conditions; the Company’s ability to timely lease or re-lease space at current or anticipated rents; changes in interest rates; changes in operating costs; the Company’s ability to complete acquisitions on acceptable terms; the Company’s ability to manage its current debt levels and repay or refinance its indebtedness upon maturity or other required payment dates; the Company’s ability to maintain financial covenant compliance under its debt agreements; the Company’s ability to remediate the material weakness in its internal controls over financial reporting described in its Annual Report on Form 10-K for the year ended December 31, 2011 and to re-establish and maintain effective internal controls over financial reporting and disclosure controls and procedures; any potential impact of the ongoing internal investigation; the Company’s ability to obtain debt and/or financing on attractive terms, or at all; changes in the assumptions underlying the Company’s earnings and FFO guidance and other risks detailed in the Company’s Annual Report on Form 10-K and described from time to time in the Company’s filings with the SEC. Many of these factors are beyond the Company’s ability to control or predict. Forward-looking statements are not guarantees of performance. For forward-looking statements herein, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.