Doug Donatelli, president and CEO of First Potomac Realty Trust (NYSE: FPO), joined REIT.com for a CEO Spotlight video interview at REITWorld 2012: NAREIT's Annual Convention for All Things REIT at the Manchester Grand Hyatt in San Diego.
First Potomac is a publicly traded real estate investment trust that owns of office and industrial properties in the Washington, D.C., region. Donatelli helped start First Potomac in 1997.
Donatelli was asked about the effect of talk in Washington about government spending cutbacks on his company's business.
"It doesn't really affect our longer-term planning. We are looking at what the short-term implications are of any cutbacks in the federal government. There is a fair amount of uncertainty that is having an effect on our tenants' ability to make decisions right now," Donatelli said. "In the long run, though, D.C. is a phenomenal market. It's a gateway city. It's a great place to be investing. And real estate is a long-term business. Our focus is on creating long-term value."
Donatelli discussed some of the steps that First Potomac has taken in the last year to strengthen its balance sheet and decrease its leverage levels. He also outlined the company's plans to take advantage of what he said he expects to be a "rebounding" market in Washington.
We still have a fair amount of work left to do and we'll do that through a combination of the lease-up efforts on our current portfolio, as well as dispositions of some of our more stable properties," he said. "But our long-term focus is continuing to shift our product offerings much more into office and focusing on disposing of some of our properties that we've had in our portfolio for a longer period of time."
Donatelli laid out the keys to a healthy 2013 for First Potomac.
"A lot of it is going to be determined by what happens on Capitol Hill. As far as '13 is concern, really anything to get rid of some of the uncertainty in our market," he said. We just need to get some clarity. I think it's important for the country, not only D.C., that we get these budget issues behind us."