REIT's portfolio grows by three

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First Potomac Realty Trust reached 10.4 million square feet of commercial space under management in November when it added three new properties to its holdings.

The trust says it controls 2 percent of the Washington area's industrial and flex property and sees plenty of room for growth. Flex refers to buildings that can be used for a combination of industrial, office or retail space.

"We continue to see attractive acquisition opportunities and have begun developing a few buildings on land that we had previously acquired," said Barry H. Bass, First Potomac's chief financial officer.

The company focuses on a Mid-Atlantic market that stretches from Baltimore in the north to Norfolk in the south.

The three buildings acquired in the past month are valued at a total of $41.9 million.

They are located in Owings Mills, Md.; Norfolk and Richmond.

Despite a brisk pace of acquisitions, some economic trends are creating suspicions that the collapse of the housing boom in the past year could creep into the commercial real estate market soon.

Investors continue to pour huge amounts of money into commercial real estate because of the high returns they have received in the past five years, much of it financed with debt.

Meanwhile, the nation's economy is slowing, from 5.6 percent growth in the first three months of this year, to 2.6 percent in the second and 2.2 percent in the third, according to the U.S. Commerce Department.

If the economic slowdown continues to the point of recession, job losses come with it, followed by a higher vacancy rate for commercial real estate, according to industry analysts.