New Boston Fund and the Meridian Group sell Virginia Square Plaza for $51.8 million

Joint venture sells premier Class A office building, reaps significant return on investment in just two years


Arlington, Va., Oct. 15, 2003 - New Boston Fund, a Boston-based real estate investment, development and management firm, and its development partner, The Meridian Group of Bethesda, Md., today announced that they have sold Virginia Square Plaza, a premier office building located at 3811 North Fairfax Drive in Arlington, Va., to Principal Financial Group for $51.8 million. Steve Collins, Brian Dawson, and Jim Molloy of Spaulding & Slye Colliers brokered the transaction on behalf of New Boston Fund and The Meridian Group.

The partnership completed the development of the 10-story, 158,230-square-foot Class A speculative office building in July 2001.

The site is situated on North Fairfax Drive, the main thoroughfare within the Rosslyn-Ballston corridor, across from the Virginia Square Metro stop and next to DARPA (the Defense Advanced Research Projects Agency). Major tenants include the University of Southern California, Alphatech, Shafer Corp., SAIC, and Booz Allen Hamilton.

The development of Virginia Square Plaza was the first investment that New Boston Fund made in the Metropolitan Washington, D.C., region. Today, New Boston Fund owns nearly 2 million square feet of space in Northern Virginia and Maryland, and has established a regional office in Tysons Corner. New Boston Fund continues to expand its presence in the region through additional acquisitions and developments.

New Boston Fund President Jerry Rappaport Jr. said that Virginia Square Plaza proved to be a great investment for New Boston Fund. "This investment, our first in the Metro Washington, D.C., region, has proven to be one of our most successful investments to date," said Rappaport. "Our development team delivered the building on time and on budget, we were able to attract strong credit tenants to lease 95 percent of the space, and sold the building at a tremendous profit for our investors."

James P. Kelleher, senior vice president and director of acquisitions for New Boston Fund, said that Virginia Square Plaza`s quality, strong tenant roster, and location all made it a very attractive asset and attracted a large number of bids from investors. "There is a great appetite in the investment market today for high quality buildings such as Virginia Square Plaza, and this proved to be an ideal time to harvest the gains from this development," he said. "The Meridian Group and New Boston Fund developed a tremendous building, and the success of this sale is a testament to the quality of the asset and the success of our joint venture."

New Boston Fund is actively searching for acquisition and development opportunities in the Metropolitan Washington, D.C., region on behalf of its newest investment offering, New Boston Real Estate Investment Fund, LP VI. Fund VI is a $350 million investment fund targeting office, office/R&D, warehouse/distribution, residential, and retail assets in select markets in the Eastern United States.

New Boston Fund is currently developing a 116,000-square-foot office/research facility in Rockville, Md., in partnership with Spaulding & Slye Colliers and Johns Hopkins University.

About New Boston Fund
Based in Boston, New Boston Fund is one of the fastest growing private real estate investment, development and management firms in New England. Founded in 1993 by the Rappaport family of Boston, New Boston Fund owns and manages more than 13 million square feet of commercial real estate, worth in excess of $1.3 billion. The firm is also currently undertaking over $150 million of development in New England and the Mid-Atlantic regions.

About The Meridian Group
The Meridian Group is a private real estate investment and development company. Since its formation in1993, Meridian has completed acquisitions totaling 6.1 million square feet including 35 office and industrial buildings, a Hyatt Regency Hotel, and 105 acres of developmental land representing total value of approximately $900 million. The firm`s properties have been located in metropolitan Washington, D.C., and Baltimore, Md., Charlotte, N.C., and West Palm Beach, Fla.