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First Potomac Realty Trust – ‘DEFM14A’ on 8/24/17

On:  Thursday, 8/24/17, at 6:07am ET   ·   Effective:  8/24/17   ·   Accession #:  1193125-17-265999   ·   File #:  1-31824

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 8/24/17  First Potomac Realty Trust        DEFM14A     8/24/17    1:1.9M                                   Donnelley … Solutions/FA

Document/Exhibit                   Description                      Pages   Size 

 1: DEFM14A     Definitive Proxy Solicitation Material - Merger or  HTML   1.10M 
                          Acquisition                                            

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(RULE 14a-101)

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.      )

Filed by the Registrant  ☒                            Filed by a Party other than the Registrant  ☐

Check the appropriate box:

FIRST POTOMAC REALTY TRUST

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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7600 Wisconsin Avenue, 11th Floor

Bethesda, Maryland 20814

August 24, 2017

Dear Fellow Shareholders:

You are cordially invited to attend the special meeting of shareholders (the “Special Meeting”) of First Potomac Realty Trust (the “Company”) on Tuesday, September 26, 2017 at 11:00 a.m., Eastern Time, at the Company’s offices at 7600 Wisconsin Avenue, 11th Floor, Bethesda, Maryland 20814.

At the Special Meeting, you will be asked to consider and vote on the merger of the Company with GOV NEW OPPTY REIT (“REIT Merger Sub”), a Maryland real estate investment trust and wholly-owned subsidiary of Government Properties Income Trust, a Maryland real estate investment trust (“GOV”), pursuant to the definitive Agreement and Plan of Merger, dated as of June 27, 2017 (the “Merger Agreement”), among the Company, First Potomac Realty Investment Limited Partnership, a Delaware limited partnership, and GOV, REIT Merger Sub and GOV NEW OPPTY LP, a Delaware limited partnership and majority-owned subsidiary of REIT Merger Sub and wholly-owned subsidiary of GOV. If the merger of the Company with REIT Merger Sub (the “REIT Merger”) is completed, you, as a holder of common shares of beneficial interest of the Company, par value $0.001 per share (the “Common Shares”), will be entitled to receive $11.15 in cash, without interest, less any applicable tax withholding, in exchange for each Common Share you own, as more fully described in the enclosed Proxy Statement.

After careful consideration, our board of trustees (“Board of Trustees”) has unanimously approved the REIT Merger, the Merger Agreement and the other transactions contemplated by the Merger Agreement, and has declared the REIT Merger, the Merger Agreement and the other transactions contemplated by the Merger Agreement advisable and in the best interests of the Company and its shareholders. Our Board of Trustees recommends that you vote “FOR” the proposal to approve the REIT Merger and the other transactions contemplated by the Merger Agreement.

The REIT Merger must be approved by the affirmative vote of the holders of a majority of the Common Shares outstanding as of the close of business on the record date for the Special Meeting. The Proxy Statement accompanying this letter provides you with more specific information about the Special Meeting, the REIT Merger, the Merger Agreement and the other transactions contemplated by the Merger Agreement. We encourage you to read carefully the enclosed Proxy Statement, including the exhibits thereto. You may also obtain more information about the Company from us or from documents we have filed with the Securities and Exchange Commission.

Your vote is very important regardless of the number of Common Shares that you own. If you fail to vote by proxy or in person, or fail to instruct your broker on how to vote, it will have the same effect as a vote against approval of the REIT Merger and the other transactions contemplated by the Merger Agreement. Therefore, whether or not you plan to attend the Special Meeting, we request that you authorize your proxy by either completing and returning the enclosed proxy card in the postage-paid envelope as promptly as possible or submitting your proxy or voting instructions by telephone or Internet. The enclosed proxy card contains instructions regarding voting. If you are a shareholder of record or the holder of a valid proxy and attend the Special Meeting, you may continue to have your Common Shares voted as instructed in the proxy, or you may withdraw your proxy at the Special Meeting and vote your Common Shares in person.

If you have any questions or need assistance voting your Common Shares, please contact MacKenzie Partners, Inc., our proxy solicitor, by calling toll-free at (800) 322-2885 or by e-mail at proxy@mackenziepartners.com.

On behalf of our Board of Trustees and our employees, we thank you for your continued interest in and support of our company.

Sincerely,

Robert Milkovich

President and Chief Executive Officer

This Proxy Statement is dated August 24, 2017 and is first being mailed to our shareholders on or about August 24, 2017.

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7600 Wisconsin Avenue, 11th Floor

Bethesda, Maryland 20814

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

TO BE HELD ON SEPTEMBER 26, 2017

To the Shareholders of First Potomac Realty Trust:

You are cordially invited to attend a special meeting of shareholders (the “Special Meeting”) of First Potomac Realty Trust (the “Company”), to be held on Tuesday, September 26, 2017 at 11:00 a.m., Eastern Time, at the offices of the Company at 7600 Wisconsin Avenue, 11th Floor, Bethesda, Maryland 20814. The Special Meeting is being held in order for the Company’s shareholders to consider and vote on the following matters:

The foregoing items of business are more fully described in the attached Proxy Statement, which forms a part of this notice and is incorporated herein by reference.

Our board of trustees (“Board of Trustees”) has unanimously approved the REIT Merger, the Merger Agreement and the other transactions contemplated by the Merger Agreement, and has declared the REIT Merger, the Merger Agreement and the other transactions contemplated by the Merger Agreement advisable and in the best interests of the Company and its shareholders. Our Board of Trustees recommends that you vote “FOR” the proposal to approve the REIT Merger and the other transactions contemplated by the Merger Agreement, “FOR” the non-binding, advisory merger-related compensation proposal and “FOR” the adjournment proposal.

All holders of record of common shares of beneficial interest of the Company, par value $0.001 per share (the “Common Shares”), as of the record date for the Special Meeting, which was the close of business on August 21, 2017, are entitled to receive notice of and attend the Special Meeting or any postponements or adjournments of the Special Meeting and are entitled to vote at the Special Meeting or any postponements or adjournments of the Special Meeting. If you hold your Common Shares in the name of a brokerage firm, bank or other nominee, only that entity can vote such Common Shares. Please give instructions as to how you wish your Common Shares to be voted to the person responsible for your account.

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The REIT Merger and the other transactions contemplated by the Merger Agreement must be approved by the affirmative vote of the holders of a majority of the Common Shares outstanding as of the record date for the Special Meeting. If you fail to vote in person or by proxy, it will have the same effect as a vote against the proposal to approve the REIT Merger and the other transactions contemplated by the Merger Agreement. The merger-related compensation proposal (on a non-binding, advisory basis) and the adjournment proposal both must be approved by the affirmative vote of the holders of a majority of the votes cast on each such proposal. If you fail to vote in person or by proxy, such failure will have no effect on either of these proposals, although abstentions will be considered present for the purpose of determining the presence of a quorum.

The result of the vote on the merger-related compensation proposal is non-binding and advisory and, as a result, will not be binding on us, our Board of Trustees or the compensation committee of our Board of Trustees. Therefore, if the REIT Merger and the other transactions contemplated by the Merger Agreement are approved by our shareholders and the REIT Merger is completed, this compensation, including amounts that we may be contractually obligated to pay, would still be payable to our named executive officers regardless of whether our shareholders approve the merger-related compensation proposal.

Your vote is important. Whether or not you expect to attend the Special Meeting in person, we urge you to vote your Common Shares as promptly as possible by: (1) marking, signing and returning the enclosed proxy card in the postage paid envelope provided, so that your Common Shares may be represented and voted at the Special Meeting; (2) calling the toll-free number specified on your proxy card; or (3) accessing the Internet website specified on your proxy card. If your Common Shares are held in the name of a bank, broker or other fiduciary, please follow the instructions on the voting instruction card furnished by the record holder. Any proxy may be revoked at any time prior to its exercise by delivery of a properly executed, later-dated proxy card, by submitting your proxy or voting instructions by telephone or Internet at a later date than your previously authorized proxy, by submitting a written revocation of your proxy to our corporate secretary at 7600 Wisconsin Avenue, 11th Floor, Bethesda, Maryland 20814 or by voting in person at the Special Meeting.

Under Maryland law, because the Common Shares were listed on the New York Stock Exchange at the close of business on the record date for the Special Meeting, you do not have any appraisal rights, dissenters’ rights or similar rights of an objecting shareholder in connection with the REIT Merger or any of the other transactions contemplated by the Merger Agreement.

We encourage you to read the accompanying Proxy Statement in its entirety and to submit a proxy or voting instructions so that your Common Shares will be represented and voted even if you do not attend the Special Meeting. If you have any questions or need assistance in submitting a proxy or voting instructions, please contact our proxy solicitor, MacKenzie Partners, Inc., toll-free at (800) 322-2885 or by e-mail at proxy@mackenziepartners.com.

By order of the Board of Trustees,

Samantha Sacks Gallagher

Executive Vice President,

General Counsel and Secretary

Bethesda, Maryland

August 24, 2017

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QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGERS

For additional information about the mergers, please review the Merger Agreement attached to this Proxy Statement as Exhibit A and incorporated by reference into this Proxy Statement. We encourage you to read the Merger Agreement carefully and in its entirety, as it is the principal document governing the mergers.

Our Board of Trustees is delivering this Proxy Statement to solicit proxies from shareholders in connection with the Special Meeting to approve the REIT Merger and the other transactions contemplated by the Merger Agreement. In order to complete the REIT Merger, it must be approved by an affirmative vote of the holders of a majority of Common Shares outstanding and entitled to vote at the Special Meeting.

Your vote is very important. Not voting is the same as a vote against the REIT Merger and the Merger Agreement. We encourage you to vote as soon as possible.

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The tax consequences to you of the mergers will depend on your own situation. You should consult your own tax advisor for a full understanding of the tax consequences to you of the mergers. For more information regarding the tax consequences of the mergers to holders of the Common Shares, please see “Material U.S. Federal Income Tax Consequences” beginning on page 58.

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Approval, on a non-binding, advisory basis, of the merger-related compensation proposal and approval of the adjournment proposal each requires the affirmative vote of the holders of a majority of the votes cast by holders of Common Shares present or represented by proxy at the Special Meeting entitled to vote on the proposal. Because the required vote for these proposals is based on the number of votes actually cast by holders of outstanding Common Shares that are entitled to vote, rather than on the number of votes entitled to be cast, and because abstentions are not treated as votes cast, failure to vote Common Shares and abstentions will have no effect on the outcome of the merger-related compensation proposal and the adjournment proposal.

In order for your Common Shares to be voted, you must either return the enclosed proxy card, authorize your proxy or voting instructions by telephone or Internet or vote in person at the Special Meeting.

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If you hold Common Shares in the name of a broker, bank or other nominee, please follow the voting instructions provided by your broker, bank or other nominee to ensure that your Common Shares are voted at the Special Meeting.

If you have not received such voting instructions or require further information regarding such voting instructions, contact your broker, bank or other nominee who can give you directions on how to vote your Common Shares. If you hold your Common Shares through a broker, bank or other nominee and wish to

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vote in person at the Special Meeting, you must obtain a “legal proxy,” executed in your favor, from the broker, bank or other nominee (which may take several days). If you do not obtain a legal proxy from your broker, bank or other nominee, you can still attend the Special Meeting, but you will not be able to vote your Common Shares at the Special Meeting.

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MacKenzie Partners, Inc.

105 Madison Avenue

New York, NY 10016

Toll-free at (800) 322-2885

E-mail at proxy@mackenziepartners.com

If your broker holds your Common Shares, you should also contact your broker for additional information.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Proxy Statement and the documents incorporated herein by reference contain “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Although we believe that the expectations reflected in those forward-looking statements are based upon reasonable assumptions, we can give no assurance that expectations will be achieved. Any statements contained in or incorporated by reference into this Proxy Statement that are not statements of historical fact should be considered to be forward-looking statements. Some of the words used to identify forward-looking statements include “believes,” “anticipates,” “plans,” “expects,” “seeks,” “estimates,” “intends,” and any other similar expressions. Readers should exercise caution in interpreting and relying on forward-looking statements since they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond our control and could materially affect our actual results, performance or achievements. The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements:

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The risks set forth above are not exhaustive. Many of these factors are beyond our ability to control or predict. These risks and uncertainties, along with the risk factors discussed under “Item 1A.—Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2016 and under “Part II, Item 1A.—Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2017 should be considered in evaluating any forward-looking statements contained in this Proxy Statement. Forward-looking statements are not guarantees of performance. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events. The Company does not intend to, and expressly disclaims any duty to, update or revise the forward-looking statements in this discussion to reflect changes in underlying assumptions or factors, new information, future events, or otherwise, after the date hereof, except as may be required by law. In light of these risks and uncertainties, you should not rely upon these forward-looking statements after the date of this communication and should keep in mind that any forward-looking statement made in this discussion, or elsewhere, might not occur.

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PROPOSAL 1—PROPOSAL TO APPROVE THE REIT MERGER

We are asking our shareholders to vote on a proposal to approve the REIT Merger and the other transactions contemplated by the Merger Agreement.

For detailed information regarding this proposal, see the information about the REIT Merger and the Merger Agreement throughout this Proxy Statement, including the information set forth in the sections entitled “The Mergers” and “The Merger Agreement.” A copy of the Merger Agreement is attached as Exhibit A to this Proxy Statement.

Approval of the proposal to approve the REIT Merger and the other transactions contemplated by the Merger Agreement requires the affirmative vote of the holders of a majority of Common Shares outstanding as of the record date for the Special Meeting. Because the required vote for this proposal is based on the number of votes our shareholders are entitled to cast rather than on the number of votes actually cast, failure to vote your Common Shares (including failure to give voting instructions to your broker, bank or other nominee) and abstentions will have the same effect as voting “against” the proposal to approve the REIT Merger and the other transactions contemplated by the Merger Agreement.

Approval of this proposal is a condition to the completion of the mergers. In the event this proposal is not approved, the mergers cannot be completed.

Recommendation of our Board of Trustees:

Our Board of Trustees unanimously recommends that our shareholders vote “FOR” the proposal to approve the REIT Merger and the other transactions contemplated by the Merger Agreement.

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PROPOSAL 2—PROPOSAL TO APPROVE CERTAIN MERGER-RELATED COMPENSATION

Pursuant to Rule 14a-21(c) under the Exchange Act, we are asking our shareholders to vote at the Special Meeting, on a non-binding, advisory basis, on a proposal to approve the compensation that may become payable to our named executive officers in connection with the mergers. Information intended to comply with Item 402(t) of Regulation S-K concerning this compensation, subject to certain assumptions described therein, is presented in the section entitled “The Mergers—Interests of Our Trustees and Executive Officers in the Mergers.”

In order to approve this Proposal 2, we are asking our shareholders to vote “FOR” the adoption of the following resolution:

“RESOLVED, that the Company’s shareholders approve, on a non-binding, advisory basis, the compensation that may become payable to the Company’s named executive officers in connection with the mergers.”

The shareholder vote on merger-related compensation is a non-binding, advisory vote only, and it is not binding on us or our Board of Trustees. Further, the underlying arrangements are contractual in nature and not, by their terms, subject to approval of the Company’s shareholders. Accordingly, regardless of the outcome of the non-binding, advisory vote, if the mergers are completed, our named executive officers will be eligible to receive the compensation that may become payable to our named executive officers in connection with the mergers, in accordance with the terms and conditions applicable to such compensation.

Approval of this proposal, which includes adoption of the above resolution, on a non-binding, advisory basis, requires the affirmative vote of the holders of a majority of the votes cast on the proposal. Abstentions are not considered votes cast and therefore will have no effect on the outcome of this proposal. Approval of this proposal is a not a condition to the completion of the mergers.

Recommendation of our Board of Trustees:

Our Board of Trustees unanimously recommends that our shareholders vote “FOR” the proposal to approve, on a non-binding, advisory basis, the merger-related compensation proposal.

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PROPOSAL 3—PROPOSAL TO APPROVE ADJOURNMENTS OF THE SPECIAL MEETING

We are asking our shareholders to vote on a proposal to approve any adjournments of the Special Meeting for the purpose of soliciting additional proxies if there are not sufficient votes at the Special Meeting to approve the REIT Merger and the other transactions contemplated by the Merger Agreement.

If the number of Common Shares voting in favor of Proposal 1 to approve the REIT Merger and the other transactions contemplated by the Merger Agreement is insufficient to approve Proposal 1 at the time of the Special Meeting, then the Company may move to adjourn the Special Meeting in order to enable the Board of Trustees to solicit additional proxies in favor of such proposal. In that event, shareholders will be asked to vote only upon the adjournment proposal, and not on any other proposal, including Proposal 1. If the Company’s shareholders approve the adjournment proposal, the Company may adjourn the Special Meeting one or more times and use the additional time to solicit additional proxies, including the solicitation of proxies from shareholders that have previously returned properly executed proxies or authorized a proxy by using the Internet or telephone. Among other things, approval of the adjournment proposal could mean that, even if the Company has received proxies representing a sufficient number of votes against the approval of Proposal 1 such that the proposal would be defeated, the Company may adjourn the Special Meeting without a vote on Proposal 1 and seek to obtain sufficient votes in favor of approval of Proposal 1 to obtain approval of that proposal.

Approval of this proposal requires the affirmative vote of the holders of a majority of the votes cast on the proposal (regardless of whether there is a quorum present). Abstentions are not considered votes cast and therefore will have no effect on the outcome of this proposal. Approval of this proposal is a not a condition to the completion of the mergers.

Recommendation of our Board of Trustees:

Our Board of Trustees unanimously recommends that our shareholders vote “FOR” the adjournment proposal.

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THE PARTIES TO THE MERGERS

First Potomac Parties

First Potomac Realty Trust, referred to herein as “First Potomac” or the “Company”, a Maryland real estate investment trust formed in 2003, is a self-administered, self-managed real estate investment trust that focuses on owning, operating, developing and redeveloping office and business park properties in the greater Washington, D.C. region. The Common Shares are publicly traded on the New York Stock Exchange (NYSE: FPO).

We conduct our business through First Potomac Realty Investment Limited Partnership, our operating partnership, referred to herein as the “Company LP”. We are the sole general partner of, and, as of June 30, 2017, owned 95.8% of the common interest in, the Company LP. The remaining common interests in the Company LP are limited partnership interests that are owned by unrelated parties. The Company and the Company LP are collectively referred to as the “First Potomac Parties.”

At June 30, 2017, we wholly owned properties totaling 6.0 million square feet and had a noncontrolling ownership interest in properties totaling an additional 0.4 million square feet through two unconsolidated joint ventures. We also owned land that can support 0.4 million square feet of additional development. Our consolidated properties were 92.6% occupied by 378 tenants at June 30, 2017. We do not include the square footage of properties in development or redevelopment, which totaled 0.1 million square feet at June 30, 2017, in our occupancy calculation. We derive substantially all of our revenue from leases of space within our properties. As of June 30, 2017, our largest tenant was the U.S. government, which accounted for 13.8% of our total annualized cash basis rent, and the U.S. government combined with government contractors accounted for 20.8% of our total annualized cash basis rent as of June 30, 2017. We operate so as to qualify as a REIT for federal income tax purposes.

The address of the First Potomac Parties is 7600 Wisconsin Avenue, 11th Floor, Bethesda, Maryland 20814. The telephone number of the First Potomac Parties is (301) 986-9200.

GOV Parties

Government Properties Income Trust, referred to herein as “GOV”, is a Maryland real estate investment trust. GOV NEW OPPTY REIT, referred to herein as “REIT Merger Sub,” is a newly formed Maryland real estate investment trust and wholly-owned subsidiary of GOV. GOV NEW OPPTY LP, referred to herein as “Partnership Merger Sub,” is a newly formed Delaware limited partnership and majority-owned subsidiary of REIT Merger Sub and wholly-owned subsidiary of GOV. GOV, REIT Merger Sub and Partnership Merger Sub are collectively referred to as the “GOV Parties.”

As of June 30, 2017, GOV owned 74 properties (96 buildings), excluding one property (one building) classified as discontinued operations. GOV’s properties are located in 31 states and the District of Columbia and contain approximately 11.5 million rentable square feet, of which 57.8% was leased to the U.S. government, 21.8% was leased to 13 state governments, 3.2% was leased to four other government tenants, 3.6% was leased to government contractor tenants, 8.6% was leased to various other non-governmental organizations and 5.0% was available for lease as of June 30, 2017 . The U.S. government, 13 state governments and four other government tenants combined were responsible for 87.6% of GOV’s annualized rental income as of June 30, 2017. The term annualized rental income as used in this paragraph is defined as the annualized contractual base rents from GOV’s tenants pursuant to its lease agreements as of the measurement date, plus straight line rent adjustments and estimated recurring expense reimbursements to be paid to GOV, and excluding lease value amortization.

REIT Merger Sub and Partnership Merger Sub were created solely for the purpose of engaging in the transactions contemplated by the Merger Agreement. Neither REIT Merger Sub nor Partnership Merger Sub has

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carried on any activities to date other than activities incidental to their formation and activities undertaken in connection with the transactions contemplated by the Merger Agreement. Subject to the terms of the Merger Agreement, upon completion of the Partnership Merger, the Company LP will survive as a majority-owned subsidiary of the Company and the separate existence of Partnership Merger Sub will cease. Upon completion of the REIT Merger, REIT Merger Sub will survive and the separate corporate existence of the Company will cease and REIT Merger Sub and the Company LP, under the name “GOV NEW OPPTY LP,” will be indirect, majority-owned subsidiaries of GOV.

The address of the GOV Parties is Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458. The telephone number of the GOV Parties is (617) 219-1440.

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THE SPECIAL MEETING

We are furnishing this Proxy Statement to our shareholders as part of the solicitation of proxies by our Board of Trustees for use at the Special Meeting in connection with the mergers. This Proxy Statement provides our shareholders with the information they need to know to be able to vote or instruct their vote to be cast at the Special Meeting.

Date, Time and Purpose of the Special Meeting

This Proxy Statement is being furnished to our shareholders in connection with the solicitation of proxies by our Board of Trustees to be exercised at the Special Meeting to be held on Tuesday, September 26, 2017 at 11:00 a.m., Eastern Time, at 7600 Wisconsin Avenue, 11th Floor, Bethesda, Maryland 20814. The purpose of the Special Meeting is for you to consider and vote on the following matters:

We are not aware of any other business to be acted upon at the Special Meeting or any postponements or adjournments thereof. If, however, other matters are properly brought before the Special Meeting or any postponements or adjournments thereof, the persons named as proxies will vote on those matters in their discretion. Holders of a majority of the outstanding Common Shares as of the record date for the Special Meeting must approve the REIT Merger and the other transactions contemplated by the Merger Agreement for the REIT Merger to occur. A copy of the Merger Agreement is attached as Exhibit  A to this Proxy Statement, which we encourage you to read carefully in its entirety.

Record Date, Notice and Quorum

The record date for the Special Meeting is August 21, 2017. Holders of Common Shares at the close of business on the record date are entitled to vote or have their votes cast at the Special Meeting. At the close of business on the record date, there were approximately 58,740,535 Common Shares outstanding and entitled to vote at the Special Meeting, held by approximately 146 holders of record. Shareholders will have one vote for each of the REIT Merger and the other transactions contemplated by the Merger Agreement, the merger-related compensation proposal, the adjournment proposal and any other matter properly brought before the Special Meeting for each Common Share they owned as of the close of business on the record date.

Under our Bylaws, the presence in person or by proxy of shareholders entitled to cast a majority of all the votes entitled to be cast at the Special Meeting constitutes a quorum.

Required Vote

Completion of the REIT Merger requires approval of the REIT Merger and the other transactions contemplated by the Merger Agreement by the affirmative vote of the holders of a majority of the outstanding Common Shares as of the record date for the Special Meeting. Each of our shareholders is entitled to cast one vote on each matter presented at the Special Meeting for each Common Share owned by such shareholder on the record date. Because the required vote for this proposal is based on the number of votes our shareholders are entitled to cast rather than on the number of votes cast, failure to vote your Common Shares (including failure to

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give voting instructions to your broker, bank or other nominee) and abstentions will have the same effect as voting “against” the proposal to approve the REIT Merger and the other transactions contemplated by the Merger Agreement.

Approval of the non-binding, advisory merger-related compensation proposal and the adjournment proposal each requires the affirmative vote of the holders of a majority of the votes cast on the proposal. Approval of these proposals is not a condition to the completion of the mergers. For the purpose of these proposals, if a shareholder fails to cast a vote on either of these proposals, in person or by authorizing a proxy, such failure will not have any effect on the outcome of such proposal. In addition, abstentions are not considered votes cast and therefore will have no effect on the outcome of the merger-related compensation proposal or the adjournment proposal.

Brokers, banks or other nominees holding Common Shares in “street name” may vote your Common Shares on the proposal to approve the REIT Merger and the other transactions contemplated by the Merger Agreement, the non-binding, advisory merger-related compensation proposal, or the adjournment proposal, if necessary, only if you provide instructions on how to vote, and your failure to provide instructions will result in your Common Shares not being present at the meeting and not being voted on those proposals, with the same result as a vote against the REIT Merger and no effect on the other proposals. It is very important that ALL of our shareholders vote their Common Shares, so please promptly complete and return the enclosed proxy card.

As of the record date for the Special Meeting, our trustees and executive officers owned and are entitled to vote an aggregate of approximately 1,156,958 Common Shares, entitling them to exercise approximately 2.0% of the voting power of Common Shares entitled to vote at the Special Meeting. Our trustees and executive officers have informed us that they intend to vote the Common Shares that they own in favor of the proposal to approve the REIT Merger and the other transactions contemplated by the Merger Agreement, in favor of the non-binding, advisory merger-related compensation proposal and in favor of the adjournment proposal.

Votes cast by proxy or in person at the Special Meeting will be counted by the person appointed by us to act as inspector of election for the Special Meeting. The inspector of election will also determine whether a quorum is present at the Special Meeting.

How to Authorize a Proxy

Holders of record of Common Shares may vote or cause their Common Shares to be voted by proxy using one of the following methods:

Regardless of whether you plan to attend the Special Meeting, we request that you authorize a proxy to vote your Common Shares as described above as promptly as possible.

If you vote by Internet or telephone, your vote must be received before 11:59 p.m. Eastern Time on September 25, 2017, the day before the Special Meeting.

If you own Common Shares through a broker, bank or other nominee, you must provide voting instructions in accordance with the instructions on the voting instruction card that your broker, bank or other nominee provides to you, as brokers, banks and other nominees do not have discretionary voting authority with respect to

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any of the proposals described in this Proxy Statement. You should instruct your broker, bank or other nominee as to how to vote your Common Shares following the directions contained in such voting instruction card. If you have not received such voting instructions or require further information regarding such voting instructions, contact your broker, bank or other nominee who can give you directions on how to vote your Common Shares. If you hold your Common Shares through a broker, bank or other nominee and wish to vote in person at the Special Meeting, you must obtain a “legal proxy,” executed in your favor, from the broker, bank or other nominee (which may take several days).

Proxies and Revocation

If you authorize a proxy, your Common Shares will be voted at the Special Meeting as you indicate on your proxy. If no instructions are indicated when you authorize your proxy, your Common Shares will be voted in accordance with the recommendations of our Board of Trustees. Our Board of Trustees recommends that you vote “FOR” the proposal to approve the REIT Merger and the other transactions contemplated by the Merger Agreement, “FOR” the approval, on a non-binding advisory basis, of the merger-related compensation proposal and “FOR” the adjournment proposal.

You may revoke your proxy at any time, but only before the proxy is voted at the Special Meeting, in any of three ways:

Attendance at the Special Meeting will not, in itself, constitute revocation of a previously granted proxy. If you own Common Shares in “street name,” you may revoke or change previously granted voting instructions by following the instructions provided by the broker, bank or other nominee that is the registered owner of the Common Shares.

We do not expect that any matters other than the proposals set forth above will be brought before the Special Meeting. If, however, such a matter is properly presented at the Special Meeting or any postponements or adjournments of the Special Meeting, the persons appointed as proxies will have discretionary authority to vote the Common Shares represented by duly executed proxies.

Solicitation of Proxies

We will bear the cost of solicitation of proxies for the Special Meeting. In addition to the use of mails, proxies may be solicited by personal interview, telephone, facsimile, e-mail or otherwise, by our trustees, officers and other employees without additional compensation for such activities. We have engaged MacKenzie Partners, Inc. to assist in the solicitation of proxies for a fee of approximately $15,000, plus reimbursement of related expenses. We will also request persons, firms and corporations holding Common Shares in their names or in the names of their nominees, that are beneficially owned by others, to send or cause to be sent proxy materials to and obtain proxies from such beneficial owners. We will reimburse such holders for their reasonable expenses in doing so.

Exchange of Common Share Certificates

Our shareholders should not send Common Share certificates with their proxies. A letter of transmittal with instructions for the surrender of Common Share certificates, among other things, will be mailed to our shareholders as soon as practicable following completion of the REIT Merger. See “The Merger Agreement—Exchange and Payment Procedures” beginning on page 66.

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Adjournments

Although it is not currently expected, subject to approval of the adjournment proposal, the Special Meeting may be adjourned for the purpose of soliciting additional proxies if we believe it is reasonably likely that the REIT Merger and the other transactions contemplated by the Merger Agreement will not be approved at the Special Meeting when convened on September 26, 2017, or when reconvened following any adjournment. Any adjournments may be made to a date not more than 120 days after the original record date without notice (other than by an announcement at the Special Meeting), by the affirmative vote of the holders of a majority of the votes cast on the adjournment proposal, whether or not a quorum exists.

Postponements

If a quorum is not present, our Board of Trustees may postpone the Special Meeting without the approval of our shareholders to a date not more than 120 days after the original record date (subject to certain restrictions in the Merger Agreement).

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THE MERGERS

General Description of the Mergers

The REIT Merger is one of two separate mergers contemplated by the Merger Agreement. The other, the Partnership Merger, was approved by the Company, in its capacities as the sole general partner and the majority limited partner of the Company LP. Subject to the terms of the Merger Agreement, (i) upon completion of the Partnership Merger, the Company LP will survive as a majority-owned subsidiary of the Company and the separate existence of Partnership Merger Sub will cease and (ii) upon completion of the REIT Merger, REIT Merger Sub will survive and the separate corporate existence of the Company will cease and REIT Merger Sub and the Company LP will be indirect, majority-owned subsidiaries of GOV.

In connection with the REIT Merger, holders of Common Shares will receive an amount of cash per Common Share equal to $11.15, without interest, less any applicable tax withholding. In connection with the Partnership Merger, outside limited partners will receive an amount of cash per partnership unit equal to $11.15, without interest, less any applicable tax withholding, except that each outside limited partner may elect, in lieu of cash consideration, to have such holder’s partnership units exchanged into an equal number of Series A preferred units, subject to certain conditions.

Our Board of Trustees has approved the mergers, the Merger Agreement and the other transactions contemplated thereby and has declared the REIT Merger, the Merger Agreement and the other transactions contemplated thereby advisable and in the best interests of the Company and its shareholders. Our Board of Trustees unanimously recommends that you vote “FOR” the proposal to approve the REIT Merger and the other transactions contemplated by the Merger Agreement.

Background of the Mergers

Our Board of Trustees and management team periodically, and in the ordinary course of business, review and assess the performance, business, strategic direction and prospects of the Company in light of the current business and economic environment, as well as developments in the office REIT sector, the broader commercial real estate market and conditions of the capital markets in connection with our long-term business strategy to enhance value for our shareholders. From time to time, our Board of Trustees and management team have evaluated and considered various potential financial and strategic options in light of industry developments, changing economic and market conditions and challenges facing participants in the commercial real estate industry. Wells Fargo Securities historically has acted as financial advisor to the Company in connection with past strategic alternative assignments and from time to time has met with our Board of Trustees to assist in evaluating market conditions and potential strategic alternatives.

In November 2015, the Company undertook a leadership transition, and Robert Milkovich was promoted to President and Chief Executive Officer (while retaining the chief operating officer role and assuming the role of leading investment activities for the Company) and appointed as a trustee of the Company. In connection with this leadership transition and at the direction of the Board of Trustees, the Company’s management team, with input from outside advisors, conducted a thorough review of the Company’s business, portfolio and property-level operations over the next few months and formulated a strategic business plan for the Company, with a view toward enhancing shareholder value. During this period, the Company’s management regularly updated the trustees on the status of these efforts.

Several times in February 2016, the Company’s trustees and management held formal and informal meetings to discuss the draft strategic business plan for the Company prepared by management. During the course of these meetings, the Company’s trustees and management engaged in discussions regarding, among other things, the Washington, D.C. office market, property-level valuations, balance sheet initiatives, the

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Company’s dividend policy, potential asset dispositions, potential redevelopment opportunities and various strategic initiatives in connection with each of the foregoing. After an extensive review of, and discussions regarding, the business and the portfolio, the Board of Trustees authorized the Company’s management team to present the plan to investors in a public release dated February 22, 2016. Also on February 22, 2016, the Company published presentation materials outlining its strategic business plan, the focus of which was to de-risk the portfolio, de-lever the balance sheet and maximize asset values (the “Business Plan”), and held a conference call with investors to discuss the details of the Business Plan.

Following the announcement of the Business Plan, from time to time, the Company has received unsolicited inquiries regarding potential strategic transactions. In particular, between March 2016 and December 2016, the Company received three formal unsolicited inquiries to acquire the Company.

In March 2016, the Company received an unsolicited letter from a financial advisor representing a joint venture between a China-based private equity firm and a U.S. private investment firm. The letter presented a non-binding indication of interest from the joint venture to engage in discussions with the Company regarding a potential acquisition of the Company at what appeared to be an attractive price range from a credible capital source. The Board of Trustees met to discuss the unsolicited indication of interest, and directed the Company’s management, with the assistance of financial and legal advisors, to review such potential transaction, to enter into a nondisclosure agreement with the joint venture in order to continue discussions with such party and to formally begin the process of evaluating the potential transaction. Following the negotiation and execution of the nondisclosure agreement, the Company provided confidential due diligence materials to the joint venture and its financial advisor.

In May 2016, the joint venture submitted a revised, non-binding indication of interest proposing to acquire 100% of the Company’s outstanding equity for a cash purchase price of $10.50 per share, which was significantly below the purchase price range proposed in the original letter. The Board of Trustees held meetings in May 2016 to discuss the revised proposal, and concluded that the revised proposal did not represent a compelling opportunity that merited further consideration at such time.

Also at one of the May 2016 meetings of the Board of Trustees, which Wells Fargo Securities attended at the invitation of the Company, Wells Fargo Securities provided an overview, and the trustees engaged in discussion regarding, among other things, the global macroeconomic outlook, recent mergers and acquisitions activity, market performance of the REIT sector generally and performance of the Washington, D.C. office market relative to other national gateway markets, as well as potential strategic alternatives for unlocking the Company’s net asset value, including portfolio transactions, joint venture transactions and other strategic transactions. After full discussion, the Board of Trustees directed the Company’s management team, with the assistance of Wells Fargo Securities, to continue exploring whether alternatives to the Company’s Business Plan might merit further consideration by the Board of Trustees, while management continued to implement the Company’s Business Plan.

Also in May 2016, the Company received an unsolicited letter from a real estate private equity firm jointly owned by U.S. investors and a large, China-based real estate developer, which expressed interest in acquiring 100% of the Company’s outstanding equity, but contained no specific price or terms. In June 2016, this party submitted a revised, non-binding indication of interest, dated June 16, 2016, to acquire 100% of the Company’s outstanding equity for a cash purchase price of $10.50 per share, but contained no additional information regarding transaction structure or financing sources. The Board of Trustees met to discuss the revised proposal, and concluded that the revised proposal lacked any meaningful detail that would be necessary in order for the Board of Trustees to properly evaluate both the credibility and the merits of the proposal, and did not represent a compelling opportunity that merited further consideration at such time.

In July 2016, the Board of Trustees met, together with the Company’s management team and representatives from Wells Fargo Securities, to discuss, among other things, a review of potential strategic alternatives.

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Following this discussion, the Board of Trustees expressed a view that the Company’s management team, with the assistance of Wells Fargo Securities, should continue to review potential strategic alternatives that reasonably could be expected to present a compelling opportunity and merit further consideration by the Board of Trustees, while management continued to implement the Company’s Business Plan.

In October 2016, the Company received an unsolicited, non-binding indication of interest from a partnership between a value-oriented investment manager (“Party A”) and its co-investor. The letter presented a non-binding indication of interest for the partnership to engage in discussions regarding a potential acquisition of the Company with a proposed cash purchase price range of $11.00 to $12.00 per share. The Board of Trustees met in October 2016 with the Company’s management team and representatives from Wells Fargo Securities and directed the Company, with the assistance of the Company’s financial and legal advisors, to review such expression of interest, to enter into nondisclosure agreements with Party A and its co-investor in order to continue discussions with such parties and to formally begin the process of evaluating the potential transaction. Following the negotiation and execution of the nondisclosure agreements with Party A and its co-investor, the Company provided confidential due diligence materials to Party A, its co-investor and their representatives.

From October 2016 through early January 2017, in accordance with the directives of the Board of Trustees, the Company’s management team and representatives from Wells Fargo Securities had discussions with Party A and its representatives regarding the initial indication of interest, and the Company’s management provided additional information to Party A about the Company, including during a meeting between the Company’s management and Party A in December 2016. During this period, Party A continually communicated its need for additional time in order to complete due diligence and finalize its underwriting before it could submit a specific proposal for a transaction with the Company. Members of the Company’s management team periodically updated the Board of Trustees regarding these discussions. In conversations with representatives from Wells Fargo Securities, Party A informally communicated that it was analyzing a potential transaction with the Company at a cash purchase price around $11.00 per share. Party A also indicated it did not have its equity financing in place for a potential transaction with the Company. Ultimately, Party A and its co-investor did not submit a more detailed proposal following their due diligence efforts.

In December 2016, representatives of a joint venture sponsored by a private equity firm (“Party B”) called a member of the Company’s management team, and orally communicated Party B’s interest in a potential transaction with the Company. The Company’s management team had follow-up conversations with Party B and its representatives regarding Party B’s interest in the Company, but Party B did not submit a written indication of interest during this period.

As the Company was near completion of the key action items under the Business Plan, throughout January and February 2017, the Company’s trustees and management held formal and informal meetings and discussions on an individual and/or group basis regarding the next phase of the Company’s independent business plan. In particular, the Company’s management team and trustees evaluated the Company’s near-term and long-term independent business plan and possible future performance under various scenarios, including on a stand-alone basis and through growth-oriented acquisition scenarios over a five-year period, with a view toward enhancing shareholder value. During the course of these meetings and discussions, the Company’s management team and trustees evaluated the challenges and execution risks associated with implementing the next phase of the independent business plan, whether on a stand-alone basis or through the various growth-oriented acquisition scenarios.

On February 16, 2017, the Finance and Investment Committee of the Board of Trustees (the “Finance and Investment Committee”) held a meeting, together with members of the Company’s management team, to consider, among other things, the next phase of the independent business plan and possible future performance under various scenarios, including growth-oriented acquisition scenarios over a five-year period, and potential strategic alternatives available to the Company, with a view toward enhancing shareholder value. During this meeting, and in light of the extensive review previously undertaken with respect to implementing the next phase

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of the independent business plan and related challenges and execution risks, a discussion ensued regarding the various options available to the Company in pursuing a formal process to evaluate potential strategic alternatives. Following this discussion, the Finance and Investment Committee recommended that the Board of Trustees approve a comprehensive review and pursuit of various potential strategic alternatives that may be available to the Company.

On February 21, 2017, the Board of Trustees held a meeting, together with members of the Company’s management team and representatives from Wells Fargo Securities and Hogan Lovells US LLP, the Company’s outside legal counsel (“Hogan Lovells”), to discuss, among other things, the Company’s exploration of potential strategic alternatives. The trustees recapped their discussions with management from the previous months, which included reviewing the next phase of the Company’s independent business plan and possible future performance under various scenarios, and the challenges and execution risks associated with continuing to implement the independent business plan. The Board of Trustees then discussed the Finance and Investment Committee’s recommendation that the Company explore various potential strategic alternatives, including a possible sale of the Company. Wells Fargo Securities discussed with the Board of Trustees, among other things, certain financial matters pertaining to the Company, including the Company’s independent business plan and certain financial information that had been prepared by management focused on a growth-oriented strategy. At this meeting, the Board of Trustees considered three primary options: (i) a limited process that would involve approaching a handful of likely qualified buyers; (ii) a broad canvassing of potential qualified buyers in a confidential process; and (iii) a broad canvassing of potential qualified buyers in a public process announced via press release at the time of commencement of the process. Wells Fargo Securities shared its perspectives with the Board of Trustees regarding these options, noting that, based on its understanding regarding the Company’s prior experience with inbound inquiries, a limited process was not as likely to yield an attractive result for the Company and its shareholders as compared to a broadly marketed process. Following this discussion, representatives from Hogan Lovells provided a review of the duties of the trustees under Maryland law with respect to considering possible sale or business combination transactions in order to enhance shareholder value, including through a potential third-party solicitation process. After full discussion, the Board of Trustees unanimously approved the Company undertaking a comprehensive pursuit of various strategic alternatives, including soliciting third-party indications of interest for a merger, business combination or other sale of the Company or some or substantially all of its assets. In taking this action, the Board of Trustees took into consideration, among other things, its knowledge of the business, operations, financial condition, earnings and prospects of the Company, as well as its knowledge of the current and prospective environment in which the Company operates, including economic and market conditions, and its review of the Company’s near-term and long-term independent business plan, including the Company’s possible future performance under various scenarios (in particular, including growth-oriented acquisition scenarios over a five-year period). At the meeting, the Board of Trustees also authorized engaging Wells Fargo Securities as a financial advisor to the Company and engaging Hogan Lovells as the Company’s legal counsel, each specifically in connection with the Company’s strategic alternatives process, and approved the Company entering into retention bonus agreements with certain non-executive officer employees of the Company, as deemed necessary by the executive officers of the Company, to assist with the process. The trustees directed the Company’s management, with the assistance of Wells Fargo Securities, to contact a range of potential investors, including publicly traded REITs, private investment firms and institutional investors (including domestic and foreign investors), for proposals for a possible acquisition of, or business combination transaction with, the Company.

On March 21, 2017, the Board of Trustees held a meeting, together with the Company’s management. During the meeting, among other things, management provided an update on the Company’s process to review potential strategic alternatives, including a proposed initial list of more than 70 potential investors, the planned process for executing nondisclosure agreements with such potential investors, and a potential timeline for officially launching the process. After full discussion, the Board of Trustees expressed consensus that the Company proceed with the process to pursue strategic alternatives.

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Beginning on March 27, 2017, in accordance with the directives of the Board of Trustees, Wells Fargo Securities began contacting potential investors, including publicly traded REITs, private investment firms and institutional investors (including domestic and foreign investors), regarding the Company’s strategic alternatives process. These potential investors were identified based on their perceived interest in a possible acquisition of, or business combination transaction with, the Company, as well as their expected capacity to consummate such a transaction. In the course of discussions with various potential investors during this period, the level of interest of each potential investor in continuing to participate in the Company’s process was assessed, particularly with respect to each investor’s interest in a potential Company-level transaction, and the Company entered into nondisclosure agreements with potential primary investors and their affiliates, co-investors and advisors. The nondisclosure agreements generally provided for restrictions on the use and disclosure of confidential due diligence materials shared by the Company and included customary “standstill” restrictions, which automatically would “fall away” upon the Company entering into a definitive agreement with another party for an acquisition of, or business combination transaction with, the Company. During this period, potential investors and their representatives that entered into nondisclosure agreements with the Company were granted access to the Company’s electronic data room containing detailed property-level, financial and corporate due diligence materials of the Company. Also during this period, the Company’s management regularly updated the trustees on the status of the process to review potential strategic alternatives, and the trustees expressed support for continuing the process.

Beginning on April 20, 2017, the Company’s process letter was sent to the potential investors that had entered into nondisclosure agreements with the Company. The process letter requested that investors submit non-binding indications of interest by May 10, 2017.

On April 24, 2017, certain media outlets published reports that the Company was working with an advisor to explore a potential sale of the Company. In addition, on April 27, 2017, one of the participants in the Company’s process, which had entered into a nondisclosure agreement with the Company, confirmed in its public earnings call that the Company was engaged in such a process and that such party had been formally contacted regarding such process, which confirmation was subsequently reported in various analysts’ reports. Following these reports, additional potential investors contacted Wells Fargo Securities to inquire about participating in the Company’s process.

During the period from March 27, 2017 to May 12, 2017, in accordance with the directives of the Board of Trustees, Wells Fargo Securities contacted 99 potential primary investors on behalf of the Company, other potential investors submitted inquiries to the Company, and the Company ultimately entered into nondisclosure agreements with 39 potential primary investors, including GOV on May 2, 2017. Potential investors that entered into nondisclosure agreements with the Company and their representatives were granted access to the Company’s electronic data room. During this period, the Company’s management regularly updated the trustees on the status of the process to review potential strategic alternatives, both individually and at regularly scheduled meetings of the Board of Trustees, and the trustees expressed support for continuing the process.

On May 10, 11 and 12, 2017, the Company received 10 non-binding indications of interest with respect to a potential Company-level transaction, including four indications confirmed in writing (including from GOV, Party A and Party B), and six communicated orally. In addition, two oral indications of interest in specific Company assets were received, as well as one written indication of interest regarding a structured asset contribution transaction.

On May 15, 2017, the Board of Trustees held a meeting, together with members of the Company’s management team and representatives from Wells Fargo Securities and Hogan Lovells, to discuss the status of the Company’s process to review potential strategic alternatives. Wells Fargo Securities provided an overview of the process to date and a summary of the 10 non-binding indications of interest that had been received for a potential Company-level transaction, as well as the written and oral indications of interest regarding asset transactions, and relayed investor feedback received during the process. Of the four written indications of interest

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for a Company-level transaction, one (Party A) proposed a cash purchase price range of $11.00 to $11.25 per share, two (GOV and Party B) proposed cash purchase prices of $11.00 per share, and one proposed a cash purchase price of $10.00 per share. Of the six oral indications of interest for a Company-level transaction, one proposed a cash purchase price of $9.25 per share, two proposed cash purchase prices of $9.00 per share, and three had not yet proposed a purchase price.

As part of the discussion, Wells Fargo Securities noted that a Company-level transaction likely would have lower execution risk and greater potential to enhance shareholder value than sub-portfolio and individual asset sales. With respect to the six oral indications of interest, Wells Fargo Securities indicated that it was unclear whether those parties would refine or provide additional details regarding their interest. Wells Fargo Securities also noted for the Board of Trustees that the Company’s share price had appreciated since the strategic alternatives process officially launched on March 27, 2017 (noting that the price of the Common Shares was up 5% as of May 12, 2017 versus its peers (which were down 0.2%) and the RMZ REIT Index (which was down 1.3%)), as certain media outlets began to report on April 24, 2017 that the Company was engaged in a process for a potential sale of the Company). After full discussion regarding the indications of interest received, including their relative benefits and risks, and potential next steps for the process, the trustees determined to invite three parties (GOV, Party A and Party B) to participate in “Round II” of the Company’s process, each of which had submitted written proposals with the highest price ranges among the group of potential investors and meaningful detail as to a proposed transaction structure to merit further consideration. Representatives from Hogan Lovells also provided a review of the duties of the trustees under Maryland law with respect to considering a possible change-of-control transaction.

During this period, at the direction of and with input from the Company’s management team, representatives from Hogan Lovells prepared a bid draft merger agreement, which contemplated that the transaction would be structured as a merger of the Company with the acquiring entity for cash and a merger of Company LP with a subsidiary of the acquiring entity for cash or new preferred units in the surviving partnership, at the election of the unitholders. The draft included the election for unitholders so that the transaction would not trigger certain tax indemnity obligations of the Company, which otherwise could have an adverse effect on the purchase price per share obtained in any strategic transaction.

On May 16, 2017, access to the Company’s electronic data room for all parties other than GOV, Party A, Party B and their respective representatives was terminated.

On May 22, 2017, in accordance with the directives of the Board of Trustees, a new process letter was sent to each of the three parties that had submitted the highest offers in Round I of the Company’s process: (i) GOV, which submitted a proposal to acquire 100% of the Company’s outstanding equity for a cash purchase price of $11.00 per share; (ii) Party A, which, with an additional co-investor, submitted a proposal to acquire 100% of the Company’s outstanding equity for a cash purchase price of $11.00 to $11.25 per share based on due diligence materials obtained during 2016 under the nondisclosure agreements entered into with the Company in November 2016, as amended in May 2017, after having declined to execute new nondisclosure agreements to participate in the Company’s formal process or receive access to the electronic data room; and (iii) Party B, which in December 2016 had orally communicated to the Company’s management its interest in a potential transaction, submitted a proposal to acquire 100% of the Company’s outstanding equity for a cash purchase price of $11.00 per share. The process letter set forth the Company’s expectations for a Company-level transaction and requested from each party: (i) the submission of a definitive proposal by June 13, 2017, including the transaction consideration and structure for the transaction; (ii) the submission of a mark-up of the bid draft merger agreement by June 8, 2017 (and specifically stated that bidders should not merely submit an issues list in lieu of a mark-up of the bid draft merger agreement); (iii) information regarding any debt and equity financing, including any commitment letters; (iv) completion of all due diligence regarding the Company; and (v) additional information regarding the proposed transaction, including with respect to the expected timing for entering into and closing under a definitive agreement and any required approvals, including confirmation that any internal approvals had been obtained prior to submitting the definitive proposal.

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On May 24 and 25, 2017, members of the Company’s management team met with principals and representatives of GOV to discuss the Company’s business, portfolio and property-level operations.

On May 25, 2017, the Company posted a bid draft merger agreement to the Company’s electronic data room for review by GOV, Party A, Party B and their respective representatives (each of these parties received the same form of the bid draft merger agreement).

On June 1, 2017, members of the Company’s management team met with principals and representatives of Party A to discuss the Company’s business, portfolio and property-level operations.

On June 7, 2017, legal counsel for Party B provided an issues list regarding the Company’s bid draft merger agreement. In this issues list, certain provisions of the bid draft merger agreement were not addressed or were noted as to be determined or subject to due diligence, including the amount of the reverse termination fee to be paid by Party B if it did not proceed to closing. In addition, the issues list contemplated proposals more customary for an asset transaction than a Company-level transaction, including the requirement for a net working capital adjustment and the concept of a “property material adverse effect.”

Also on June 7, 2017, during a meeting between members of the Company’s management team and representatives of Party A, as well as during a telephone call between representatives of Party A and Wells Fargo Securities, Party A indicated that it would need an additional two to three weeks to submit a specific proposal for a transaction with the Company. Representatives for Party A subsequently submitted a mark-up of the bid draft merger agreement on June 8, 2017. Among other things, the mark-up proposed a closing condition with respect to CFIUS clearance for Party A and omitted certain information, including the price per share merger consideration.

On June 8, 2017, members of the Company’s management team met with principals and representatives of Party B to discuss the Company’s business, portfolio and property-level operations.

Also on June 8, 2017, at the direction of the Company, representatives from Wells Fargo Securities had a status update call with members of GOV’s management team. GOV’s management indicated that GOV and its representatives were working diligently to complete a definitive proposal for Round II, including completing their mark-up of the bid draft merger agreement.

On June 13, 2017, the Company received a submission from GOV, which included: (i) a letter, dated June 13, 2017 and signed by Mr. David M. Blackman, president and chief operating officer of GOV, setting forth a proposal for GOV to acquire 100% of the Company’s outstanding equity for a cash purchase price of $11.00 per share; (ii) a detailed mark-up of the bid draft merger agreement; and (iii) a commitment letter from Citigroup Global Markets Inc. (“Citigroup”), which also serves as GOV’s financial advisor with respect to the mergers, for an unsecured $750 million bridge loan facility to be made to GOV. In its proposal letter, GOV indicated that it had substantially completed its due diligence of the Company, had or would have sufficient cash to fund the transaction (through the bridge loan facility together with capacity under its existing revolving credit facility and the planned assumption of certain mortgage debt of the Company), had substantially completed the prospectus supplement for an equity offering contemplated in connection with the transaction and was willing to negotiate and enter into a definitive agreement with respect to the proposal expeditiously. The proposal letter also indicated that the proposal had been approved by GOV’s board of trustees and that the proposed transaction would not require approval of GOV’s shareholders and would not include a financing contingency.

Also on June 13, 2017, the Company received a submission from Party B, which included: (i) a letter, dated June 13, 2017, setting forth a proposal for Party B to acquire 100% of the Company’s outstanding equity for a cash purchase price of $11.15 per share; (ii) an issues list regarding the bid draft merger agreement, including updates to the issues list previously provided on June 7, 2017 (although still noting that certain items were to be determined or subject to the completion of due diligence, including the amount of the reverse termination fee to

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be paid by Party B if it did not proceed to closing); and (iii) a commitment letter from a major lender for debt financing through two first-priority mortgage loans, a short-term loan of up to $320 million and long-term loan of up to $640 million to be made to Party B. In its proposal letter, Party B indicated that it expected to continue conducting due diligence of the Company for an additional two to three weeks (during which period Party B indicated the need to perform physical inspections of the Company’s Washington, D.C. properties and certain other properties, to commission third-party reports, including property condition reports and environmental reports, and to investigate the possibility of selling certain of the Company’s D.C. properties), and requested that the Company enter into an exclusivity agreement with Party B for that two-to-three week period. Party B also proposed a reverse termination fee construct in lieu of full specific performance, but did not propose an amount for the reverse termination fee. Party B’s submission did not provide a mark-up of the bid draft merger agreement, nor any commitment letter for the equity component of financing or sponsor guaranty.

On June 14, 2017, the Company also received a short letter from Party A, which reiterated its need for additional time in order to complete due diligence and finalize its underwriting and debt financing commitment, and which indicated that Party A believed it would be prepared to provide a specific proposal for a transaction with the Company by June 30, 2017. In conversations with representatives from Wells Fargo Securities, Party A had communicated that additional time was needed for underwriting and internal approvals by its foreign investment partners.

Also on June 14, 2017, members of the Company’s management team held a conference call with representatives from Wells Fargo Securities and Hogan Lovells to discuss the recent communications from GOV, Party A and Party B. The Company’s management and its representatives discussed the potential benefits and risks of each proposal, including the greater execution risk presented by Party B given the optional nature of its proposed transaction structure, whereby Party B could terminate the merger agreement for any reason and the Company’s only recourse for Party B’s failure to close would be receipt of the reverse termination fee, as well as Party B’s mortgage-based debt financing, compared to the fully committed proposal by GOV, an investment-grade, publicly traded REIT. Also discussed was a potential timeline for continuing the strategic alternatives process.

On June 16, 2017, the Board of Trustees held a meeting, together with members of the Company’s management team and representatives from Wells Fargo Securities and Hogan Lovells, to discuss updates regarding Round II of the Company’s process. Following a report from the Company’s management, Wells Fargo Securities summarized the terms of the respective proposals by GOV and Party B, and relayed the notice from Party A that it would not be in a position to provide a specific proposal until June 30, 2017. Wells Fargo Securities also summarized its communications with each of the parties since the last meeting of the Board of Trustees, and provided a comparison of each of GOV’s proposal and Party B’s proposal. The Company’s trustees, management and representatives discussed the greater execution risk presented by Party B’s proposal due to the “option-type” reverse termination fee construct of its proposed transaction structure (whereby Party B could terminate the merger agreement for any reason and the Company’s only recourse for Party B’s failure to close would be receipt of the reverse termination fee) and its mortgage-based debt financing, compared to the fully committed proposal by GOV. It was noted that, although GOV’s mark-up of the bid draft merger agreement included a reverse termination fee construct in lieu of full specific performance, Wells Fargo Securities believed, based on its discussions with representatives of GOV and given GOV’s fully financed proposal as a strategic buyer, that GOV would agree to a full specific performance construct, meaning that the Company would be entitled to pursue specific performance to require GOV to consummate the transaction and that GOV would be generally liable on an uncapped basis if it failed to close the transaction. A full discussion ensued among the Board of Trustees, management, Wells Fargo Securities and Hogan Lovells regarding the potential benefits and risks associated with GOV’s and Party B’s respective proposals. The Board of Trustees considered that, although Party B’s proposal included a slightly higher price than GOV’s proposal, pursuing a transaction with GOV would allow the Company to more quickly enter into a favorable definitive merger agreement with GOV on terms providing better certainty that a transaction would be consummated. This decision was based in part on Party B continuing to require two to three weeks of additional time to complete its diligence (during which period

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Party B indicated the need to perform physical inspections of the Company’s Washington, D.C. properties and certain other properties, to commission third-party reports, including property condition reports and environmental reports, and to investigate the possibility of selling certain of the Company’s D.C. properties), while GOV indicated it had substantially completed its due diligence and was prepared to sign a definitive merger agreement within a matter of days.

During this meeting, the trustees also considered the risks associated with engaging in extended exclusive negotiations with Party B, including the fact that the Company, if it were restricted from negotiating with other parties, would continue to face market risk for a longer period while Party B completed its due diligence (including the risk of a reduction in Party B’s offer price given the extensive scope of this proposed additional due diligence), potentially placing the Company in a disadvantaged position to negotiate an agreement that would be fair to the Company and its shareholders. The Company also considered the risk of losing the more certain proposal from GOV while subject to exclusivity with Party B. The Company’s trustees, management and representatives discussed whether granting Party B’s request for two to three weeks, or even a shorter period of seven to 10 days, of additional due diligence would enable more certainty with respect to the parties’ ability to execute on Party B’s proposal. There also was discussion of the termination fees proposed by each of GOV and Party B. The Company’s representatives indicated that both the 4% of equity value proposed by Party B and $30 million fee proposed by GOV were at the higher end of the range of market fees, and that they would seek to negotiate with both parties for a lower termination fee. During the discussion, the Board of Trustees determined that both parties should be encouraged to improve their proposed purchase price and other terms of their proposals (including with respect to conditions and deal certainty) and the importance of submitting a mark-up of the bid draft merger agreement and otherwise solidifying its proposal should be emphasized to Party B. The trustees and the Company’s representatives also discussed the risk of waiting for the parties to improve their proposals, in that one or both of the parties could choose to disengage from the Company’s process, and the Company’s representatives were instructed to move quickly in discussing matters with GOV and Party B while continuing to wait for feedback from Party A. Following this discussion, representatives from Hogan Lovells reviewed with the Board of Trustees again the duties of the trustees under Maryland law with respect to considering a possible change-of-control transaction. A full discussion ensued. The Board of Trustees also discussed Wells Fargo Securities’ disclosures to the Board of Trustees regarding its material relationships with GOV, Party A, Party B and certain related entities.

Following this meeting, in accordance with the directives of the Board of Trustees, on June 17, 2017, representatives from Wells Fargo Securities had telephone calls with representatives of Party B to encourage Party B to provide a mark-up of the bid draft merger agreement in order to fully assess Party B’s proposal and to seek clarification on various matters, including the timeline for, and contingencies regarding, Party B’s due diligence review, specific steps to closing and associated timing for execution of a definitive agreement and announcement of a transaction, as well as an indication of Party B’s ability to improve the economic terms of its proposal. Also on June 17, 2017, as instructed, representatives from Wells Fargo Securities held a telephone call with Mr. Blackman of GOV and GOV’s financial advisor, Citigroup, to communicate the need for GOV to refine its proposed purchase price and agree to provide full specific performance and uncapped damages for failure to close the transaction in lieu of a reverse termination fee construct. A request was also made for clarification regarding specifics steps to closing and associated timing for execution of a definitive agreement and announcement of a transaction. In addition, representatives from Hogan Lovells and the Company’s management team prepared a revised draft merger agreement in response to GOV’s mark-up, which, among other things, rejected GOV’s proposed reverse termination fee construct and instead provided for full specific performance and uncapped damages for failure to close the transaction. Representatives of the Company provided the revised draft merger agreement to GOV on June 19, 2017.

On June 20, 2017, GOV submitted a letter signed by Mr. Blackman setting forth a revised proposal for GOV to acquire 100% of the Company’s outstanding equity for a cash purchase price of $11.15 per share, and indicating that GOV would agree with the Company’s request for an express right to seek full specific performance in lieu of a reverse termination fee. Attached to the letter was an exclusivity agreement signed by

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Mr. Blackman, which provided for exclusivity through July 1, 2017. The letter indicated that the purchase price of $11.15 per share was GOV’s “best and final offer” and further provided that, in the absence of the Company entering into an exclusivity agreement with GOV by noon on June 22, 2017, GOV’s offer would be deemed withdrawn and GOV would cease any further work on a potential transaction with the Company. During the business hours of June 20, 2017, members of the Company’s management team updated the trustees, provided a copy of GOV’s letter and scheduled a meeting of the Board of Trustees for June 21, 2017 to discuss GOV’s revised proposal, as well as discussions with representatives of Party B.

Also on June 20, 2017, at the direction of the Company, representatives from Wells Fargo Securities informed representatives of Party B that the Board of Trustees was in the process of scheduling a meeting for the morning of June 21, 2017 in order to give Party B an opportunity to respond prior to such meeting. In response, on the evening of June 20, 2017, representatives of Party B contacted representatives from Wells Fargo Securities to discuss the terms of Party B’s proposal and engaged in a series of telephone calls with representatives from Wells Fargo Securities that evening. Over the course of these discussions, a representative of Party B orally communicated that Party B would be willing to increase its proposed purchase price to up to $11.25 per share but would continue to require a reverse termination fee structure in the leveraged private-equity model, with the specific terms and the fee amount to be determined. Representatives from Wells Fargo Securities requested clarification as to whether Party B was proposing an “option-type” reverse termination fee (meaning that Party B could terminate the merger agreement for any reason and the Company’s only recourse for Party B’s failure to close would be receipt of the reverse termination fee). Party B’s representatives confirmed and specifically stated that Party B would only agree to an “option-type” reverse termination fee. Party B’s representatives also indicated that Party B would not be in a position to provide a mark-up of the bid draft merger agreement at such time. As directed by the Company, representatives from Wells Fargo Securities reminded Party B’s representatives of the upcoming meeting of the Board of Trustees scheduled for the morning of June 21, 2017, and specifically requested that Party B provide its revised offer in writing, together with a mark-up of the bid draft merger agreement, prior to the scheduled meeting of the Board of Trustees. Party B’s representatives indicated that it was unlikely that Party B would be able to submit an offer in writing before the scheduled meeting of the Board of Trustees and also indicated that, before entering into a definitive agreement with respect to a transaction, Party B needed to undertake the following prior to entering into a definitive agreement: (i) physically inspect the Company’s Washington, D.C. properties and certain other properties, (ii) complete its due diligence review of all materials in the electronic data room, (iii) complete all due diligence with respect to tax matters and (iv) commence certain third-party reports (property condition reports and environmental reports).

On June 21, 2017, the Board of Trustees held a meeting, together with members of the Company’s management team and representatives from Wells Fargo Securities and Hogan Lovells, to discuss updates regarding the representatives’ discussions with GOV and Party B. Wells Fargo Securities summarized its discussions with GOV and Party B since the last meeting of the Board of Trustees and provided an overview of GOV’s letter, a copy of which was previously provided to the trustees in advance of the meeting. Representatives from Wells Fargo Securities indicated that, based on their discussions with Party B’s representatives the prior evening, it was uncertain whether Party B would submit a revised offer in writing reflecting their latest oral communications. It was also noted that the Company had not received any further meaningful updates from Party A. The trustees and the Company’s representatives discussed the price difference between GOV’s final written proposal and the oral communications of Party B’s representatives, and also discussed the expected timing of signing and closing a transaction with each of the parties and execution risks associated with pursuing a transaction with Party B, especially in light of its repeated request for additional due diligence, continued demand for an “option-type” reverse termination fee and the lack of clarity regarding Party B’s proposal in the absence of a mark-up of the bid draft merger agreement. The trustees and the Company’s representatives further discussed that Party B’s proposal contemplated marketing for sale some or all of the Company’s Washington, D.C. properties prior to closing a merger transaction with the Company and that this simultaneous asset sales process could delay closing of a merger transaction with Party B or otherwise raise the risks that Party B might not proceed to closing the transaction at the agreed upon price, or at all. The view of the Board of Trustees was that Party B’s proposal placed significantly greater execution risk on the Company than did GOV’s proposal. Also,

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the trustees and the Company’s representatives discussed the fact that the proposals by both GOV and Party B contemplated a prohibition on the Company making any further dividend payments prior to closing. Finally, the trustees noted the risks of waiting for an unknown proposal to materialize from Party A, including the risk that Party A might not submit a proposal (as Party A had failed to submit a final proposal in connection with its initial discussions with the Company between October 2016 and January 2017). The trustees then discussed the June 22, 2017 deadline for responding to GOV’s final offer and its impact on the process. The trustees discussed the risks associated with not responding to GOV’s deadline, including the risk that GOV could terminate discussions with the Company, leaving the Company with diminished negotiating leverage if it decided to continue discussions with Party B or, in the event it ultimately made a proposal, with Party A. Following a full discussion, the Board of Trustees voted unanimously to authorize the Company to enter into exclusive negotiations with GOV. The trustees directed the Company’s management team to negotiate and execute the exclusivity agreement with GOV and to proceed with negotiations for a definitive agreement providing for a merger transaction. The Company’s management team and representatives noted that upon entering into an exclusivity agreement with GOV, the Company would be restricted from engaging with any third parties, including Party B and Party A, until the termination of such agreement.

Also on June 21, 2017, representatives of Party B submitted to the Company a short, unsigned letter memorializing Party B’s oral offer and proposing to purchase 100% of the equity of the Company for $11.25 per share with a reverse termination fee of approximately $40 million. The letter did not propose specific timing for entering into a definitive agreement, and no mark-up of the bid draft merger agreement was provided. Members of the Company’s management team updated the Board of Trustees and provided them with a copy of the letter. At its meeting earlier that morning, the Board of Trustees unanimously agreed that, in the event that Party B submitted a revised offer letter, no further meeting was required if Party B’s letter was consistent with its oral offer relayed to representatives of the Company the prior evening and discussed at the meeting. As the terms of the unsigned letter on behalf of Party B were consistent with the terms discussed during the meeting of the Board of Trustees earlier that morning, after updating the Board of Trustees, the Company proceeded, based on the authorization of the Board of Trustees, to enter into exclusive negotiations with GOV.

Later on June 21, 2017, in accordance with the directives of the Board of Trustees, the Company entered into an exclusivity agreement with GOV, which required the Company and its representatives to terminate and cease all discussions with all third parties with respect to any alternative acquisition proposal through 5:00 p.m. (ET) on July 1, 2017 and to notify GOV of any alternative acquisition proposal received by the Company during the exclusivity period. The Company terminated access to the electronic data room for Party A, Party B and their respective representatives.

From June 21, 2017 until the execution of the Merger Agreement on June 27, 2017, representatives of the Company and GOV participated in a series of telephone discussions and other communications in order to discuss matters related to a potential merger transaction, including, among other things, due diligence matters and the potential structure and terms of a transaction, including the treatment of unitholders of Company LP, deal protection provisions, termination rights and fees, specific performance remedies and operational matters. During this period, the Company’s management regularly updated the trustees on the status of discussions with GOV, and the trustees expressed continued support for these discussions.

Also during this period, the Company, GOV and their respective legal representatives continued to negotiate the terms of the merger agreement and related transaction documents. Hogan Lovells, on behalf of the Company, and Sullivan & Worcester LLP (“Sullivan & Worcester”), on behalf of GOV, exchanged several drafts of the merger agreement and related transaction documents and held several conference calls to discuss these drafts and identify items to be discussed among the principals of the Company and GOV. GOV and its representatives also continued to conduct confirmatory due diligence of the Company.

On the morning of Sunday, June 25, 2017, the respective general counsels of the Company and of GOV’s manager, The RMR Group LLC (“RMR LLC”), and representatives from Hogan Lovells and Sullivan &

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Worcester participated in a conference call to discuss the merger agreement and related transaction documents. During this discussion, the parties negotiated the merger agreement and narrowed the outstanding issues to a short list. Shortly after the call, the respective principals of the Company and GOV scheduled a conference call for the morning of June 26, 2017 to discuss the list of outstanding issues.

Late in the evening on Sunday, June 25, 2017, the Company received an unsolicited, unsigned letter from representatives of Party B, which set forth a revised proposal for Party B to acquire 100% of the Company’s outstanding equity for a cash purchase price of $11.40 per share. Other than the revised per share offer price, the letter was not substantially different from the unsigned letter provided by representatives of Party B on June 21, 2017. Party B for the first time also provided a mark-up of the bid draft merger agreement, which had been provided to Round II bidders on May 25, 2017. This mark-up reflected the terms of Party B’s unsigned letter and the issues list it previously provided, including an “option-type” reverse termination fee construct pursuant to which the Company would have no specific performance rights and the Company’s only recourse would be the $40 million reverse termination fee if Party B failed to close when all closing conditions had been satisfied or waived (but not for breach generally). In accordance with its obligations under the exclusivity agreement, the Company promptly informed GOV of the Company’s receipt of Party B’s revised offer.

Early in the morning of June 26, 2017, members of the Company’s management team updated the Board of Trustees, provided them with a copy of the unsolicited, unsigned letter received from representatives of Party B, informed them of management’s upcoming, previously scheduled conference call with GOV and scheduled a meeting of the Board of Trustees for later that day.

Later in the morning of June 26, 2017, executive officers of the Company, a managing trustee and officers of GOV and representatives from Hogan Lovells, Sullivan & Worcester, Wells Fargo Securities and Citigroup participated in two conference calls to discuss the list of outstanding issues between the parties. During these discussions, the Company and GOV reached an agreement in principle on the remaining substantive points in the merger agreement, other than the size of the Company’s termination fee, which the Company advised GOV and its representatives that it was continuing to consider (and would have to discuss with the Board of Trustees).

In the afternoon on June 26, 2017, the Board of Trustees held a meeting, together with members of the Company’s management team and representatives from Wells Fargo Securities and Hogan Lovells, to discuss updates regarding the Company’s negotiations with GOV and Party B’s latest offer, which was previously provided to the Board of Trustees in advance of the meeting. The Company’s management and representatives summarized the discussions between the Company and GOV and indicated that the parties had made significant progress in finalizing the merger agreement and related transaction documents and completing confirmatory due diligence, noting that the principal outstanding point was the size of the Company’s termination fee. They also discussed Party B’s new unsolicited, unsigned letter and mark-up received late Sunday evening, and reviewed the Company’s obligations under its exclusivity agreement with GOV not to engage in discussions with any third party. Wells Fargo Securities summarized for the Board of Trustees its discussions with representatives of GOV regarding GOV’s expected timing for a transaction with the Company, which was to enter into a definitive merger agreement late in the day on June 27, 2017 and to launch an equity offering prior to market open on the morning of June 28, 2017. The trustees and the Company’s representatives discussed the price difference between the two proposals and the relative certainty and potential execution risks presented by each proposal at this stage in the process. It continued to be the unanimous view of the Board of Trustees that Party B’s proposal placed significantly greater execution risk on the Company than did GOV’s proposal. The trustees noted that GOV was prepared to enter into a definitive merger agreement for a fully committed, fully enforceable transaction with the Company immediately upon approval by the Board of Trustees. The trustees and the Company’s representatives also discussed some of the uncertainties still associated with Party B’s proposal, as well as the fact that it was still structured as an “option-type” transaction pursuant to which Party B could terminate the merger agreement for any reason, and a $40 million reverse termination fee would be the Company’s only recourse for Party B’s failure to close the transaction. In addition, the trustees discussed the fact that Party B’s mark-up of the bid draft merger agreement contemplated a simultaneous asset sales process for

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certain assets that could both delay closing and potentially impact the likelihood that Party B would fail to close (and pay the reverse termination fee) or seek revised pricing for the transaction if Party B did not obtain from the proposed asset sales the price contemplated by Party B in underwriting the portfolio (in particular when combining this asset sale concept with the “option-type” structure contemplated by Party B’s offer). In light of this discussion and the continued uncertainty posed by Party B’s proposal, the Board of Trustees indicated continued support for the GOV transaction, but instructed the Company and its representatives to seek an improved offer price and lower termination fee from GOV in light of Party B’s new unsolicited, unsigned letter.

Shortly after the meeting of the Board of Trustees, and as instructed, representatives from Wells Fargo Securities had a telephone call with representatives of Citigroup to relay the request of the Board of Trustees for an improved purchase price and lower termination fee from GOV. Citigroup communicated that GOV already had improved its proposed purchase price from $11.00 per share to $11.15 per share in the proposal submitted on June 20, 2017 and that the representatives of Citigroup believed that $11.15 per share continued to be GOV’s best and final offer. Representatives of Citigroup thereafter confirmed that they had discussed the Board of Trustees’ request with GOV and that GOV indicated that $11.15 per share was its best and final offer and that if a definitive merger agreement was not signed the following day, GOV would terminate discussions with the Company. However, Citigroup indicated that GOV would agree to reduce the Company’s termination fee from the $30 million proposed by GOV to $25 million.

In the evening on June 26, 2017, the Board of Trustees held another meeting, together with members of the Company’s management team and representatives from Wells Fargo Securities and Hogan Lovells, to discuss updates regarding the Company’s continued negotiations with GOV. Wells Fargo Securities summarized its discussions with Citigroup, including the fact that GOV had communicated it was not willing to further increase its final purchase price of $11.15 per share, but would agree to a reduced Company termination fee of $25 million. The trustees and the Company’s representatives discussed the relative certainty of a transaction with GOV, in comparison to Party B’s proposal. The Company’s trustees, management and representatives also again discussed Party B’s contemplated marketing for sale some or all of the Washington, D.C. properties, noting that in earlier communications, they had learned that Party B’s expectations regarding the values it believed could be realized in such sales transactions were, in the Company’s view, aggressive. As a result, the possibility that Party B might not be able to realize its expected proceeds from the sale of such assets, when considered alongside the proposed “option-type” reverse termination fee structure, could present significant execution risks for the Company to consummate a transaction at the agreed upon price, or at all. Also discussed was the recent closing price of the Common Shares, which, at $11.35 per share, was higher than GOV’s offer, although it was noted that GOV’s offer reflected a premium of approximately 9.3% to the Company’s 30-trading day volume weighted average price ended April 24, 2017, the last trading day before media speculation regarding a potential sale of the Company, and a premium of approximately 11.4% over the unaffected closing price for a Common Share on March 24, 2017, the last trading day prior to commencement of the Company’s strategic alternatives process. The Board of Trustees unanimously expressed consensus that the Company should continue to engage in discussions with GOV with a view toward finalizing the merger agreement and related transaction documents, and scheduled a meeting of the Board of Trustees for the following evening.

Following this meeting, in accordance with the directives of the Board of Trustees, on June 26, 2017 and on June 27, 2017, the Company, GOV and their respective representatives continued discussions and made significant progress in finalizing the merger agreement and related transaction documents.

In the evening on June 27, 2017, the Board of Trustees held a meeting, together with members of the Company’s management team and representatives from Wells Fargo Securities and Hogan Lovells, to discuss updates regarding the Company’s continued negotiations with GOV. The Company’s management team provided updates on the Company’s discussions with GOV, including that the merger agreement was substantially complete and that the parties were prepared to enter into a definitive agreement later that night if approved by each party’s board of trustees. The Board of Trustees expressed its consensus view that, as currently contemplated, the proposed transaction with GOV presented a superior transaction to Party B’s current proposal,

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notwithstanding the perceived difference in price, given the certainty, expected speed and contemplated terms of the transaction with GOV, as compared with the same factors in Party B’s proposed transaction. Representatives from Hogan Lovells summarized the terms of the merger agreement and related transaction documents previously provided to the trustees in advance of the meeting and responded to questions from the trustees. Representatives from Hogan Lovells also provided a review of the duties of the trustees under Maryland law with respect to considering a possible change-of-control transaction. The trustees also reviewed and discussed each of the proposed resolutions previously provided to the trustees in advance of the meeting. During an executive session, from which the Company’s management team, including Robert Milkovich, President, Chief Executive Officer and Chief Operating Officer and a trustee of the Company, was excused, the remaining trustees discussed the proposed transaction, management’s role in negotiating the proposed transaction and any potential conflicts of interest in connection therewith, and following that discussion recommended that the full Board of Trustees approve the transaction. Following this discussion, the Company’s management team, including Mr. Milkovich, returned to the meeting, and the trustees continued discussion and evaluation of the proposed transaction. Wells Fargo Securities reviewed its financial analysis of the consideration to be received in the REIT Merger with the Board of Trustees and rendered to the Board of Trustees an oral opinion, confirmed by delivery of a written opinion dated June 27, 2017, to the effect that, as of such date and based on and subject to various assumptions made, procedures followed, matters considered and limitations and qualifications described in its opinion, the consideration to be received in the REIT Merger by holders of Common Shares (other than the GOV Parties and their respective affiliates) pursuant to the Merger Agreement was fair, from a financial point of view, to such holders. After discussion, the Board of Trustees unanimously determined that the Merger Agreement and related transaction documents were advisable and fair to and in the best interests of the Company and its shareholders and approved the mergers, the Merger Agreement, the other transaction documents and the transactions contemplated thereby and further resolved to recommend to the Company’s shareholders that they vote to approve the REIT Merger and the other transactions contemplated by the Merger Agreement.

Later on June 27, 2017, representatives of the Company and GOV executed the Merger Agreement. Each of the Company and GOV issued a press release announcing the Merger Agreement prior to the opening of trading on June 28, 2017.

Following the execution of the Merger Agreement, in accordance with the terms thereof, the Company sent letters to the parties that had entered into nondisclosure agreements with the Company during its strategic alternatives process, which letters instructed such parties to return or destroy the confidential due diligence materials previously provided through the process.

Recommendations and Reasons for the Mergers

After careful consideration, our Board of Trustees has unanimously approved the REIT Merger, the Merger Agreement and the other transactions contemplated thereby and has declared the REIT Merger, the Merger Agreement and the other transactions contemplated thereby advisable and in the best interests of the Company and its shareholders. Our Board of Trustees unanimously recommends that you vote “FOR” the proposal to approve the REIT Merger and the other transactions contemplated by the Merger Agreement, “FOR” the non-binding, advisory merger-related compensation proposal and “FOR” the adjournment proposal.

In evaluating the REIT Merger, our Board of Trustees consulted with the Company’s executive officers and outside legal and financial advisors and, in reaching its decision to unanimously approve the transactions contemplated by the Merger Agreement, including the REIT Merger and the Partnership Merger, carefully considered numerous factors that our Board of Trustees believed supported its decision, including the following material factors:

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Our Board of Trustees also considered a variety of risks and other potentially negative factors concerning the REIT Merger and the Merger Agreement, including the following:

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The above discussion of the factors considered by our Board of Trustees is not intended to be exhaustive and is not provided in any specific order or ranking, but does set forth material factors considered by our Board of Trustees. In view of the wide variety of factors considered in connection with its evaluation of the mergers and the complexity of these matters, our Board of Trustees did not consider it practicable to, and did not attempt to, quantify, rank or otherwise assign relative or specific weight or values to any of these factors, and individual trustees may have held varied views of the relative importance of the factors considered. Our Board of Trustees viewed its position and recommendation as being based on an overall review of the totality of the information available to it, including discussions with the Company’s management and legal and financial advisors, and considered these factors to be favorable to, and to support, its determination regarding the mergers, and determined that, in the aggregate, the potential benefits considered outweighed the potential risks or possible negative consequences of approving the mergers, the Merger Agreement and the other transactions contemplated thereby. This explanation of the Company’s reasons for entering into the REIT Merger and other information presented in this section is forward-looking in nature and should be read in light of the “Cautionary Statement Regarding Forward-Looking Statements.”

For the reasons set forth above, our Board of Trustees has unanimously approved the REIT Merger, the Merger Agreement and the other transactions contemplated thereby and has declared the REIT Merger, the Merger Agreement and the other transactions contemplated thereby advisable and in the best interests of the Company and its shareholders. Our Board of Trustees unanimously recommends that you vote “FOR” the proposal to approve the REIT Merger and the other transactions contemplated by the Merger Agreement, “FOR” the non-binding, advisory merger-related compensation proposal and “FOR” the adjournment proposal.

Opinion of the Company’s Financial Advisor

The Company has engaged Wells Fargo Securities to act as the Company’s financial advisor in connection with the mergers. As part of Wells Fargo Securities’ engagement, the Board of Trustees requested that Wells Fargo Securities evaluate the fairness, from a financial point of view, of the consideration to be received in the REIT Merger by holders of Common Shares (other than the GOV Parties and their respective affiliates) pursuant to the Merger Agreement. On June 27, 2017, at a meeting of the Board of Trustees held to evaluate the mergers, Wells Fargo Securities rendered to the Board of Trustees an oral opinion, confirmed by delivery of a written opinion dated June 27, 2017, to the effect that, as of such date and based on and subject to various assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken stated in its opinion, the consideration to be received in the REIT Merger by holders of Common Shares (other than the GOV Parties and their respective affiliates) pursuant to the Merger Agreement was fair, from a financial point of view, to such holders.

The full text of Wells Fargo Securities’ written opinion, dated June 27, 2017, to the Board of Trustees is attached as Exhibit B to this Proxy Statement and is incorporated in this Proxy Statement by reference. The written opinion sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken by Wells Fargo Securities in rendering its opinion. The following summary is qualified in its entirety by reference to the full text of the opinion. The opinion was addressed to the Board of Trustees (in its capacity as such) for its information and use in connection with its evaluation of the consideration to be received in the REIT Merger from a financial point of view and did not address any other terms, aspects or implications of the mergers. Wells Fargo Securities’ opinion did not address the merits of the underlying decision by the Company to enter into the Merger Agreement or the relative merits of the mergers compared with other business strategies

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or transactions available or that have been or might be considered by the Company or the Board of Trustees or in which the Company might engage. Wells Fargo Securities’ opinion does not constitute a recommendation to the Board of Trustees or any other person or entity in respect of the mergers, including as to how any holder of any of the Company’s securities should vote or act in connection with the mergers or any other matters.

The terms of the mergers were determined through negotiations between the Company and GOV, rather than by any financial advisor, and the decision to enter into the Merger Agreement was solely that of the Board of Trustees. Wells Fargo Securities did not recommend any specific form of consideration to the Board of Trustees or that any specific form of consideration constituted the only appropriate consideration for the mergers. Wells Fargo Securities’ opinion was only one of many factors considered by the Board of Trustees in its evaluation of the consideration to be received in the REIT Merger and should not be viewed as determinative of the views of the Board of Trustees, management or any other party with respect to the mergers or the consideration payable in the mergers.

In arriving at its opinion, Wells Fargo Securities, among other things:

In connection with its review, Wells Fargo Securities assumed and relied upon the accuracy and completeness of the financial and other information provided, discussed with or otherwise made available to Wells Fargo Securities, including all accounting, tax, regulatory and legal information, and Wells Fargo Securities did not make (and did not assume any responsibility for) any independent verification of such

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information. Wells Fargo Securities relied upon assurances of the Company’s management and other representatives of the Company that they were not aware of any facts or circumstances that would make such information inaccurate or misleading. With respect to the financial forecasts, estimates and other information relating to the Company that Wells Fargo Securities was directed to utilize in its analyses, Wells Fargo Securities was advised by the Company’s management and Wells Fargo Securities assumed that they were reasonably prepared and reflected the best currently available estimates, judgments and assumptions of the Company’s management as to the future financial performance of the Company and the other matters covered thereby. Wells Fargo Securities assumed no responsibility for, and expressed no view as to, such forecasts, estimates or other information utilized in Wells Fargo Securities’ analyses or the judgments or assumptions upon which they were based. Wells Fargo Securities also assumed that there had been no meaningful changes in the condition (financial or otherwise), results of operations, businesses or prospects of the Company since the date of the most recent financial statements and other information provided to Wells Fargo Securities. Wells Fargo Securities relied, at the direction of the Company, upon the assessments of the Company’s management as to, among other things, (i) the potential impact on the Company of certain market, competitive and other trends in and prospects for the real estate industry and related credit and financial markets, including in the greater Washington D.C. and southern Virginia markets, and governmental, regulatory and legislative matters relating to or otherwise affecting the Company, and (ii) existing and future relationships, agreements and arrangements with, and the ability to attract and retain, key employees, property managers, leasing agents, tenants and other commercial relationships of the Company. Wells Fargo Securities assumed, with the Company’s consent, that there would be no developments with respect to any such matters that would be meaningful in any respect to Wells Fargo Securities’ analyses or opinion and that any alternative transaction structure to the mergers as permitted under the Merger Agreement would not impact such analyses or opinion.

In arriving at its opinion, Wells Fargo Securities did not conduct physical inspections of the properties or assets of the Company or any other entity, and Wells Fargo Securities did not make and was not provided with any evaluations or appraisals of the properties, assets or liabilities (contingent, derivative, off-balance sheet or otherwise) of the Company or any other entity. Wells Fargo Securities also did not evaluate the solvency or fair value of the Company or any other entity under any state, federal or other laws relating to bankruptcy, insolvency or similar matters.

In rendering its opinion, Wells Fargo Securities assumed, at the direction of the Company, that the final form of the Merger Agreement, when signed by the parties thereto, would not differ from the draft Merger Agreement reviewed by Wells Fargo Securities in any respect meaningful to Wells Fargo Securities’ analyses or opinion, that the mergers would be consummated in accordance with the terms described in the Merger Agreement and related documents and in compliance with all applicable laws, documents and other requirements without amendment or waiver of any material terms or conditions and that, in the course of obtaining any necessary governmental, regulatory or third party consents, approvals or agreements for the mergers, no delay, limitation or restriction, including any divestiture or other requirements, would be imposed or occur or action would be taken that would be meaningful in any respect to Wells Fargo Securities’ analyses or opinion. Wells Fargo Securities was advised by the Company, and Wells Fargo Securities assumed, that the Company operated in conformity with the requirements for qualification as a REIT for U.S. federal income tax purposes since its election to be taxed as a REIT.

Wells Fargo Securities’ opinion was necessarily based on economic, market, financial and other conditions existing, and information made available to Wells Fargo Securities, as of the date of Wells Fargo Securities’ opinion. Although subsequent developments may affect the matters set forth in its opinion, Wells Fargo Securities does not have any obligation to update, revise, reaffirm or withdraw its opinion or otherwise comment on or consider any such events occurring or coming to Wells Fargo Securities’ attention after the date of its opinion.

Wells Fargo Securities’ opinion only addressed the fairness, from a financial point of view and as of the date of the opinion, of the consideration to be received in the REIT Merger by holders of Common Shares

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(other than the GOV Parties and their respective affiliates) to the extent expressly specified in Wells Fargo Securities’ opinion, without regard to individual circumstances of specific holders that may distinguish such holders or the securities of the Company held by such holders, and no opinion or view was expressed as to the relative fairness or otherwise of any consideration or other amounts payable in respect of any other securities of the Company, including, without limitation, in respect of units of partnership interest in Company LP or any other entity. Wells Fargo Securities’ opinion did not address any other terms, aspects or implications of the mergers, including, without limitation, the form or structure (or any alternative structure) of the mergers or any terms, aspects or implications of any arrangements, agreements or understandings entered into in connection with or contemplated by the mergers or otherwise. In addition, Wells Fargo Securities’ opinion did not address the fairness of the amount or nature of, or any other aspects relating to, any compensation to be received by any officers, directors or employees of any parties to the mergers or any related entities, or class of such persons, relative to the consideration to be received in the REIT Merger or otherwise. Wells Fargo Securities’ opinion also did not address the merits of the underlying decision by the Company to enter into the Merger Agreement or the relative merits of the mergers compared with other business strategies or transactions available or that have been or might be considered by the Company or the Board of Trustees or in which the Company might engage. Wells Fargo Securities also did not express any opinion or view with respect to, and at the direction of the Company relied upon the assessments of representatives of the Company regarding, accounting, tax, regulatory, legal or similar matters as to which Wells Fargo Securities understood that the Company obtained such advice as the Company deemed necessary from qualified professionals. Except as described in this summary, the Company imposed no other instructions or limitations on Wells Fargo Securities with respect to the investigations made or procedures followed by Wells Fargo Securities in rendering its opinion.

In connection with rendering its opinion, Wells Fargo Securities performed certain financial, comparative and other analyses as summarized below. This summary is not a complete description of the financial analyses performed and factors considered in connection with such opinion. In arriving at its opinion, Wells Fargo Securities did not ascribe a specific value to the Common Shares but rather made its determinations as to the fairness, from a financial point of view, of the consideration to be received in the REIT Merger on the basis of various financial and comparative analyses taken as a whole. The preparation of a financial opinion is a complex process and involves various determinations as to the most appropriate and relevant methods of financial and comparative analyses and the application of those methods to the particular circumstances. Therefore, a financial opinion is not readily susceptible to summary description.

In arriving at its opinion, Wells Fargo Securities did not attribute any particular weight to any single analysis or factor considered but rather made qualitative judgments as to the significance and relevance of each analysis and factor relative to all other analyses performed and factors considered in the context of the circumstances of this particular transaction. Accordingly, the analyses must be considered as a whole, as considering any portion of such analyses and factors, without considering all analyses and factors as a whole, could create a misleading or incomplete view of the process underlying such opinion. The fact that any specific analysis has been referred to in the summary below is not meant to indicate that such analysis was given greater weight than any other analysis referred to in the summary. No company is identical to the Company and an evaluation of Wells Fargo Securities’ analyses is not entirely mathematical; rather, such analyses involve complex considerations and judgments concerning financial and operating characteristics and other factors that could affect the public trading or other values of the companies reviewed.

In performing its analyses, Wells Fargo Securities considered industry performance, general business and economic conditions and other matters existing as of the date of its opinion, many of which are beyond the control of the Company or any other parties to the mergers. None of the Company, Wells Fargo Securities or any other person assumes responsibility if future results are different from those described whether or not any such difference is material. Any estimates contained in these analyses and the ranges of values resulting from any particular analysis are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than as set forth below. In addition, analyses relating to the value of properties, businesses or securities do not purport to be appraisals or necessarily reflect the prices at which

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properties, businesses or securities may actually be sold or acquired. Accordingly, the assumptions and estimates used in, and the results derived from, the following analyses are inherently subject to substantial uncertainty.

Financial Analyses

The following is a summary of the material financial analyses provided on June 27, 2017 to the Board of Trustees by Wells Fargo Securities in connection with its opinion. Certain financial analyses summarized below include information presented in tabular format. In order to fully understand the financial analyses, the tables must be read together with the text of each summary, as the tables alone do not constitute a complete description of the financial analyses. Considering the data in the tables below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of such financial analyses.

Net Asset Value Analysis. Wells Fargo Securities performed a net asset value analysis of the Company based on the Company’s balance sheet data as of March 31, 2017 and other information and data provided by the Company’s management. An estimated aggregate net asset value reference range for the Company was calculated based on the net operating income of, and capital costs related to, the Company’s assets as provided by the Company’s management utilizing an approximately ten-year projected period and market and submarket specific capitalization rates on an asset-by-asset basis taking into account, among other factors, the asset quality, tenant roster, portfolio location, current occupancy levels and lease maturity profiles of such assets. For purposes of its net asset value analysis, Wells Fargo Securities also took into account, based on the Company’s balance sheet as of March 31, 2017 and other information and data provided by the Company’s management, (i) the estimated market value of certain land owned by the Company and the total estimated value of the Company’s cash, cash equivalents and other non-real estate assets as of March 31, 2017 and (ii) the total estimated amount of the Company’s liabilities as of March 31, 2017, with total estimated debt marked to market as of May 31, 2017. This analysis indicated the following approximate implied equity value per share reference range for the Company, as compared to the consideration to be received in the REIT Merger:

Selected Public Companies Analysis. Wells Fargo Securities reviewed and compared financial and operating data relating to the Company and the following seven selected publicly traded REITs with primarily office properties that Wells Fargo Securities deemed generally relevant (the “selected companies”):

Wells Fargo Securities reviewed, among other information, closing stock prices of the selected companies on June 26, 2017 (the last trading day prior to execution of the Merger Agreement) as multiples of calendar years 2017 and 2018 estimated funds from operations per share (“FFO per share”) and funds from operations (“FFO”) as adjusted for certain items, including primarily straight-line rent revenues, recurring capital expenditures, above market and below market lease amortization and non-cash employee compensation per share (“AFFO per share”). Estimated financial data of the selected companies were based on publicly available Wall Street research

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analysts’ estimates and other publicly available information. Estimated financial data of the Company were based on financial forecasts and estimates of the Company’s management.

The overall low to high calendar year 2017 estimated FFO per share and calendar year 2017 estimated AFFO per share multiples observed for the selected companies were 11.9x to 18.1x (with a mean of 14.7x and a median of 14.9x) and 16.3x to 23.7x (with a mean of 21.0x and a median of 22.1x), respectively, and the overall low to high calendar year 2018 estimated FFO per share and calendar 2018 estimated AFFO per share multiples observed for the selected companies were 11.4x to 17.5x (with a mean and median of 14.0x, each) and 16.1x to 22.1x (with a mean of 19.5x and a median of 19.8x), respectively. Wells Fargo Securities then applied selected ranges of calendar year 2017 estimated FFO per share and calendar year 2017 estimated AFFO per share multiples of 12.0x to 15.0x and 18.0x to 21.0x, respectively, and selected ranges of calendar year 2018 estimated FFO per share and calendar year 2018 estimated AFFO per share multiples of 11.0x to 14.0x and 17.0x to 20.0x, respectively, derived from the selected companies to corresponding data of the Company. This analysis indicated an overall approximate implied equity value per share reference range for the Company based on calendar years 2017 and 2018 estimated FFO per share of $9.44 to $12.59 and an overall approximate implied equity value per share reference range for the Company based on calendar years 2017 and 2018 estimated AFFO per share of $8.13 to $12.54 from which Wells Fargo Securities selected the following implied equity value per share reference range for the Company, as compared to the consideration to be received in the REIT Merger:

Discounted Cash Flow Analysis. Wells Fargo Securities performed a discounted cash flow analysis of the Company to calculate a range of implied present values of the unlevered free cash flows that the Company was forecasted to generate during the nine months ending December 31, 2017 through the full fiscal year ending December 31, 2021 utilizing financial forecasts and estimates of the Company’s management. Wells Fargo Securities derived implied terminal values by applying to the Company’s estimated forward cash net operating income a range of exit capitalization rates of 7.40% to 7.60%. Present values (as of March 31, 2017) of cash flows and terminal values were then calculated by Wells Fargo Securities using a discount rate range of 8.25% to 9.25%. This analysis indicated the following approximate implied equity value per share reference range for the Company, as compared to the consideration to be received in the REIT Merger:

Dividend Discount Analysis. Wells Fargo Securities performed a dividend discount analysis of the Company to calculate a range of implied present values of the dividends that the Company forecasted would be payable during the nine months ending December 31, 2017 through the full fiscal year ending December 31, 2019 utilizing financial forecasts and estimates of the Company’s management. Wells Fargo Securities then derived implied terminal values by applying to the Company’s estimated forward-year FFO for the fiscal year ending December 31, 2019 a selected range of terminal FFO multiples of 12.0x to 14.0x. Present values (as of March 31, 2017) of distributable dividends and terminal values were then calculated by Wells Fargo Securities using a selected discount rate range of 10.25% to 11.25%. This analysis indicated the following approximate implied equity value per share reference range for the Company, as compared to the consideration to be received in the REIT Merger:

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Miscellaneous

Wells Fargo Securities is the trade name for certain capital markets and investment banking services of Wells Fargo & Company and its subsidiaries, including Wells Fargo Securities. Wells Fargo Securities is an internationally recognized investment banking firm that is regularly engaged in providing financial advisory services in connection with mergers and acquisitions. The Company selected Wells Fargo Securities as a financial advisor in connection with the mergers because of its qualifications, reputation and experience generally and particularly in the real estate industry and its familiarity with the Company and its business. The issuance of Wells Fargo Securities’ opinion was approved by an authorized committee of Wells Fargo Securities.

The Company has agreed to pay Wells Fargo Securities for its financial advisory services in connection with the mergers an aggregate fee currently estimated to be approximately $9 million, of which a portion was payable upon delivery of its opinion and approximately $8 million is contingent upon consummation of the mergers. The Company also has agreed to reimburse certain of Wells Fargo Securities’ expenses, including fees and disbursements of Wells Fargo Securities’ counsel, and to indemnify Wells Fargo Securities and certain related parties against certain liabilities, including liabilities under the U.S. federal securities laws, that may arise out of Wells Fargo Securities’ engagement.

Wells Fargo Securities and its affiliates provide a full range of investment banking and financial advisory, securities trading, brokerage and lending services in the ordinary course of business, for which Wells Fargo Securities and such affiliates receive customary fees and, given certain policies and procedures designed to preserve the independence of Wells Fargo Securities’ research and credit analysts, the views of such analysts may differ from those reflected in Wells Fargo Securities’ analyses and opinion. In connection with unrelated matters, Wells Fargo Securities and its affiliates in the past have provided, currently are providing and in the future may provide investment banking and certain other financial services to the Company, GOV and certain of their respective affiliates for which Wells Fargo Securities and its affiliates have received and would expect to receive fees including, during the two-year period prior to the date of Wells Fargo Securities’ opinion, having acted or acting as (i) in the case of the Company, (a) agent in connection with the repurchase of certain securities of the Company, and (b) joint lead arranger and joint lead bookrunning manager for, and as a lender under, certain credit facilities of an affiliate of the Company, and (ii) in the case of GOV and certain other entities managed by GOV’s external manager, The RMR Group, LLC (“RMR LLC”), (a) joint bookrunning manager for certain debt offerings of GOV and certain other entities managed by RMR LLC, (b) joint lead arranger, joint lead bookrunner or joint bookrunner and/or administrative agent for, and as a lender under, certain credit facilities of GOV and certain other entities managed by RMR LLC, (c) broker for certain real estate sales and in identifying potential financing sources for the purchase of properties of an entity managed by RMR LLC, and (d) registrar, transfer agent and/or exchange agent for certain securities of GOV and certain other entities managed by RMR LLC. During the two-year period prior to the date of Wells Fargo Securities’ opinion, Wells Fargo Securities received for investment banking services aggregate fees of approximately $370,000 from the Company and/or certain of its affiliates and approximately $10 million from GOV and certain other entities managed by RMR LLC. In the ordinary course of business, Wells Fargo Securities and its affiliates may actively trade, hold or otherwise effect transactions in the securities or financial instruments (including bank loans or other obligations) of the Company, GOV, The RMR Group Inc. and certain of their respective affiliates for Wells Fargo Securities’ and its affiliates’ own account and for the accounts of customers and, accordingly, may at any time hold a long or short position in such securities or financial instruments.

Certain Unaudited Prospective Financial Information of the Company

Except with respect to our annual guidance provided and updated from time to time in the ordinary course of business, we do not as a matter of course make public long-term projections as to future revenues, net operating income, earnings, funds from operations or other results given, among other reasons, the uncertainty of

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the underlying assumptions and estimates. However, we are including below certain unaudited prospective financial information of the Company that was prepared by our management and made available to our Board of Trustees in connection with the evaluation of the REIT Merger. This information also was provided to the Company’s financial advisor for its use and reliance in connection with its financial analyses and opinion described under “—Opinion of the Company’s Financial Advisor.” The inclusion of this information should not be regarded as an indication that any of the Company, its affiliates, management, advisors or any other recipient of this information considered, or now considers, it to be necessarily predictive of actual future results.

The unaudited prospective financial information was, in general, prepared solely for internal use and is subjective in many respects. As a result, the prospective results may not be realized and actual results may be significantly higher or lower than estimated. Since the unaudited prospective financial information covers multiple years, that information by its nature becomes less predictive with each successive year.

The unaudited prospective financial information provided below are forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act and are subject to risks and uncertainties that could cause actual results to differ materially from those statements and should be read with caution. You should review the Company’s Securities and Exchange Commission filings for a description of risk factors with respect to our business. See “Cautionary Statement Regarding Forward-Looking Statements” and “Where You Can Find More Information” in this Proxy Statement. The unaudited prospective financial information was not prepared with a view toward public disclosure, nor was it prepared with a view toward compliance with GAAP, published guidelines of the Securities and Exchange Commission or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. In addition, the unaudited prospective financial information requires significant estimates and assumptions that make it inherently less comparable to the similarly titled GAAP measures in the Company’s historical GAAP financial statements.

Neither the Company’s independent registered public accounting firm nor any other independent accountants have compiled, examined or performed any audit or other procedures with respect to the unaudited prospective financial information contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability. The report of the Company’s independent registered public accounting firm contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, which is incorporated by reference into this Proxy Statement, relates to the historical financial information of the Company and does not extend to the unaudited prospective financial information and should not be read to do so. Furthermore, the unaudited prospective financial information does not take into account any circumstances or events occurring after the date on which it was prepared. The following table presents selected unaudited prospective financial data for the 12 months ending December 31, 2017 through December 31, 2020 for the Company. It does not give effect to the mergers and related transactions.

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Pro Rata Cash NOI, Adjusted EBITDA, FFO, AFFO and FAD are “non-GAAP financial measures” as set forth in Item 10(e) of Regulation S-K and should not be considered as alternatives to net income (determined in accordance with GAAP) or as an indication of our performance. None of these non-GAAP measures represents cash generated from operating activities determined in accordance with GAAP, and neither is a measure of liquidity or an indicator of our ability to make cash distributions.

In preparing the foregoing unaudited prospective financial information, we made a number of assumptions and estimates regarding, among other things, interest rates, corporate financing activities, including our ability to finance our operations and investments and refinance certain of our outstanding indebtedness and the terms of any such financing or refinancing and leverage ratios, the amount and timing of our investments and the yield to be achieved on such investments, the amount and timing of capital expenditures, distribution rates, occupancy and the amount of general and administrative costs.

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The assumptions made in preparing the above unaudited prospective financial information may not reflect actual future conditions. The estimates and assumptions underlying the unaudited prospective financial information involve judgments with respect to, among other things, future economic, competitive, regulatory and financial market conditions and future business decisions which may not be realized and that are inherently subject to significant business, economic, competitive and regulatory uncertainties and contingencies, including, among others, risks and uncertainties described under “Cautionary Statement Regarding Forward-Looking Statements,” as well as the risks described in the Company’s periodic reports filed with the Securities and Exchange Commission, all of which are difficult to predict and many of which are beyond our control. Accordingly, the projected results may not be realized, and actual results likely will differ, and may differ materially, from those reflected in the unaudited prospective financial information, whether or not the merger is completed.

You should not place undue reliance on the unaudited prospective financial information set forth above. No representation is made by the Company or any other person to any shareholder or other person regarding the ultimate performance of the Company compared to the information included in the above unaudited prospective financial information. The inclusion of unaudited prospective financial information in this Proxy Statement should not be regarded as an indication that the prospective financial information will be necessarily predictive of actual future events, and such information should not be relied on as such. You should review the description of the Company’s reported results of operations and financial condition and capital resources during 2016, including in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s periodic reports filed with the Securities and Exchange Commission and incorporated by reference into this Proxy Statement.

WE DO NOT INTEND TO UPDATE OR OTHERWISE REVISE THE ABOVE UNAUDITED PROSPECTIVE FINANCIAL RESULTS TO REFLECT CIRCUMSTANCES EXISTING AFTER THE DATE WHEN MADE OR TO REFLECT THE OCCURRENCE OF FUTURE EVENTS, EVEN IN THE EVENT THAT ANY OR ALL OF THE ASSUMPTIONS UNDERLYING SUCH UNAUDITED PROSPECTIVE FINANCIAL RESULTS ARE NO LONGER APPROPRIATE, EXCEPT AS MAY BE REQUIRED BY APPLICABLE LAW.

Financing

The consummation of the mergers is not subject to any financing condition. GOV expects to finance the amounts needed to pay the merger consideration to the Company’s shareholders and certain limited partners of the Company LP and to pay the amounts due to holders of the Company’s equity-based awards, as well as the fees and expenses related to the mergers and other transactions contemplated by the Merger Agreement, with cash on hand, including the approximately $737 million in net proceeds that GOV received from its July 2017 underwritten public offerings of GOV’s common shares and senior unsecured notes, and borrowings under GOV’s existing $750 million unsecured revolving credit facility.

Concurrently with the execution of the Merger Agreement, GOV entered a commitment letter with a group of institutional lenders for an unsecured bridge loan facility in an initial aggregate principal amount of up to $750 million. The commitment letter for this bridge loan facility was terminated on July 20, 2017 following GOV’s July 2017 underwritten public offerings of common shares and senior unsecured notes, the proceeds of which GOV will use to finance the mergers and the other transactions contemplated by the Merger Agreement.

Interests of Our Trustees and Executive Officers in the Mergers

In considering the recommendation of our Board of Trustees to approve the REIT Merger and the other transactions contemplated by the Merger Agreement, shareholders should be aware that certain trustees and executive officers of the Company have interests in the REIT Merger that may be different from, or in addition to, the interests of shareholders generally and which may create potential conflicts of interest. Our Board of Trustees was aware of these interests and considered them, among other matters, in approving the REIT Merger,

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the Merger Agreement and the other transactions contemplated thereby and making its recommendations that the shareholders of the Company approve the REIT Merger and the other transactions contemplated by the Merger Agreement. Set forth below are descriptions of these interests, including interests in equity or equity-based awards, change in control severance arrangements and other compensation and benefit arrangements that may be realized by virtue or as a result of the REIT Merger. The dates used in the discussions below to quantify certain of these interests have been selected for illustrative purposes only. They do not necessarily reflect the dates on which certain events will occur.

Company Restricted Shares

Immediately prior to the REIT Merger effective time, each Company Restricted Share that is outstanding immediately prior to the REIT Merger effective time, whether or not vested or subject to any performance condition that has not been satisfied or performance period that has not lapsed, will vest in full (which, for Company Restricted Shares subject to performance conditions shall mean fully vested in accordance with, and shall include any additional Company Restricted Shares issued upon performance in excess of “target” level in accordance with, the terms of the applicable award agreement or equity incentive plan), will be treated as an outstanding Common Share and will be cancelled and converted into the right of the holder to receive the merger consideration of $11.15, without interest, less any applicable tax withholding.

At the REIT Merger effective time, each Company Restricted Share that will vest or become issued and vest in accordance with the terms of the applicable award agreement, equity incentive plan or the terms of the Merger Agreement (including (i) any Company Restricted Shares issued upon performance in excess of “target” level in accordance with the terms of the applicable award agreement or equity incentive plan governing such awards and (ii) any Company Restricted Shares issued upon conversion of an award outstanding under the Company historical-looking, long-term incentive program for the measurement period commencing January 1, 2015 and ending December 31, 2017 that is settled in the form of Company Restricted Shares (each, a “Look-Back LTI Award”) as described below) will vest in full, will be treated as an outstanding Common Share and will be cancelled and converted into the right of the holder to receive the merger consideration of $11.15, without interest, less any applicable tax withholding.

Immediately prior to the REIT Merger effective time, each Look-Back LTI Award that is outstanding immediately prior to the REIT Merger effective time shall automatically become earned (with the portion of such award that is subject to the achievement of performance-based metrics becoming earned at the greater of the target award and or actual performance, measured as of immediately prior to the REIT Merger effective time) and shall be converted into a number of fully vested Company Restricted Shares, equal to the dollar amount of such earned Look-Back LTI Award divided by the merger consideration. At the REIT Merger effective time, each such fully vested Company Restricted Share shall be considered an outstanding Company Restricted Share for all purposes of the Merger Agreement, including the right to receive the merger consideration of $11.15 as described above.

In addition, as of the REIT Merger effective time, each holder of Company Restricted Shares that become fully vested, or issued and vested, shall be entitled to receive a cash lump sum payment equal to the sum of any cash dividends and other distributions paid from the applicable date of grant of such Company Restricted Shares (which, with respect to any Company Restricted Shares issued immediately prior to the REIT Merger effective time, means the date of the applicable award) to immediately prior to the REIT Merger effective time with respect to the total number of Company Restricted Shares that become fully vested or issued and vested as of immediately prior to the REIT Merger effective time (but including only those dividends and other distributions which have not previously been distributed to the holder).

The following table summarizes the (i) aggregate number of outstanding Company Restricted Shares held by each of the Company’s named executive officers and trustees during the prior fiscal year, (ii) the number of Company Restricted Shares to be issued to the Company’s named executive officers upon (a) conversion of the

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Look-Back LTI Awards and (b) performance in excess of “target” level in accordance with the terms of the respective award agreements or equity incentive plan governing such awards for the performance-based Company Restricted Shares for the performance period running from February 22, 2016 through December 31, 2018 (the “2016-2018 LTI Company Restricted Shares”) and the performance-based Company Restricted Shares for the performance period running from January 1, 2017 through December 31, 2019 (the “2017-2019 LTI Company Restricted Shares”)), (iii) the cash dividends payable to the Company’s named executive officers and trustees with respect to the Company Restricted Shares and (iv) the consideration that each of them may become entitled to receive in connection with the vesting and settlement of these awards, in each case, assuming continued employment or service through the REIT Merger effective time and assuming the REIT Merger effective time occurred on October 2, 2017.

Payments upon Change in Control

As a result of the change in control that would result from the mergers, each of the Company’s named executive officers would be entitled to certain severance benefits.

The Company is currently party to employment agreements (the “Employment Agreements”) with each of Robert Milkovich, Andrew P. Blocher and Samantha Sacks Gallagher, which entitles them to receive certain severance benefits from the Company based on the nature of their termination. The Employment Agreements provide that if within the period commencing on a change of control and ending two years following a change in control their employment is terminated by the Company without “cause” or by the applicable executive for “good reason,” the applicable executive will be entitled to receive all amounts and benefits that are payable to such executive under his or her applicable Employment Agreement, which amounts will include the following: (w) any accrued but unpaid compensation; (x) a single sum payment equal to three times the sum of (i) the executive’s highest annual base salary in effect for the three years prior to their termination and (ii) the average annual bonus paid to the executive during the three years prior to their termination (or the period of the executive’s employment, if less than three years); (y) (i) a pro rata short-term incentive bonus calculated at the target amount of the applicable executive’s short-term incentive and based on the number of days in the fiscal year that the applicable executive was employed through the termination date or (ii) if the termination occurs after the end of a fiscal year and prior to the payment of the annual cash incentive under the short-term incentive plan for such prior fiscal year, an amount equal to the annual cash incentive that the applicable executive would have received under the short-term incentive plan had he or she remained employed through the payment date, in either case paid as a lump sum; and (z) an additional lump sum payment of $75,000.

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The table below under “—Quantification of Payments and Benefits” reflects the amount of payments and benefits that each of the Company’s named executive officers would be entitled to receive upon termination of such executive’s employment in connection with the mergers. In the event of a termination by the surviving company for cause or by the executive without good reason, including in connection with a change in control, such executive would not be entitled to any of such amounts.

Indemnification of Our Trustees and Officers

The Merger Agreement provides that for a period of six years after the REIT Merger effective time, all rights to indemnification existing in favor of our trustees and officers contained in our Declaration of Trust and Bylaws in effect as of the date of the Merger Agreement will become the obligations of the surviving company in the REIT Merger, and the surviving company shall, to the fullest extent permitted by applicable law, indemnify and hold harmless such trustees and officers against all losses, claims, damages, liabilities, costs, expenses, judgments, fines, penalties and amounts paid in settlement arising in whole or in part out of actions or omissions by any of them in their capacity as our trustees or officers occurring at or prior to the REIT Merger effective time (including in respect of the mergers and the other transactions contemplated by the Merger Agreement) and, subject to certain conditions, shall pay related legal fees, costs and expenses incurred by them in connection therewith.

The Merger Agreement requires that GOV and the surviving companies, as applicable, maintain our trustees’ and officers’ liability insurance policies in effect on the date of the Merger Agreement for at least six years after the closing of the mergers for acts or omissions occurring prior to and through the closing date (or substitute policies with at least the same coverage and amounts as our existing policies), or the Company may obtain extended reporting period coverage or purchase a “tail” policy for a cost not in excess of three times the current annual premiums; provided that GOV and the surviving entities will not be required to pay annual premiums in excess of 300% of our current annual premiums.

The parties have agreed not to terminate or modify the obligations described above regarding trustees’ and officers’ indemnification in such a manner as to adversely affect our trustees and officers, and such obligations must be assumed by any successor entity to the surviving company in the mergers as a result of any consolidation, merger, dissolution or transfer of all or substantially all of its properties and assets.

Quantification of Payments and Benefits

The table below sets forth the estimated amounts of payments and benefits that each named executive officer of the Company could receive that are based on or otherwise relate to the mergers. These amounts have been calculated assuming:

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Golden Parachute Compensation

Regulatory Matters

We are unaware of any material federal, state or foreign regulatory requirements or approvals that are required for the execution of the Merger Agreement or the completion of either the REIT Merger or the Partnership Merger, which was approved by the Company, in its capacities as the sole general partner and the majority limited partner of the Company LP, other than the filing of the Articles of Merger with respect to the REIT Merger with, and the acceptance of such Articles of Merger for record by, the State Department of Assessments and Taxation of Maryland, and the filing of a Certificate of Merger with respect to the Partnership Merger by the Company LP with, and the acceptance of such Certificate of Merger for record by, the Secretary of State of the State of Delaware.

Litigation Relating to the Mergers

Three purported federal securities class action lawsuits have been filed against the Company and each of the members of the Board of Trustees in the United States District Court for the District of Maryland. The first case, Schwartz v. First Potomac Realty Trust, et al., (No. 1:17-cv-2214-CCB), was filed on August 4, 2017; the second case, Sciabacucchi v. First Potomac Realty Trust, et al., (No. 1:17-cv-2245-JKB), was filed on August 8, 2017, and also names the Company LP and the GOV Parties as defendants; and the third case, Geml v. First Potomac Realty Trust, et al., (No. 1:17-cv-2263-CCB), was filed on August 10, 2017. Each lawsuit, which purports to have been brought on behalf of all holders of the Common Shares, generally alleges that the preliminary proxy statement filed by the Company with the Securities and Exchange Commission on July 31, 2017 failed to disclose material information about the pending merger transaction in violation of the Exchange Act. The Schwartz complaint seeks to enjoin the defendants from proceeding with the shareholder vote on the proposed merger transaction or consummating the proposed merger unless and until the Company discloses the allegedly omitted information, in addition to damages allegedly suffered by the plaintiffs as a result of the asserted omissions, as well as attorneys’ fees and expenses. The Sciabacucchi and Geml complaints seek to enjoin the defendants from proceeding with the merger transaction, and seek to compel defendants to disseminate a proxy statement that contains the allegedly omitted information, in addition to rescissory damages, as well as attorneys’ fees and expenses. The defendants believe that all of the allegations in the complaints are meritless and intend to defend against the lawsuits vigorously.

Shareholders may file additional lawsuits challenging the pending merger transaction or the other transactions contemplated by the Merger Agreement, which may name the Company, Company LP, the GOV Parties, members of the Board of Trustees or others as defendants. No assurance can be made as to the outcome of such lawsuits or the lawsuits described above, including the amount of costs associated with defending these claims or any other liabilities that may be incurred in connection with the litigation of these claims. If the plaintiffs are successful in obtaining an injunction prohibiting the parties from completing the pending merger transaction, such an injunction may delay the completion of the transaction in the expected timeframe, or may prevent the transaction from being completed altogether.

Material U.S. Federal Income Tax Consequences

The following is a summary of the material U.S. federal income tax consequences of the mergers to holders of Common Shares whose Common Shares are surrendered in the mergers in exchange for the merger consideration pursuant to the Merger Agreement and who hold their Common Shares as a capital asset within the

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meaning of Section 1221 of the Code. The summary is based on the Code, Treasury regulations issued under the Code, and administrative and judicial interpretations thereof, each as in effect as of the date of this proxy statement, all of which are subject to change at any time, possibly with retroactive effect. We have not requested, and do not plan to request, any rulings from the Internal Revenue Service (“IRS”) relating to this transaction concerning our tax treatment or the federal income tax consequences of the mergers, and the statements in this proxy statement are not binding on the IRS or any court. As a result, neither GOV nor the Company can assure you that the IRS would not assert, or that a court would not sustain, a position contrary to any of the tax consequences set forth below.

For purposes of this discussion, the term “U.S. shareholder” means a beneficial owner of Common Shares that is, for U.S. federal income tax purposes:

whose status as a U.S. shareholder is not overridden by an applicable tax treaty.

For purposes of this discussion, a “non-U.S. shareholder” means a beneficial owner of Common Shares that is, for U.S. federal income tax purposes, an individual, corporation, estate or trust and is not a U.S. shareholder as described above.

This summary does not describe all of the tax consequences of the mergers that may be applicable to holders of Common Shares who are subject to special treatment under U.S. federal income tax law (including, for example, financial institutions, dealers in securities, insurance companies or tax-exempt entities, shareholders who acquired Common Shares pursuant to the exercise of an employee stock option or right or otherwise as compensation, partnerships or other pass-through entities (and persons holding Common Shares through a partnership or other pass-through entity), broker-dealers, regulated investment companies, REITs, certain expatriates, United States persons that have a functional currency other than the United States dollar, persons subject to the alternative minimum tax, persons subject to the Medicare contribution tax on net investment income, and shareholders who hold Common Shares as part of a hedge, straddle, conversion, constructive sale or other integrated transaction). In addition, this discussion does not describe the tax consequences of the mergers that may be applicable to a non-U.S. shareholder who:

Except to the extent specifically discussed below, this summary does not address the tax consequences of any transaction other than the mergers. Also, this summary does not address U.S. federal income tax considerations applicable to holders of options or warrants to purchase Common Shares. In addition, no information is provided with respect to the tax consequences of the mergers under applicable state, local or non-United States laws or U.S. federal tax laws other than federal income tax laws.

If a partnership holds Common Shares, the tax treatment of a partner will generally depend on the status of the partners and the activities of the partnership. With regard to a partner in a partnership holding Common Shares, the partner should consult its tax advisors.

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This summary of U.S. federal income tax consequences is for general information purposes only and is not intended to constitute a complete description of all tax consequences relating to the mergers. We urge you to consult with your tax advisor regarding the applicability to you of the rules discussed above and the particular tax effects to you of the mergers, including the application of state, local and foreign tax laws.

Consequences to the Company of the Mergers

For U.S. federal income tax purposes, GOV and the Company will treat the mergers as if the Company had sold all of its assets to GOV in exchange for the merger consideration and the share award payments and the assumption of the Company’s liabilities in a fully taxable transaction and then made a liquidating distribution of such consideration (other than assumed liabilities) to the holders of the Common Shares in exchange for the outstanding Common Shares. The Company is generally entitled to receive a deduction for liquidating distributions due to its qualification for taxation as a REIT under the Code, and it anticipates that its deemed liquidating distribution will exceed its taxable income recognized as a result of the mergers (together with any other undistributed taxable income recognized in the taxable year of the mergers). Accordingly, the Company anticipates that it will not be subject to U.S. federal income tax on any gain recognized in connection with the mergers and the other transactions contemplated by the Merger Agreement.

Pursuant to the Merger Agreement, under certain circumstances the parties may restructure the REIT Merger as a reverse merger. Under a reverse merger structure, REIT Merger Sub would merge with and into the Company and the separate corporate existence of REIT Merger Sub would cease, with the Company continuing as the surviving entity and a wholly-owned subsidiary of GOV. For U.S. federal income tax purposes, GOV and the Company will treat the reverse merger as a sale of Common Shares, rather than a sale of assets by the Company followed by a liquidating distribution.

Consequences of the Mergers to U.S. Shareholders

General. For holders of Common Shares, the mergers will be treated as a taxable sale for U.S. federal income tax purposes by you of your Common Shares in exchange for the merger consideration. As a result, U.S. shareholders will recognize gain or loss equal to the difference, if any, between the cash received in the REIT Merger and the shareholder’s adjusted tax basis in the Common Shares exchanged.

Generally, any gain or loss recognized should be capital gain or loss and will constitute long-term capital gain or loss if you have held the Common Shares for more than one year as of the effective time of the REIT Merger. An individual U.S. shareholder will be subject to tax on net capital gain at a maximum U.S. federal income tax rate of 20%. Capital gains of corporate U.S. shareholders generally are taxable at the regular tax rates applicable to corporations. The deductibility of a capital loss recognized in the exchange is subject to limitations. If you hold blocks of Common Shares which were acquired separately at different times or prices, you must separately calculate your gain or loss for each block of Common Shares.

Special Rule for U.S. Shareholders Who Have Held Shares Less than Six Months. A U.S. shareholder who has held Common Shares for less than six months at the effective time of the REIT Merger, taking into account certain holding period rules, and who recognizes a loss on the exchange of Common Shares for cash in the REIT Merger, will be treated as recognizing a long-term capital loss to the extent of any capital gain dividends received from the Company (including the holder’s share of any designated retained capital gains) with respect to those Common Shares.

Consequences of the Mergers to Non-U.S. Shareholders

General. A non-U.S. shareholder’s gain or loss from the mergers will be determined in the same manner as that of a U.S. shareholder. Subject to the discussion of backup withholding described below, a non-U.S. shareholder’s gain or loss recognized upon receipt of the merger consideration generally will not be subject to

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U.S. federal income tax unless: (1) such non-U.S. shareholder’s Common Shares are treated as being effectively connected with its U.S. trade or business (and, if a tax treaty applies, is attributable to a U.S. permanent establishment by the non-U.S. shareholder); or (2) such non-U.S. shareholder is a nonresident alien individual who is present in the United States for 183 days or more during the calendar year and certain other conditions are met.

A non-U.S. shareholder whose gain is effectively connected with the conduct of a trade or business in the United States will be subject to U.S. federal income tax on such gain on a net basis in the same manner as a U.S. shareholder. In addition, a non-U.S. shareholder may be subject to applicable alternative minimum taxes. Finally, a non-U.S. shareholder that is a corporation may be subject to the 30% branch profits tax (or lower applicable treaty rate) on such effectively connected gain.

If a non-U.S. shareholder is an individual who has been present in the U.S. for 183 days or more during the taxable year of disposition and certain other conditions are satisfied, that shareholder will be subject to a 30% tax on the shareholder’s capital gains, which may be offset by U.S.-source capital losses.

A non-U.S. shareholder who has held more than 10% of the Common Shares at any time during the five-year period ending on the date the mergers are completed or a non-U.S. shareholder who is a “qualified shareholder” as defined in Section 897(k)(3)(A) of the Code should consult its own tax advisors concerning the tax consequences of the receipt of the merger consideration.

Information Reporting and Backup Withholding

Information reporting and backup withholding may apply to payments made in connection with the mergers. Backup withholding, currently at a rate of 28%, will not apply, however, to a shareholder who (a) in the case of a U.S. shareholder, furnishes a correct taxpayer identification number and certifies that it is not subject to backup withholding on an IRS Form W-9 or substitute form, (b) in the case of a non-U.S. shareholder, furnishes an applicable IRS Form W-8 or substitute form, or (c) is otherwise exempt from backup withholding and complies with other applicable rules and certification requirements.

Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against such shareholder’s U.S. federal income tax liability provided the required information is timely furnished to the IRS.

Additional Withholding Tax on Payments Made to Foreign Accounts

Withholding taxes may be imposed under Sections 1471 through 1474 of the Code (such Sections commonly referred to as FATCA) on certain types of payments made to non-U.S. financial institutions and certain other non-U.S. entities. The application of FATCA to the payment of the merger consideration made to a non-U.S. shareholder with respect to Common Shares pursuant to the REIT Merger is not entirely clear. We urge you to consult your tax advisor regarding FATCA and the application of these rules to such payment.

The foregoing discussion of U.S. federal income tax consequences is for general information purposes only and is not intended to constitute a complete description of all tax consequences relating to the mergers. Tax matters are very complicated, and the tax consequences of the mergers to you will depend upon the facts of your particular situation. Because individual circumstances may differ, we urge you to consult with your tax advisor regarding the applicability to you of the rules discussed above and the particular tax effects to you of the mergers, including the application of state, local and foreign tax laws.

Delisting and Deregistration of Common Shares

If the REIT Merger is completed, the Common Shares will no longer be traded on the New York Stock Exchange and will be deregistered under the Exchange Act.

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THE MERGER AGREEMENT

The following summarizes the material provisions of the Merger Agreement. This summary does not purport to be complete and may not contain all of the information about the Merger Agreement that is important to you. The summary of the material terms of the Merger Agreement below and elsewhere in this Proxy Statement is qualified in its entirety by reference to the Merger Agreement, a copy of which is attached to this Proxy Statement as Exhibit A and which we incorporate by reference into this Proxy Statement. We urge you to read the copy of the Merger Agreement attached to this Proxy Statement as Exhibit A carefully and in its entirety, as the rights and obligations of the parties are governed by the express terms of the Merger Agreement and not by this summary or any other information contained in this Proxy Statement.

The Merger Agreement contains representations and warranties made by the Company, the Company LP, GOV, REIT Merger Sub and Partnership Merger Sub. These representations and warranties, which are set forth in the copy of the Merger Agreement attached to this Proxy Statement as Exhibit A, were made for the purposes of negotiating and entering into the Merger Agreement between the parties. In addition, these representations and warranties were made as of specified dates, may be subject to standards of materiality different from what may be viewed as material to our shareholders, or may have been used for the purpose of allocating risk between the parties instead of establishing such matters as facts. Moreover, the representations and warranties are qualified in a number of important respects, including through the use of exceptions for certain matters disclosed by the party that made the representations and warranties to the other parties, and information concerning the subject matter of the representations and warranties, which do not purport to be accurate as of the date of this Proxy Statement, may have changed since the date of the Merger Agreement and subsequent developments or new information qualifying a representation or warranty may have been included in this Proxy Statement. None of the representations and warranties will survive the closing of the mergers and, therefore, they will have no legal effect under the Merger Agreement after the closing of the mergers.

Structure

The Partnership Merger

The Company, in its capacities as the sole general partner and the majority limited partner of the Company LP, on behalf of the Company LP, adopted and approved the Merger Agreement and approved the mergers and the other transactions contemplated by the Merger Agreement and the consummation thereof by the parties. At the Partnership Merger effective time, Partnership Merger Sub will merge with and into the Company LP with the Company LP surviving under the name “GOV NEW OPPTY LP” as a majority-owned subsidiary of the Company and the separate existence of Partnership Merger Sub will cease.

The REIT Merger

At the REIT Merger effective time, the Company will merge with and into REIT Merger Sub with REIT Merger Sub surviving under the name “GOV NEW OPPTY REIT” and the separate corporate existence of the Company will cease. Following the completion of the REIT Merger, the Common Shares will no longer be traded on the New York Stock Exchange and will be deregistered under the Exchange Act and REIT Merger Sub and the Company LP will be indirect, majority owned subsidiaries of GOV.

Pursuant to the Merger Agreement, under certain circumstances as set forth therein and if requested by GOV, the parties may restructure the REIT Merger as a reverse merger and make such reasonable amendments to the Merger Agreement as may be mutually agreed and necessary to reflect such structure; provided that the reverse merger structure shall not: (i) delay the closing; (ii) relieve GOV, REIT Merger Sub or Partnership Merger Sub of their obligations to pay the merger consideration and share award payments at the closing as required under the Merger Agreement; (iii) adversely affect the classification or qualification for taxation of the Company as a REIT; or (iv) reasonably be expected to result in adverse consequences to the Company’s

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shareholders or Company LP’s limited partners as a whole, that are incrementally greater or more adverse than under the currently contemplated structure, unless such holders are indemnified by GOV for such incremental consequences. Under a reverse merger structure, REIT Merger Sub would merge with and into the Company and the separate corporate existence of REIT Merger Sub would cease, with the Company continuing as the surviving entity and a wholly-owned subsidiary of GOV.

Merger Consideration

In connection with the REIT Merger, holders of Common Shares will receive an amount of cash per Common Share equal to $11.15, without interest, less any applicable tax withholding. In connection with the Partnership Merger, outside limited partners will receive an amount of cash per partnership unit equal to $11.15, without interest, less any applicable tax withholding, except that each outside limited partner may elect, in lieu of cash consideration, to have such holder’s partnership units exchanged into an equal number of Series A preferred units, subject to certain conditions.

Closing; Effective Times

The closing of the mergers shall occur on a date that is the third business day after all the conditions set forth in the Merger Agreement shall have been satisfied or validly waived by the party entitled to the benefit of such condition, or on such other date and such other time as may be mutually agreed upon by the parties, unless such date is extended by mutual agreement of the parties.

On the closing date, the Company LP will file a certificate of merger with the Secretary of State of the State of Delaware in accordance with Delaware law to effect the Partnership Merger. The Partnership Merger will become effective upon such time as the partnership certificate of merger has been accepted for record by the Secretary of State of the State of Delaware or such later time as agreed by the parties in accordance with applicable law.

On the closing date, the Company will file articles of merger with the State Department of Assessments and Taxation of Maryland to effect the REIT Merger. The REIT Merger will be effective immediately following the Partnership Merger effective time.

Organizational Documents

At the Partnership Merger effective time, the certificate of limited partnership of the Company LP will be the certificate of limited partnership of the surviving partnership and the limited partnership agreement of Partnership Merger Sub as in effect prior to the Partnership Merger effective time will be the limited partnership agreement of the surviving partnership, as amended to reflect the change of name of the surviving partnership to “GOV NEW OPPTY LP” and the terms of the Series A preferred units in the form attached to the Merger Agreement (the “Surviving Partnership Agreement”).

At the REIT Merger effective time, the declaration of trust and bylaws of REIT Merger Sub will be the declaration of trust and bylaws of the surviving company.

Trustees and Officers; General Partner

The trustees and officers of REIT Merger Sub immediately prior to the REIT Merger effective time will be the trustees and officers of the surviving company immediately after the REIT Merger effective time. At the REIT Merger effective time, REIT Merger Sub, as the surviving company in the REIT Merger, will continue as the general partner of the Company LP as successor by merger to the Company.

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Treatment of Partnership Units, Common Shares, Equity Awards

Common Shares

At the REIT Merger effective time, each Common Share (excluding Common Shares then held by any wholly-owned subsidiary of the Company) shall no longer be outstanding and shall be automatically cancelled and retired and converted into the right to receive the merger consideration of $11.15 per share in cash, without interest, less any applicable tax withholding.

Each common share of beneficial interest of REIT Merger Sub issued and outstanding immediately prior to the REIT Merger effective time shall remain as an issued and outstanding common share of beneficial interest of the REIT Merger Sub and each such share shall continue to be owned by GOV.

Under the terms of the Merger Agreement, we may not declare, set aside for payment or pay any dividend or other distribution to holders of Common Shares during the interim period without the prior written consent of GOV. However, if, as permitted under the Merger Agreement, the Company pays any dividend or other distribution to holders of Common Shares, partnership units or equity interests in the Company’s REIT subsidiary (i) to maintain the Company’s status or the status of its REIT subsidiary as a REIT under the Code, or (ii) to avoid or reduce the imposition of any entity level income or excise tax under the Code, the merger consideration will be reduced by an amount equal to the per share or per unit amount of such dividend or distribution.

Company Equity Awards

Immediately prior to the REIT Merger effective time, each option outstanding immediately prior to the REIT Merger effective time (whether or not vested and exercisable) will become fully vested and exercisable, and will automatically be cancelled in exchange for the right of the holder to receive a single lump sum cash payment, equal to the product of (i) the number of Common Shares subject to such option immediately prior to the REIT Merger effective time, whether or not vested or exercisable, and (ii) the excess, if any, of the merger consideration of $11.15 over the exercise price per share of such option. Any option that has a per share exercise price that is equal to or greater than the merger consideration of $11.15 will be cancelled without payment at the REIT Merger effective time.

Immediately prior to the REIT Merger effective time, each Company Restricted Share that is outstanding immediately prior to the REIT Merger effective time, whether or not vested or subject to any performance condition that has not been satisfied or performance period that has not lapsed, will vest in full (which, for Company Restricted Shares subject to performance conditions, shall mean fully vested in accordance with, and shall include any additional Company Restricted Shares issued upon performance in excess of “target” level in accordance with, the terms of the applicable award agreement or equity incentive plan), will be treated as an outstanding Common Share and will be cancelled and converted into the right of the holder to receive the merger consideration of $11.15, without interest, less any applicable tax withholding.

At the REIT Merger effective time, each Company Restricted Share that will vest or become issued and vest in accordance with the terms of the applicable award agreement or equity incentive plan (including (i) any Company Restricted Shares issued upon performance in excess of “target” level in accordance with the terms of the applicable award agreement or equity incentive plan governing such awards and (ii) any Look-Back LTI Award as described below) will vest in full, will be treated as an outstanding Common Share and will be cancelled and converted into the right of the holder to receive the merger consideration of $11.15, without interest, less any applicable tax withholding.

Immediately prior to the REIT Merger effective time, each Look-Back LTI Award that is outstanding immediately prior to the REIT Merger effective time shall automatically become earned (with the portion of such award that is subject to the achievement of performance-based metrics becoming earned at the greater of the

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target award and or actual performance, measured as of immediately prior to the REIT Merger effective time) and shall be converted into a number of fully vested Company Restricted Shares, equal to the dollar amount of such earned Look-Back LTI Award divided by the merger consideration of $11.15. At the REIT Merger effective time, each such fully vested Company Restricted Share shall be considered an outstanding Company Restricted Share for all purposes of the Merger Agreement, including the right to receive the merger consideration of $11.15 as described above.

In addition, as of the REIT Merger effective time, each holder of Company Restricted Shares that become fully vested, or issued and vested, shall be entitled to receive a cash lump sum payment equal to the sum of any cash dividends and other distributions paid from the applicable date of grant of such Company Restricted Shares (which, with respect to any Company Restricted Shares issued immediately prior to the REIT Merger effective time, means the date of the applicable award) to immediately prior to the REIT Merger effective time with respect to the total number of Company Restricted Shares that become fully vested or issued and vested as of immediately prior to the REIT Merger effective time (but including only those dividends and other distributions which have not previously been distributed to the holder).

Partnership Units

At the Partnership Merger effective time, each unit of limited partnership interest held by each of REIT Merger Sub and GOV NEW OPPTY LP REIT, a Maryland real estate investment trust (“Partnership Merger Sub Minority Limited Partner”), in Partnership Merger Sub immediately prior to the Partnership Merger effective time shall automatically be converted into one unit of limited partnership interest of the Company LP and shall continue to be held by REIT Merger Sub and Partnership Merger Sub Minority Limited Partner, and REIT Merger Sub and Partnership Merger Sub Minority Limited Partner shall be admitted as limited partners of the Company LP.

At the Partnership Merger effective time, each unit of general partnership interest held by REIT Merger Sub in Partnership Merger Sub immediately prior to the Partnership Merger effective time shall automatically be converted into one unit of general partnership interest of the Company LP and shall continue to be held by REIT Merger Sub, and REIT Merger Sub shall be admitted as a general partner of the Company LP, and each unit of general partnership interest held by the Company in the Company LP immediately prior to the Partnership Merger effective time shall be automatically converted into one unit of general partnership interest of the Company LP and each unit of limited partnership interest held by the Company in the Company LP immediately prior to the Partnership Merger effective time shall be automatically converted into one unit of limited partnership interest of the Company LP. Upon the REIT Merger effective time, the unit of general partnership interest and the units of limited partnership interest in the Company LP held by the Company shall thereafter be held by REIT Merger Sub.

At the Partnership Merger effective time, each partnership unit held by an outside limited partner issued and outstanding immediately prior to the Partnership Merger effective time shall be converted into, and shall be cancelled in exchange for, the right to receive an amount of cash per partnership unit equal to $11.15, without interest, less any applicable tax withholding, except that each outside limited partner may, subject to certain requirements and conditions, elect, in lieu of the merger consideration, to have such holder’s units of limited partnership interests in the Company LP converted into an equal number of Series A preferred units.

Holders of partnership units will only be entitled to elect to convert their partnership units into Series A preferred units if they (1) are “accredited investors” as defined under the Securities Act, (2) are not a “benefit plan investor” under ERISA or other similar laws, (3) agree to be bound by the Surviving Partnership Agreement, and (4) make a valid and timely election to receive the Series A preferred units pursuant to election materials that will be separately sent to such holders. This Proxy Statement does not constitute any solicitation of consents in respect of the Partnership Merger, and does not constitute an offer to exchange or convert the partnership units that you may own for or into Series A preferred units of the surviving partnership.

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In general, Series A preferred units will have the following terms:

No Further Ownership Rights

From and after the applicable effective time of the mergers, holders of Common Shares or partnership units will cease to be, and will have no rights as, our shareholders or the Company LP’s outside partnership unitholders other than the right to receive the merger consideration, or with respect to the electing outside partnership unitholders, the Series A preferred units. The merger consideration or Series A preferred units paid or delivered, as applicable, in accordance with the Merger Agreement will be deemed to have been paid or delivered, as the case may be, in full satisfaction of all rights and privileges pertaining to Common Shares, Company Restricted Shares, equity awards and partnership units, as applicable, exchanged therefor.

Exchange and Payment Procedures

At or immediately after the REIT Merger effective time, GOV shall cause to be deposited with the Company LP the share award payments (described under “—Treatment of Partnership Units, Common Shares, Equity Awards—Company Equity Awards”) for the benefit of the former holders of equity awards and the Look-Back LTI Awards and promptly after the REIT Merger effective time (but in any event within three business days after the REIT Merger effective time), the Company LP shall pay the applicable amount to each of such former holders.

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In accordance with the Merger Agreement GOV will designate a paying agent to handle the payment and delivery of the merger consideration. At or before the REIT Merger effective time, GOV shall deposit, or cause to be deposited, with the paying agent cash in immediately available funds in an amount sufficient to pay the aggregate merger consideration to the holders of Common Shares and the outside limited partners who did not elect to receive Series A preferred units. GOV, REIT Merger Sub and the Company LP, as the surviving entities of the mergers, shall cause the paying agent to make, and the paying agent shall make, delivery of the merger consideration in accordance with the Merger Agreement. For the avoidance of doubt, the share award payments are not deposited with the paying agent and shall be deposited by GOV with the Company LP and paid by the Company LP, as the surviving entity in the Partnership Merger, in accordance with the Merger Agreement. The payment fund shall not be used for any other purpose.

Promptly after the REIT Merger effective time (but in any event within three business days after the REIT Merger effective time), GOV and REIT Merger Sub shall cause the paying agent to mail to each holder of record of Common Shares immediately prior to the REIT Merger effective time (other than holders of Company Restricted Shares) a customary letter of transmittal and instructions for use in effecting the surrender of such Common Shares, including any certificates evidencing such Common Shares, in exchange for the merger consideration.

Upon surrender of a share certificate (or affidavit of loss in lieu thereof) or transfer of any book-entry share for exchange and cancellation to the paying agent, together with a letter of transmittal, duly completed and validly executed in accordance with the instructions thereto, the holder of such share certificate or book-entry share shall be entitled to receive in exchange therefor the merger consideration, by mail or by wire transfer, for each Common Share formerly represented by such share certificate or book-entry share.

Any portion of the merger consideration that remains undistributed to the former holders of Common Shares or partnership units for 12 months after the closing date shall be delivered to REIT Merger Sub or the Company LP, as applicable, upon demand, and any former holders of Common Shares or former holders of the partnership units who have not theretofore complied with the exchange and payment procedures contained in the Merger Agreement must look only to REIT Merger Sub and the Company LP, as the surviving entities of the mergers, for payment of the applicable merger consideration.

None of GOV, the Company, REIT Merger Sub, the Company LP, the paying agent, or any employee, officer, trustee, director, agent or affiliate thereof, shall be liable to any person in respect of any merger consideration delivered to a public official pursuant to any applicable abandoned property, escheat or similar law. Any amounts remaining unclaimed by holders of any share certificates or partnership unit certificates immediately prior to the time at which such amounts would otherwise escheat to, or become property of, any governmental authority shall, to the extent permitted by applicable law, become the property of REIT Merger Sub free and clear of any claims or interest of such holders or their successors, assigns or personal representatives previously entitled thereto.

Tax Withholding

All payments under the Merger Agreement, including payment of the merger consideration, are subject to applicable withholding requirements.

Representations and Warranties

The Company and the Company LP, jointly and severally, made customary representations and warranties in the Merger Agreement that are subject, in some cases, to specified exceptions and qualifications contained in the Merger Agreement or in the disclosure schedules delivered in connection therewith. These representations and warranties relate to, among other things:

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The Merger Agreement also contains customary representations and warranties made, jointly and severally, by GOV Parties that are subject, in some cases, to specified exceptions and qualifications contained in the Merger Agreement. These representations and warranties relate to, among other things:

The representations and warranties of each of the parties to the Merger Agreement will terminate at the REIT Merger effective time.

Material Adverse Effect

For the purposes of the Merger Agreement, “material adverse effect” means, when used in connection with the Company and its subsidiaries, any event, circumstance, change, effect, development, condition or occurrence that individually or in the aggregate with all other events, circumstances, changes, effects, developments, conditions or occurrences is material and adverse to the business, assets (including any property), liabilities,

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condition (financial or otherwise) or results of operations of the Company and its subsidiaries, taken as a whole, other than any event, circumstance, change, effect, development, condition or occurrence to the extent arising out of or resulting from:

The term “material adverse effect” in connection with the Company and its subsidiaries also means any event, circumstance, change, effect, development, condition or occurrence that prevents or materially impairs the ability of the Company or the Company LP to consummate the mergers or any of the other transactions contemplated by the Merger Agreement, or prevents or materially impairs the ability of the Company or the Company LP to perform their obligations under the Merger Agreement before December 31, 2017.

When the term “material adverse effect” is used in the Merger Agreement in connection with GOV, it means any event, circumstance, change, effect, development, condition or occurrence that prevents or materially impairs or delays the consummation of the mergers or any of the other transactions contemplated by the Merger Agreement or prevents or materially impairs or delays the ability of GOV, REIT Merger Sub or Partnership Merger Sub to perform their respective obligations under the Merger Agreement.

No Further Dividends

As a general matter, under the terms of the Merger Agreement, the Company may not declare, set aside for payment or pay any dividend or other distribution to holders of Common Shares during the interim period without the prior written consent of GOV. However, if, as permitted under the Merger Agreement, the Company pays any dividend or other distribution to holders of Common Shares, Company partnership units or equity interests in the Company’s REIT subsidiary (i) to maintain the Company’s status or the status of its REIT subsidiary as a REIT under the Code, or (ii) to avoid or reduce the imposition of any entity level income or excise tax under the Code, the merger consideration will be reduced by an amount equal to the per share or per unit amount of such dividend or distribution.

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Conduct of Business Pending the Mergers

Under the Merger Agreement, the Company and the Company LP have agreed that, subject to certain exceptions and limitations in the Merger Agreement, between the date of the Merger Agreement and the earlier of the REIT Merger effective time or the termination of the Merger Agreement in accordance with its terms (which period we refer to as the interim period), they and their subsidiaries will:

The Company and the Company LP have also agreed that during the interim period, subject to certain exceptions described in the Merger Agreement or unless GOV gives its prior written consent, the Company and its subsidiaries will not, among other things:

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