UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 14, 1999
PRIME GROUP REALTY TRUST
(Exact name of registrant as specified in its charter)
Maryland 1-13589 36-4173047
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification
incorporation or Number)
organization)
77 West Wacker Drive, Suite 3900, Chicago Illinois 60601
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 917-1300
N/A
(Former name of former address, if changed since last report)
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ITEM 5. OTHER EVENTS
The registrant has announced that on July 14, 1999 it has closed on the
sale of nine industrial properties and one office property. A press release
dated July 19, 1999 relating to this event is attached to this Report. The text
of the press release is as follows:
Chicago, Illinois, July 19, 1999. Prime Group Realty Trust (NYSE:PGE) (the
"Company") announced today that it has closed on the sale of nine industrial
properties and one office property to Manulife Financial for a total sales price
of $89.5 million. The ten properties purchased by Manulife contain a total of
1.5 million square feet of the Company's 6.3 million square foot industrial
portfolio and the 123,000 square foot office property represents 1.5% of the
Company's 8.0 million square foot office portfolio. The Company realized
$24,500,000 of net cash proceeds from the sale, after the repayment of related
indebtedness, commissions and closing costs.
Commenting on the sale, Richard S. Curto, President and Chief Executive Officer
said, "The disposition of these assets is consistent with our value creation
strategy. The properties sold are mature assets, which are 100% leased. The
expected 1999 net operating income from these properties is $7.4 million, which
represents an 8.3% cap rate on the $89.5 million sales price. We expect to
redeploy the net proceeds in new assets, which will yield both greater current
returns and a higher growth potential. The sale of these assets and the
acquisition of new properties will be completed on a tax-free exchange basis for
federal income tax purposes."
"Our commitment to industrial real estate remains strong," said Jeffrey A.
Patterson, Executive Vice President and Chief Investment Officer. "After the
sale, we still own 40 industrial properties containing 4.9 million square feet
and we will continue to manage and lease the Manulife portfolio. We are actively
seeking new industrial development and acquisition opportunities."
Prime Group Realty Trust is a fully-integrated, self-administered, and
self-managed real estate investment trust (REIT) which owns, manages, leases,
develops and redevelops office and industrial real estate, primarily in the
Chicago metropolitan area. After this transaction, the Company's portfolio
consists of 26 office properties, containing an aggregate of 7.9 million net
rentable square feet and 40 industrial properties containing an aggregate of 4.9
million net rentable square feet. The portfolio also includes approximately
250.5 acres of developable land and rights to acquire more than 300.4 additional
acres of developable land, which management believes could be developed into
approximately 12.3 million rentable square feet of office and industrial space.
This press release contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 that reflect
management's current views with respect to future events and financial
performance. The words "believes", "expects", "anticipates", "estimates", and
similar words or expressions are generally intended to identify forward-looking
statements. Actual results may differ materially from those expected because of
various risks and uncertainties, including, but not limited to, changes in
general economic conditions, adverse changes in real estate markets as well as
other risks and uncertainties included from time to time in the Company's
filings with the Securities and Exchange Commission.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PRIME GROUP REALTY TRUST
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Registrant
/s/ William M. Karnes
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William M. Karnes
Executive Vice President and
Chief Financial Officer
Date: July 29, 1999
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