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 15, 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 15, 1999 it has closed on the
purchase of a 62,000 square foot parcel of land at the northeast corner of South
Wacker Drive and West Monroe Street in downtown Chicago, Illinois. 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 purchase of a 62,000 square
foot parcel of land at the northeast corner of South Wacker Drive and West
Monroe Street in downtown Chicago. As previously announced, the Company has
entered into a contract to construct and sell upon completion a 1,038-car
parking garage on the eastern one-third of the site. The buyer is Central
Parking Corporation (NYSE: CPC), one of the nation's largest public operators
and owners of parking garages.
The Company expects to construct the parking garage at an estimated cost of
$18.0 million and will sell the parking garage for a price of $37.3 million,
thereby reducing the Company's total investment in the development site to $37.0
million. Construction of the garage is anticipated to begin after permits are
obtained in the fall of 1999 with an anticipated completion date nine months
thereafter.
The purchase of the development site and construction of the garage is being
financed, in part, with a $38.0 million land acquisition and construction
facility from CORUS Bank, N.A., located in Chicago, Illinois. The initial
funding under the facility was $28 million, with the remaining $10 million to be
drawn down over the construction period for the parking garage. The facility has
a maturity date of March 31, 2001, and bears interest at LIBOR plus 2.75%.
Commenting on the acquisition and related financing, Richard S. Curto, President
and Chief Executive Officer stated, "The Wacker and Monroe parcel is one of the
premier development sites in downtown Chicago. The presale of the parking garage
has reduced our net investment in the site to only $25.50 per buildable square
foot, which will allow our Company to be very competitive in attracting new
tenants to our future office development."
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. 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 word 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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