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): December 17, 1999
PRIME GROUP REALTY TRUST
(Exact name of registrant as specified in its charter)
MARYLAND 1-13589 36-4173047
(State or other jurisdiction of (Commission File (I.R.S. Employer
incorporation or organization) Number) Identification No.)
77 West Wacker Drive, Suite 3900, 60601
Chicago, Illinois (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (312) 917-1300.
NOT APPLICABLE
(Former name or former address, if changed since last report)
-1-
<PAGE>
ITEM 5. OTHER EVENTS.
(a) December 17, 1999 Press Release: On December 17, 1999, Prime Group
Realty Trust issued the Press Release attached hereto as Exhibit 99.1. Such
Press Release is incorporated herein by reference.
(b) Exhibits:
Exhibit
No. Description
--- -----------
99.1 Press Release of Prime Group Realty Trust dated
December 17, 1999.
-2-
<PAGE>
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 hereunto duly authorized.
PRIME GROUP REALTY TRUST
------------------------
Registrant
Dated: December 21, 1999 By: /s/ William M. Karnes
------------------------
William M. Karnes
Executive Vice President and
Chief Financial Officer
-3-
EXHIBIT NO. 99.1
At the Company: At The Financial Relations Board:
- --------------- ---------------------------------
Richard S. Curto William M. Karnes Bill Murphy Georganne Palffy
President Executive Vice President General Inquiries Investor Inquiries
Chief Executive Chief Financial 312/266-7800 312/266-7800
Officer Officer
312/917-1300 312/917-1300
FOR IMMEDIATE RELEASE
FRIDAY, DECEMBER 17, 1999
Prime Group Realty Trust Announces Major Share Repurchase Program
The Company Plans To Purchase Up To $250.0 Million Of Stock
CHICAGO, Illinois, December 17, 1999 -- Prime Group Realty Trust's (NYSE: PGE)
(the "Company") announced today that its Board of Directors has approved the
repurchase of up to $250.0 million of its outstanding common shares. The shares
will be purchased from time to time in management's discretion in open market
and privately-negotiated purchases. Subject to applicable securities laws, share
purchase decisions will be made by management based on market conditions and
other factors. Over the next six months, the Company plans to raise up to $500.0
million from the sale of stabilized and mature properties, and/or the sale of
joint venture interests in such properties. The Company intends to use
approximately 50% of these proceeds to retire debt and the remainder to
repurchase its common shares. The properties or interests to be sold will
represent approximately 30% of the net asset value of the Company's current
office and industrial portfolio.
As previously announced, the Company believes that the current market value of
its assets, net of all outstanding indebtedness and the liquidation preference
on its outstanding preferred stock, equates to approximately $24.50 per
outstanding common share. At yesterday's closing price of $13.44 per common
share, the Company believes that the best use of its capital is to repurchase
its common shares. Likewise, the Company also may repurchase a portion of its
outstanding Series B preferred shares, which have a $25.00 per share liquidation
preference and are currently trading at $14.31 per share.
Commenting on the announcement, Michael W. Reschke, Chairman of the Board,
stated "We are committed to creating shareholder value by harvesting the value
of certain assets through the sale of these assets to the private sector and by
redeploying this capital to retire debt and to repurchase our shares. Every
share that we can buy below our net asset value per share results in an increase
in net asset value per share for our remaining shareholders. We believe that the
-4-
<PAGE>
purchase of our shares is a prudent use of our capital and is the best
investment the Company can make at this time."
"In addition to executing the strategic plan to repurchase our shares, our
management team will continue to increase net asset value per share through the
proactive management and aggressive leasing of our property portfolio, by
completing those properties currently in various stages of development and by
seeking highly accretive development and acquisition opportunities," said
Richard S. Curto, President and Chief Executive Officer of the Company. "Upon
completion of the asset sales anticipated in this program, the Company's
stabilized portfolio will contain over $1.1 billion of high quality office and
industrial properties primarily located in the Chicago market."
The Company expects to commence its share repurchase program upon the sale or
joint venture of the first group of properties early next year but may commence
the program earlier if asset sales or joint ventures are closed more rapidly.
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 29 office
properties, containing an aggregate of 9.6 million net rentable square feet and
40 industrial properties containing an aggregate of 5.0 million net rentable
square feet. The portfolio also includes approximately 248.2 acres of
developable land and rights to acquire more than 261.2 additional acres of
developable land, which management believes could be developed with
approximately 11.0 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.
-5-
