Now owning 1.04 million shares for a 6.6% stake in the REIT, Northland Capital Investors, LLC and executive officer Lawrence R. Gottesdiener more than doubled their position in the past two months by spending $2.68 million for 608,300 shares, according to a report filed with the Securities and Exchange Commission.

While that gives Northland Capital Investors a stake little more than one-third the size of K Capital Partners, the REIT's largest investor, the smaller shareholder say they have given a recapitalization proposal to Prime Group Realty Trust's board of trustees. Although the specifics are not disclosed in the SEC filing, Northland Capital Investors says the plan could give the REIT more breathing room, "without having to sell its assets under duress."

Although Northland Capital Investors stresses in the filing that no deal has been struck, the proposal could include senior management of Prime Group Realty Trust as well as trustees. In addition to acting chairman Stephen J. Nardi, the board includes former Equity Residential Properties Trust chief executive officer Douglas Crocker II; Julien J. Studley, Inc. president Jacque M. Ducharme; Host Marriott Corp. president and chief executive officer Christopher J. Nassetta and former Illinois governor James R. Thompson. Former Prime Group Realty Trust chairman Michael W. Reschke also remains on the board despite his resignation in April.