Michael Silberberg with New York-based Berkley Properties hasentered into a purchase and sale agreement with the Prime GroupREIT to buy the 770,000-square-foot 180 N. LaSalle, which the trustsays is about 75% occupied, with major tenants that includeAccenture, Career Builder and Performics Inc. According to a REITstatement, the trust will receive net proceeds of about $12.5million from the sale, which is expected to close by June. Thetrust said Silberberg has provided $4 million in an earnest depositfor the purchase. Neither Silberberg nor trust executives returnedcalls for comment on this story.


While it's true that $72 million is much less than the previousoffers in 2009 from Winthrop Realty Trust and Younan InvestmentProperties LP, at up to $116 million, those two deals did not makeit through financing approval. Prime Group reportedly bought theproperty for less than $60 million in 1998, though the trust didpour more than $20 million of renovations into the tower.


As for the defaults, Prime said in the statement that two of itssubsidiaries, each of which owns separate portions of the844,000-square-foot Continental Towers complex on West Golf Road,are in default under their respective first mortgage loansencumbering the complex. Continental Towers Associates III LLC,which is the owner of the 281,528-square-foot Tower II portion, isin default under its loan "because the cash flow from the CTA IIIproperty is not sufficient to pay the required escrows and debtservice payments on the CTA III loan," Prime Group said in thestatement. The CTA III loan is for $41.4 million. ContinentalTowers LLC, which owns the other two buildings with a $73.6 millionloan, also is in default "because it is cross-defaulted with theCTA III loan," the REIT said.


Prime Group Realty Trust said in the statement that thesubsidiaries are in discussions about the defaults. On the REIT'sWeb site, lease data shows that Tower I is only 7% vacant, whileTower II is more than 70% vacant and Tower III is almost 50%vacant.

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