Meanwhile, the REIT says it has extended loans totaling $32.5-million with Fleet National Bank until November 2004. Prime Group Realty Trust was scheduled to retire $20 million in debt in June and another $12.5 million in November. Please see related story.
Previously, the embattled accounting firm paid $1.1 million to exit IBM Plaza at 330 N. Wabash Ave., where it had leased 76,490 sf.
Before its legal and financial woes stemming from its involvement with the failure of Enron, Andersen had accounted for 8.6% of Prime Group Realty Trust's revenue in addition to leasing the most space in the REIT's 7.8-million-sf office portfolio, which is primarily in the city and suburbs. Cleveland-based National City Bank now is the REIT's largest tenant. Locally, Jenner & Block is the largest tenant with 338,000 sf at IBM Plaza.
Prime Group Realty Trust will use $7 million to pay down debt, while the rest of the termination fee goes into escrow with DGZ Deka Bank, which holds a $67-million mortgage on 33 W. Monroe St., for operating and costs involved in finding replacement tenants.
That work already was being done, the REIT has said, and early results include a 10-year deal with Shipnow, Inc. for 19,450 sf. In addition, two other tenants have taken two-year deals for 41,574 sf, the company reports.
"We believe that this advantageous settlement with Andersen allows us to aggressively release this space, which was previously leased to Andersen at below-market rents," says Prime Group chairman Stephen J. Nardi in a statement.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.