Lightstone Group has agreed to buy Prime Group Realty Trust subject to ongoing litigation over a previous offer Prime-Mansur Investment Partners, which includes the REIT's former chairman, Michael W. Reschke. However, president and chief executive officer Jeffrey A. Patterson says Prime Group Realty Trust indicates suitors continue calling. "We've received inquiries," Patterson says during his company's recent earnings conference call. "But pursuant to the merger agreement with Lightstone, we're prohibited from having discussions."
Vacancy in submarkets where the REIT owns office buildings range from 16.4% in the Central Loop to 23.3% in the East-West Corridor, according to Grubb & Ellis' most recent market report. "We believe we outperformed the market," Patterson says. "We're pleased with our leasing results in a challenging market."
The REIT will have a chance to refinance or pay off its debt on the three-building Continental Towers in Rolling Meadows. The $66-million mortgage from Prudential Life Insurance Co. carries a 7.22% interest rate, which could run into 2013. Occupancy at the 922,898-sf asset, Prime Group Realty Trust's largest suburban property, ended the year at 77.6%.
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