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CHICAGO-While the future of the REIT’s management and ownership is up in the air, Prime Group Realty Trust may be lightening its Loop office portfolio by 770,191 sf. Prime Group’s office tower at 180 N. LaSalle St., renovated by the REIT, is drawing interest from potential buyers, Chairman Michael W. Reschke says, though none of their most recent offers are exciting.

“We recently received our second round of bids for 180 N. LaSalle,” Reschke reports. “These bids are currently under negotiation, and the company has not concluded if any are acceptable. There’s no doubt the effects of Sept. 11 has had a significant dampening effect on the depth of buyers’ interest. Many institutional buyers who were quite active in the market are, quite frankly, sitting on the sidelines. And no one is able to predict how long this malaise of buyer demand will persist.”

The largest Downtown office sale to close after Sept. 11 was the $239-million sale of 181 W. Madison St., at $255 per sf. Los Angeles-based Davis Cos. followed through on the deal in spite of a Sept.11 closing’s delay because of the terrorist attacks on the US. Before that, 225 W. Washington St. sold at $185 per sf, which would equate to $142.5 million for Prime Group’s class A building.

While most of Prime Group’s portfolio boasts above-average occupancy, vacancy at the shopped 180 N. LaSalle is nearly 10%. Asking rents are $16 per sf net.

More likely to happen, Prime Group President Richard S. Curto says, is a $125-million joint venture deal involving suburban office properties, which could net the REIT about $25 million. Sales proceeds could go to pay down debts, including an $11-million obligation due Nov. 30 and a $40-million debt in January.

Meanwhile, Reschke told investors and analysts Wednesday little about Vornado Realty Trust’s pending foreclosure on a $62-million loan made to his Primestone Investment Partners, L.P. The loan, as well as another $38-million debt, was secured by partnership units convertible to more than 7.9 million shares of Prime Group stock. Vornado, which bought the $38-million mortgage, would have a 30% stake in the REIT as well as a seat on its board.

However, Reschke was not rolling out the welcome mat. “We have no comment on the foreclosure other than that Primestone, the borrower, will contest and defend itself, and is exploring all its legal options at this time,” he says. Vornado, through a spokesperson, also declines comment on its eventual intentions with Prime Group other than its foreclosure action.

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