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CHICAGO-Louis G. Conforti has landed on his feet, and arguably on much steadier ground given recent market events. Formerly chief financial officer of Prime Group Realty Trust, Conforti now is senior managing member of Greenwood Group, LLC, which has raised $160 million to invest in small- and mid-cap REITs. Among the investors are principals of Jupiter Realty Corp.

Rising interest rates recently sent REIT stocks into a tailspin, but Conforti suggests rough sailing lies ahead. “The first REIT correction was only a precursor,” he tells GlobeSt.com. “It’s not a value metric. It’s about cash flow.”

While some REIT operators argue the value of their real estate now exceeds the company’s market capitalization, Conforti says the ability to cover dividend payments will become paramount. “The key word is DROCC: Don’t run out of cash. It’s all about cash flow,” says Conforti, who now has it to spare, as opposed to his previous post.

Conforti took over co-leadership of Prime Group Realty Trust following the departures of former chairman Michael W. Reschke and president Richard S. Curto, just as company auditors raised questions about the debt-laden REIT’s ability to continue as a going concern. His efforts to help sell assets or the entire company became more difficult with the demise of accounting giant Andersen, which was Prime Group Realty Trust’s largest office tenant.

The Greenwood Group, which has an office at 401 N. Michigan Ave. as well as in Dallas, has money for mezzanine loans, preferred equity or joint ventures with “cash-flow challenged” companies who need it for acquisitions, development, renovation of their properties or improving their balance sheets.

“Private capital will occupy an increasingly important place in the capital structure as variables such as the higher cost of capital expenditures, especially tenant improvements, and rising interest rates make access to public capital markets more difficult,” Conforti says. “We’re already looking seriously at some neat things.”

George E. Scott and Lee Pollock join Conforti in heading the Chicago office while Tod A. Ruble leads the Dallas office.

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