American Mortgage News

CHICAGO--(BUSINESS WIRE)--Prime Group Realty Trust (NYSE:PGEPRB) (the “Company”) is announcing that on November 21, 2006, the owners of the Continental Towers property located at 1701 Golf Road, Rolling Meadows, Illinois (the “Property”) refinanced the property with a first mortgage loan in the principal amount of $115.0 million (the “Senior Loan”) from CWCapital LLC (“Senior Lender”). Proceeds of the loan were utilized to (i) repay the existing first mortgage loan encumbering the Property in the principal amount of $75.0 million and (ii) partially repay approximately $36.6 million of the junior mortgage loan (the “Junior Loan”) encumbering the Property. The Junior Loan is held by a wholly owned subsidiary of the Company’s operating partnership, Prime Group Realty, L.P. After the partial repayment of the Junior Loan, approximately $128.6 million of principal and accrued interest remains outstanding under the Junior Loan. The Company used the funds from the partial prepayment of the Junior Loan, and certain other funds, to make a repayment of $39.2 million to Citicorp USA Inc. (“Citicorp”), in order to partially repay an existing mezzanine loan from Citicorp in the original principal amount of $58.0 million.

Although the Company does not own fee title to the Continental Towers property, the Company has a significant economic interest in the Property through its ownership of the Junior Loan secured by the property, and the Company consolidates the Property’s operations into its financial statements and accounts for it as an owned property. In addition, a subsidiary of the Company manages the Property.

The Senior Loan has a fixed interest rate of 5.864% per year and matures on December 1, 2016. Payments of interest only are due monthly and there is no required principal amortization.

Additional information regarding the foregoing matters can be found in the Company’s current Report on Form 8-K filed with the United States Securities and Exchange Commission on or about the date of this press release. A copy of the Form 8-K can be found at the Company’s web site at www.pgrt.com.

About the Company

Owned by one of the largest private real estate owners in the country, The Lightstone Group, Prime Group Realty Trust is a fully-integrated, self-administered, and self-managed real estate investment trust (REIT) that owns, manages, leases, develops, and redevelops office and industrial real estate, primarily in metropolitan Chicago. The Company owns 10 office properties containing an aggregate of 3.9 million net rentable square feet, one industrial property comprised of approximately 120,000 square feet and two joint venture interests in office properties totaling approximately 1.1 million net rentable square feet. It leases and manages all 5.0 million square feet. In addition, the Company is also the managing and leasing agent for the 1.5 million square foot Citadel Center office building located at 131 South Dearborn Street in Chicago, Illinois.

For more information about Prime Group Realty Trust, contact the company’s Chicago headquarters at (312) 917-1300 or visit its website at www.pgrt.com.

Founded in 1988, The Lightstone Group is ranked among the 25 largest real estate companies in the industry with a diversified portfolio of over 20,000 residential units as well as office, industrial and retail properties totaling approximately 30 million square feet of space in 28 states and Puerto Rico. Headquartered in Lakewood, New Jersey, The Lightstone Group employs over 1,000 professionals and maintains regional offices in New York, Maryland, Virginia and California. The Lightstone Group has acquired in excess of $2 billion in real estate over the past 24 months.

For more information on The Lightstone Group, contact the company’s Lakewood, New Jersey headquarters at (800) 347-4078 or visit www.lightstonegroup.com.

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect management’s current views with respect to future events and financial performance. The words "believes", "expects", "anticipates", "estimates", and similar words or expressions are generally intended to identify forward-looking statements. Actual results may differ materially from those expected because of various risks and uncertainties, including, but not limited to, changes in general economic conditions, adverse changes in real estate markets as well as other risks and uncertainties included from time to time in the Company’s filings with the Securities and Exchange Commission.
Contacts

Prime Group Realty Trust
Jeffrey A. Patterson
President and Chief Executive Officer
312-917-1300
or
Paul G. Del Vecchio
Senior Vice President—Capital Markets
312-917-1300