| Prime Group Realty Trust | |||
| Proposed Ticker: | PPE | 77 West Wacker Drive, Suite 3900 | |
| Exchange: | New York Stock Exchange | Chicago, IL 60601 | |
| Industry: | Financial (SIC Code 6798) | (312) 917-1500 | |
| # of Employees: | 151 | ||
| Type of Shares: | Common Shares | Filing Date: | 8/13/97 | |
| U.S. Shares Filed: | 14,250,000 | Filing Range: | $18.00 - $20.00 | |
| Non-U.S. Shares Filed: | 0 | Offering Amount: | $270,750,000 | |
| Primary Shares: | 14,250,000 | Expenses: | - | |
| Secondary Shares: | 0 | Shares Out After: |
| Manager | Tier | Phone |
| Prudential Securities Incorporated | Lead Manager | (212) 778-5420 |
| Friedman, Billings, Ramsey & Co., Inc. | Co-manager | (703) 312-9571 |
| Issuer's Law Firm: | Winston & Strawn |
| Bank's Law Firm: | Skadden, Arps, Slate, Meagher & Flom |
| Auditor: | Ernst & Young |
| Registrar/Transfer Agent: | LaSalle National Trust, N.A. |
Dollar amounts in U.S. millions except for per share data | |||||
| 3 Month Ending Financials | |||||
| Full Year Audited Income | Latest Unaudited Income | Prior Unaudited Income | Balance Sheet | ||
| 12/31/96 | 3/31/97 | 3/31/96 | 3/31/97 | ||
| Revenue: | $48.16 | $12.62 | $11.51 | Assets: | $319.42 |
| Net Income: | -$30.52 | -$6.62 | -$6.60 | Curr Assets: | |
| EPS: | Liabilities: | $441.83 | |||
| Prior EPS: | -$3.73 | -$2.94 | Curr Liabilities: | ||
| Cash Flow/Oper: | -$3.17 | $1.33 | $2.68 | Equity: | -$122.41 |
| Cash Flow/Fin: | $5.73 | $0.54 | $0.38 | Cash: | $3.71 |
| Cash Flow/Inv: | $1.13 | $0.54 | |||
| Business Description |
| The company is a real estate investment trust, (REIT). The company will continue and expand the office and industrial real estate business of The Prime Group, Inc. The company will own 9 office properties, 29 industrial properties and 1 parking facility The Company is a fully-integrated, self-administered and self-managed real estate company that has been formed to continue and expand the office and industrial real estate business of The Prime Group, Inc. and certain of its affiliates (collectively, "Prime"). The Company expects to qualify as a real estate investment trust ("REIT") for federal income tax purposes. In connection with the Offering, the Company will succeed to the office and industrial development, leasing and property management business of Prime and will acquire certain additional office and industrial properties from third parties.The Company believes that the Properties are well-located and have excellent highway access, attract high-quality tenants, are well-maintained and professionally managed, and achieve among the highest rent, occupancy, and tenant retention rates within their markets. |
| Competition |
| The Company may be competing with other owners and developers that may have greater resources and more experience than the Company. Additionally, the number of competitive properties in any particular market or submarket in which the Properties are located could have a material adverse effect on both the Company's ability to lease space at the Properties or any newly-acquired property and on the rents charged at the Properties. The Company believes that the Offering, the Credit Facility and the Company's access as a public company to the capital markets to raise funds during periods when conventional sources of financing may be unavailable or prohibitively expensive will provide the Company with substantial competitive advantages. Further, the Company believes that its capital structure and ability to acquire properties in exchange for Common Units, and thereby defer a seller's potential taxable gain, will enhance the ability of the Company to consummate transactions quickly and to structure more competitive acquisitions than other real estate companies in the market which lack the Company's access to capital and ability to acquire property with Common Units. The Company believes that the number of real estate developers has decreased as a result of the recessionary market conditions and tight credit markets during the early 1990s as well as the reluctance on the part of more conventional financing sources to fund development and acquisition projects. In addition, the Company believes that it will be one of a limited number of publicly-traded real estate companies primarily focusing on the office and industrial market in the Chicago Metropolitan Area. |
| Business Plan |
| The Company will focus on enhancing its cash flow per share by: (a) maximizing cash flow from its Properties through contractual rent increases, pro-active leasing programs and effective property management; (b) managing operating expenses through the use of in-house management, leasing, marketing, financing, accounting, legal, construction, management and data processing functions; (c) maintaining and developing long-term relationships with a diverse tenant group; (d) attracting and retaining motivated employees by providing financial and other incentives to meet the Company's operating and financial goals; and (e) continuing to emphasize value-added capital improvements to enhance the Properties' competitive advantages in their submarkets. |
| Use of Proceeds |
| The proceeds from the proposed offering will be used to acquire the General Partner's interest in the Operating Partnership. The operating partnership will use the funds to repay, assume or purchase certain mortgage and other indebtedness related to third party lenders, acquire the ownership interest in the Prime Properties not held by Prime, acquire the Acquisition properties, and acquire the assets and business of the Continental Management Business and pay expenses of the Formation Transactions and the offering. |
| Officer Name | Title | Age |
| Michael W. Reschke | Chairman of the Board, Trustee | 41 |
| W. Michael Karnes | Executive Vice President and Chief Financial Officer | 51 |
| Jeffrey A. Patterson | Executive Vice President, General Counsel and Secretary; Senior Vice President, General Counsel and Secretary of FFCIC | 38 |
| Robert J. Rudnik | Executive Vice President, General Counsel and Secretary; Senior Vice President, General Counsel and Secretary of FFCIC | 43 |
| Donald H. Faloon | Executive Vice President--Development | 50 |
| Richard S. Curto | President and Chief Executive Officer, Trustee | 45 |
| Edward S. Hadesman | President--Industrial Division | 64 |
| Kevork M. Derderian | President--Office Division | 46 |
| John O. Wilson | President--Prime Group Realty Services, Inc. | 43 |
| Faye I. Oomen | Senior Vice President--Corporate Development and Marketing/Leasing--Suburban Office | 48 |
| Tucker B. Magid | Senior Vice President--Industrial Development | 32 |
| Christopher "Kit" J. Sultz | Senior Vice President--Industrial Operations | 31 |
| Steven R. Baron | Senior Vice President--Marketing and Leasing/CBD Office | 48 |
| Philip A. Hoffer | Senior Vice President--Real Estate Operations | 47 |
| Scott D. McKibben | Vice President--Acquisitions | 32 |
| James F. Runnion | Vice President--Asset Management | 53 |
| James F. Hoffman | Vice President--Associate General Counsel | 35 |
| Kathryn A. Deane | Vice President--Controller | 48 |
| Rux B. Currin | Vice President--Development | 41 |
| Phillip E. Waters | Vice President--Marketing and Leasing | 38 |
| Donald E Anderson | Vice President--Property Mangement | 55 |
| Rolanda H. Derderian | Vice President--Real Estate Tax Specialist | 42 |