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Industrial Sale Shifts Focus for REIT

CHICAGO-Prime Group Realty Trust hopes to have a 30,000-sf retail tenant signed by the end of the year at Bank One Corporate Center, and is using a large chunk of net proceeds from its industrial portfolio sale to CenterPoint Properties Trust for anticipated tenant improvements at IBM Plaza.

By Mark Ruda | Updated on November 15, 2004

CHICAGO-With all but two industrial assets sold, Prime Group Realty Trust is aiming to lease 30,000 sf of retail space at its Bank One Corporate Center before the end of the year. The company, which is repositioning itself as a city and suburban office REIT, recently closed on the sale of five industrial properties totaling 310,225 sf as well as a 50,400-sf Schaumburg office building to CenterPoint Properties Trust.

President and chief executive officer Jeffrey A. Patterson says the REIT is finishing a lease deal with a tenant that would take 30,000 sf of retail space at 131 S. Dearborn St., which would bring occupancy of the retail portion of the building to 50%. In addition, the new tenant would take 20,000 sf of office space in the 1.5-million-sf building, which is 73% occupied.

CenterPoint Properties Trust, the largest industrial property owner in the market, paid $26.4 million for three industrial buildings in Elmhurst, as well as one each in Carol Stream and Hillside, along with the office building at 1301 Tower Rd. Previously, Prime Group Realty Trust sold 3.4 million sf of industrial assets to CenterPoint Properties Trust for $98.7 million. In the most recent deal, CenterPoint Properties Trust assumes $14.5 million in debt, while Prime Group Realty Trust gets $11.4 in net proceeds.

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