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GlobeSt.com ANALYSIS: The Prime Group Struggle Continues

CHICAGO-At stake: 4.6 million-plus sf of office properties in metro Chicago. The players: A half-dozen competing interests and personalities. The conclusion: Too soon to call.

By Dees Stribling | Updated on January 10, 2005

CHICAGO-Prime Group Realty Trust is one of the metro area real estate’s longest-running soap operas, and it’s taken a new twist at the beginning of 2005–a legal battle over who will own the office REIT. The outcome may be months away, or longer, since the matter is now in court.

On the face of it, the dispute is about the validity of an agreement signed in late October between Prime Group and Prime-Mansur Investment Partners, which is headed by well-known local real estate investor E. Barry Mansur (as chairman) and CEO Michael Reschke, the former chairman of Prime Group who was ousted by the REIT’s board in 2002. It was a sales agreement, with Prime-Mansur to acquire all of Prime Group’s common stock and partnership units for $6.70 a share.

The deal was inked on Oct. 27, but by Nov. 10, Prime Group decided that the deal was off, asserting that Prime-Mansur hadn’t fulfilled its financing obligations, a contention that the buyers have vigorously denied. Neither side in the dispute was willing to speak to GlobeSt.com about the matter, but they did trade dueling statements in the first week of this year, shortly after Prime-Mansur filed suit in Circuit Court for Montgomery County, MD, to enforce the sales agreement.

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