Prime Group Realty Trust Recapitalizes 330 North Wabash Avenue Via Joint Venture With Five Mile Capital Partners

CHICAGO, Feb. 15, 2011 /PRNewswire/ -- Prime Group Realty Trust (PGRT) announced that it has entered into a joint venture agreement with an affiliate of Five Mile Capital Partners (Five Mile), an investment management firm based in Stamford, Conn. for 330 North Wabash Avenue, a landmark 52-story, mixed-use tower designed by renowned architect Mies van der Rohe and located in Chicago, Ill.

In connection with the entry into the joint venture agreement, Five Mile agreed to provide up to $75 million of additional capital to the joint venture for building redevelopment, tenant improvements and other leasing costs. In addition, the terms of the existing debt on the property were modified to, among other things, (i) pay down $20 million of principal and provide for the outstanding principal balance of the property loans to be $98 million, (ii) extend the maturity date to January 31, 2016, and (iii) modify the future loan commitment so that $30 million remains available to be drawn for tenant improvement, leasing, building redevelopment and other costs.

"Our new joint venture is the latest example of PGRT's commitment to solidifying 330 North Wabash's position as a classic, architecturally iconic building with highly desirable office space," said Jeffrey Patterson, chief executive officer of PGRT. "In 330 North Wabash, Five Mile saw a great mixed-use property with sound long-term investment attributes. We're confident this transaction will ensure the building is well-positioned for years to come."  

PGRT completed a $24 million base building redevelopment of 330 North Wabash in 2010, including modernizing its operational systems, building automation technology and fire and life safety command center. It also renovated the building's intricate and expansive granite and Italian travertine lobby, thereby restoring it to the pristine condition that Mies envisioned when the building was originally constructed in 1973.  PGRT will use the funding commitments from its lender and from Five Mile to redevelop the vacant office floors and complete its ongoing modernization effort.

The modernization will include newly designed elevator cabs, upgrading the HVAC system on the tower-rise floors, new washrooms and a variety of other renovations. Once completed, 330 North Wabash's office floors will have many of the same features and attributes found in recently constructed office buildings.  

330 North Wabash's tenants and guests will also benefit from a variety of new amenities through The Langham, Chicago, a five-star luxury hotel that will occupy floors 2-13. Amenities include a chef-driven restaurant, spa and fitness center, as well as meeting and conference facilities. The hotel is expected to open in late 2012.

"With 330 North Wabash's expansive and river views, dynamic location and host of new amenities and features, it has evolved into one of Chicago's most attractive office locations," added Patterson. "We're proud to have repositioned this visionary building and are excited to begin this next phase with our new partner, Five Mile Capital Partners."

About 330 North Wabash

330 North Wabash is a 52-story mixed-use tower, landmarked by the City of Chicago, and is the last and largest office structure designed by renowned architect Mies van der Rohe.  The building won The 2007/2008 Office Building of the Year (TOBY) award for the North Central Region in the category of over 1 million square feet, competing against buildings in more than five other states for the prestigious award, sponsored by the Building Owners and Managers Association.  Langham Hotels, a luxury hotel owner is developing the lowest 12 floors of the building with a 335 room high-end hotel.  The hotel will feature 17,000 square feet of state-of-the-art facilities for meetings and social events, a ballroom with spectacular river views, a chef-driven restaurant, fitness center, indoor pool, and a destination spa.  

Forward Looking Statements

This press release contains certain forward-looking statements which involve known or unknown risks, uncertainties or other factors not under the Company's control which may cause the actual results, performance or achievement of the Company and the matters discussed in this press release to be materially different from the results, performance or other expectations implied by these forward-looking statements.  

SOURCE Prime Group Realty Trust