Prime Group Realty Trust, Chicago, IL

PGRT's portfolio consisted of 15 office buildings totaling 7.6 million square feet, all but one of which were located either in downtown or suburban Chicago. Included in the portfolio were the 1.4 million square foot, Mies van der Rohe-designed IBM Tower, the 1.5 million square foot BancOne Tower and the 945,000 square foot 77 West Wacker Drive.

Prior to Lightstone's involvement, PGRT had been burdened by a complicated debt and capital structure, bloated overhead, years of deteriorating market fundamentals, a history of management turmoil and a series of collapsed merger transactions.

Savills identified the correct point in time when the debt, capital and management issues were capable of being resolved in an advantageous manner. Savills also identified several value-add opportunities within the portfolio, and suggested an acquisition strategy that capitalized on a projected market turnaround and took advantage of a substantial cash reserve "war chest" that the company had quietly built up over the past several years.

Savills services in connection with the transaction included:

• Introducing Lightstone, which had no previous exposure either to the office sector generally or to Chicago in particular, to the opportunity.
• Creating leveraged and unleveraged financial models for the acquisition.
• Analyzing the proposed transaction in light of going-in cap rates, price per square foot, and comparisons to recent Chicago-area office transactions.