New York investor's $560m purchase is Chicago's biggest office sale this year.

CHICAGO, IL: Prime Group Realty Trust announced that CARI, LLC signed a letter of contract on the purchase Citadel Center located at 131 South Dearborn Street, Chicago, Illinois, from Dearborn Center, LLC for $560 million.

The purchaser is an entity controlled by Robert Gans, a real estate investor based in New York, New York. A subsidiary of the company's operating partnership, Prime Group Realty, L.P. owns a 30% joint venture interest in Dearborn LLC.

The company's services firm, Prime Group Realty Services, Inc. manages and leases the property.

The buyer has deposited $20 million in escrow to secure its obligation to purchase the property. The purchase and sale agreement provides that an affiliate of the company will remain the manager and leasing agent for the property pursuant to a management and leasing agreement through approximately August 31, 2012, subject to extension by agreement of the parties.

Jeffrey A. Patterson, Prime's president and chief executive officer said, "We believe that this is the largest single office building sale transaction in Chicago this year.

"We think we have achieved very good execution on the sale of the asset and look forward to our continuing involvement in the property as manager and leasing agent."

In connection with the sale, the operating partnership will be entitled to receive its annual distribution of income from Dearborn LLC of $4.1 million. Prime Group estimates that the operating partnership's share of' the net proceeds from the sale will be approximately $82.5 million, and that the operating partnership will have a book gain according to generally accepted accounting principles of approximately $11.0 million from the transaction.

The Operating Partnership will use the net proceeds to pay down corporate level debt.

Owned by one of the largest private real estate owners in the country, The Lightstone Group, Prime Group Realty Trust is a fully-integrated, self-administered, and self-managed real estate investment trust (REIT).

It owns 10 office properties containing an aggregate of 3.9 million net rentable square feet, one industrial property comprised of approximately 120,000 s/f and three joint venture interests in office properties totaling 2.6 million net rentable square feet.