REIT Urged to Sell Big Part of Portfolio

K Capital Partners LLC, Boston, has urged Prime Group Realty Trust, Chicago, to liquidate "a substantial portion" of its real estate portfolio or to pursue a sale of the entire company.In a Dec. 3 letter to Prime Group acting chairman Stephen J. Nardi, K Capital managing director Abner Kurtin said K Capital controls over 18% of the shares of Prime Group, a real estate investment trust. Mr. Kurtin said K Capital believes the stock market valuation of the REIT "represents a significant discount to its real estate net asset value" as a result of high leverage, lack of a dividend, and small market capitalization. The discount exists despite the efforts of Prime Group's board and management to turn the company around and manage debt levels, so "we strongly encourage" the REIT's management and board to "pursue a liquidation of a substantial portion of its real estate portfolio or a sale of the entire company," he said.