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Michael Reschke could be called the Harry Houdini of Chicago's real estate circus.
The chairman of Chicago-based Prime Group Realty Trust always seems to be ensnared in some dangerous trap: blindfolded, manacled, locked in a trunk and thrown into a giant tank of debt only to swim miraculously to the surface.
His latest feats are no less death-defying. In the next few months, he must raise millions to pull two high-profile deals out of his hat: his planned acquisition of Chicago's IBM Plaza and a buyout of a key investor in a struggling Baltimore real estate investment trust (REIT) specializing in outlet malls.
But Mr. Reschke appears unfazed.
"You call that dodging bullets? Try opening a downtown office building in the middle of a bad market. We were dodging cannonballs," he says, referring to 77 W. Wacker Drive, a 50-story building he developed in 1992, when vacancy rates topped 20%.
In that instance, Mr. Reschke cheated fate with a gamble, dangling generous upfront concessions like free rent in front of tenants in exchange for above-market rents on the back end of their leases. Today, the 944,600-square-foot high-rise is Prime Group Realty's largest property, with estimated rental income of about $25 million.
On the IBM Plaza deal, he'll need similar derring-do. Working under a board edict to reduce debt, he must raise $230 million to buy IBM Plaza from New York's Blackstone Group Inc., or lose $8 million.
The predicament came about only after Mr. Reschke balked at an earlier deal with Blackstone, risking the loss of his earnest money of $20 million, a sum equal to the 1998 net income of his rapidly growing office and industrial REIT.
Then there's the outlet mall REIT, Prime Retail Inc. As chairman, Mr. Reschke has two months to raise $43.6 million to buy out Security Capital Preferred Growth Inc.'s investment, part of a deal worked out after the REIT nearly defaulted...