THE LIGHTSTONE GROUP COMPLETES
ACQUISITION OF PRIME GROUP REALTY TRUST


CHICAGO—(BUSINESS WIRE)—July 1, 2005--Prime Group Realty Trust (NYSE:PGE) (the “Company”), a Chicago-based publicly traded real estate investment trust (REIT), and The Lightstone Group, LLC (“Lightstone”), a New Jersey-based private real estate company, announced today that an affiliate of Lightstone has completed its acquisition of the Company. Originally announced in February 2005, the acquisition was approved by the Company’s shareholders on June 28, 2005.

As a result of the transaction, Lightstone now controls the Company, and the Company’s common shares will no longer be listed or traded on the New York Stock Exchange. In accordance with the terms of the previously announced merger agreement, each common share of the Company and limited partner unit of Prime Group Realty, L.P., the Company’s operating partnership, was cancelled and converted into the right to receive cash in the amount of $7.25 per common share/limited partner unit, without interest. Letters of transmittal regarding the procedures to receive the merger consideration will promptly be sent to former common shareholders of the Company and limited partner unit holders of the Operating Partnership.

The Company’s Series B Cumulative Redeemable Preferred Shares (the “Series B Shares”) remain outstanding after the completion of the acquisition. Concurrently with the completion of the acquisition, all accrued but unpaid distributions on the Company’s Series B Shares, plus distributions on the Series B Shares for the third quarter of 2005, were paid to the holders of the Series B Shares.

Also in connection with the completion of the acquisition, Lightstone caused the Company and its operating partnership to adopt and assume two previously disclosed employment agreements, each dated as of May 31, 2005, between an affiliate of Lightstone and Jeffrey A. Patterson, the Company’s President and Chief Executive Officer, and James F. Hoffman, its Executive Vice President, General Counsel and Secretary.

In connection with the acquisition, Mr. Patterson agreed to remain as a trustee of the Company. Messrs. Jacque Ducharme, Stephen Nardi, Christopher Nassetta, Douglas Crocker, Ray D’Ardenne and Daniel Lupiani have been succeeded as trustees of the Company by Messrs. David Lichtenstein, the Chairman and Principal of Lightstone, Michael Schurer, the Chief Financial Officer of Lightstone, and Bruno de Vinck, a Senior Vice President of Lightstone, each named as non-independent trustees of the Company, and Messrs. George R. Whittemore, John M. Sabin, and Shawn R. Tominus, each named as the Company’s independent trustees and members of its audit committee. Mr. Richard FitzPatrick resigned from his position as Executive Vice President – Chief Financial Officer of the Company.

David Lichtenstein, Chairman and Chief Executive Officer of The Lightstone Group, commented, “We are pleased to have finalized this acquisition, which provides Lightstone with a portfolio of high-quality office properties and a platform to acquire and operate additional office and industrial assets in the Midwest.”

Jeffrey A. Patterson, the Company’s President and Chief Executive Officer, said that, “We have successfully completed a process which resulted in a sale of the Company at $7.25 per share, which is approximately 68% higher than what our shares were trading approximately two and one-half years ago when we started this process.” Mr. Patterson continued, “We intend to continue operating the Company as a Chicago-based company and to remain focused on providing excellent service to our existing tenants and to aggressively attract new tenants.”

Prime Group Realty Trust’s assets include joint venture interests in the RR Donnelley Building at 77 West Wacker Drive and Bank One Center at 131 South Dearborn Street in Chicago’s Central Business District. The Company also owns the landmark IBM Plaza, 180 N. LaSalle Street and 208 S. LaSalle Street properties in the Chicago Central Business District, as well as numerous suburban Chicago office assets.

Wachovia Securities acted as financial advisor to the Company’s Board of Trustees, Winston & Strawn LLP provided legal advice to the Company and Herrick, Feinstein LLP provided legal advice to Lightstone.