Capstone Equities Capital Management Addresses Letter to Prime Office REIT

New York (ots/PRNewswire) -

Prof. Dr. H.c, Roland Berger
de.newsaktuell.mb.nitf.xml.Br@ea568e1Chairman; Prime Office REIT
Supervisory Board

Alexander Von Crammde.newsaktuell.mb.nitf.xml.Br@d88934aChief
Financial Officer; Prime Office REIT

Prime Office REIT - AG Hopfenstasse 4 80335 Munich Germany

Dear Messrs. Berger and Von Cramm,

Capstone Equities Capital Management ("CECM") is a shareholder of
Prime Office REIT ("Prime"). By way of background, CECM was formed
from Capstone Equities, a real estate private equity firm based in
New York City. We have closed 18 transactions, which in aggregate
exceeds $1 billion of real estate transactions and understand all
aspects of commercial real estate from closing through to disposal.
Our investment partners include some of the world's finest private
equity firms, such as Carlyle Group and Angelo Gordon, and large
family offices.

CECM is a public markets hedge fund that has made numerous
successful investments in undervalued hard asset companies in Europe
& US. We conducted a bottoms-up analysis of Prime's assets and
concluded that they are deeply undervalued and believe the company to
be worth in excess of EUR6.00 per share. Our due diligence included
several trips to Germany and conversations with brokerage firms to
understand lease rates, capitalization rates, vacant building values,
as well as an extensive review of comparable sales.

To date, we have been deeply disappointed by the fiduciary conduct
of the supervisory board and the management board of Prime. Prime
IPO'd at the worst possible time in 2011, leaving the company
undercapitalized. According to people in the industry, the IPO was
handled in a way that left the company vulnerable to further
discounts. Now, shareholders are asked to vote on a deal with OCM
Acorn that even further dilutes shareholders. Since this deal was
announced, there has been an 11.4% share price decline, showing the
deal is unsupported.

The merger ratio is simply inadequate and further share capital
increases at these price levels are highly dilutive. Given that the
share price today is a 54.3% discount to the restated NAV, it would
make more sense for the company to sell assets like SZ Tower even for
a modest discount to book value rather than be forced into a dilutive
merger ratio and then raise equity at such a steep discount.

CECM urges the supervisory board to hire an investment banker to
conduct a thorough strategic alternatives process - 1) The Company
could liquidate its assets 2) The Company could find a financial
sponsor that would inject equity into the company, while leaving
existing shareholders undiluted. We believe the company and its
supervisory board did not adequately pursue all strategic
alternatives as evidenced with our conversations with potential
suitors and should delay its AGM until it has conducted a more
thorough process.

There are numerous conflicts of interest inherent in the OCM
Acorn/Prime deal. The conflicts of interest in this merger are
staggering: 1) Both companies used CBRE to evaluate the real estate
assets; 2) Both companies used Berenberg as financial advisor for the
transaction; 3) While we respect Alexander Von Cramm and his
abilities, we believe that there are inherent conflicts of interest
with him being on the management board of the new entity.

Ultimately, we believe that Prime has high quality properties
located in markets with significant barriers to entry. We firmly
believe that Prime shareholders can do better than the current OCM
Acorn offer, which significantly dilutes existing shareholders.

Sincerely,

Adam M. Chud Partner Portfolio Manager Capstone Equities Capital
Management 545 Fifth Avenue New York, N.Y. 10017

CC: Ironsides Partners

Oaktree European Principal

Morgan Stanley

Karoo Investment Fund

BNP Paribas Asset Management

ots Originaltext: Capstone Equities Capital Management
Im Internet recherchierbar: http://www.presseportal.de

Contact:
Justin Adelipour, +1-646-517-1411