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Prime Retail in shelf filing to raise up to $400 million REIT may expand outlet mall portfolio; Commercial real estate


Prime Retail Inc. is seeking permission to sell up to $400 million worth of common and preferred shares, capital that the Baltimore-based developer likely will use to develop, buy or expand its outlet center mall portfolio.

The so-called shelf filing, submitted yesterday to the U.S. Securities and Exchange Commission, allows the real estate investment trust to register securities before selling them.

Prime Retail said it also may use the new stock proceeds to repay debt. The nation's largest owner and operator of outlet center malls has roughly $1 billion in debt, thanks in part to its June acquisition of the Michigan-based Horizon Group Inc.

The REIT added that the additional shares will not dilute shareholders' equity, because the sale of any new stock will be done over time.

"We would not sell securities into the market if we couldn't then deploy that capital and make it accretive to shareholders," said Robert P. Mulreaney, the company's chief financial officer.

Mulreaney said the shelf registration replaces one that had existed before the Horizon purchase.

In all, Prime Retail has about 68 million shares of outstanding common and preferred stock and operating partnership units. Its common stock close yesterday at $10.312 per share, down 6.25 cents.

Prime Retail has sold stock three times in its 10-year history, raising a total of $482 million.

The company controls nearly 50 outlet centers.

Pub Date: 12/08/98

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