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                                                                   EXHIBIT 10.32

                                PLACEMENT FEE LETTER
                                          
                                 November 17, 1997


Security Capital Markets Group Incorporated
399 Park Avenue
New York, New York  10022
Attention:  Mr. Garret C. House, Vice President

     Re:  Prime Group Realty Trust

Gentlemen:

     This letter confirms the appointment of Security Capital Markets Group
Incorporated ("SCMG") by Prime Group Realty Trust (the "Company") and Prime
Group Realty, L.P. (the "Operating Partnership") as a Placement Agent in
connection with that certain Series A Preferred Securities Purchase Agreement
(the "Purchase Agreement") by and among the Company, the Operating Partnership
and Security Capital Preferred Growth Incorporated ("SCPG"), pursuant to which
SCPG is purchasing 2 million shares of the Company's Series A Cumulative
Convertible Preferred Shares of Beneficial Interest (the "Securities").  Nothing
herein shall constitute an undertaking by SCMG to underwrite or otherwise
purchase the Securities.

     For these services, the Company and the Operating Partnership jointly agree
that SCMG's compensation hereunder will consist of a fee (the "Fee") equal to 1%
of the Aggregate Purchase Price (as defined in the Purchase Agreement) of all
Securities purchased by SCPG pursuant to the Purchase Agreement.  Such fee shall
be payable at or prior to the Closing Date (as defined in the Purchase
Agreement).  The Company and the Operating Partnership agree and acknowledge
that no fee payable to any other finder, broker, broker-dealer or other party
shall reduce the Fee Payable hereunder.

     Each of SCMG, the Company and the Operating Partnership agrees that (i) in
connection with the sale of the Securities, neither it nor any person acting on
its behalf has offered or sold or will offer or sell the Securities by any form
of general solicitation or general advertising, including but not limited to the
following:  (A) any advertisement, article, notice or other communication
published in any newspaper or broadcast over television or radio or (B) any
seminar or meeting whose attendees were invited by any general solicitation or
general advertising; and (ii) it has solicited and will solicit offers for
Securities only from and will offer Securities only to, investors that it has a
reasonable basis to believe are "accredited investors" within the meaning of
Rule 501(a) under the Securities Act of 1933, as amended.

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     In consideration for SCMG agreeing to provide the services referred to
herein, the Company and the Operating Partnership jointly agree to indemnify and
hold harmless SCMG, its affiliates and each other entity or person, if any,
controlling SCMG or any of its affiliates within the meaning of the federal
securities laws, and their respective directors, officers and employees (SCMG
and each such entity or person being referred to as an "Indemnified Person"),
from and against any claim by any third party for any losses, claims, damages or
liabilities (or actions in respect thereof) relating to or arising out of the
services performed pursuant to this agreement, the purchase contemplated hereby
or SCMG's role in connection therewith, and to reimburse any Indemnified Person
for all expenses (including, without limitation, reasonable fees and
disbursements of counsel) incurred in connection with any action, suit or
proceeding in relation thereto or in connection therewith, other than any such
losses, claims, damages, liabilities or expenses of any Indemnified Person that
are determined by final judgment of a court of competent jurisdiction to have
resulted primarily from actions taken or omitted to be taken by such Indemnified
Person in bad faith or from such Indemnified Person's gross negligence or SCMG's
intentional and material breach of this agreement.  The Company shall not be
liable for any settlement of any proceeding effected without its prior written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the Company agrees to indemnify the Indemnified Person from and
against any loss or liability by reason of such settlement or judgment subject
to the rights of the Company in this paragraph to claim exemption from its
indemnity obligations.  The Company shall not, without the prior written consent
of any Indemnified Person, effect any settlement of any proceeding in respect of
which such Indemnified Person is a party and indemnity could have been sought
hereunder by such Indemnified Person, unless such settlement includes an
unconditional release of such Indemnified Person from all liability on claims
that are the subject matter of such proceeding.

     This agreement shall be governed by the internal laws of the state of
Illinois.  This agreement may be terminated at any time by the Company or SCMG
upon written notice to the other party; provided that the representations and
indemnity obligations of the Company hereunder and the obligation of the Company
to pay SCMG the Fee shall survive any termination of SCMG's engagement hereunder
and any sale of such Securities.

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     Please indicate your agreement with this understanding by signing the
letter below and returning it to the undersigned.

                              Sincerely,

                              PRIME GROUP REALTY TRUST

                              By:/s/ W. Michael Karnes
                                 --------------------------------
                              Name  W. Michael Karnes
                                  -------------------------------
                              Its  Executive Vice President and
                                 --------------------------------
                                  Chief Financial Officer
                                  -------------------------------

                              PRIME GROUP REALTY, L.P.

                              By:  Prime Group Realty Trust, its
                                   general partner

                              By: /s/ W. Michael Karnes
                                  ------------------------------
                              Name  W. Michael Karnes
                                  ------------------------------
                              Its  Executive Vice President and
                                  ------------------------------
                                  Chief Financial Officer
                                  ------------------------------


Accepted and Agreed to as of the date set forth above:

SECURITY CAPITAL MARKETS GROUP INCORPORATED


By: /s/ Garret C. House
    --------------------
Name  Garret C. House
    --------------------
Its  Vice  President
   ---------------------