Commercial
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Hunt Is On for Buyer of Grubb & Ellis


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Thomas P. D'Arcy

Three years ago, Grubb & Ellis Co. (NYSE:GBE) was taken over by NNN Realty Advisors of Santa Ana, CA.  GBE moved its headquarters from Chicago to Santa Ana.

Today, the 50-year-old commercial real estate firm is looking for a new company boss.  Grubb & Ellis is one of the best recognized names in U.S. commercial real estate circles. Thomas P. D'Arcy is president of the firm.

San Francisco investment banker JMP Securities LLC is heading the hunt for Grubb & Ellis.  The company will consider an outright sale or merger.

Grubb & Ellis reported a net loss of $10.7 million during the fourth quarter of 2010, capping at least two years of red ink. The company reported a net loss of nearly $79 million in 2009 and almost $67 million in 2010.

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Anthony Thompson

In a recent filing with the Securities and Exchange Commission, Grubb & Ellis chairman C. Michael Kojaian said,  "We believe now is the time to explore opportunities on how to best leverage the broad platform and capabilities of the company into an improving market for the benefit of all stakeholders."

Grubb & Ellis already has received unsolicited inquiries and decided "a formal process is in the best interest of all of our constituents," Kojaian said.

The brokerage has a market capitalization of $68 million. Its stock has fallen 23 percent this year and is trading near the $1-per-share range.

A company spokeswoman told the Orange County (CA.) Register Grubb & Ellis was currently searching for a new owner because it needs "greater capital to continue to reinvest and grow over the next few years."

Grubb is emerging from one of the worst commercial real estate slumps on record, the spokeswoman said.

In recent years, Grubb has expanded its services and recruited top-performing sales agents.

NNN Realty Advisors completed a virtual takeover of Grubb & Ellis in December 2007, merging the two companies' operations and moving Grubb's headquarters from Chicago to Orange County.

Within months, NNN Realty chairman and chief shareholder Tony Thompson left the newly merged firm and set up a rival company. Thompson later made an unsuccessful bid to regain control of the Grubb & Ellis board during a shareholder election.

In February, Grubb announced that the vestigial holdings of the former NNN Realty - management of some 130 investor-owned commercial properties in about 30 states - would be transferred to a new entity, Daymark Realty Advisors.

That new entity is conducting its own search for investors with spin-off possibilities, according to the Orange County Register.

 

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