Grubb & Ellis Company (GBE) filed Amended Quarterly Report for the period ended 2009-06-30.
Grubb & Ellis Company is a full service commercial real estate company. The Company has a global strategic alliance with Knight Frank, one of the leading property consulting firms in Europe and Asia. The Company, through its offices, affiliates and alliance with Knight Frank, provides a full range of real estate services, including advisory, management and consultative services, to users and investors worldwide. Grubb & Ellis Company has a market cap of $99.1 million; its shares were traded at around $1.52 with and P/S ratio of 0.2.
Highlight of Business Operations:
The net loss attributable to Grubb & Ellis Company for the first six months of 2009 was $74.3 million, or $1.17 per diluted share, and includes a non-cash charge of $12.2 million for real estate related impairments and a $16.5 million charge, which includes an allowance for bad debt and write-offs of related party receivables and advances. In addition, the six month results included approximately $6.2 million of stock-based compensation and $1.6 million for amortization of other identified intangible assets.
In total, $210.9 million in equity was raised for the Company’s investment programs for the three months ended June 30, 2009, compared with $251.9 million in the same period in 2008. The decrease was driven by a decrease in TIC equity raised, partially offset by an increase in equity raised by the Company’s public non-traded REITs. During the three months ended June 30, 2009, the Company’s public non-traded REIT programs raised $208.7 million, an increase of 50.5% from the $138.7 million equity raised in the same period in 2008. The Company’s TIC 1031 exchange programs raised $2.2 million in equity during the second quarter of 2009, compared with $54.6 million in the same period in 2008. The decrease in TIC equity raised for the three months ended June 30, 2009 reflects the continued decline in current market conditions.
Acquisition and loan fees decreased approximately $12.9 million, or 94.1%, to approximately $815,000 for the three months ended June 30, 2009, compared to approximately $13.7 million for the same period in 2008. The quarter-over-quarter decrease in acquisition fees was primarily attributed to a decrease of $9.2 million in fees earned from the Company’s non-traded REIT programs, a decrease in fees from the Private Client Management platform, formerly known as Wealth Management, of $1.4 million and a decrease of $2.2 million in fees from the TIC programs. During the three months ended June 30, 2009, the Company acquired 2 properties on behalf of its sponsored programs for an approximate aggregate total of $41.1 million, compared to 21 properties for an approximate aggregate total of $497.5 million during the same period in 2008.
The Company’s operating expenses decreased approximately $3.4 million, or 2.1%, to $157.2 million for the three months ended June 30, 2009, compared to approximately $160.7 million for the same period in 2008. The Company recognized real estate impairments of $2.0 million during the three months ended June 30, 2009. Additionally there was an increase in interest expense of $2.2 million and increases in general and administrative expense of $8.7 million for the three months ended June 30, 2009. Offsetting these increases were decreases in compensation costs from lower commissions paid and synergies created as a result of the Merger of $10.1 million and decreases of merger related costs of $4.7 million.
Compensation costs decreased approximately $10.1 million, or 8.2%, to $112.5 million for the three months ended June 30, 2009, compared to approximately $122.6 million for the same period in 2008 due to a decrease in commissions paid of approximately $10.4 million related to the Transactions Services portfolio as a result of decrease in activity and a decrease of approximately $5.0 million related to the Investment Management business as a result of a reduction in headcount and decreases in salaries partially offset by an increase of $5.4 million as a result of an increase in reimbursable salaries, wages and benefits due to the growth in the Management Services portfolio.
Interest expense increased approximately $2.2 million, or 96.6%, to $4.5 million for the three months ended June 30, 2009, compared to $2.3 million for the same period in 2008. The increase in interest expense includes an increase of $604,000 related to the reimbursement of mezzanine interest costs on certain TIC programs, an increase of $273,000 due to additional borrowings and an increase in the interest rate on the Credit Facility as a result of the 3rd amendment to the Credit Facility, an increase of $368,000 related to the write off of loan fees related to the Credit Facility and an increase of $97,000 related to the amortization of the Warrants.
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