Grubb & Ellis Company has a market cap of $135.1 million; its shares were traded at around $1.95 with and P/S ratio of 0.3. GBE is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:This Amendment No. 1 to our Annual Report on Form 10-K for the year ended December 31, 2009 (the Amended 10-K), amends our Annual Report on Form 10-K for the year ended December 31, 2009, filed with the Securities and Exchange Commission on March 16, 2010 (the Original 10-K). This Amended 10-K amends the Original 10-K solely for the purpose of amending its previously filed consolidated statement of cash flows for the year ended December 31, 2009 to adjust certain items contained therein. As a result of these adjustments, net cash used in operating activities improved by $10.2 million, net cash provided by investing activities decreased by $10.7 million, and net cash used in financing activities improved by $0.5 million.
The Company and its subsidiaries are leading sponsors of real estate investment programs that provide individuals and institutions the opportunity to invest in a broad range of real estate investment vehicles, including public non-traded REITs, TIC investments, mutual funds and other real estate investment funds. The Company brands its investment programs as Grubb & Ellis in order to capitalize on the strength of the Grubb & Ellis brand name and to leverage the Companys various platforms. During the year ended December 31, 2009, more than $554.7 million in investor equity was raised for these sponsored investment programs. As of December 31, 2009, the Company has more than $5.7 billion of assets under management related to the various programs that it sponsors. The Company has completed transaction acquisition and disposition volume totaling approximately $12.3 billion on behalf of more than 55,000 program investors since 1998.
The Company and Grubb & Ellis Equity Advisors, LLC, (GEEA) a subsidiary of the Company, sponsor and advise public non-traded REITs that are registered with the SEC but are not listed on a national securities exchange like a traded REIT. According to the published Stanger Report, Winter 2010, by Robert A. Stanger and Co., an independent investment banking firm, approximately $6.7 billion was raised in the non-traded REIT sector in 2009. As of December 31, 2009, the Company sponsors two demographically focused programs that are actively raising capital, Grubb & Ellis Healthcare REIT II, Inc. and Grubb & Ellis Apartment REIT, Inc. In addition, the Company raised equity for and provided advisory services to Grubb & Ellis Healthcare REIT, Inc. (now Healthcare Trust of America, Inc.) until August 28, 2009 and September 20, 2009, respectively. Public non-traded REITs sponsored or advised by the Company and its affiliates raised $536.9 million in combined capital in 2009.
Each share of 12% Preferred Stock is convertible into 60.606 shares of common stock of the Company, which represents a conversion price of approximately $1.65 per share of common stock. The Company received net proceeds from the private placement of approximately $90.1 million after deducting the initial purchasers discounts and certain offering expenses and after giving effect to the conversion of $5.0 million of subordinated debt previously provided by an affiliate of the Companys largest shareowner. The Company used the net proceeds to pay transaction costs and repay in full the Companys Credit Facility (as defined below) at the agreed reduced principal amount equal to approximately 65% of the principal amount outstanding under such facility (as more fully discussed in the section immediately following Amendment and Repayment of Senior Secured Credit Facility). The balance of the net proceeds from the offering will be used for general corporate purposes.
During 2007, the Company acquired three commercial properties the Danbury Corporate Center in Danbury, Connecticut (the Danbury Property), Abrams Center in Dallas, Texas (the Abrams Property) and 6400 Shafer Court in Rosemont, Illinois (the Shafer Property) for an aggregate contract price of $122.2 million, along with acquisition costs of approximately $1.3 million, and assumed obligations of approximately $0.5 million. On June 3, 2009, the Company sold the Danbury Property to an unaffiliated entity for a sales price of $72.4 million.
The Amendment to the Loan provided, among other things, for an extension of the term of the Loan until March 31, 2010 (the Loan Extension Date). In addition, the principal balance of the Loan was reduced from $42.5 million to $11.0 million in connection with the transfer of the Shafer Property from the Borrower to an affiliate of Lender for nominal consideration pursuant to a special warranty deed (the Special Warranty Deed) that was recorded on December 29, 2009.
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