Santa Ana-Based Company Has Fielded Unsolicited Inquiries From Potential Partners
Grubb & Ellis Co. (NYSE:
GBE) announced Monday it has engaged San Francisco-based investment bank JMP Securities to explore strategic alternatives, including the potential sale the company.
The Santa Ana, CA-based has received "unsolicited inquiries" and decided that entering into a formal strategic process to explore alternatives, including a sale or merger, "is in the best interest of all of our constituents," said C. Michael Kojaian, chairman of the board.
Despite improved leasing and sales volume in a recovering
commercial real estate market, the company's share price fell to its 2011 low of 98 cents on Friday, down from the 52-week high of $2.27 on April 14, 2010. With the economy and real estate market on the upswing, the timing is right to explore options, the company said. The stock rebounded more than 11% in after-hours trading following the announcement.
"While the management team has made progress restructuring the business and driving top-line growth, 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," Kojaian said.
Along with the announcement, the board said it would not declare a quarterly dividend to holders of its preferred stock.
"A formal process to explore a transaction which affords the company the opportunity to drive additional scale across our platform is in the best interests of our corporate stakeholders, clients, broker-dealer partners and Grubb & Ellis professionals," said Thomas P. D'Arcy, president and chief executive officer.
Grubb & Ellis joined with NNN Realty Advisors Inc. in 2007 near the peak of the real estate boom. The company has faced complicated integration issues during the downturn, including management of a troubled portfolio of legacy tenant-in-common (TIC) assets acquired as part of the NNN Realty transaction.
The company in February launched Daymark Realty Advisors Inc. to manage those TIC assets. Santa Ana-based Daymark -- the fourth Grubb & Ellis reporting segment in addition to its transaction, management and, investment management businesses -- becomes one of the nation's largest asset management companies, overseeing a nationwide portfolio of about 33 million square feet, including more than 8,700 multifamily units.