Wednesday, February 22, 2012
|Seattle Times||Daily Journal of Commerce Headline|
|Kings, Hornets, Coyotes proving slippery for Seattle||
Grubb says it’s bankrupt
|Rising sales point to better year for housing||Grubb & Ellis is declaring bankruptcy and has signed a deal to sell most of its assets to a company that owns another commercial real estate firm called Newmark Knight Frank.
What effect this will have on local operations is not clear. A source close to the deal said details, such as what name the company will operate under, have not been determined.
Grubb & Ellis announced the deal on Monday when many businesses were closed for Presidents Day. The company said it would sell most of its assets to BGC Partners, a publicly traded financial services company that acquired Newmark Knight Frank last fall.
If consummated, the deal would bring stability to Grubb & Ellis.
Grubb officials said in a press release that BGC is financially strong, and said the transaction will position their company to become part of a well-capitalized global platform.
“The thing that is interesting to us is the Newmark piece of the story,” said Craig E. Hill, a senior vice president in Grubb’s Seattle office. Hill referred questions to Jane Lanford, another Grubb senior VP in Seattle, but she was unavailable.
Newmark Knight Frank has more than 7,000 employees in 240 offices on five continents. The offices closest to the Puget Sound region are in the Bay Area.
Grubb & Ellis is a national company with more than 100 offices and 3,000 employees.
The Grubb & Ellis website shows the company has about a dozen brokers and agents in this area, making it the region’s 19th largest company. Last summer, Seattle managing director and broker Bill Condon left the company to become managing director of Colliers International’s Seattle office. Another top producing broker, Matt McGregor, also left Grubb for Colliers.
The Santa Ana, Calif.-based Grubb & Ellis has struggled during the real estate crash. The Los Angeles Times reported that in its bankruptcy filing, Grubb listed $150 million in assets and $167 million in debt at the end of 2011. In January, the New York Stock Exchange delisted Grubb & Ellis, and its common stock now trades over the counter. Grubb has been looking at a sale or merger with other companies for about a year.
Grubb & Ellis intends to implement the BGC transaction as an asset sale under Section 363 of the U.S. Bankruptcy Code. The company started Chapter 11 proceedings in the U.S. Bankruptcy Court for the Southern District of New York. In a prepared statement, Grubb & Ellis said it expects business to continue without disruption as it completes the sale as quickly as possible.
“BGC’s purchase of the company’s senior debt and its willingness to provide incremental financing to ensure the smooth execution of the sale process demonstrate its commitment to the success of the Grubb & Ellis business,” said Grubb & Ellis President and CEO Thomas P. D’Arcy.
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