No one’s saying anything outside of official statements, but it appears that Grubb & Ellis is becoming more aggressive in its efforts to find a buyer or merger candidate for its financially troubled commercial brokerage.
Last year was a rough one for Grubb & Ellis. The national brokerage — which boasts a strong presence in the Midwest — lost $67 million.
According to an official statement released by Grubb & Ellis, New York’s C-III Capital Partners and an affiliate of Santa Monica, Calif.-based Colony Capital LLC have entered into negotiations with Grubb & Ellis.
C-III Capital is an intriguing partner in these negotiations. The company is an affiliate of New York City’s Island Capital Gropu LLC, headed by Andrew Farkas. Farkas knows how to close deals; he is the former chairman and chief exective officer of Insignia Financial Group.
“Grubb & Ellis is a long-time leader in the real estate industry and we share management’s vision of strengthening the platform and growing the company,” Farkas was quoted in Grubb & Ellis’ official statement. “C-III Capital Partners and Colony have the capital base and industry expertise necessary to bolster Grubb & Ellis’ client offerings and position the company for long-term success.”
This latest announcement provides further evidence that Grubb & Ellis is boosting its efforts to either sell the company or find a suitable partner for a merger.
Earlier this year, in March, Grubb & Ellis hired JMP Securities as an adviser charged to explore merger and buy-out opportunities.
The company has already shed some of its business units, notably its TIC Business — known as Daymark Realty Advisors — and its Alesco Global Advisors unit. Analysts have viewed these moves as key ones as Grubb & Ellis prepares for a sale or merger.
Thomas D’Arcy, president and chief executive officer of Grubb & Ellis, said that the negotiations with C-III and Colony could result in a stronger brokerage.
“We look forward to working with C-III and Colony to complete a transaction which offers broad benefits to our professionals and platform. A transaction with these two highly regarded firms would provide the scale for us to more efficiently and effectively serve our clients and broker-dealer partners,” D’Arcy said in Grubb’s statement.
C. Michael Kojaian, also in a statement, said that he, too, expected the relationship betweeen Grubb & Ellis, C-III and Colony to be a fruitful one.
“This announcement is very positive for Grubb & Ellis employees, clients and stakeholders,” Kojaian said. “C-III Capital Partners and Colony Capital are highly regarded multi-faceted organizations with deep expertise and involvement in the commercial real estate industry. Partnering with these firms offers significant growth opportunities for Grubb & Ellis.”
This move isn’t the last time that Farkas and C-III have made news in the Midwest. Last summer, Farkas announced that C-III Capital Partners was set to acquire NAI Global, a company that operates several brokerages throughout the Midwest. This transaction, though, has not yet closed, and C-III isn’t saying anything about when it eventually will.