Grubb & Ellis Company Reports 2009 First Quarter Results

Yahoo:

Grubb & Ellis Company (NYSE: GBE - News),a leading real estate services and investment firm, today reported revenue of $118.3 million for the first quarter of 2009, compared with first quarter 2008 revenue of $150.4 million. The net loss attributable to the company was $41.5 million, or $0.65 per share, for the first quarter of 2009, compared with a net loss attributable to the company of $6.3 million, or $0.10 per share, in the same period a year ago.

2009 Highlights

Amended the company's senior secured credit facility.

Recruiting momentum continues, with 18 senior-level brokers joining the company in the first quarter, raising to nearly 60 the number of top brokerage sales professionals who have joined in the past nine months.

Company ranks as No. 1 public non-traded sponsor REIT based on equity investment sales for the months of February, March and April, with Grubb & Ellis Healthcare REIT surpassing the $1 billion mark in equity raised in April.

Awarded 26 new property and facilities management assignments during first quarter totaling 16 million square feet of property.

New cost reduction initiatives result in $5 million annualized savings.

Cumulative 2008 and 2009 restructuring and cost reduction actions through March 31, 2009, total $25 million in estimated annualized savings.

Grubb & Ellis has been heavy on the recruiting, with two senior levels guys here in Los Angeles joining. Revenue is down because sales are down. Having a good property management team is steady income, not great money like brokerage, but small amounts of steady income are important.

Cost reduction measures, we know what those look like.

Probably the most significant thing is the credit amendment, since it allows G&E to stay in business:

The amendment, entered into on May 20, 2009 and effective as of May 18, 2009, modifies the amount, terms, length and certain other provisions of the facility, and imposes various conditions on the company. These conditions, as well as other material provisions of the amended credit facility, are described in the company’s Annual Report on Form 10K that will be filed later in the day with the Securities and Exchange Commission. Under the new structure, the $67.3 million maximum aggregate credit facility includes a $29.3 million revolving line of credit and a $38
million term loan.

The facility will remain in effect until March 31, 2010, and may be extended until January 5, 2011 under certain conditions, subject to early termination in certain
circumstances.