Grubb & Ellis Equity Advisors Eliminates Potential REIT Internalization Fees

Jun 03, 2010, 08:30 ET from Grubb & Ellis Equity Advisors

SANTA ANA, Calif., June 3 /PRNewswire-FirstCall/ -- Grubb & Ellis Equity Advisors, the primary real estate investment and asset management subsidiary of Grubb & Ellis Company (NYSE: GBE), announced today that it has eliminated potential internalization fees for the non-traded real estate investment trusts for which it provides advisory and management services. Currently registered offerings affected by the policy are Grubb & Ellis Healthcare REIT II, Inc. and Grubb & Ellis Apartment REIT, Inc.  

"We have taken this action because we believe it is in the best interests of the stockholders whom have invested in our real estate investment trusts. This action further reinforces that Grubb & Ellis Equity Advisors is fully focused on working to provide superior returns to our investors and we believe our sponsorship philosophy will help build long-term brand value for Grubb & Ellis as a leading sponsor in the non-traded REIT sector," said Thomas P. D'Arcy, chairman of Grubb & Ellis Equity Advisors and president and chief executive officer of Grubb & Ellis Company.  "This decision clearly demonstrates our commitment to our partnership with the broker-dealer community, registered representatives and individual investors."

Grubb & Ellis is the first major sponsor of publicly-registered, non-traded REITs to eliminate potential internalization fees, which are typically paid when a REIT matures to the point that its board of directors determines that the REIT should become internally managed.  Between 2000 and 2007, seven non-traded REITs paid internalization fees ranging from $68 million to $375 million.

"This new policy represents potentially substantial investor savings and is consistent with our 'investor first' philosophy," said Jeff Hanson, president and chief executive officer of Grubb & Ellis Equity Advisors.  "Through this decisive action, Grubb & Ellis Equity Advisors directly aligns its interests with those of its non-traded REIT stockholders and demonstrates our commitment to the success of our investment programs."

Publicly registered, non-traded real estate investment trusts raised approximately $58.7 billion in investor equity between 2000 and 2009.  The industry is expected to raise between $7.5 billion and $8 billion in 2010, according to Robert A. Stanger & Company, which tracks the sector.  

About Grubb & Ellis Equity Advisors

Grubb & Ellis Equity Advisors, LLC is the primary investment and asset management subsidiary of Grubb & Ellis Company (NYSE: GBE), one of the largest and most respected commercial real estate services and investment companies in the world. Grubb & Ellis Equity Advisors and its investment affiliates manage a nationwide portfolio of office, industrial, retail, multifamily and healthcare-related assets valued in excess of $5.6 billion.  One of the nation's most active buyers and sellers of commercial real estate, Grubb & Ellis Equity Advisors and its investment affiliates have completed acquisition and disposition volume totaling more than $12 billion on behalf of investors since 1998, including more than $9 billion since Jan. 1 2005.  

Grubb & Ellis Equity Advisors offers a full range of commercial real estate investment vehicles, including public non-traded real estate investment trusts (REITs), institutional investments and separate accounts, including the Grubb & Ellis Private Client Management program.  Our affiliate, Grubb & Ellis Realty Investors, LLC, is one of the nation's leading sponsors and managers of tenant-in-common investment programs for 1031 exchanges. For more information, visit http://equityadvisors.grubb-ellis.com.

Forward-Looking Statement

Certain statements included in this press release may constitute forward-looking statements regarding, among other things, our ability to provide superior returns to investors, the ability to build long-term brand value for Grubb & Ellis as a leading sponsor in the non-traded real estate investment trust sector, and the ultimate success of our investment programs. These statements involve known and unknown risks, uncertainties and other factors that may cause the company's actual results and performance in future periods to be materially different from any future results or performance suggested by these statements. Such factors which could adversely affect the company's ability to obtain these results include, among other things: (i) the continuing general economic downturn and recessionary pressures on businesses in general; (ii) a prolonged and pronounced recession and continued decline in real estate markets and values; (iii) the unavailability of credit to finance real estate transactions; (iv) the success of each non-traded real estate investment trust; (v) the success of new initiatives and investments; (vi) the uncertainties relating to the implementation of the company's real estate investment strategy; and (vii) the inability to attain expected levels of revenue, performance and/or brand equity in the current macroeconomic and credit environment.  The company does not undertake any obligation to update forward-looking statements.

SOURCE Grubb & Ellis Equity Advisors



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