Urges Stockholders to Re-Elect Incumbent Directors at the 2008 Annual Meeting by Voting the WHITE Proxy Card Today SANTA ANA, Calif., Nov. 19
SANTA ANA, Calif., Nov. 19 /PRNewswire-FirstCall/ -- Grubb & Ellis Company
(NYSE: GBE), a leading real estate services and investment firm, mailed to all
stockholders yesterday the following letter in connection with the company's
December 3, 2008 Annual Meeting of Stockholders.
The full text of Grubb & Ellis' letter follows:
November 18, 2008
Dear Grubb & Ellis Stockholder:
We are asking for your support to re-elect three of your experienced and
independent directors - Harold H. Greene, Devin I. Murphy and D. Fleet
Wallace. Please be sure your shares are voted at the upcoming Annual Meeting
on Wednesday, December 3, 2008. It is quick and easy to vote by telephone or
on the Internet - or by signing, dating and returning the enclosed WHITE proxy
card today.
Your Board and management team have confidence in the Company's future and
our interests are closely aligned with yours - in fact, we own more than 25%
of the Company's outstanding shares of common stock. We ask you to support us
by voting your shares FOR ALL of the Company's directors on the WHITE proxy
card.
Unfortunately, Anthony Thompson - who resigned as a director and as
Chairman of the Board just two months after the merger of Grubb & Ellis and
NNN Realty Advisors to start a competitor, Thompson National Properties - has
launched a costly and disruptive proxy contest to elect himself and two others
to your Board. We believe this is a blatant attempt by Mr. Thompson to
ultimately take control of your Company and install one of his nominees,
Stuart Tanz, as CEO of Grubb & Ellis. Furthermore, we believe Mr. Thompson
may intend to cause your Company to either buy or absorb his fledgling
company.
We urge you to reject Mr. Thompson and his self-serving proxy campaign and
to discard any proxy materials and not sign any green proxy cards you may
receive from him.
SETTING THE RECORD STRAIGHT ABOUT MR. THOMPSON'S CAMPAIGN
Stockholders should consider the following about Mr. Thompson and his
hand-picked director nominees:
-- In late June of 2008, just four months after he resigned, Mr. Thompson
requested that he be put back on your Board - notwithstanding the fact
that he was then running his own private company as a direct competitor
to Grubb & Ellis.
-- Five of your independent directors met with Mr. Thompson on July 8,
2008 to discuss his request to be reappointed to your Board, at which
time Mr. Thompson also brought with him one of his current nominees,
Stuart Tanz, as someone who might be interested in playing a role in
the future of the Company.
-- The Governance and Nominating Committee of your Board was charged with
making a recommendation to the full Board on Mr. Thompson's
reappointment request. The Committee thoroughly considered the
request, including conducting interviews with the Company's executives,
employees, as well as certain third parties with whom the Company does
business. An overwhelming number of these key constituents did not
welcome, or view as positive, Mr. Thompson's return as a Grubb & Ellis
director.
-- On July 21, 2008, the Board informed Mr. Thompson of its unanimous
conclusion that it was not in the best interests of the Company and its
stockholders to put Mr. Thompson back on the Grubb & Ellis Board.
-- It is important to note that at the time your Board rejected Mr.
Thompson's request to be reappointed, your Board consisted of: four
legacy NNN Realty directors, each of whom had been expressly approved
by Mr. Thompson to serve on the NNN Board; three legacy Grubb & Ellis
directors; and one new independent director, Devin Murphy, who was
appointed on July 10, 2008.
-- On August 12, 2008, Mr. Thompson sent a letter to the Company making it
clear that he was unlikely to accept the Board's decision concerning
the rejection of his reappointment and threatened a proxy battle over
the issue.
-- In late August of 2008, Mr. Tanz formally expressed interest in the
permanent CEO position and took part in an initial screening by the
Company's independent executive search firm. While it is the Company's
policy to not comment on the status of the CEO search process, we can
confirm that Mr. Tanz was eliminated in September of 2008 as a
candidate for the CEO position, as he did not meet the Company's
required qualifications.
Mr. Thompson's "strategic program" for Grubb & Ellis offers stockholders
nothing that has not already been implemented or considered by your Board and
executive management, and completely ignores the realities of the current
economic environment and real estate market. We strongly believe that Mr.
Thompson and his nominees are the wrong choice for Grubb & Ellis as the
Company moves forward to address the many challenges in the current economic
and business environment and to reap the benefits from the merger with NNN
Realty.
-- Having a direct competitor, such as Mr. Thompson, serve on your Board
is contrary to good corporate governance principles, and clearly NOT in
the best interests of stockholders.
-- Properties controlled by Mr. Thompson continue to be in default on
loans from the Company and Mr. Thompson continues to be a seller of the
Company's stock. Currently, one Thompson property remains in default
on principal and interest payments of nearly $1 million and another is
in arrears for expenses of more than $300,000. Furthermore, since the
closing of the Company's merger with NNN Realty in December 2007, Mr.
Thompson has sold the Company's stock on 16 separate occasions,
sometimes in multiple trades on the same day.
-- We believe that Stuart Tanz, who was rejected for the permanent CEO
position, could be a disruptive influence on your Board as we move to
complete our ongoing CEO search process. Furthermore, just because Mr.
Tanz previously served as the former CEO of a public REIT that managed
strip shopping centers (before being sold in 2006) does not make him
qualified to serve on your Board.
-- Harold Ellis, 77, who co-founded the Company in 1958, resigned as CEO
and as a director of Grubb & Ellis in 1992. It has been 16 years since
Mr. Ellis has had any involvement with the Company.
Your Board strongly believes that the best interests of the Company and
its stockholders will not be served by electing Mr. Thompson, Mr. Tanz or Mr.
Ellis, and we urge you to reject Mr. Thompson and his self-serving proxy
campaign at the upcoming Annual Meeting.
GRUBB & ELLIS IS MAKING PROGRESS TO REALIZE THE BENEFITS FROM THE MERGER,
DESPITE THE DIFFICULT ENVIRONMENT
In today's volatile and turbulent economy, the real estate market, like
nearly every industry, is facing unprecedented challenges. Since completion
of the Company's merger with NNN Realty, Grubb & Ellis has been focused on
leveraging the strength of its brand combined with a powerful platform of real
estate services and investment programs. Your Board and management team have
taken aggressive actions to increase productivity, reduce costs and position
the Company for profitable and sustainable growth and success.
-- During the third quarter of 2008, the Company raised approximately $245
million of equity for our investment programs - an increase of
approximately 35% over the prior year period - bringing the total
equity raised for the year to approximately $761 million.
-- According to industry reports, Grubb & Ellis ranked fifth among all
public non-traded REIT sponsors in total sales for the third quarter of
2008. The total equity raise for the Company's public non-traded REIT
programs is up more than 90% during the first nine months of 2008,
compared with the same period of 2007.
-- In 2008, Grubb & Ellis moved aggressively to take advantage of its
brand - increasing to over 35,000 as compared to 13,600 at the end of
2007 the number of independent registered representatives selling our
public non-traded Grubb & Ellis Healthcare REIT.
-- During the third quarter of 2008, the Company renewed six major
corporate services accounts, including being selected by Kraft Foods
Global as its facilities services provider for more than 4 million
square feet of property.
-- In 2008, the Company instituted a Wealth Management Investment Platform
to capitalize on meeting the needs of high net worth real estate
investors throughout the world. So far in 2008, the Company has raised
and placed $193 million in equity through this program.
-- Although revenues for the Company's Transaction Services segment and
the total Company are down for the first nine months of 2008 as
compared to the same period of 2007, the results are in line with
industry peers.
-- The Company has the leading 1031 securitized tenant-in-common platform
- and our market share increased to 23% in the third quarter of 2008 as
compared to 17% in the third quarter of 2007.
-- We have targeted annualized cost savings in excess of $20 million for
2009 as a result of our merger integration actions.
-- Since July 1, 2008, the Company has added 30 senior-level professionals
and eliminated more than 10% of our brokerage sales professionals who
did not meet production expectations.
-- The Board of Directors is undertaking a comprehensive search for a
permanent CEO to lead the Company forward and to continue to execute on
our strategic initiatives to the benefit of all stockholders.
Additionally, in 2008, we have attracted ten experienced executives in
key management and operational roles.
-- The Company has taken steps to strengthen its capital position in light
of the challenging credit environment. On November 6, 2008, the
Company announced the amendment of its $75 million senior secured
revolving credit facility with Deutsche Bank Trust Company Americas,
which principally modifies select financial covenants to reflect the
impact of the current economic environment on the Company's financial
performance.
-- The Company is diligently exploring the sale of corporate owned real
estate assets as a means to raise capital and reduce debt. On October
31, 2008, the Company entered into a definitive agreement with Matrix
Connecticut, LLC to sell Danbury Corporate Center for $76 million.
We strongly believe that electing Mr. Thompson and his nominees would
undermine the important business inroads and reverse the constructive steps we
have been taking since Mr. Thompson's departure.
LEADING INDEPENDENT RESEARCH ANALYSTS AND INDUSTRY EXPERTS RECOGNIZE THE
MERITS OF OUR STRATEGY
We believe that Grubb & Ellis has the right strategy, leadership team and
Board of Directors to successfully navigate the current environment and
position the Company for significant value creation. But don't just take our
word for it - consider what a number of leading independent real estate
industry analysts have recently published about Grubb & Ellis(1):
"Although the environment remains difficult, GBE continues to demonstrate
an ability to execute its strategy and is maintaining share in a
resource-constrained environment." (Brandt Sakakeeny, Deutsche Bank,
11.06.08)
"Given the company's more diversified and competitive business model after
the merger with NNN Realty Advisors, recent selling agreements with major
broker-dealers and a stable and growing property management platform, we
believe GBE can weather the economic downturn and credit crisis."
(William Marks, JMP Securities, 11.07.08)
"We see several opportunities for the company to make fundamental changes
in the operating platform (e.g., integration synergies, improve broker
productivity, expand international presence), and view third-quarter
results as showing continued progress toward these goals. In the long
run, we believe Grubb has a good opportunity to emerge from the current
downturn a much stronger and more competitive firm." (Brandon Dobell,
William Blair & Company, 11.10.08)
(1) Permission to use quotations was neither sought nor obtained.
GRUBB & ELLIS' BOARD OF DIRECTORS IS EXPERIENCED, INDEPENDENT AND
COMMITTED TO SERVING THE BEST INTERESTS OF ALL STOCKHOLDERS
Your Board, which is comprised of eight directors, seven of whom are
independent, takes its fiduciary duties seriously and is committed to serving
the best interests of all Grubb & Ellis stockholders.
Your Board has the necessary depth and breadth of expertise in areas that
are critical to Grubb & Ellis' continued success. Not only are most of Grubb
& Ellis' directors veterans in real estate, but they also bring experience in
public company leadership, finance, accounting, professional services and
government. Each of your directors is a seasoned leader who is committed to
building value for all Grubb & Ellis stockholders.
Your Board is asking you to re-elect the following directors at the
upcoming 2008 Annual Meeting:
-- Harold H. Greene has served as a director of Grubb & Ellis since
December 2007, and is a member of the Audit Committee and the
Governance and Nominating Committee. Previously he served as a
director of NNN Realty Advisors from November 2006 to December 2007.
Mr. Greene is a 40-year veteran of the commercial and residential real
estate lending industry and most recently served as the Managing
Director for Bank of America's California Commercial Real Estate
Division from 1998 to his retirement in 2001. Mr. Greene currently
serves as a director on the Board of Gary's and Company, Paladin Realty
Income Properties and William Lyon Homes.
-- Devin I. Murphy has served as a director of Grubb & Ellis since July
2008. He is a Managing Partner of Coventry Real Estate Advisors, LLC,
a real estate private equity firm which sponsors opportunistic
institutional investment funds that acquire and develop retail and
mixed-used properties, and since its inception, has invested in excess
of $2.5 billion of properties. Prior to joining Coventry Real Estate
Advisors, LLC earlier this year, Mr. Murphy was the Global Head of Real
Estate Investment Banking at Deutsche Bank Securities, Inc. from 2004
to 2007. Under his leadership, Mr. Murphy's team executed over 500
separate transactions on behalf of clients representing total
transaction volume exceeding $400 billion.
-- D. Fleet Wallace has served as a director of Grubb & Ellis since
December 2007, and is a member of the Audit Committee and the
Compensation Committee. Previously he served as a director of NNN
Realty Advisors from November 2006 to December 2007. Mr. Wallace is a
principal and co-founder of McCann Realty Partners, LLC, an apartment
investment company focusing on garden apartment properties in the
Southeast formed in October 2004. Mr. Wallace has been instrumental to
the success of McCann Realty Partners which, since its inception, has
acquired 14 apartment communities totaling over 3,300 units in
transactions valued at more than $250 million. Mr. Wallace also serves
as principal of Greystone Capital Management, LLC, formed in September
2001, and helps manage Greystone Fund, L.P.
PLEASE VOTE YOUR WHITE PROXY CARD TODAY!
Your vote is extremely important - no matter how many or how few shares
you own. Please take a few moments and follow the simple instructions to vote
your proxy by Internet or Telephone.
Stockholders may also sign, date and return the enclosed duplicate WHITE
proxy card today in the postage-paid envelope provided. If you have any
questions or need any assistance voting your shares, please contact MacKenzie
Partners, Inc., Toll-Free at (800) 322-2885.
Sincerely,
Your Board of Directors
/s/ Glenn L. Carpenter/s/ Harold H. Greene /s/ Gary H. Hunt
Glenn L. CarpenterHarold H. Greene Gary H. Hunt
Chairman of the BoardInterim Chief
Executive Officer
/s/ C. Michael Kojaian/s/ Robert J. McLaughlin /s/ Devin I. Murphy
C. Michael KojaianRobert J. McLaughlin Devin I. Murphy
/s/ D. Fleet Wallace /s/ Rodger D. Young
D. Fleet Wallace Rodger D. Young
If you have any questions, require
assistance with voting your WHITE proxy
card,
or need additional copies of the proxy
materials, please contact:
MacKenzie Partners, Inc.
105 Madison Avenue
New York, NY 10016
proxy@mackenziepartners.com
(212) 929-5500 (Call Collect)
Or
TOLL-FREE (800) 322-2885
About Grubb & Ellis
Grubb & Ellis Company (NYSE: GBE) is one of the largest and most respected
commercial real estate services and investment companies. With more than 130
owned and affiliate offices worldwide, Grubb & Ellis offers property owners,
corporate occupants and investors comprehensive integrated real estate
solutions, including transaction, management, consulting and investment
advisory services supported by proprietary market research and extensive local
market expertise.
Grubb & Ellis and its subsidiaries are leading sponsors of real estate
investment programs that provide individuals and institutions the opportunity
to invest in a broad range of real estate investment vehicles, including
tax-deferred 1031 tenant-in-common (TIC) exchanges; public non-traded real
estate investment trusts (REITs) and real estate investment funds. As of
September 30, 2008, more than $3.8 billion in investor equity has been raised
for these investment programs. The company and its subsidiaries currently
manage a growing portfolio of more than 225 million square feet of real
estate. In 2007, Grubb & Ellis was selected from among 15,000 vendors as
Microsoft Corporation's Vendor of the Year. For more information regarding
Grubb & Ellis Company, please visit http://www.grubb-ellis.com.
Forward-Looking Statements
Certain statements included in this press release may constitute
forward-looking statements regarding, among other things, future revenue
growth, market trends, new business opportunities and investment programs,
synergies resulting from the merger of Grubb & Ellis Company and NNN Realty
Advisors, certain combined financial information regarding Grubb & Ellis
Company and NNN Realty Advisors, new hires, results of operations, changes in
expense levels and profitability and effects on the Company of changes in the
real estate markets. 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 slowdown in the volume and the decline in
transaction values of sales and leasing transactions; (ii) the general
economic downturn and recessionary pressures on businesses in general; (iii) a
prolonged and pronounced recession in real estate markets and values; (iv) the
unavailability of credit to finance real estate transactions in general and
the Company's tenant-in-common programs, in particular; (v) the reduction in
borrowing capacity under the Company's current credit facility, and the
additional limitations with respect thereto; (vi) the Company's continuing
ability to make interest and principal payments with respect to its credit
facility; (vii) an increase in expenses related to new initiatives,
investments in people, technology and service improvements; (viii) the success
of current and new investment programs; (ix) the success of new initiatives
and investments; (x) the inability to attain expected levels of revenue,
performance, brand equity and expense synergies resulting from the merger of
Grubb & Ellis Company and NNN Realty Advisors in general, and in the current
macroeconomic and credit environment, in particular and (xi) other factors
described in the Company's annual report on Form 10-K for the fiscal year
ending December 31, 2007 and in the Company's quarterly reports on Form 10-Q
for the quarters ended March 31, 2008, June 30, 2008 and September 30, 2008
filed with the Securities and Exchange Commission (the "SEC"). The Company
does not undertake any obligation to update forward-looking statements.
Important Information
On November 10, 2008, Grubb & Ellis Company filed a definitive proxy
statement with the SEC in connection with the Company's 2008 Annual Meeting.
Grubb & Ellis Company's stockholders are strongly advised to read the
definitive proxy statement carefully before making any voting decision because
the definitive proxy statement contains important information. The Company's
definitive proxy statement and any other materials filed by the Company with
the SEC can be obtained free of charge at the SEC's web site at
http://www.sec.gov or from Grubb & Ellis Company at
http://www.grubb-ellis.com. The Company's definitive proxy statement and
other materials will also be available without charge by written request
addressed to Investor Relations, Grubb & Ellis Company, 1551 N. Tustin Avenue,
Suite 300, Santa Ana, CA 92705. Grubb & Ellis Company, its directors and
director nominees may be deemed to be participants in the solicitation of the
Company's security holders in connection with its 2008 Annual Meeting.
Security holders may obtain information regarding the names, applications and
interests of such individuals in the Company's definitive proxy statement and
its November 18, 2008 letter to stockholders filed with the SEC as definitive
additional soliciting materials.
SOURCE Grubb & Ellis Company
