Grubb & Ellis Files for Chapter 11 Bankruptcy
One of the nation’s largest commercial real estate brokerages filed for bankruptcy this week. Grubb & Ellis says the financial crisis and the sluggish commercial property market are to blame.
Grubb & Ellis also announced it will sell nearly all of its assets to BGC Partners, a financial brokerage firm that says it wants to make a push more into the commercial real estate arena, The New York Times reports.
“BGC’s strong capital base, robust technology, and deep commitment to its brokers provides Grubb & Ellis with scale along with the resources needed by our professionals to deliver exceptional service to our clients,” Thomas P. D’Arcy, chief executive of Grubb & Ellis, said in a statement. “We are confident this will be a seamless transition for our clients and that becoming part of BGC is an extremely attractive opportunity for our brokerage professionals and employees.”
Grubb & Ellis’ bankruptcy comes after several years of hardship for the company. In a bankruptcy filing, the company listed $167 million in debts.
The commercial real estate firm was badly hampered by “the 2007-2009 meltdown of the financial markets,” Michael J. Rispoli, the company’s chief financial officer, wrote in a petition filing. The company’s merger in 2007 with NNN Realty Advisors also didn’t prove profitable, Rispoli wrote.
“The combined effect of these adverse economic conditions and liabilities and losses associated with disposed businesses severely strained Grubb & Ellis’s liquidity and hampered its ability to continue as a going concern,” Rispoli continued.
Source: “Grubb & Ellis Files for Bankruptcy and Agrees to Sell Assets to BGC,” The New York Times (Feb. 21, 2012)