Press Release: Grubb & Ellis
March 13, 2002
NEW YORK, NY -- The management of Grubb & Ellis (NYSE: GBE) announced yesterday that it has undertaken several
new initiatives designed to continue its transformation of the company into a global real estate advisory resource.
In making the announcement, Grubb & Ellis CEO Barry Barovick said the initiatives follow on the heels of an
announcement by the firm last week of its success in restructuring its credit arrangements and completing additional
arrangements for a capital infusion by its largest investor, New York-based Warburg Pincus, LP.
According to the company's Chief Financial Officer, Ian Bress, additional capital provided to Grubb & Ellis
by its largest investor brings the total capital investment made by the venture capital firm to $15.2 million since
January of this year.
CEO Barovick said Grubb & Ellis has made significant progress in recent months in re-engineering its management
approach to achieve its goal of creating the real estate industry's first global advisory resource.
``Since announcing that we were moving our executive headquarters to New York, we have taken significant measures
to reorganize the company along three major core business strategies -- consulting, property management and transaction
management,'' said Barovick. ``Global management of the firm will be directed from New York with support from existing
finance, technology, legal, human resources and other operational services which remain in the Chicago area. To
strengthen our local servicing capability, we have regionalized our field office governance strategy into six major
regions to be supported by three major hub operations in New York, Chicago and San Francisco.''
Along those lines, Grubb & Ellis Chief Operating Officer Mark Costello reported that like other companies in
its industry, Grubb & Ellis is acting to increase its immediate operating efficiencies by reducing its salaried
overhead. He added that none of the recent shifts or personnel reductions affected by the company involve non-salaried
professionals on the revenue side of the company's business.
CFO Bress added that as result of recent cost cutting measures, the company has been able to reduce its overhead
by $13.5 million on an annualized basis. Bress also said that the company intends to continue looking for additional
ways to streamline its operations.
As far as the company's aggressive program to create the industry's first global advisory group, and, remarkably,
a commercial real estate resource not motivated strictly by transaction fees, CEO Barovick said the company has
now succeeded in adding several new capabilities to its growing ``continuum of consulting services.''
``We have now completed the acquisition and integration of the Wadley- Donovan Group, a firm which is recognized
as one of the industry's premier site selection and economic development firms,'' said Barovick. He said Grubb
& Ellis has also established a core group of advisors to provide clients with strategic planning expertise
built around three recognized industry consultants: Len Malkin, Paul Loucas and Ed Lubieniecki.
Barovick believes that as Grubb & Ellis moves even further forward with its plan, the new company will succeed
where others have failed. He said he is also unfazed by periodic speculation that larger competitors in his industry
are planning to combine forces.
``It's time for real change in this industry,'' said Barovick. ``What we don't need is two or three transaction
firms combining to simply make a bigger transaction firm. We need to address what our clients need - an unprecedented
penetration right into the local market of a diverse platform of services offering all of the capabilities that
can bring real estate, their second largest cost, into sync with overall company goals.''
``By offering strategic planning, site selection, workforce analysis capabilities and other key resources along
with transaction and management expertise,'' said Barovick, ``we are confident we can change the way the real estate
industry thinks and operates.''
Grubb & Ellis:
Grubb & Ellis is a business advisory firm with global expertise in real estate. As one of the leading providers
of multi-level solutions for businesses and corporations worldwide, Grubb & Ellis delivers strategic planning,
property and asset management services, and transaction expertise in both corporate and investment real estate.
With the collective resources of more than 8,000 people in over 200 offices in 29 countries, including its affiliates
and a strategic initiative with Knight Frank, one of the leading property consulting firms in Europe, Africa and
Asia Pacific, Grubb & Ellis provides a single point of contact for clients addressing commercial real estate
issues seamlessly. For more information, visit the company's website at www.grubb-ellis.com
.
SOURCE: Grubb & Ellis