Grubb & Ellis files for bankruptcy and will sell most of its assets to BGC Partners
- February 22, 2012
The bankruptcy filing of Grubb & Ellis has caused a local affiliate, Grubb & Ellis| Harrison & Bates, to weigh its options. The firm, located on West Broad Street in Henrico County, is independently owned and operated, and was not surprised by yesterday’s announcement, Stevens N. Gentil, Harrison & Bates’ chairman, said in an e-mail to Virginia Business.
“This possibility has been in the works for quite some time so we were not caught off guard,” he said. “In spite of the challenges Grubb & Ellis has faced, Grubb & Ellis | Harrison & Bates has been profitable the last three years of this deep recession. We will keep on taking care of our clients’ needs just as we have for the last 102 years.”
Gentil added in an interview that the company, which employs about 50 people, “is always exploring our options. With the Grubb episode, once that settles down, we’ll figure out what to do.”
Under the affiliation, Harrison & Bates pays a monthly fee — which Gentil said is not large — for inbound and outbound referrals.
Grubb & Ellis Co., located out of Santa Ana, Calif., said yesterday that it signed an agreement to sell nearly all of its assets to BGC Partners Inc., a New-York based broker of financial products. To implement the sale, G&E filed for Chapter 11 bankruptcy protection Monday in U. S. Bankruptcy Court for the Southern District of New York. It blamed its financial instability on the country’s weak financial markets in 2008 and the downturn in the U. S. real estate market.
BGC acquired Newmark Knight Frank, one of the largest commercial real estate firms in the U S., in October. It said in a press release that its planned purchase of Grubb & Ellis, which must be approved by the court, will bolster efforts “to build a premier position in real estate services.”
In 2011, Grubb & Ellis said it completed about 12,000 sale and lease transactions. The company and its affiliates currently manage more than 250 million square feet of property, including enough projects in the Washington, D. C. metro area to earn it a sixth place ranking on the Washington Business Journal’s list of top commercial real estate leasing brokerages. According to the Journal, Grubb & Ellis made $23.9 million from area leasing deals in 2010.
Now affiliates must decide if they will stick with new owner BGC Partners or seek affiliations with other companies.