UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31,
1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number 1-8122
GRUBB & ELLIS COMPANY
(Exact name of registrant as specified in its charter)
Delaware 94-1424307
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
One Montgomery Street, - Telesis Tower,
San Francisco, CA 94104
(Address of principal executive offices)
(Zip Code)
(415)956-1990
(Registrant's telephone number, including area code)
no change
(Former name, former address and former fiscal year
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No _____
4,112,358
(number of shares outstanding of the registrant's
common stock at May 1, 1994)
</PAGE>
PART I
FINANCIAL INFORMATION
</PAGE>
Item 1. Financial Statements
<TABLE>
GRUBB & ELLIS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands except per share amounts and shares)
<CAPTION>
Three Months
Ended March 31,
1994 1993
<S> <C> <C>
<S>Revenue
<S>Commercial real estate
brokerage commissions $ 27,779 $ 27,441
<S>Residential real estate
brokerage commissions 3,785 6,613
<S> Real estate services fees,
commissions and other 7,401 8,050
<S>Interest income 133 134
<S>Other 5 59
<S> Total revenue 39,103 42,297
<S>Cost and Expenses
<S>Real estate brokerage and
other commissions 18,514 20,981
<S>Selling, general and
administrative 12,690 12,644
<S>Salaries and wages 11,450 11,856
<S>Interest expense 587 775
<S>Depreciation and amortization 492 603
<S> Total costs and expenses 43,733 46,859
<S>Loss before income taxes (4,630) (4,562)
<S>Provision for income taxes 117 100
<S> Net loss $(4,747) $(4,662)
<S>Undeclared dividends (accretion of
liquidation preference) on
preferred stock $ 638 $ 399
<S>Net loss applicable to common
stock $(5,385) $(5,061)
<S>Net loss per common share and
equivalents $ (1.33) $ (1.30)
<S>Weighted average common shares 4,062,136 3,900,154
<FN>
<F1> The accompanying notes are an integral part
of the consolidated financial statements.
</TABLE>
</PAGE>
<TABLE>
GRUBB & ELLIS COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands)
<CAPTION>
March 31, December 31, March 31,
1994 1993 1993
<S> <C> <C> <C>
<S>ASSETS
<S>Current assets
<S>Cash and cash
equivalents $ 10,360 $ 22,364 $ 10,384
<S>Real estate brokerage
commissions receivable 1,724 493 4,650
<S>Real estate services
fees and other commissions
receivable 2,009 2,312 2,916
<S>Other receivables 4,172 4,865 3,415
<S>Real estate investments
and other assets held for sale - - - - 1,127
<S>Prepaids and other
current assets 2,077 2,628 1,130
<S> Total current assets 20,342 32,662 23,622
<S>Noncurrent assets
<S>Real estate brokerage
commissions receivable 1,136 1,155 1,345
<S>Real estate investments held for
sale and real estate owned 1,241 1,305 1,773
<S>Equipment and leasehold
improvements, net 4,977 5,063 3,259
<S>Excess of cost over net assets
of acquired companies, net - - - - 10,358
<S>Other assets 1,865 2,000 845
<S> Total assets $ 29,561 $ 42,185 $ 41,202
<FN>
<F1> The accompanying notes are an integral part
of the consolidated financial statements.
</TABLE>
</PAGE>
<TABLE>
GRUBB AND ELLIS COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands except per share amounts and shares)
<CAPTION>
March 31, December 31, March 31,
1994 1993 1993
<S> <C> <C> <C>
<S>LIABILITIES
<S>Current liabilities
<S> Notes payable and current
portion of long-term debt $ 506 $ 9,336 $ 3,684
<S> Accounts payable 1,536 1,873 2,316
<S> Compensation and employee benefits 6,375 11,817 4,921
<S> Deferred commissions payable 180 2,814 189
<S> Accrued severance obligation 2,323 2,883 1,072
<S> Accrued office closure costs 2,782 3,043 2,284
<S> Accrued claims and settlements 10,375 10,375 13,596
<S> Other accrued expenses 6,005 8,363 4,632
<S> Total current liabilities 30,082 50,504 32,694
<S>Long-term liabilities
<S> Long-term debt, net of current
portion 29,432 16,137 17,313
<S> Accrued claims and settlements 9,124 9,678 9,349
<S> Accrued severance obligations 457 555 1,215
<S> Accrued office closure costs 3,938 4,043 4,308
<S> Other 26 235 1,798
<S> Total liabilities 73,059 81,152 66,677
<S>REDEEMABLE PREFERRED STOCK
<S>12% Senior convertible preferred stock:
137,160 shares outstanding 14,857 14,365 13,060
<S>5% Junior convertible preferred stock:
150,000 shares outstanding 15,737 15,535 14,957
Total redeemable preferred stock 30,594 29,900 28,017
<S>STOCKHOLDERS' EQUITY (DEFICIT)
<S>Preferred stock, $.01 par value:
1,000,000 shares authorized; 287,160
shares issued as redeemable preferred
stock
<S>Common stock, $.01 par value:
25,000,000 shares authorized;
4,112,358, 4,060,271 and 4,055,579
shares issued and outstanding at
March 31, 1994, December 31, 1993 and
March 31, 1993, respectively 42 41 40
<S>Additional paid-in-capital 47,591 48,070 49,900
<S>Retained earnings (deficit) (121,725) (116,978) (103,432)
<S>Total stockholders' equity
(deficit) (74,092) (68,867) (53,492)
<S> Total liabilities and
stockholders' deficit $ 29,561 $ 42,185 $ 41,202
<FN>
<F1> The accompanying notes are an integral part
of the consolidated financial statements.
</TABLE>
</PAGE>
<TABLE>
GRUBB & ELLIS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - in thousands)
<CAPTION>
For the Three Months
Ended March 31,
1994 1993
<S> <C> <C>
<S>Cash Flows from Operating Activities:
<S> Net loss $ (4,747) $ (4,662)
<S>Adjustments to reconcile net loss to net
cash used by operating activities:
<S> Depreciation and amortization 492 603
<S> Increase in brokerage receivables (1,231) (385)
<S> Decrease in compensation and employee
benefits (5,442) (3,706)
<S> Decrease in deferred commissions (2,634) (1,725)
<S> Decrease in accounts payable (337) (859)
<S> Decrease in other, net (1,755) (2,052)
<S>Net cash used by operating activities (15,654) (12,786)
<S>Cash Flows from Investing Activities:
<S> Dispositions of real estate joint ventures
and real estate owned - - 300
<S> Disposition of other assets - - 3,350
<S> Purchases of equipment and leasehold
improvements (331) (209)
<S> Distribution from real estate joint
ventures and real estate owned 40 - - -
<S> Net cash (used) provided by investing
activities (291) 3,441
<S>Cash Flows from Financing Activities:
<S> Repayment of notes payable (62) (5,595)
<S> Proceeds from issuance of preferred stock - - 13,750
<S> Costs related to issuance of preferred
stock and restructure of debt - - (1,400)
<S> Proceeds from issuance of common stock 3 37
<S> Proceeds from borrowing 4,000 - - -
<S> Net cash provided by financing activities 3,941 6,792
<S>Net decrease in cash and cash equivalents (12,004) (2,553)
<S>Cash and cash equivalents at beginning of
period 22,364 12,937
<S>Cash and cash equivalents at end of period$ 10,360 $ 10,384
<S>Supplemental Disclosure of Cash Flow Information:
<S>Cash paid during the year for:
<S> Interest $ 598 $ 15
<S> Taxes 197 117
<FN>
<F1> The accompanying notes are an integral part
of the consolidated financial statements.
</TABLE>
</PAGE>
GRUBB & ELLIS COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements
1. Interim Period Reporting
The accompanying unaudited consolidated financial
statements include the accounts of Grubb & Ellis
Company, its wholly and majority owned subsidiaries and
controlled partnerships (the "Company"), and are
prepared in accordance with generally accepted
accounting principles for interim financial
information. The information presented includes all
adjustments which are, in the opinion of management,
necessary to a fair statement of results for the
interim periods reported. All adjustments are of a
normal recurring nature. Such information should be
read in conjunction with the Company's Annual Report on
Form 10-K for the year ended December 31, 1993.
Certain amounts in prior periods have been reclassified
to conform to the current presentation.
2. Income Taxes
The Company's tax provision is attributable to current
state tax liabilities.
3. Loss Per Common Share and Equivalents
Loss per common share and equivalents computations are
based on the weighted average number of common shares
outstanding after giving effect to potential dilution
from common stock options and warrants.
The calculation of loss per share of common stock
includes net loss plus amounts applicable to the Senior
and Junior Preferred Stock for the undeclared dividends
(accretion of liquidation preference) earned in the
amounts of approximately $444,000 and $194,000,
respectively, for the quarter ended March 31, 1994.
4. Commitments and Contingencies
The Company was contingently liable for approximately
$486,000 at March 31, 1994 as a guarantor of certain
notes payable of real estate joint ventures and
partnerships. These notes payable mature at various
dates through 1998. Of the Company's contingent
liability at March 31, 1994, substantially all is
collateralized by land and improved property of these
entities. In the opinion of management, the current
underlying value of the assets collateralizing the
contingent liabilities is greater than the related
obligations guaranteed by the Company. The Company has
also indemnified two wholly owned partnerships for
their contingent liabilities of up to $2 million each.
Grubb & Ellis Asset Services Company ("GEASC") since
September 1993 has voluntarily withdrawn from entering
into new service contracts with the Resolution Trust
Corporation (the "RTC") and the Federal Deposit
Insurance Corporation (the "FDIC") until certain
federal government contracting compliance requirements
are met relative to one of the Company's principal
shareholders. In April 1994, the Company was notified
by the RTC that it has proposed to exclude the Company
and GEASC from RTC contracting as the Company had not
filed certain reports with the RTC. The Company plans
to file a response to the RTC's proposed exclusion and
is unable to predict the outcome or timing of these
</PAGE>
GRUBB & ELLIS COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements
matters or whether or when it will be allowed to resume
RTC and FDIC contracting services.
Johsz et al v. Koll Company et al was filed in the
Orange County (California) Superior Court on March 14,
1994 against the Koll Company, Grubb & Ellis Company,
Koll Center Number 10, a California general partnership
("Koll"), and Southern California Edison Company
("Edison"). The Complaint has not yet been served and
no discovery has been conducted. The plaintiffs, two
former Company brokers, their wives, and a current
Company employee, allege that the brokers and employee
acquired cancer from electromagnetic waves produced by
the electric transformer owned by Edison and situated
in a vault below office space leased by the Company in
a building owned by Koll. The Complaint alleges
negligence, battery, negligent infliction of emotional
distress, fraudulent concealment, loss of consortium
and, against Edison only, strict liability. Specific
damages were not pled, but punitive as well as
compensatory damages are sought. The potential
financial impact of this lawsuit on the Company cannot
not yet be determined.
The Company is involved in various other claims and
lawsuits arising in the ordinary course of business, as
well as in connection with its participation in various
joint ventures, partnerships and a trust. In the
opinion of management, upon the advice of counsel, the
eventual outcome of such claims and lawsuits will not
have a material adverse effect on the Company's
financial position.
5. Long-Term Debt Modifications and Proposed Rights
Offering
During March 1994, the Company, Warburg, Pincus
Investors, L.P. ("Warburg") and The Prudential
Insurance Company of America ("Prudential") entered
into an agreement in principle (the "Agreement")
pursuant to which certain provisions of the existing
Prudential debt agreements were waived to provide that
the Company will not be required to make principal
payments on any of the Prudential debt during 1994.
Upon formal amendment of such debt agreements, the
revolving credit facility will mature on November 1,
1999, principal on the Senior Note will be payable in
two equal installments on November 1, 1997 and 1998,
and principal on the PIK Notes will be payable in two
approximately equal installments on November 1, 2000
and 2001. The interest rate on the PIK Notes will
increase from 10.65% to 11.65% per annum on January 1,
1996. In addition, certain covenants of the debt
agreements remain in place, but will not be in effect
until April 1, 1997. The debt agreements, as amended,
will provide for supplemental principal payments
commencing July 1, 1998 if the Company meets certain
financial tests.
The Agreement also provided for the Company to seek
additional equity capital through a rights offering,
subject to stockholder approval, and for Warburg to
loan the Company up to $10 million at an initial
interest rate of 5% per annum with a maturity date of
April 28, 1995 ("Warburg Interim Financing Loan"). The
interest rate will increase to 10% per annum in the
event that stockholder approval of certain of the
</PAGE>
GRUBB & ELLIS COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements
transactions contemplated by the Agreement is not
obtained. Interest on the loan will be due upon
maturity or upon refinancing, whichever occurs first.
The loan is secured by the Company's commercial
brokerage revenues through a cash collateral account.
Prudential also has a lien on the cash collateral
account which will be subordinated to Warburg's loan.
The Company has borrowed $4 million from Warburg under
this facility. Warburg has agreed to acquire the
common stock not acquired by the holders of common
stock in the rights offering, through the conversion of
the Warburg Interim Financing Loan up to an amount not
exceeding $10 million plus accrued interest on the
loan.
The Agreement also contemplates certain amendments to
the existing Convertible Preferred Stock and warrants
to purchase common stock of the Company held by Warburg
and Prudential, and the issuance of additional warrants
to Warburg and Prudential, also subject to stockholder
approval.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Revenue
The Company has typically experienced its lowest quarterly
revenue in the first quarter of each year with historically
higher and more consistent revenue in the second and third
quarters. The fourth quarter has historically provided the
highest quarterly level of revenue due to increased activity
caused by the desire of clients to complete transactions by
year-end. However, quarterly revenue variations are not
significant. Over the last three years, revenue in any
given quarter, as a percentage of total annual revenue,
ranged from a high of no more than 29.2% to a low of 21.1%.
Revenue of $39.1 million for the first quarter of 1994
declined $3.2 million or 7.6% from revenue of $42.3 million
in the first quarter of 1993. Excluding revenue from the
sold Northern California residential brokerage operations
and certain offices closed during the last quarter of 1993
and first quarter of 1994, as well as government contracting
business conducted during the first quarter of 1993 not
repeated in 1994 (See Note 4 of Notes to Consolidated
Financial Statements), revenue increased approximately $2.8
million or 7.9% in the first quarter of 1994 compared to the
first quarter of 1993.
Effective February 1, 1994, the Company modified its
reporting structure to increase operating efficiencies and
reduce costs. The modifications include the integration of
management of commercial brokerage operations with the
appraisal and consulting and commercial mortgage brokerage
operations, on a regional basis. The integration also
includes those property management operations which the
Company has resumed, independent of Axiom Real Estate
Management, Inc. ("Axiom"), a majority owned subsidiary of
the Company which provides property and facilities
management. Axiom closed certain offices pursuant to its
strategic objectives. Additionally, in February 1994, the
Company closed several unprofitable appraisal and consulting
offices.
</PAGE>
Increases in revenue of $1.1 million or 26.6% and $185,000
or 1.9%, as compared to the first quarter of 1993, occurred
in the Pacific Northwest and Pacific Southwest regions,
respectively. These increases were offset by declines in
revenue in the Eastern and Midwest/Texas regions of $544,000
or 8.5% and $254,000 or 2.9%, respectively.
Revenue from the Company's remaining residential brokerage
operation increased $241,000 or 6.8% as compared to the
first quarter of 1993 and property management, under Axiom,
improved $226,000 or 4.6%. Revenue from the existing
residential mortgage brokerage operations declined $167,000
or 31.3% from the first quarter of 1993.
Costs and Expenses
Real estate brokerage commissions expense (salespersons'
participation) is the Company's major expense and is
contingent upon gross brokerage commission revenue levels.
As a percentage of total revenue, salespersons'
participation expense for the three months ended March 31,
1994 decreased to 47.4% from 49.6% for the same period in
1993. This decrease is primarily a result of the sale of
the Northern California residential brokerage operation.
Operating expenses, other than real estate brokerage
commissions expense, of $25.2 million for the first quarter
of 1994 declined by 2.5% from $25.9 million in the first
quarter of 1993. Excluding the decline in expenses
resulting from the sale of Northern California residential
brokerage operations and the closure of the offices
discussed above, operating expenses increased by $2.0
million or 8.6% in the first quarter of 1994 compared to the
same period of 1993. The increase was primarily a result of
several key management positions being filled in the latter
part of 1993 and additional investments in training,
computer systems, and other resources anticipated to improve
future profits.
Net Loss
The net loss for each of the first quarters of 1994 and 1993
was $4.7 million. Net loss per common share was $1.33 for
the first quarter of 1994 compared to $1.30 for the same
period last year.
Liquidity and Capital Resources
Cash and cash equivalents decreased by $12.0 million from
December 31, 1993 to March 31, 1994. The decrease was mainly
attributable to cash used by operations of $15.7 million,
which included $5.4 million for 1993 salespersons' and
managers' incentive compensation, $2.6 million for deferred
salespersons' commission payments, and an interest payment
of $495,000 on the Prudential Senior Note. These cash
outflows were offset by cash received of $4 million from the
Warburg interim financing loan (see Note 5 of Notes to the
Consolidated Financial Statements).
During the first quarter, working capital increased by $8.1
million to a deficit of $9.7 million, primarily due to the
modification of terms on the Prudential debt. The
modification had the effect of reclassifying approximately
$9 million of principal payments on the Prudential Senior,
Subordinated and Revolving Credit Notes from current to
noncurrent liabilities. Additionally, the Company borrowed
$4 million on the Warburg interim financing loan.
</PAGE>
Stockholders' deficit was $74.1 million or $18.02 per share
at March 31, 1994 as compared to $68.9 million or $16.96 per
share at December 31, 1993. The accumulated deficit
increased to $121.7 million from $117.0 million at December
31, 1993.
The Company believes that its short-term and long-term cash
requirements will be met by operating cash flow, seasonal
use of the Prudential $5-million Revolving Credit Note, use
of the interim financing provided by Warburg (see Note 5 of
Notes to the Consolidated Financial Statements), and
assuming the Company obtains the required stockholder
approval, the subsequent sale of rights to acquire common
stock in the Company (also discussed in Note 5). Although
first quarter operating cash flow was not positive,
historically the Company's cash flow typically has improved
in each subsequent quarter. While the Company's full year
operating plan for 1994 provides for positive operating cash
flow, the Company was unable to generate positive operating
cash flow during 1993 despite plans to do so. If the 1994
operating plan is not substantially achieved because of
adverse economic conditions or other unfavorable events, the
Company may find it necessary to further reduce expense
levels, or undertake other actions as may be appropriate.
</PAGE>
PART II
OTHER INFORMATION
(Items 2, 3, 4, and 5 are not applicable
for the quarter ended March 31, 1994)
</PAGE>
Item 1. Legal Proceedings
The information in Note 4, Commitments and
Contingencies, to the Consolidated Financial
Statements related to Johsz et al v. Koll Company
et al is incorporated herein by reference.
Item 6(a). Exhibits
(4) Instruments Defining the Rights of Security
Holders, including Indentures
4.1 Senior Note, Subordinated Note and Revolving
Credit Note Agreement between The Prudential
Insurance Company of America and the Registrant
dated as of November 2, 1992, incorporated herein
by reference to Exhibit 4.6 to the Registrant's
Current Report on Form 8-K filed on February 8,
1993 (Commission File No. 1-8122).
4.2 Letter agreement between The Prudential Insurance
Company of America and the Registrant dated March
26, 1993, incorporated herein by reference to
Exhibit 4.10 to the Registrant's Quarterly Report
on Form 10-Q filed on May 15, 1993 (Commission
File No. 1-8122).
4.3 Letter agreement between The Prudential Insurance
Company of America and the Registrant dated April
19, 1993, incorporated herein by reference to
Exhibit 4.11 to the Registrant's Quarterly Report
on Form 10-Q filed on May 15, 1993 (Commission
File No. 1-8122).
4.4 Letter agreement between The Prudential Insurance
Company of America and the Registrant dated
October 26, 1993, incorporated herein by reference
to Exhibit 4.21 to the Registrant's registration
statement on Form S-8 filed on November 12, 1993
(Registration No. 33-71484).
4.5 Letter agreement between The Prudential Insurance
Company of America and the Registrant dated March
28, 1994, incorporated by reference to Exhibit 4.5
to the Registrant's Annual Report on Form 10-K
filed on March 31, 1994 (Commission File No. 1-
8122).
4.6 Modification to Note and Security Agreement
between the Registrant and The Prudential
Insurance Company of America dated as of March 28,
1994, incorporated by reference to Exhibit 4.17 to
the Registrant's Amendment to its Annual Report on
Form 10-K/A filed on April 29, 1994 (Commission
File No. 1-8122).
4.7 Securities Purchase Agreement between The
Prudential Insurance Company of America and the
Registrant, dated as of November 2, 1992,
incorporated herein by reference to Exhibit 28.4
to the Registrant's Current Report on Form 8-K
filed on November 12, 1992 (Commission File No. 1-
8122).
4.8 Specimen of stock subscription warrant No. 5
issued to The Prudential Insurance Company of
America, dated January 29, 1993, exercisable for
200,000 shares of the Registrant's Common Stock,
incorporated by reference to Exhibit 28.10 to the
</PAGE>
Registrant's Current Report on Form 8-K filed on
February 8, 1993 (Commission File No. 1-8122).
4.9 Securities Purchase Agreement among Warburg,
Pincus Investors, L.P., Joe F. Hanauer and the
Registrant, dated as of November 2, 1992,
incorporated herein by reference to Exhibit 28.3
to the Registrant's Current Report on Form 8-K
filed on November 12, 1992 (Commission File No. 1-
8122).
4.10 Specimen of stock subscription warrant No. 6
issued to Warburg, Pincus Investors, L.P., dated
as of January 29, 1993, exercisable for 337,042
shares of the Registrant's Common Stock,
incorporated herein by reference to Exhibit 4.11
to the Registrant's registration statement on Form
S-8 filed on November 12, 1993 (Registration No.
33-71484).
4.11 Specimen of stock subscription warrant No. S-3
issued to Warburg, Pincus Investors, L.P., dated
January 29, 1993, exercisable for 370,566 shares
of the Registrant's Common Stock, incorporated
herein by reference to Exhibit 4.17 to the
Registrant's registration statement on Form S-8
filed on November 12, 1993 (Registration No. 33-
71484).
4.12 Summary of terms of proposed bridge loan and
rights offering executed by Warburg, Pincus
Investors, L.P., The Prudential Insurance Company
of America and the Registrant as of March 28,
1994, incorporated by reference to Exhibit 4.11 to
the Registrant's Annual Report on Form 10-K filed
on March 31, 1994 (Commission File No. 1-8122).
4.13 Cash Collateral Account Agreement between Bank of
America N.T.&S.A. and the Registrant dated as of
March 29, 1994, incorporated by reference to
Exhibit 4.12 to the Registrant's Annual Report on
Form 10-K filed on March 31, 1994 (Commission File
No. 1-8122).
4.14 Intercreditor Agreement between Warburg Pincus,
Investor, L.P. and The Prudential Insurance
Company of America dated as of March 28, 1994,
incorporated by reference to Exhibit 4.13 to the
Registrant's Annual Report on Form 10-K filed on
March 31, 1994 (Commission File No. 1-8122).
4.15 Promissory Note in the amount of up to $10 million
dated as of March 29, 1994, executed by the
Registrant in favor of Warburg, Pincus Investors,
L.P., incorporated by reference to Exhibit 4.15 to
the Registrant's Amendment to its Annual Report on
Form 10-K/A filed on April 29, 1994 (Commission
File No. 1-8122).
4.16 Loan and Security Agreement among the Registrant,
Warburg Pincus Investors, L.P. and The Prudential
Insurance Company of America dated as of March 29,
1994., incorporated by reference to Exhibit 4.15
to the Registrant's Amendment to its Annual Report
on Form 10-K/A filed on April 29, 1994 (Commission
File No. 1-8122).
4.17 Promissory Note in the amount of $250,000 dated as
of January 8, 1990 executed by the Registrant in
favor of DW Limited Partnership, incorporated by
reference to Exhibit 4.14 to the Registrant's
</PAGE>
Annual Report on Form 10-K filed on March 31, 1994
(Commission File No. 1-8122).
On an individual basis, instruments other than
Exhibits 4.1 through 4.17 listed above defining
the rights of holders of long-term debt of the
Registrant and its consolidated subsidiaries and
partnerships do not exceed ten percent of total
consolidated assets and are, therefore, omitted;
however, the Company will furnish supplementally
to the Commission any such omitted instrument upon
request.
(10) Material Contracts
10.1Grubb & Ellis Company 1990 Amended and Restated
Stock Option Plan, as amended as of August 9,
1993, incorporated herein by reference to Exhibit
4.1 to the Registrant's registration statement on
Form S-8 filed on November 12, 1993 (Registration
No. 33-71580).
10.2 Grubb & Ellis Company Executive Supplemental
Deferred Compensation Plan, incorporated herein by
reference to Exhibit 10.13 to the Registrant's
Registration Statement on Form S-2 filed on
January 12, 1990 (Registration No. 33-32979).
10.3 Grubb & Ellis Company 1985 Restricted Value Stock
Plan, as amended effective December 3, 1987,
incorporated herein by reference to Exhibit 10.13
to the Registrant's Annual Report on Form 10-K
filed on March 31, 1989 (Commission File No. 1-
8122).
10.4 Agreement between HSM Inc. and David Donosky dated
January 15, 1988, regarding exchange of
indebtedness, incorporated herein by reference to
Exhibit 10.23 to the Registrant's Annual Report on
Form 10-K filed on March 30, 1988 (Commission File
No. 1-8122).
10.5 Loan Agreement between David Donosky and the
Registrant dated October 20, 1989, incorporated
herein by reference to Exhibit 10.21 to the
Registrant's registration statement on Form S-2
filed on January 12, 1990 (Registration No. 33-
32979).
10.6 Description of Grubb & Ellis Company Senior
Management Compensation Plan, incorporated herein
by reference to Exhibit 10.17 to the Registrant's
Annual Report on Form 10-K filed on March 30, 1992
(Commission File No. 1-8122).
10.7 Stock Purchase and Stockholder Agreement dated May
6, 1992, among GE New Corp., the Registrant and
International Business Machines Corporation,
incorporated herein by reference to Exhibit 28.2
to the Registrant's Quarterly Report on Form 10-Q
filed on May 15, 1992 (Commission File No. 1-
8122).
10.8 Master Management Agreement dated May 6, 1992
between International Business Machines
Corporation and GE New Corp., incorporated herein
by reference to Exhibit 28.2 to the Registrant's
Quarterly Report on Form 10-Q filed on May 15,
1992 (Commission File No. 1-8122).
</PAGE>
10.9 Master Financing Agreement dated August 5, 1992
between IBM Credit Corporation and Axiom Real
Estate Management, Inc., incorporated herein by
reference to Exhibit 28.4 to the Registrant's
Quarterly Report on Form 10-Q filed on August 13,
1992 (Commission File No. 1-8122).
10.10 Credit Agreement dated as of August 31, 1992,
between Axiom Real Estate Management, Inc. and the
Registrant, incorporated herein by reference to
Exhibit 28.6 to the Registrant's Quarterly Report
on Form 10-Q filed on November 16, 1992
(Commission File No. 1-8122).
10.11 Purchase Agreement dated February 16, 1993
between the Registrant and JMB Institutional
Realty Advisers, L.P., incorporated herein by
reference to Exhibit 10.20 to the Registrant's
Quarterly Report on Form 10-Q filed on May 15,
1993 (Commission File No. 1-1822).
10.12 Purchase Agreement dated March 4, 1993
between the Registrant and Fox and
Carskadon/Better Homes and Gardens, incorporated
herein by reference to Exhibit 10.21 to the
Registrant's Quarterly Report on Form 10-Q filed
May 15, 1993 (Commission File No. 1-1822).
10.13 Stockholders' Agreement among Warburg, Pincus
Investors, L.P., The Prudential Insurance Company
of America, Joe F. Hanauer and the Registrant
dated January 29, 1993, incorporated herein by
reference to Exhibit 28.1 to the Registrant's
Current Report on Form 8-K filed on February 8,
1993 (Commission File No. 1-8122).
10.14 Amendment to Stockholders' Agreement among
Warburg, Pincus Investors, L.P., The Prudential
Insurance Company of America, Joe F. Hanauer and
the Registrant, dated as of July 1, 1993,
incorporated herein by reference to Exhibit 10.15
to the Registrant's Quarterly Report on Form 10-Q
filed on August 16, 1993 (Commission File No. 1-
8122).
10.15 Severance Compensation Agreement, dated as of
December 31, 1992, between the Registrant and
Donald L. McGee, incorporated herein by reference
to Exhibit 10.25 to the Registrant's Annual Report
on Form 10-K filed on April 15, 1993 (Commission
File No. 1-8122).
10.16 Severance Compensation Agreement, dated as of
August 31, 1992, between the Registrant and Emmett
R. DeMoss, Jr., incorporated herein by reference
to Exhibit 10.26 to the Registrant's Annual Report
on Form 10-K filed on April 15, 1993 (Commission
File No. 1-8122).
10.17 Severance Compensation Agreement, dated as of
December 31, 1992, between the Registrant and
Donald V. Jones, incorporated herein by reference
to Exhibit 10.27 to the Registrant's Annual Report
on Form 10-K filed on April 15, 1993 (Commission
File No. 1-8122).
10.18 Amendment No. 1 to Severance Compensation
Agreement, dated as of December 31, 1992, between
the Registrant and Donald V. Jones, incorporated
herein by reference to Exhibit 10.28 to the
</PAGE>
Registrant's Annual Report on Form 10-K filed on
April 15, 1993 (Commission File No. 1-8122).
10.19 Employment Agreement, effective May 20, 1992,
between the Registrant and Alvin L. Swanson, Jr.,
incorporated herein by reference to Exhibit 10.29
to the Registrant's Annual Report on Form 10-K
filed on April 15, 1993 (Commission File No. 1-
8122).
10.20 First Amendment to Employment Agreement,
effective as of May 20, 1992, between the
Registrant and Alvin L. Swanson, Jr., incorporated
herein by reference to Exhibit 10.30 to the
Registrant's Annual Report on Form 10-K filed on
April 15, 1993 (Commission File No. 1-8122).
10.21 Second Amendment to Employment Agreement,
effective as of February 24, 1993, between the
Registrant and Alvin L. Swanson, Jr., incorporated
herein by reference to Exhibit 10.31 to the
Registrant's Quarterly Report on Form 10-Q filed
on May 15, 1993 (Commission File No. 1-8122).
10.22 1993 Stock Option Plan for Outside Directors,
incorporated herein by reference to Exhibit 4.1 to
the Registrant's registration statement on Form S-
8 filed on November 12, 1993 (Registration No. 33-
71484).
10.23 Separation Agreement between the Registrant
and Wilbert F. Schwartz dated as of April 25,
1994, incorporated by reference to Exhibit 10.23
to the Registrant's Amendment to its Annual Report
on Form 10-K/A filed on April 29, 1994 (Commission
File No. 1-8122).
(11) Statement Regarding Computation of Per Share
Earnings
Item 6(b) Reports on Form 8-K
None.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
GRUBB & ELLIS COMPANY
(Registrant)
Date: May 13, 1994 /s/Connie Hardisty
Connie Hardisty
Vice President and
Corporate Controller
</PAGE>
GRUBB & ELLIS COMPANY AND SUBSIDIARIES
EXHIBIT INDEX
for the quarter ended March 31, 1994
Exhibit Page:
(11) Statement regarding Computation of Per Share Earnings 18
</PAGE
<TABLE>
GRUBB & ELLIS COMPANY AND SUBSIDIARIES
EXHIBIT (11) STATEMENT RE COMPUTATION OF
PER SHARE EARNINGS - FORM 10-Q
for the three-months ended
March 31, 1994 and 1993
(in thousands except for shares and per share amounts)
<CAPTION>
Three Months
Ended March, 31
1994 1993
<S> <C> <C>
<S>Net loss $ (4,747) $ (4,662)
<S>Earnings applicable to Preferred
Stockholders (638) (399)
<S>Net loss applicable to Common
Stockholders (5,385) (5,061)
<S>Primary loss per share applicable to
Common Stockholders
<S> Weighted average common shares
outstanding 4,062,136 3,900,154
<S>Dilutive stock options - based on the
treasury stock method 0 0
<S> Total 4,062,136 3,900,154
<S>Loss per common share and equivalents
applicable to Common Stockholders $ (1.33) $ (1.30)
<S>Fully-diluted loss per share (A)<F1>
applicable to Common Stockholders
<S>Weighted average common shares
outstanding 4,062,136 3,900,154
<S>Dilutive stock options - based on the
treasury stock method 0 0
<S> Total 4,062,136 3,900,154
<S>Loss per common share and equivalents
applicable to Common Stockholders $ (1.33) $ (1.30)
<FN>
<F1>
(A) This calculations is submitted in accordance with
Securities Exchange Act of 1934, Release No. 9083,
although not required by footnote 2 to paragraph 14 of
APB opinion No. 15 because it results in dilution of
less than 3%.
</TABLE>
