<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
FORM 8-K/A
AMENDMENT NO. 1 TO
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 22, 1998
------------------------------
GRUBB & ELLIS COMPANY
- ------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 1-8122 94-1424307
- ------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
2215 SANDERS ROAD, SUITE 400 NORTHBROOK, IL 60062
- ------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 847.753.7500
----------------------------
no change
- ------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
The undersigned registrant hereby amends the following financial statements,
exhibits or other portions of its Current Report on Form 8-K filed on August
6, 1998 as set forth below and in the pages attached hereto:
(a) Financial statements of business acquired.
Financial statements required to be filed pursuant to Item 7 of Form 8-K,
reflecting the acquisition of certain assets of Bishop Hawk, Inc.
(b) Pro-forma financial information.
Pro forma financial information required to be filed pursuant to Item 7 of Form
8-K, reflecting the acquisition of certain assets of Bishop Hawk, Inc.
(c) Exhibits.
(2) PLAN OF ACQUISITION, REORGANIZATION, ARRANGEMENT, LIQUIDATION OR
SUCCESSION
The registrant will furnish supplementally to the Commission, upon request, any
omitted schedule or exhibit to the listed exhibits.
2.1 Asset Purchase Agreement by and among Bishop Hawk, Inc., Sopilote
Inc., N. Bruce Ashwill and Grubb & Ellis Company dated July 22,
1998 (without exhibits), previously filed with this Report.
2.2 Promissory Note Issued July 22, 1998 by Grubb & Ellis Company in
favor of Bishop Hawk, Inc. in the amount of $1,449,800,
previously filed with this Report.
2.3 Promissory Note Issued July 22, 1998 by Grubb & Ellis Company in
favor of Bishop Hawk, Inc. in the amount of $1,084,020,
previously filed with this Report.
2.4 Press Release of Grubb & Ellis Company dated July 22, 1998,
previously filed with this Report.
(23) CONSENTS OF EXPERTS AND COUNSEL
23.1 Consent of Ernst & Young LLP
1
<PAGE>
SIGNATURES
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 hereunto duly authorized.
GRUBB & ELLIS COMPANY
------------------------
(Registrant)
Date: October 5, 1998 By: /s/ Robert J. Walner
------------------------
Robert J. Walner
Senior Vice President and
General Counsel
2
<PAGE>
ITEM 7.(a) FINANCIAL STATEMENTS OF BISHOP HAWK, INC.
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders
Grubb & Ellis Company
The Board of Directors and Shareholder
Bishop Hawk, Inc.
We have audited the accompanying balance sheet of Bishop Hawk, Inc. (a
wholly-owned subsidiary of Sopilote, Inc.) as of November 30, 1997, and the
related statements of income and retained earnings and cash flows for the
year then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Bishop Hawk, Inc. at November
30, 1997, and the results of its operations and its cash flows for the year then
ended in conformity with generally accepted accounting principles.
/s/ ERNST & YOUNG LLP
Chicago, Illinois
August 21, 1998
3
<PAGE>
BISHOP HAWK, INC.
(A WHOLLY-OWNED SUBSIDIARY OF SOPILOTE, INC.)
BALANCE SHEETS
(in thousands, except share data)
<TABLE>
<CAPTION>
MAY 31, NOVEMBER 30,
1998 1997
----------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash $ 89 $ 935
Commissions receivable 199 527
Advances to brokers 309 160
Prepaid expenses and other current assets 20 23
------- -------
Total current assets 617 1,645
Equipment and leasehold improvements, net 239 187
Notes receivable:
Related parties 4,241 4,240
Other 13 13
------- -------
$5,110 $6,085
------- -------
------- -------
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Commissions payable $218 $1,149
Accounts payable 159 128
Compensation and employee benefits payable 21 93
Current portion of capitalized lease obligations 42 41
------- -------
Total current liabilities 440 1,411
Long-term portion of capitalized lease obligations 49 40
Shareholder's equity:
Common stock, no par value; 100,000 shares
authorized, issued and outstanding 3,033 2,765
Retained earnings 1,588 1,869
------- -------
Total shareholder's equity 4,621 4,634
------- -------
$5,110 $6,085
------- -------
------- -------
</TABLE>
SEE ACCOMPANYING NOTES.
4
<PAGE>
BISHOP HAWK, INC.
(A WHOLLY-OWNED SUBSIDIARY OF SOPILOTE, INC.)
STATEMENTS OF INCOME AND RETAINED EARNINGS
(in thousands, except per share data)
<TABLE>
<CAPTION>
YEAR ENDED
SIX MONTHS ENDED MAY 31, NOVEMBER 30,
------------------------
1998 1997 1997
------------------------ --------------
(UNAUDITED)
<S> <C> <C> <C>
Transaction service commission revenues $6,653 $6,143 $14,811
Costs and expenses:
Transaction service commissions 4,389 4,010 9,925
Compensation and employee benefits 539 596 1,265
Selling, general and administrative 1,043 837 1,669
Depreciation 25 3 45
------ ------ -------
5,996 5,446 12,904
------ ------ -------
Income from operations 657 697 1,907
Other income (expense):
Interest income 4 1 6
Interest expense (8) (33) (30)
------ ------ -------
Income before income taxes 653 665 1,883
Income taxes 268 273 766
------ ------ -------
Net income 385 392 1,117
Retained earnings, beginning of period 1,869 2,276 2,276
Cash dividends paid to Sopilote, Inc. (666) (533) (1,524)
------ ------ -------
Retained earnings, end of period $1,588 $2,135 $1,869
------ ------ -------
------ ------ -------
Basic and diluted earnings per share $3.85 $3.92 $11.17
------ ------ -------
------ ------ -------
Dividends per share $6.66 $5.33 $15.24
------ ------ -------
------ ------ -------
</TABLE>
SEE ACCOMPANYING NOTES.
5
<PAGE>
BISHOP HAWK, INC.
(A WHOLLY-OWNED SUBSIDIARY OF SOPILOTE, INC.)
STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
YEAR ENDED
SIX MONTHS ENDED MAY 31, NOVEMBER 30,
-----------------------
1998 1997 1997
------------------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 385 $ 392 $ 1,117
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation 25 3 45
Intercompany charge from Sopilote, Inc.
in lieu of income taxes 268 273 766
Net changes in:
Advances to brokers (149) (24) (51)
Prepaid expenses and other current assets 3 23 19
Commissions receivable 328 49 645
Commissions payable (931) (348) (350)
Accounts payable 31 15 8
Compensation and employee benefits
payable (72) (44) 29
------ ----- ------
Net cash (used in) provided by operating
activities (112) 339 2,228
------ ----- ------
Cash flows from investing activities:
Capital expenditures for equipment and
leasehold improvements (39) (31) (45)
Principal additions to notes receivable from
related parties (1) (3) (36)
Principal additions to other note receivable - (13) (13)
------ ----- ------
Cash used in investing activities (40) (47) (94)
------ ----- ------
Cash flows from financing activities:
Principal payments on capitalized lease
obligations (28) (34) (50)
Cash dividends paid to Sopilote, Inc. (666) (533) (1,524)
------ ----- ------
Cash used in financing activities (694) (567) (1,574)
------ ----- ------
Net (decrease) increase in cash (846) (275) 560
Cash, beginning of period 935 375 375
------ ----- ------
Cash, end of period $ 89 $ 100 $ 935
------ ----- ------
------ ----- ------
</TABLE>
SEE ACCOMPANYING NOTES.
6
<PAGE>
BISHOP HAWK, INC.
(A WHOLLY-OWNED SUBSIDIARY OF SOPILOTE, INC.)
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION, BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION AND BUSINESS
Bishop Hawk, Inc. (the "Company") was incorporated in the State of California
on May 8, 1981 and is a wholly-owned subsidiary of Sopilote, Inc. The Company
is a commercial real estate brokerage firm that provides services to real
estate owners/investors and tenants, including transaction services involving
leasing, acquisitions and dispositions of industrial and commercial
properties principally in the Northern California area.
SALE OF CERTAIN ASSETS
On July 22, 1998, the Company, Sopilote, Inc. and its sole shareholder
consummated an agreement to sell certain assets of the Company (which consist
principally of real estate services contracts, fixtures and equipment,
commissions receivable, proprietary rights relating to the business and other
personal property) to Grubb & Ellis Company ("G&E"). The parties also entered
into a non-competition agreement whereby the sellers agreed not to compete with
G&E for a three-year period.
UNAUDITED INTERIM FINANCIAL STATEMENTS
The unaudited interim financial statements as of May 31, 1998 and for the six
months ended May 31, 1998 and 1997 have been prepared in accordance with
generally accepted accounting principles for interim financial information.
Accordingly, they do not include all of the information and disclosures required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation have been included in
the accompanying unaudited interim financial statements. Operating results for
the six months ended May 31, 1998 are not necessarily indicative of the results
that may be expected for the year ending November 30, 1998.
EARNINGS PER SHARE - BASIC AND DILUTED
Earnings per share is based upon 100,000 shares outstanding during the
respective period. There are no dilutive instruments outstanding.
7
<PAGE>
1. ORGANIZATION, BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
BASIS OF PRESENTATION
The financial statements have been prepared in conformity with generally
accepted accounting principles which require management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
(including disclosure of contingent assets and liabilities) at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards ("SFAS") No. 107, "Disclosures
about Fair Value of Financial Instruments," requires disclosure of fair value
information about financial instruments, whether or not recognized in the
balance sheets. Considerable judgment is required in interpreting market data
to develop estimates of fair value. Accordingly, the estimates presented
herein are not necessarily indicative of the amounts that the Company could
realize in a current market exchange. The use of different market assumptions
and/or estimation methodologies may have a material effect on the estimated
fair value amounts.
Management believes that the carrying amounts of the Company's financial
instruments, which include receivables and capitalized lease obligations,
approximate their fair values.
TRANSACTION SERVICE COMMISSION REVENUE AND EXPENSE RECOGNITION
Real estate sales commissions are recognized at the earlier of receipt of
payment, close of escrow or transfer of title between buyer and seller. Receipt
of payment occurs at the point at which all Company services have been
performed, title to real property has passed from seller to buyer, if
applicable, and no contingencies exist with respect to entitlement to the
payment. Real estate leasing commissions are recognized at the earlier of
receipt of payment or tenant occupancy, assuming a lease agreement has been
executed and no contingencies exist.
Real estate transaction commission expenses are recognized concurrently with the
related revenues, as described above.
CONCENTRATIONS OF CREDIT RISK
A geographic concentration of commissions receivable exists as of November
30, 1997 because all such receivables are from various Northern California
real estate owners/investors. The Company performs ongoing credit evaluations
of its clients, brokers and other debtors and does not require collateral for
the majority of its receivables. As of November 30, 1997, management believes
that no loss allowances for commissions receivable, advances to brokers or
notes receivable are required.
8
<PAGE>
1. ORGANIZATION, BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements are stated at cost and depreciated using
the straight-line method over the estimated useful lives of the assets or the
lease term, whichever is less. The estimated useful lives are as follows:
<TABLE>
<CAPTION>
<S> <C>
Office furniture and equipment 5 to 10 years
Automobiles 5 years
Leasehold improvements 7 to 10 years
</TABLE>
INCOME TAXES
The Company files consolidated federal and California income tax returns with
Sopilote, Inc. Pursuant to an informal tax sharing arrangement with Sopilote,
Inc., the Company records income taxes as if the Company was a separate
taxpayer. However, to the extent Sopilote does not require the Company to
actually pay income taxes, current taxes payable have been reflected as deemed
capital contributions in the accompanying financial statements.
During the year ended November 30, 1997, the Company made no payments to
Sopilote, Inc. for income taxes.
2. EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Equipment and leasehold improvements consist of the following (in thousands):
<TABLE>
<CAPTION>
MAY 31, NOVEMBER 30,
1998 1997
--------- ------------
(UNAUDITED)
<S> <C> <C>
Office furniture and equipment $ 286 $ 224
Automobiles 35 35
Leasehold improvements 144 129
------- -------
465 388
Less accumulated depreciation 226 201
------- -------
$ 239 $ 187
------- -------
------- -------
</TABLE>
9
<PAGE>
3. NOTES RECEIVABLE FROM RELATED PARTIES
As of November 30, 1997, notes receivable from related parties consist of
various unsecured, noninterest-bearing notes receivable from Sopilote, Inc.
and the Company's President which are payable on demand.
4. COMMITMENTS AND CONTINGENCIES
LEASING ARRANGEMENTS
The Company leases various office buildings, equipment and leasehold
improvements. The leases expire at various times between December 1998 and
December 2002 and certain of the agreements contain rent escalation
provisions and renewal options. These leases are classified as either capital
leases or operating leases based on the terms of the respective agreements.
The lessor in one such operating lease agreement (the "Related Party Lease")
involving an office building in Sacramento, California is an entity
controlled by the sole shareholder of Sopilote, Inc. The Related Party Lease
requires monthly rental payments of $13,000 (subject to certain escalation
provisions) through December 2002.
Future minimum payments, by fiscal year, under capital leases and
noncancellable operating leases with terms of one year or more consist of the
following as of November 30, 1997 (in thousands):
<TABLE>
<CAPTION>
CAPITAL OPERATING
LEASES LEASES
-------- -------
<S> <C> <C>
1998 $ 52 $ 394
1999 36 268
2000 6 196
2001 4 187
2002 - 165
Thereafter - 13
-------- -------
Total minimum lease payments 98 $1,223
-------
-------
Less amount representing interest
(at imputed rates ranging from
16% to 30%) 17
--------
Present value of net minimum lease
payments (including $41 classified
as current) $ 81
--------
--------
</TABLE>
10
<PAGE>
4. COMMITMENTS AND CONTINGENCIES (CONTINUED)
LEASING ARRANGEMENTS (CONTINUED)
During the year ended November 30, 1997, the Company made imputed interest
payments aggregating $30,000.
Total rental expense charged to operations as a result of all operating leases
was $359,000 during the year ended November 30, 1997. Rental expense associated
with the Related Party Lease amounted to $160,000 during the year ended November
30, 1997.
The following amounts are included in equipment and leasehold improvements as
assets recorded under capital leases as of November 30, 1997 (in thousands):
<TABLE>
<CAPTION>
<S> <C>
Office furniture and equipment
Leasehold improvements $52
104
--------
156
Less accumulated depreciation (49)
--------
$107
--------
--------
</TABLE>
Depreciation expense charged to operations pursuant to equipment and
leasehold improvements recorded under capital leases was $21,000 during the
year ended November 30, 1997.
LITIGATION
The Company is involved in certain litigation, as both plaintiff and defendant,
arising in the ordinary course of business. In the opinion of management, after
consultation with legal counsel, these matters will be resolved without a
material adverse effect on the Company's financial position or results of
operations.
5. INCOME TAXES
There are no significant temporary differences between the financial reporting
and income tax bases of the Company's assets and liabilities.
The intercompany charge from Sopilote, Inc. in lieu of income taxes for the year
ended November 30, 1997 consists of the following components (in thousands):
<TABLE>
<CAPTION>
<S> <C>
Current:
Federal $594
State 172
-----
$766
-----
-----
</TABLE>
11
<PAGE>
5. INCOME TAXES (CONTINUED)
The intercompany charge from Sopilote, Inc. in lieu of income taxes for the
year ended November 30, 1997 differs from the amount computed by applying the
applicable statutory federal income tax rate to income before income taxes as
follows:
<TABLE>
<CAPTION>
<S> <C>
Tax at statutory federal rate 34.0%
State taxes, net of federal benefit 6.1
Other 0.6
-----
Effective income tax rate 40.7%
-----
-----
</TABLE>
6. YEAR 2000 ISSUE (UNAUDITED)
The Company intended to make certain minor modifications (at an estimated cost
of approximately $2,000 to $5,000) to various operating software programs, so
that its computer systems would function properly with respect to dates in the
Year 2000 and thereafter. Due to the sale of the Company to G&E on July 22, 1998
(Note 1), such modifications have been postponed.
If the required Year 2000 modifications to the Company's existing operating
software programs are not made or conversion to a computer system of G&E is not
completed in a timely manner, the Year 2000 issue could materially affect the
Company's operations.
12
<PAGE>
ITEM 7.(b) PRO FORMA FINANCIAL INFORMATION.
GRUBB & ELLIS COMPANY
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 1998
(UNAUDITED)
This unaudited Pro Forma Condensed Consolidated Balance Sheet is presented as if
Grubb & Ellis Company ("G&E") entered into the Asset Purchase Agreement with
Bishop Hawk, Inc., Sopilote Inc. and N. Bruce Ashwill on June 30, 1998. The pro
forma financial information contained herein is not necessarily indicative of
what the actual financial position would have been at June 30, 1998, nor does it
purport to represent the future financial position of G&E.
13
<PAGE>
GRUBB & ELLIS COMPANY
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 1998
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments (1) Pro Forma
---------- --------------- ---------
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 14,251 $ (8,677) $ 5,574
Service fees receivable, net 8,006 -- 8,006
Deferred taxes and other assets 11,092 -- 11,092
--------- --------- ---------
Total current assets 33,349 (8,677) 24,672
Noncurrent assets:
Equipment, software and leasehold improvements, net 13,152 25 13,177
Goodwill, net 10,578 11,186 21,764
Deferred taxes and other assets 6,439 -- 6,439
--------- --------- ---------
Total assets $ 63,518 $ 2,534 $ 66,052
--------- --------- ---------
--------- --------- ---------
Current liabilities:
Accounts payable and other accrued expenses $ 7,772 $ -- $ 7,772
Acquisition indebtedness 2,807 1,440 4,247
Compensation and employee benefits payable 6,948 -- 6,948
--------- --------- ---------
Total current liabilities 17,527 1,440 18,967
Long-term liabilities:
Accrued claims and settlements and other liabilities 10,577 -- 10,577
Acquisition indebtedness -- 1,094 1,094
--------- --------- ---------
Total liabilities 28,104 2,534 30,638
--------- --------- ---------
Stockholders' equity:
Common stock 198 -- 198
Additional paid-in-capital 111,562 -- 111,562
Retained earnings (deficit) (76,346) -- (76,346)
--------- --------- ---------
Total stockholders' equity 35,414 -- 35,414
--------- --------- ---------
Total liabilities and stockholders' equity $ 63,518 $ 2,534 $ 66,052
--------- --------- ---------
--------- --------- ---------
</TABLE>
(1) These adjustments record the asset purchase, inclusive of capitalized
direct costs and seller financing provided pursuant to terms of the
purchase. The adjustments also assume that the portion of the purchase
price which was funded with $3.5 million of borrowings from G&E's credit
facility (and was repaid within 30 days of the acquisition date) was
instead funded from G&E's working capital reserves.
14
<PAGE>
GRUBB & ELLIS COMPANY
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 1998
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
This Pro Forma Condensed Consolidated Statement of Operations is presented as if
G&E had entered into the Asset Purchase Agreement on July 1, 1997. The pro
forma information contained herein does not purport to be indicative of the
results that would have been obtained had these events occurred on such date,
nor is it intended to be a projection of future results of G&E.
The fiscal year of Bishop Hawk, Inc. ends on November 30 as compared to G&E's
fiscal year which ends on June 30. Therefore, pro forma operations of Bishop
Hawk, Inc. for the year ended June 30, 1998 are calculated from the financial
statements included in this Form 8-K using operations for the year ended
November 30, 1997, adding the operations from the six months ended May 31, 1998
and deducting the operations from the six months ended May 31, 1997.
15
<PAGE>
GRUBB & ELLIS COMPANY
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 1998
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
---------- ----------- ---------
<S> <C> <C> <C>
Revenue:
Transaction services fees $247,040 $15,321 (1) $262,361
Management services fees 35,794 - 35,794
-------- ----------- ---------
Total revenue 282,834 15,321 298,155
-------- ----------- ---------
Costs and expenses:
Transaction services commissions 140,457 10,304 (1) 150,761
Salaries and wages 70,680 1,208 (1) 71,888
Selling, general and administrative 53,816 1,875 (1) 55,691
Other expenses, net 2,432 1,001 (2) 3,433
-------- ----------- ---------
Total costs and expenses 267,385 14,388 281,773
-------- ----------- ---------
Income before income taxes 15,449 933 16,382
Net benefit (provision) for income taxes 6,057 (364) 5,693
-------- ----------- ---------
Net income $21,506 $569(3) $22,075
-------- ----------- --------
-------- ----------- --------
Basic -
Net income per common share $1.10 $1.13
-------- --------
-------- --------
Weighted average common shares
outstanding 19,607,352 19,607,352
---------- ----------
---------- ----------
Diluted -
Net income per common share $.98 $1.00
---------- ----------
---------- ----------
Weighted average common shares
outstanding 22,043,920 22,043,920
---------- ----------
---------- ----------
</TABLE>
(1) This adjustment reflects historical operations of Bishop Hawk, Inc., for
the fiscal year ended June 30, 1998, excluding depreciation and other net
expenses of $63,000 and income taxes of $761,000.
(2) This adjustment represents $594,000 of annual amortization expense of
goodwill related to the purchase and $232,000 of interest expense related
to seller financing incurred in acquiring the assets. An adjustment has
also been recorded to decrease historical interest income by $175,000,
reflecting the utilization of working capital reserves to fund the
acquisition.
16
<PAGE>
(3) G&E also estimates that it will incur non-recurring costs totaling
approximately $305,000 (net of taxes) related to the integration of this
acquisition in fiscal year 1999. These non-recurring costs have not
been reflected in the above pro forma results of operations.
17
<PAGE>
EXHIBIT INDEX(A)
Exhibit
Number
- ------
(23) CONSENTS OF EXPERTS AND COUNSEL
23.1 Consent of Ernst & Young LLP
(A) Exhibits incorporated by reference are listed in Item 7 of this Report.
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-3 No. 333-48515) pertaining to the registration of $150,000,000 of
debt securities, preferred stock, common stock, equity warrants and debt
warrants, the Registration Statement (Form S-8 No. 333-42741) pertaining to
the Grubb & Ellis Company 1990 Amended and Restated Stock Option Plan and
Grubb & Ellis Employee Stock Purchase Plan, the Registration Statements (Form
S-8 Nos. 33-71580, 33-35640 and 2-98541) pertaining to the 1990 Amended and
Restated Stock Option Plan, as amended, and the Registration Statement (Form
S-8 No. 33-71484) pertaining to the 1993 Stock Option Plan for Outside
Directors of Grubb & Ellis Company of our report dated August 21, 1998, with
respect to the November 30, 1997 financial statements of Bishop Hawk, Inc.
included in the Current Report on Form 8-K/A of Grubb & Ellis Company, dated
October 5, 1998.
/s/ ERNST & YOUNG LLP
Chicago, Illinois
October 5, 1998
