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EXHIBIT 99.(a)(5)(v)
[LETTERHEAD OF GRUBB & ELLIS]
News Release
FOR IMMEDIATE RELEASE Contact: Noeleen Colgan
847.753.7594
GRUBB & ELLIS COMPANY EXPECTS FISCAL SECOND QUARTER EARNINGS OF
APPROXIMATELY $.33 PER SHARE, EXCLUDING NON-RECURRING CHARGES
OF $.14 PER SHARE, UP FROM $.27 PER SHARE A YEAR AGO
Company completes $55 million credit agreement that will fund stock
repurchase
NORTHBROOK, Ill., - Jan. 17, 2001 -- Grubb & Ellis Company (NYSE: GBE) today
announced that it expects to report fiscal second quarter earnings of
approximately $.33 per diluted share, excluding non-recurring charges of $.14
per diluted share. Including the charges, fiscal second quarter earnings are
projected to be $.19 per diluted share. The Company said revenue growth was
approximately 20 percent for the quarter ended Dec. 31, 2000 over the same
period last year.
On Dec. 4, the Company projected fiscal second quarter earnings of $.20 per
share. At that time, the Company said fiscal second quarter earnings would be
impacted by its strategic review process, including the write-off of certain
deferred costs associated with amending its credit facility. Those costs are
expected to reduce fiscal second quarter earnings by approximately $.04 per
diluted share. Additional fees and costs specifically related to the tender
offer will be charged directly to equity and have no impact on earnings.
Fiscal 2001 second quarter earnings also will be affected by a charge of
approximately $2.2 million, or $.10 per diluted share, to write-off the
remaining goodwill associated with the April 1998 acquisition of the common
stock of White Commercial Real Estate, a real estate services firm in Hayward,
Calif. The Company believes that the future cash flows of this operation are
insufficient to support the carrying value of the goodwill. This charge was not
included in the Company's $.20 per share estimate.
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GRUBB & ELLIS FISCAL SECOND QUARTER EXPECTATIONS; COMPANY COMPLETES $55 MILLION
CREDIT AGREEMENT
ADD ONE
Grubb & Ellis expects to release fiscal second quarter earnings in
mid-February.
The Company also announced it has entered into a $55 million amended and
restated credit agreement with its existing bank group. The revised credit
facility is related to its previously announced tender offer for up to 7 million
shares of the Company's outstanding common stock at a price of $7 per share.
The credit facility, which is led by Bank of America, N.A., is comprised of
a $40 million term loan with a five-year amortization and a $15 million
revolving credit facility. Initial borrowings of $40 million will be made under
the term loan to effect the purchase of shares pursuant to the tender offer. On
Jan. 11, the Company announced an extension of the tender offer to expire at 5
p.m., New York City time, Jan. 24, 2001 to allow stockholders to consider
updated earnings information.
Calendar Year 2001 Outlook
The Company believes that real estate markets will soften moderately in
2001 due to an increase in sublease space, flattening rents and a decline in
leasing activity resulting from a slowing economy. This scenario is expected to
create leasing opportunities for tenants who were shut out of the extremely
tight market last year, generating continued positive absorption of space
(though at a lower level) and maintaining an ongoing revenue base to support the
Company's transaction and advisory business. As such, Grubb & Ellis expects its
earnings growth rate from operations to slow in calendar year 2001. However,
reported earnings per share are projected to increase to approximately $1.00 per
diluted share primarily as a result of the combined effect of fewer shares
outstanding offset by higher interest expense incurred subsequent to the closing
of the tender offer. The Company projects earnings before interest, taxes,
depreciation and amortization (EBITDA) growth in the range of 8 to 10 percent in
calendar year 2001.
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GRUBB & ELLIS FISCAL SECOND QUARTER EXPECTATIONS; COMPANY COMPLETES $55 MILLION
CREDIT AGREEMENT
ADD TWO
Grubb & Ellis Company is one of the nation's largest commercial real estate
services firms. Through its offices, affiliates and global strategic alliance
with Knight Frank, one of the leading property consulting firms in Europe,
Africa and Asia Pacific, the company provides a full range of real estate
services, including advisory, management and consultative services, to users and
investors worldwide. With the collective resources of approximately 8,000
people in over 200 offices in 27 countries, Grubb & Ellis professionals arrange
the sale or lease of such business properties as industrial, retail and office
buildings, as well as the acquisition and disposition of multi-family and
hospitality properties and commercial land. Major multiple-market clients have
a single point of contact through the firm's corporate and institutional units
for coordination of all of the firm's services as well as site selection,
feasibility studies, market forecasts and research. For more information, visit
the company's website at www.grubb-ellis.com.
Editor's note:
Except for historical information, statements included in this announcement may
constitute forward-looking statements regarding, among other things, market
outlook, future revenue and cash flow (EBITDA) growth, earnings growth, earnings
per share, changes in expense levels, profitability of acquired companies and
effects on the company of changes in the real estate markets. These statements
involve known and unknown risks, uncertainties and other factors that may cause
the company's actual results and performance in future periods to be materially
different from any future results or performance suggested by these statements.
Such factors which could adversely affect the company's ability to obtain these
results include, among other things: (i) the volume of transactions and prices
for real estate in the real estate markets generally; (ii) a general or regional
economic downturn that could create a recession in the real estate markets;
(iii) the company's increased debt level and ability to make principal and
interest payments; (iv) expenses or capital requirements related to initiatives,
investments in people, technology and service improvements; (v) the success of
new initiatives and investments; (vi) the ability of the company to integrate
acquired companies and assets; and (vii) other factors described in the
company's Form 10-K for the fiscal year ended June 30, 2000, filed with the SEC.
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