SANTA ANA, CALIF. — Grubb & Ellis has filed for Chapter 11 bankruptcy, the company announced Tuesday. The Santa Ana-based firm has agreed to sell substantially all its assets to BGC Partners, which recently acquired Newmark Knight Frank this past October, making it one of the nation’s largest commercial real estate service firms.
The deal will take place as an asset sale under Section 363 of the U.S. Bankruptcy Code. Bankruptcy proceedings will commence in the U.S. Bankruptcy Court for the Southern District of New York. The firm listed $150 million in assets and $167 million in debt, according to BusinessWeek. The news outlet also noted that Grubb & Ellis declared it had completed 12,000 sale and lease transactions in 2011 and currently manages more than 250 million square feet.
The firm anticipates that business will continue without disruption during this 363 sale process. BCG has acquired Grubb & Ellis’ outstanding secured debt and has agreed to provide the firm with “debtor-in-possession” financing to support its operations throughout this process. This loan could amount to as much as $4.8 million, BusinessWeek noted.
“Following a thorough and rigorous process and the evaluation of all available options, we determined that a partnership with BGC provides the best platform for our brokerage professionals, employees and clients,” said Thomas P. D'Arcy, president and CEO of Grubb & Ellis, in a prepared statement.
“We believe the transaction will be seamless for our clients and we expect no disruption to the company's operations,” continued D’Arcy. “BGC's purchase of the company's senior debt and its willingness to provide incremental financing to ensure the smooth execution of the sale process demonstrate its commitment to the success of the Grubb & Ellis business.”
— Nellie Day