Grubb & Ellis Co. (NYSE:GBE) announced key changes in its non-traded REIT business as the company reported higher revenue and narrowed losses during the third quarter.
Stronger leasing and sales boosted Grubb & Ellis’ third-quarter revenue by 6% from the same period last year and the company shrank its quarterly loss to $14.8 million, an improvement from $21.4 million lost during the same period a year ago. Quarterly revenue rose to $144.3 million from $136.1 million last year.
Income from sales and leasing commissions climbed 29% over the same period last year, reflecting improving market conditions and fruits from the company’s efforts to aggressively expand its talent pool during the downturn, adding nearly 200 brokers over the last two years, the firm reported this week.
While most real estate service providers are seeing improved transaction business as the economy recovers, one area where the company expects to see improvement is its investment management business. The Santa Ana, CA-based company’s non-traded REITs, Grubb & Ellis Apartment REIT and Grubb & Ellis Healthcare REIT II, Inc., have raised lower-than-expected amounts of equity funds, resulting in investment delays and diminished revenue to the parent company.
On Nov. 1, Grubb & Ellis announced that it terminated its dealer-manager and advisory agreements with Grubb & Ellis Apartment REIT following “fundamental differences of opinion” between Grubb & Ellis Co. and the REIT’s board of directors over the investment vehicle’s strategic direction, said Jeff Hanson, president and CEO of Grubb & Ellis Equity Advisors, the company’s main asset management and investment subsidiary.