March 31, 2011
Been a while since I posted anything, but this was too good to pass up:
Grubb & Ellis Company (GBE: N/A N/A) announced that it has received an $18 million financing commitment from private equity firm Colony Capital, LLC. In turn, the Los Angeles-based international investment firm has secured the right to negotiate exclusively for 60 days with Grubb & Ellis to evaluate a “potential larger strategic investment” in the Santa Ana, CA-based real estate services firm…
According to a term sheet included in a filing by GBE with the Securities and Exchange Commission, the senior loan facility, secured by Grubb’s accounts receivables, has a starting interest rate of 11% which would step up by an additional 50 basis points at the end of each quarter following the May 1, 2011 closing date on outstanding loan funds.
Not looking too hot. Does this mean that brokerage commissions being paid out are now subordinate to interest payments to Colony Capital? If so, yikes.
At Grubb’s current valuations, it seems any investment firm with a giant portfolio of real estate assets should be looking at this deal. Seems like there might be quite a bit of value to pick up here, particularly if you can throw a bunch of business your own way once you control/own a large piece of Grubb. In any event, I’d rather have Tom Barrack in my corner than not.
- More Defections at Grubb & Ellis Indicate Trouble
- Who Are The Largest Firms Investing Internationally For US Clients? Here’s The Top 10
- Who Do Foreigners Give Their Money To When Investing In US Real Estate? Here’s The Top 10
- Shake-Up at Grubb & Ellis San Jose
- Sperry Van Ness To Close Southern California Offices