Realty Giant Grubb & Ellis Plans Cutbacks

In a further sign of weakness in commercial real estate markets nationwide, San Francisco-based Grubb & Ellis, the nation’s largest commercial brokerage, said Friday that it is closing five of its 176 offices nationwide, reducing the size of others and laying off 75 of 1,700 employees.

The steps are expected to save $7 million this year and $11.5 million in 1991.

Reflecting particular softness in the East Coast, the company said it is closing its downtown Manhattan office and reducing the size of offices in New York City’s Midtown and Westchester, N.Y. Offices have been closed in southeast Denver, Detroit, Atlanta and Princeton, N.J.

In California, the only cutback was in the San Rafael office. No further cuts are planned, but the firm is monitoring its expenses, spokesman Randall Edwards said.

Edwards said the moves were prompted by declines in profit and sales. For the second quarter ended June 30, the firm lost $1.8 million on $84.5 million in sales. In the previous year’s quarter, Grubb & Ellis had a profit of $340,000 on $91.7 million in sales.

“There has been so much overbuilding, and the economy itself is lots weaker,” Edwards said. “Many people think we’re in a recession. This has affected us.”