Grubb & Ellis chief quits
Commercial real estate brokerage giant Grubb & Ellis Co., with its stock getting battered in a softening market, announced Friday that its chief executive had resigned and that it would repurchase as much as $25 million worth of its own stock.
The Santa Ana company, which helps arrange sales and leases of such properties as office buildings, stores and warehouses, said CEO and President Scott D. Peters, 50, stepped down “to pursue other interests.” He will, however, remain chairman of the company’s healthcare real estate investment trust and executive vice president of its apartment REIT.
Grubb & Ellis’ board of directors appointed independent board member Gary H. Hunt as interim CEO and planned to begin searching for a new leader. Hunt, 59, is a former executive vice president of Irvine Co. who also serves on the board of William Lyon Homes Inc. and Kennecott Land Co.
While authorizing the stock repurchase program, the Grubb & Ellis board also said that it would suspend future dividend payments after paying a 10-cents-a-share quarterly dividend later this month.
Share prices fell 52% over the last year and hit a 52-week low of $2.93 a share Thursday before closing Friday at $3.13.
The decision to suspend the dividend and buy back stock was “a vote of confidence in the company” and “a positive statement about where we think the industry is going,” Peters said. “I thinks shareholders will enjoy higher values because of that [decision].”
Analyst Craig Silvers said “it was only a question of when” the board would suspend the dividend, given market conditions. “It was the right move to eliminate it sooner rather than later.”
Commercial leasing activity “is decent but not where it was 10 months ago,” said Silvers, president of Beverly Hills investment advisory firm Bricks & Mortar Capital. Sales transactions, however, “have dropped substantially. The entire business has been hit by factors in the economy.”
Grubb & Ellis was founded in California in 1958 by real estate brokers Bill Grubb and Hal Ellis. The company moved its headquarters from Chicago to Santa Ana when it was taken over in December 2007 by NNN Realty Advisors Inc., which specializes in tax-swap property investments.
Keeping the Grubb & Ellis name, the merged company now has about 6,000 employees worldwide and a substantial presence in Southern California.
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