Grubb & Ellis 8-K/A Completion of Acquisition or Disposition of Assets

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

Amendment No. 1
to

CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) February 15, 2007

GRUBB & ELLIS COMPANY

(Exact name of registrant as specified in its charter)

Delaware	1-8122	94-1424307
(State or other	(Commission	(IRS Employer
jurisdiction of	File Number)	Identification No.)
formation)

500 West Monroe Street, Suite 2800, Chicago, Illinois 60661

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code (312) 698-6700

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Table of Contents

Item 2.01 Completion of Acquisition or Disposition of Assets
Item 9.01 Financial Statements and Exhibits.
	(A)	Pro Forma Financial Information (unaudited)
		(1)	Pro Forma Condensed Consolidated Balance Sheets as of December 31, 2006 (unaudited)
		(2)	Pro Forma Condensed Consolidated Statements of Operations for the year ended June 30, 2006 and for the six months ended December 31, 2006 (unaudited)
	(B)	Financial Statements of Real Estate Operations Acquired
		(1)	6400 Shafer Court – Rosemont, Illinois
			Report of Independent Registered Public Accounting Firm
			Statement of Revenue and Certain Expenses for the year ended December 31, 2006
			Notes to Statement of Revenue and Certain Expenses
		(2)	Abrams Office Centre – Dallas, Texas
			Report of Independent Registered Public Accounting Firm
			Statement of Revenue and Certain Expenses for the year ended December 31, 2006
			Notes to Statement of Revenue and Certain Expenses
	(C)	Exhibits
Exhibit 23.1 Consent of Ernst & Young LLP

(D) Signature

2

Item 2.01 Completion of Acquisition or Disposition of Assets

     On February 28, 2007, Grubb & Ellis Company (the “Company”), through GERA 6400 Shafer LLC, a wholly owned subsidiary of the Company, closed on the purchase of commercial real property pursuant to the Purchase and Sale Agreement dated as of February 12, 2007, with F/B 6400 Shafer Ct. (Rosemont), LLC (the “Rosemont Property”). The purchase price for the Rosemont Property was $21,500,000.

     On February 20, 2007, the Company, through GERA Abrams Centre LLC, a wholly owned subsidiary of the Company, closed on the purchase of certain real property pursuant to the Purchase and Sale Agreement dated as of October 24, 2006, as amended, with Abrams Office Center, Ltd. (the “Abrams Property”). The purchase price for the Abrams Property was $20,000,000.

     The Company acquired the Rosemont Property and Abrams Property (collectively “The Properties”) with the intention to hold them for future sale to Grubb & Ellis Realty Advisors, Inc. (“Realty Advisors”). The Company and Realty Advisors, however, do not have any current arrangement or agreement with respect to The Properties and Realty Advisors does not have any obligation to purchase The Properties from the Company. Any subsequent acquisition by Realty Advisors of The Properties would be subject to the prior approval of both Realty Advisors’ Board of Directors and its stockholders.

3

Item 9.01 Financial Statements and Exhibits.

Pro Forma Condensed Consolidated Balance Sheets
(Unaudited)

The accompanying unaudited Pro Forma Condensed Consolidated Balance Sheet of the Company is presented as if The Properties were acquired on December 31, 2006. This Pro Forma Condensed Consolidated Balance Sheet should be read in conjunction with the Company’s historical consolidated financial statements and notes thereto as filed on Form 10-Q for the six months ended December 31, 2006 and on Form 10-K for the year ended June 30, 2006. In management’s opinion, all adjustments necessary to reflect the acquisition of The Properties have been made. The following Pro Forma Consolidated Balance Sheet is not necessarily indicative of what the actual financial position would have been assuming the above transactions had been consummated at December 31, 2006, nor does it purport to represent the future financial position of the Company.

4

Grubb & Ellis Company

Pro Forma Condensed Consolidated Balance Sheets
(in thousands, except share data)

As of December 31, 2006
(unaudited)

				The Properties
	Historical (A)			(B)		Pro Forma
Current assets:
Cash and cash equivalents, including restricted deposits of $800	$	37,732		$	—	$	37,732
Services fees receivable, net		16,959			—		16,959
Other receivables		4,309			—		4,309
Professional service contracts, net		5,475			—		5,475
Prepaid and other current assets		5,120			—		5,120
Real estate held for sale		—			42,344		42,344
Deferred tax assets, net		1,736			—		1,736
Total current assets		71,331			42,344		113,675
Noncurrent assets:
Equipment, software and leasehold improvements, net		10,271			—		10,271
Goodwill, net		24,763			—		24,763
Investment in affiliate		4,266			—		4,266
Professional service contracts, net		8,552			—		8,552
Other assets		2,156			—		2,156
Total assets	$	121,339		$	42,344	$	163,683
Current liabilities:
Accounts payable	$	5,273		$	—	$	5,273
Commissions payable		15,767			—		15,767
Accrued compensation and employee benefits		17,911			—		17,911
Liabilities related to real estate held for sale		—			42,344		42,344
Deferred commissions payable		11,428			—		11,428
Other accrued expenses		11,912			—		11,912
Total current liabilities		62,291			42,344		104,635
Long-term liabilities:
Accrued claims and settlements		4,993			—		4,993
Other liabilities		5,862			—		5,862
Total liabilities		73,146			42,344		115,490
Stockholders’ equity:
Preferred stock, $1,000 stated value: 1,000,000 shares authorized; 0 shares issued and outstanding		—			—		—
Common stock, $.01 par value: 50,000,000 shares authorized; 25,808,950 shares issued and outstanding		258			—		258
Additional paid-in-capital		94,009			—		94,009
Accumulated other comprehensive income		(677	)		—		(677	)
Retained deficit		(45,397	)		—		(45,397	)
Total stockholders’ equity		48,193			—		48,193
Total liabilities and stockholders’ equity	$	121,339		$	42,344	$	163,683

5

Notes to Pro Forma Condensed Consolidated Balance Sheets
As of December 31, 2006

(A)	Represents the historical Condensed Consolidated Balance Sheet of the Company as of December 31, 2006.
(B)	Reflects the acquisition of the Rosemont Property for a purchase price of $21,450,000 and Abrams Property for a purchase price of $20,000,000. The amounts presented include net closing costs and adjustments of approximately $96,000. The acquisitions were funded through borrowings on the Company’s credit facility of approximately $41,546,000.

	6400 Shafer		Abrams		The
(in thousands)	Court		Office Centre		Properties
Assets:
Rental real estate, net	$	21,578	$	20,366	$	41,944
Other assets		397		3		400
Total assets	$	21,975	$	20,369	$	42,344
Liabilities:
Credit facilities	$	21,491	$	20,055	$	41,546
Tenant deposits		184		166		350
Other liabilities		300		148		448
Total liabilities	$	21,975	$	20,369	$	42,344

6

Pro Forma Condensed Consolidated Statements of Operations
(Unaudited)

The accompanying unaudited Pro Forma Consolidated Statements of Operations for the six month period ended December 31, 2006 and for the year ended June 30, 2006 of the Company are presented as if The Properties had been acquired on July 1, 2005. These Pro Forma Consolidated Statements of Operations should be read in conjunction with the Company’s historical consolidated financial statements and notes thereto as filed on Form 10-K for the year ended June 30, 2006 and on Form 10-Q for the six month period ended December 31, 2006. In management’s opinion, all adjustments necessary to reflect the above acquisitions have been made.

The unaudited Pro Forma Condensed Consolidated Statements of Operations are not necessarily indicative of what the actual results of operations would have been for the six month period ended December 31, 2006 and for the year ended June 30, 2006 assuming the above transactions had been consummated at July 1, 2005, nor does it purport to represent the future results of operations of the Company.

7

Grubb & Ellis Company
Pro Forma Condensed Consolidated Statements of Operations
(in thousands, except share data)

For the year ended June 30, 2006
(unaudited)

				The
	Historical			Properties
	(A)			(B)			Pro Forma
Services revenue:
Transaction fees	$	295,711		$	—		$	295,711
Management fees, including reimbursed salaries, wages and benefits		194,416			—			194,416
Total services revenue		490,127			—			490,127
Costs of services:
Transaction commissions		185,587			—			185,587
Reimbursable salaries, wages and benefits		143,537			—			143,537
Salaries, wages, benefits and other direct costs		37,364			—			37,364
Total costs of services		366,488			—			366,488
General and administrative costs:
Salaries, wages and benefits		58,463			—			58,463
Selling, general and administrative		48,700			—			48,700
Depreciation and amortization		7,748			—			7,748
Total costs		481,399			—			481,399
Total operating income		8,728			—			8,728
Other income and expenses:
Interest income		1,007			—			1,007
Interest expense		(2,530	)		—			(2,530	)
Income before income taxes		7,205			—			7,205
Provision for income taxes		(2,487	)		—			(2,487	)
Net income before income from investment in affiliate		4,718			—			4,718
Income from investment in affiliate		193			—			193
Income from continuing operations		4,911			—			4,911
Loss from operations of real estate held for sale, net of taxes of $34		—			(52	)		(52	)
Net income (loss)		4,911			(52	)		4,859
Preferred stock redemption		—			—			—
Net income (loss) to common stockholders	$	4,911		$	(52	)	$	4,859
Net income per weighted average common share outstanding:
Basic -	$	0.41		$	0.00		$	0.41
Diluted -	$	0.40		$	0.00		$	0.39
Weighted average common shares outstanding:
Basic -		11,965,899			11,965,899			11,965,899
Diluted -		12,314,242			12,314,242			12,314,242

8

Notes to Pro Forma Condensed Consolidated Statements of Operations
For the year ended June 30, 2006

(A)	Represents the historical Condensed Consolidated Statement of Operations of the Company for the year ended June 30, 2006.
(B)	Reflects the operations of The Properties during the period presented including the interest expense for the period related to borrowings from the Company’s credit facility to fund the acquisitions.
	Since the Company acquired both of The Properties with the intention to hold them for future sale to Realty Advisors, the results of operations of the Properties are reflected in the statements of operations as Discontinued Operations in accordance with Statement of Financial Accounting Standard No. 144.

	6400 Shafer			Abrams			The
(in thousands)	Court			Office Centre			Properties
Revenue:
Rental revenue	$	1,538		$	4,011		$	5,549
Tenant reimbursements		1,076			18			1,094
Other income		9			23			32
Total revenues		2,623			4,052			6,675
Expenses:
Property operating & maintenance		513			536			1,049
Utilities		199			551			750
Real estate taxes		811			418			1,229
Property management		65			32			97
Other operating expenses		116			208			324
Insurance		42			71			113
Total expenses		1,746			1,816			3,562
Earnings Before Interest, Taxes, Depreciation & Amortization (EBITDA)		877			2,236			3,113
Interest Expense (1)		(1,655	)		(1,544	)		(3,199	)
Benefit (provision) for income taxes		311			(277	)		34
Income (loss) from Discontinued Operations	$	(467	)	$	415		$	(52	)

(1) Represents the estimated interest expense for the period related to borrowings from the Company’s credit facility to fund the acquisitions. This includes estimated total borrowings of approximately $41,546,000 with a weighted average borrowing rate of 7.70%.

9

Grubb & Ellis Company
Pro Forma Condensed Consolidated Statements of Operations
(in thousands, except share data)

For the six months ended December 31, 2006
(unaudited)

				The
	Historical			Properties
	(A)			(B)			Pro Forma
Services revenue:
Transaction fees	$	163,593		$	—		$	163,593
Management fees, including reimbursed salaries, wages and benefits		99,495			—			99,495
Total services revenue		263,088			—			263,088
Costs of services:
Transaction commissions		105,031			—			105,031
Reimbursable salaries, wages and benefits		72,672			—			72,672
Salaries, wages, benefits and other direct costs		18,979			—			18,979
Total costs of services		196,682			—			196,682
General and administrative costs:
Salaries, wages and benefits		31,170			—			31,170
Selling, general and administrative		26,383			—			26,383
Depreciation and amortization		3,988			—			3,988
Total costs		258,223			—			258,223
Total operating income		4,865			—			4,865
Other income and expenses:
Gain on sale of marketable equity securities		3,765						3,765
Interest income		592			—			592
Interest expense		(700	)		—			(700	)
Income before income taxes		8,522			—			8,522
Provision for income taxes		(3,753	)		—			(3,753	)
Net income before income from investment in affiliate		4,769			—			4,769
Income from investment in affiliate		319			—			319
Income (loss) from continuing operations		5,088			—			5,088
Loss from operations of real estate held for sale, net of taxes of $423		—			(633	)		(633	)
Net income (loss)		5,088			(633	)		4,455
Preferred stock redemption		(105,267	)		—			(105,267	)
Net loss to common stockholders	$	(100,179	)	$	(633	)	$	(100,812	)
Net loss per weighted average common share outstanding:
Basic -	$	(3.97	)	$	(0.03	)	$	(3.99	)
Diluted -	$	(3.97	)	$	(0.03	)	$	(3.99	)
Weighted average common shares outstanding:
Basic -		25,239,674			25,239,674			25,239,674
Diluted -		25,239,674			25,239,674			25,239,674

10

Notes to Pro Forma Condensed Consolidated Statements of Operations
For the six months ended December 31, 2006

(A)	Represents the historical Condensed Consolidated Statements of Operations of the Company for the six months ended December 31, 2006.
(B)	Reflects the operations of the Properties during the period presented including the incremental interest expense for the period related to borrowings from the Company’s credit facility to fund the acquisitions.
	Since the Company acquired both of the Properties with the intention to hold them for future sale to Realty Advisors, the results of operations of the Properties are reflected in the statements of operations as Discontinued Operations in accordance with Statement of Financial Accounting Standard No. 144.

	6400 Shafer			Abrams			The
(in thousands)	Court			Office Centre			Properties
Revenue:
Rental revenue	$	439		$	1,309		$	1,748
Tenant reimbursements		616			4			620
Other income		3			11			14
Total revenues		1,058			1,324			2,382
Expenses:
Property operating & maintenance		253			242			495
Utilities		109			314			423
Real estate taxes		398			206			604
Property management		30			19			49
Other operating expenses		44			167			211
Insurance		21			35			56
Total expenses		855			983			1,838
Earnings Before Interest, Taxes, Depreciation & Amortization (EBITDA)		203			341			544
Interest Expense (1)		(828	)		(772	)		(1,600	)
Benefit for income taxes		251			172			423
Income from Discontinued Operations	$	(374	)	$	(259	)	$	(633	)

(1) Represents the estimated interest expense for the period related to borrowings from the Company’s credit facility to fund the acquisitions. This includes estimated total borrowings of approximately $41,546,000 with a weighted average borrowing rate of 7.70%.

11

6400 Shafer Court – Rosemont, Illinois

Statement of Revenue and Certain Expenses
For The Year Ended December 31, 2006

Report of Independent Registered Public Accounting Firm

The Board of Directors of
Grubb & Ellis Company

We have audited the accompanying statement of revenue and certain expenses of the 6400 Shafer Court – Rosemont, Illinois (the Property) for the year ended December 31, 2006. The statement of revenue and certain expenses are the responsibility of the Property’s management. Our responsibility is to express an opinion on the statement of revenue and certain expenses based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statements of revenue and certain expenses are free of material misstatement. We were not engaged to perform an audit of the Property’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Property’s internal control over financial reporting. Accordingly we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the statements of revenue and certain expenses, assessing the accounting principles used and significant estimates made by management, and evaluating the overall presentation of the statements of revenue and certain expenses. We believe that our audit provides a reasonable basis for our opinion.

The accompanying statement of revenue and certain expenses were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission, for inclusion in Grubb & Ellis Company’s Current Report on Form 8-K as described in Note 2, and is not intended to be a complete presentation of the Property’s revenue and expenses.

In our opinion, the statement of revenue and certain expenses referred to above present fairly, in all material respects, the revenue and certain expenses described in Note 2 for the year ended December 31, 2006 in conformity with U.S. generally accepted accounting principles.

/S/ ERNST & YOUNG LLP

Chicago, Illinois
January 19, 2007

12

6400 Shafer Court – Rosemont, Illinois
Statement of Revenue and Certain Expenses
For The Year Ended December 31, 2006

	Year Ended
	December 31,
	2006
Revenue
Rental income	$	1,174,959
Tenant reimbursements		1,204,083
Other income		10,619
		2,389,661
Certain Expenses
Salaries and Wages		165,890
Maintenance		71,018
Cleaning		159,326
Security		69,591
Landscaping		23,287
Utilities		193,345
Management Fees		60,000
Insurance		41,233
Real estate taxes		798,000
Other expenses		68,621
		1,650,311
Revenue in excess of certain expenses	$	739,350

See accompanying notes.

13

6400 Shafer Court – Rosemont, Illinois
Notes to Statement of Revenue and Certain Expenses
For The Year Ended December 31, 2006

1. Description of the Property

The 6400 Shafer Court – Rosemont, Illinois (the Property) located at 6400 Shafer Court, Rosemont, Illinois, is an office building that is leased primarily to office tenants.

2. Summary of Significant Accounting Policies

The accompanying statement of revenue and certain expenses for the years ended December 31, 2006 was prepared for purposes of complying with the rules and regulations of the Securities and Exchange Commission. The accompanying financial statement is not representative of the actual operations of the Property for the period presented nor indicative of future operations as certain expenses, primarily depreciation, amortization and interest expense, which may not be comparable to the expenses expected to be incurred in future operations of the Property, have been excluded.

In the preparation of the statement of revenue and certain expenses in conformity with U.S. generally accepted accounting principles, management makes estimates and assumptions that affect the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates.

3. Revenue Recognition and Related Expenses

Rental income is recognized on the straight-line basis over the life of the related lease. The related straight-line rental adjustment increased rental income by approximately $105,000 for the year ended December 31, 2006.

The length of the lease terms range from one to thirteen years from lease inception. Certain leases also contain provisions to recover real estate taxes and certain operating expenses at an amount in excess of the tenant’s base year amount, as defined. Such revenue is included in tenant reimbursements in the statement of revenue and certain expenses.

The total future minimum rental to be received under non-cancelable operating leases executed at December 31, 2006, exclusive of tenant reimbursements and contingent rentals, are as follows:

Year ending December 31
2007	$	1,298,785
2008		1,239,211
2009		1,213,488
2010		1,214,730
2011		1,259,586
Thereafter		5,606,445
	$	11,832,245

14

Abrams Office Centre – Dallas, Texas

Statement of Revenue and Certain Expenses
For The Year Ended December 31, 2006

Report of Independent Registered Public Accounting Firm

The Board of Directors of
Grubb & Ellis Company

We have audited the accompanying statement of revenue and certain expenses of the Abrams Office Centre – Dallas, Texas (the Property) for the year ended December 31, 2006. The statement of revenue and certain expenses are the responsibility of the Property’s management. Our responsibility is to express an opinion on the statement of revenue and certain expenses based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statements of revenue and certain expenses are free of material misstatement. We were not engaged to perform an audit of the Property’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Property’s internal control over financial reporting. Accordingly we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the statements of revenue and certain expenses, assessing the accounting principles used and significant estimates made by management, and evaluating the overall presentation of the statements of revenue and certain expenses. We believe that our audit provides a reasonable basis for our opinion.

The accompanying statement of revenue and certain expenses were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission, for inclusion in Grubb & Ellis Company’s Current Report on Form 8-K as described in Note 2, and is not intended to be a complete presentation of the Property’s revenue and expenses.

In our opinion, the statement of revenue and certain expenses referred to above present fairly, in all material respects, the revenue and certain expenses described in Note 2 for the year ended December 31, 2006 in conformity with U.S. generally accepted accounting principles.

/S/ ERNST & YOUNG LLP

Chicago, Illinois
February 20, 2007

15

Abrams Office Centre – Dallas, Texas
Statement of Revenue and Certain Expenses
For The Year Ended December 31, 2006

	Year Ended
	December 31,
	2006
Revenue
Rental income	$	2,425,941
Tenant reimbursements		23,038
Other income		22,122
		2,471,101
Certain Expenses
Salaries and Wages		104,000
Maintenance		148,129
Cleaning		120,299
Security		141,060
Utilities		618,807
Management Fees		34,643
Insurance		71,778
Real estate taxes		479,140
Bad debt		15,744
Other expenses		139,910
		1,873,510
Revenue in excess of certain expenses	$	597,591

See accompanying notes.

16

Abrams Office Centre – Dallas, Texas
Notes to Statement of Revenue and Certain Expenses
For The Year Ended December 31, 2006

     1. Description of the Property

The Abrams Office Centre – Dallas, Texas (the Property), located at 9330 LBJ Freeway, Dallas, Texas, is an office building that is leased primarily to office tenants.

     2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying statement of revenue and certain expenses for the year ended December 31, 2006 was prepared for purposes of complying with the rules and regulations of the Securities and Exchange Commission. The accompanying financial statement are not representative of the actual operations of the Property for the period presented nor indicative of future operations as certain expenses, primarily depreciation, amortization and interest expense, which may not be comparable to the expenses expected to be incurred in future operations of the Property, have been excluded.

In the preparation of the statement of revenue and certain expenses in conformity with U.S. generally accepted accounting principles, management makes estimates and assumptions that affect the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates.

Bad Debt Expense

Bad debt expense is recorded by management of the Property upon determination of certain tenants’ inability to meet the contractual obligations under their lease agreements. Management actively reviews receivables from tenants and determines the probability of collection for receivables identified as potentially uncollectible.

     3. Revenue Recognition and Related Expenses

Rental income is recognized on the straight-line basis over the life of the related lease. The related straight-line rental adjustment decreased rental income by approximately $66,700 for the year ended December 31, 2006.

The length of the lease terms range from two to eleven years from lease inception. Certain leases also contain provisions to recover real estate taxes and certain operating expenses at an amount in excess of the tenant’s base year amount, as defined. Such revenue is included in tenant reimbursements in the statement of revenue and certain expenses.

The total future minimum rental to be received under non-cancelable operating leases executed at December 31, 2006, exclusive of tenant reimbursements and contingent rentals, are as follows:

Year ending December 31
2007	$	2,380,536
2008		1,516,401
2009		489,634
2010		300,211
2011		171,161
Thereafter		370,345
	$	5,228,288

17

     4. Related Party Transactions

The Property pays an affiliate of one of the Property’s owners monthly fees for property management services provided as well as reimbursements for costs paid on behalf of the Property. Amounts incurred are as follows:

	Year Ended
	December 31,
	2006
Management fee (a)	$	34,643
Payroll and other operating costs (b)		175,778

(a)	Management fee equal to 1% of the monthly gross cash receipts, as defined.
(b)	Reimbursement for payroll and insurance costs paid by the affiliate on behalf of the Property.

Abrams Executive Suites, an affiliate of one of the Property’s owners, leases 22,331 square feet of office space from the Property. The Property earns rental revenue of $384,000 annually with respect to the Abrams Executive Suites office space. Such amount is included in rental income in the statement of revenues and certain expenses.

The majority owner of the Property pays approximately $60,000 monthly to the Property pursuant to a master lease agreement executed in September 2004. Such revenue has been excluded from the statement of revenues and certain expenses as the master lease receipts do not reflect the on-going operations of the Property.

18

Exhibits

The following exhibit is included in this Report

Exhibit 23.1 Consent of Ernst & Young LLP

19

Signatures

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly authorized and caused the undersigned to sign this Report on the Registrant’s behalf.

GRUBB & ELLIS COMPANY
By:	/s/ Richard W. Pehlke
	Richard W. Pehlke
	Chief Financial Officer

Dated: May 1, 2007

20