Mail Stop 4561
September 18, 2007
C. Michael Kojaian
Chairman of the Board
Grubb & Ellis Company
500 West Monroe Street, Suite 2800
Chicago, IL 60661
Re: Grubb & Ellis Company
Amendment No. 1 to Registration Statement on Form S-4
Filed on August 31, 2007
File No. 333-144306
Dear Mr. Kojaian:
We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
Proxy Statement/Prospectus Cover Page
1. We note your response to comment 7. The cover page should be
limited to the most significant information regarding the vote.
Please remove the fourth paragraph relating to insider voting
agreements.
Summary, page 1
2. We note your response to comment 10 and the disclosure of the
accretive effect to Grubb & Ellis stockholders. Please revise to
include the dilutive effect to NNN shareholders.
3. We note your response to comment 11 and the disclosure that the
exchange ratio was determined by arms-length negotiations based
upon
each company`s assessment of their relative values. Please revise
to
explain the bases for such assessments.
Selected Financial Data, page 13
4. We have considered your response to our prior comment 16.
Please
revise your disclosure to provide a brief discussion of the
reasons
why the adoption of SFAS 150 resulted in a cumulative effect
adjustment.
Comparative per Share Market Price and Dividend Information, page
43
5. We note your response to comment 8. We are still unclear how
you
have been able to determine that the combined Company will be able
to
sustain an annual dividend of $0.41 per share. It does not appear
that NNN Realty Advisors has a history of paying a dividend at or
above that rate and Grubb Ellis has no dividend history. Given
that
the number of shares outstanding will increase as a result of the
merger, explain to us specifically how you have determined that
you
will be able to pay an annual dividend of $0.41 per share and
revise
your disclosure accordingly. In your response and disclosure
include
the quantitative measures you have used to support your annual
dividend rate.
Notes to the Unaudited Pro Forma Merger Condensed Combined
Consolidated Balance Sheet as of June 30, 2007
Footnote (c), page 52
6. We have considered your response to our prior comment 24.
Revise
your presentation to provide greater detail of the tangible net
assets acquired in the transaction in a tabular format.
Notes to Unaudited Pro Forma Condensed Combined Consolidated
Statement of Operations for the Six Months Ended June 30, 2007
Footnote (b), page 56
7. We have considered your response to our prior comment 26. We
are
still unclear how you have determined that your current income
statement presentation is appropriate as you present multiple
captions for what appears to be the same expense items (i.e.
compensation costs and amortization of intangible assets). Revise
your presentation to comply with Rule 5-03 of Regulation S-X or
explain to us why no such revisions are necessary.
Footnote (d), page 56
8. We have considered your response to our prior comment 27.
Revise
your footnote disclosure to indicate that you have determined that
your trade name is an indefinite lived intangible asset and your
rationale for arriving at that conclusion under SFAS 142.
Notes to Unaudited Pro Forma Condensed Combined Consolidated
Statement of Operations for the Year Ended December 31, 2006
Footnote (g), page 61
9. We are still unclear how you determined that it would be
appropriate to eliminate the preferred stock conversion charge of
$105.3 million for purposes of calculating pro forma combined
earnings per share. It does not appear that this charge would
have
been avoided had the merger taken place on December 31, 2006,
therefore we are unclear how the adjustment recorded is directly
attributable to the transaction. Revise your calculation in your
next amendment to include the preferred stock conversion charge or
explain to us why no revision is necessary.
NNN Realty Advisors` Management`s Discussion and Analysis of
Financial Condition and Results of Operations
Overview and Background, page 66
10. Please disclose the relative contribution to revenues from TIC
programs and non-traded REITs.
11. Please disclose relevant trends regarding your managed
programs,
including the impact on future revenues of programs that are
ceasing
offerings and programs that are liquidating.
Real Estate Investor Programs, page 145
12. Please revise the program table to disclose the date each
program
will cease offering securities and the liquidation dates.
Related Party Transactions, page 178
13. Please revise the disclosure to clarify why a non-dedicated,
non-
employee executive officer, such as Mr. Peters and Ms. Biller, who
are employed by the advisor which has a contractual obligation to
perform services for the programs, would be paid a retention bonus
by
the programs. Please disclose whether these payments were made
with
the approval or consent of the advisor or were negotiated directly
between the non-employee officers and the program. Please
disclose
whether you anticipate similar retention bonuses being paid to
your
employees directly by the programs you advise.
Note 25. Employee Benefit Plans, page F-49
14. We have considered your response to our prior comment 48 and
are
still unclear why you have not accrued the $1.75 million
relocation
payment to one of your officers. Explain to us why it is not
probable that the merger will take place and why it is not
probable
that Mr. Peters will use the relocation payment to move or
purchase a
second residence.
Note 29. Subsequent Events (Unaudited), page F-59
15. We note that the Company made several acquisitions subsequent
to
June 30, 2007. Tell us whether any of these acquisitions met the
significance test of Rule 3-14 of Regulation S-X requiring you to
include audited statements of revenues and certain expenses in
your
filing.
Annex C
16. We note your response to comment 50. We reissue the comment
in
part. Please disclose the basis for JMP`s belief that
shareholders
cannot rely upon the opinion to support any claims against JMP
arising under applicable state law. Describe any applicable state
law authority regarding the availability of such a potential
defense.
In the absence of applicable state law authority, disclose that
the
availability of such a defense will be resolved by a court of
competent jurisdiction. Also, disclose that resolution of the
question of the availability of such a defense will have no effect
on
the rights and responsibilities of the board of directors under
applicable state law. Further, disclose that the availability of
such a state law defense to JMP would have no effect on the rights
and responsibilities of either JMP or the board of directors under
the federal securities law.
Exhibits
Tax Opinion
17. Refer to the last paragraph of the opinion. Counsel`s
statement
that the opinion is furnished solely to the company is
inappropriate
as shareholders must be able to rely on the opinion. Please file
a
revised opinion that omits the limitation on reliance.
* * * * *
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review. Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities Act
of
1933 and that they have provided all information investors require
for an informed investment decision. Since the company and its
management are in possession of all facts relating to a company`s
disclosure, they are responsible for the accuracy and adequacy of
the
disclosures they have made.
We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
You may contact Robert Telewicz, Accountant, at (202) 551-
3438
or Kevin Woody, Accounting Branch Chief, at (202) 551-3629 if you
have questions regarding comments on the financial statements and
related matters. Please contact Michael McTiernan, Special
Counsel,
at (202) 551-3852 or the undersigned at (202) 551-3495 with any
other
questions.
Sincerely,
Elaine Wolff
Legal Branch Chief
cc: Clifford Brandeis, Esq. (via facsimile)
C. Michael Kojaian
Grubb & Ellis Company
September 18, 2007
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