FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
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OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________________ to ___________________
Commission File Number: 1-8122
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GRUBB & ELLIS COMPANY
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(Exact name of registrant as specified in its charter)
Delaware 94-1424307
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2215 Sanders Road, Suite 400,
Northbrook, IL 60062
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(Address of principal executive offices)
(Zip Code)
(847) 753-7500
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(Registrant's telephone number, including area code)
No Change
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(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
---- ----
19,807,894
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(Number of shares outstanding of the registrant's
common stock at May 5, 2000.)
1
PART I
FINANCIAL INFORMATION
2
Item 1. Financial Statements
GRUBB & ELLIS COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
ASSETS
March 31, June 30,
2000 1999
--------- --------
Current assets:
Cash and cash equivalents $ 2,502 $ 5,500
Services fees receivable, net 14,675 9,019
Other receivables 3,033 2,291
Prepaids and other current assets 4,500 5,020
Deferred tax assets, net 942 2,940
-------- --------
Total current assets 25,652 24,770
Noncurrent assets:
Equipment and leasehold improvements, net 20,430 18,554
Goodwill, net 29,995 28,564
Deferred tax assets, net 1,248 3,450
Other assets 7,123 4,455
-------- --------
Total assets $84,448 $79,793
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,311 $ 3,122
Credit facility indebtedness - 7,500
Acquisition indebtedness 782 2,332
Accrued compensation and employee benefits 9,853 9,511
Other accrued expenses 4,590 2,605
-------- --------
Total current liabilities 18,536 25,070
Long-term liabilities:
Acquisition indebtedness - 553
Accrued claims and settlements 8,558 8,837
Other liabilities 733 851
-------- --------
Total liabilities 27,827 35,311
-------- --------
Stockholders' equity:
Common stock, $.01 par value: 50,000,000 shares
authorized; issued and outstanding
19,708,923 (net of 78,500 treasury shares)
at March 31, 2000 and 19,885,084 shares at
June 30, 1999 197 199
Additional paid-in-capital 112,999 112,550
Retained earnings (deficit) (56,575) (68,267)
-------- --------
Total stockholders' equity 56,621 44,482
-------- --------
Total liabilities and stockholders' equity $ 84,448 $ 79,793
======== ========
See notes to condensed consolidated financial statements.
3
GRUBB & ELLIS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share data)
(unaudited)
For the three months For the nine months
ended March 31, ended March 31,
--------------------------- ---------------------------
2000 1999 2000 1999
----------- ----------- ----------- -----------
Revenue:
Advisory services fees $ 76,869 $ 46,832 $ 257,522 $ 195,306
Management services fees 16,698 13,130 48,533 39,466
----------- ----------- ----------- -----------
Total revenue 93,567 59,962 306,055 234,772
----------- ----------- ----------- -----------
Costs and expenses:
Advisory services commissions 43,892 26,226 153,868 113,605
Salaries, wages and benefits 25,761 21,065 73,993 61,647
Selling, general and administrative 16,873 14,738 50,729 45,454
Depreciation and amortization 2,629 2,011 7,726 5,059
----------- ----------- ----------- -----------
Total costs and expenses 89,155 64,040 286,316 225,765
----------- ----------- ----------- -----------
Total operating income (loss) 4,412 (4,078) 19,739 9,007
Other income and expenses:
Interest and other income 262 268 800 772
Interest expense (88) (200) (381) (493)
----------- ----------- ----------- -----------
Income (loss) before income taxes 4,586 (4,010) 20,158 9,286
(Provision) benefit for income taxes (1,926) 1,604 (8,466) (3,582)
----------- ----------- ----------- -----------
Net income (loss) $ 2,660 $ (2,406) $ 11,692 $ 5,704
=========== =========== =========== ===========
Net income (loss) per common share
Basic - $ .14 $ (.12) $ .59 $ .29
=========== =========== =========== ===========
Diluted - $ .13 $ (.12) $ .56 $ .26
=========== =========== =========== ===========
Weighted average common shares
outstanding:
Basic - 19,676,369 19,805,429 19,774,590 19,760,990
=========== =========== =========== ===========
Diluted - 20,894,089 21,479,690 21,020,492 21,709,564
=========== =========== =========== ===========
See notes to condensed consolidated financial statements.
4
GRUBB & ELLIS COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited - in thousands)
For the nine months
ended March 31,
---------------------
2000 1999
-------- --------
Cash Flows from Operating Activities:
Net income $ 11,692 $ 5,704
Depreciation and amortization expense 7,726 5,059
Adjustments to reconcile net income to net cash
provided by operating activities (1,421) (4,107)
-------- --------
Net cash provided by operating activities 17,997 6,656
-------- --------
Cash Flows from Investing Activities:
Purchase of equipment, software and leasehold improvements (6,294) (5,865)
Cash paid for business acquisitions, net of cash acquired (1,112) (17,089)
Other investing activities (1,900) -
-------- --------
Net cash used in investing activities (9,306) (22,954)
-------- --------
Cash Flows from Financing Activities:
Repayment of acquisition debt (2,103) -
Repayment of borrowings on credit facility (11,000) -
Borrowings on credit facility 3,500 6,000
Repurchase of common stock (1,983) -
Other financing activities (103) (59)
-------- --------
Net cash (used in) provided by investing activities (11,689) 5,941
-------- --------
Net decrease in cash and cash equivalents (2,998) (10,357)
Cash and cash equivalents at beginning of period 5,500 14,251
-------- --------
Cash and cash equivalents at end of period $ 2,502 $ 3,894
======== ========
See notes to condensed consolidated financial statements.
5
GRUBB & ELLIS COMPANY
Notes to Condensed Consolidated Financial Statements
1. Interim Period Reporting
The accompanying unaudited condensed consolidated financial statements include
the accounts of Grubb & Ellis Company and its wholly owned subsidiaries and
controlled partnerships (collectively, the "Company").
The accompanying unaudited condensed consolidated financial statements are
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements and, therefore, should be read in conjunction with the
Company's Annual Report on Form 10-K for the year ended June 30, 1999.
The financial statements have been prepared in conformity with generally
accepted accounting principles which require management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
(including disclosure of contingent assets and liabilities) at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
In the opinion of management, all adjustments necessary for a fair statement of
the financial position and results of operations for the interim periods
presented have been included in these financial statements and are of a normal
recurring nature. Certain amounts in prior periods have been reclassified to
conform to the current presentation.
Operating results for the nine months ended March 31, 2000 are not necessarily
indicative of the results that may be achieved in future periods.
In December 1999, the Securities and Exchange Commission ("SEC") staff issued
Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition," which
summarized the SEC staff's views regarding the recognition and reporting of
revenues in financial statements and requires companies to comply with the SAB
no later than the first fiscal quarter of the fiscal year beginning after
December 15, 1999. The Company has not completed its analysis of the impact of
SAB 101.
6
GRUBB & ELLIS COMPANY
Notes to Condensed Consolidated Financial Statements
2. Income Taxes
The provision for income taxes for the nine months ended March 31, 2000 and
1999 is as follows (in thousands):
For the nine months ended
March 31,
-------------------------
2000 1999
------ ------
Current $4,266 $ 462
Deferred 4,200 3,120
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$8,466 $3,582
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3. Earnings Per Share
The following table sets forth the computation of basic and diluted
earnings per share (in thousands, except per share data):
Three months ended Nine months ended
March 31, March 31,
------------------------ -------------------------
2000 1999 2000 1999
------- ------- ------- -------
Net income (loss) $ 2,660 $(2,406) $11,692 $ 5,704
======= ======= ======= =======
Basic earnings per share:
Weighted average common shares outstanding 19,676 19,805 19,774 19,761
======= ======= ======= =======
Earnings (loss) per share - basic $ .14 $ (.12) $ .59 $ .29
======= ======= ======= =======
Diluted earnings per share:
Weighted average common shares outstanding 19,676 19,805 19,774 19,761
Effect of dilutive securities:
Stock options and warrants (A) 1,218 - 1,246 1,949
------- ------- ------- -------
Weighted average dilutive common shares
outstanding 20,894 19,805 21,020 21,710
======= ======= ======= =======
Earnings (loss) per share - diluted $ .13 $ (.12) $ .56 $ .26
======= ======= ======= =======
(A) Since the Company recognized a net loss for the three months ended
March 31, 1999, the effect of below market price stock options and warrants
would be anti-dilutive. These securities which otherwise would have had a
dilutive effect of approximately 1.7 million shares, have been excluded
from the earnings per share calculation for the three months ended March
31, 1999.
7
GRUBB & ELLIS COMPANY
Notes to Condensed Consolidated Financial Statements
4. Business Acquisitions
On July 30, 1999, the Company acquired substantially all of the assets of
Landauer Associates, Inc., a real estate valuation and consulting firm.
Consideration given to the seller at closing included cash and common stock
warrants. The Company recorded the acquisition under the purchase method of
accounting, and all operations subsequent to the acquisition date are reflected
in the Company's financial statements.
Pro Forma Information:
The Company also completed three other acquisitions during fiscal year 1999
(Williams Property Venture d/b/a Smithy Braedon Oncor International and Smithy
Braedon Oncor International Management, Inc., Commercial Florida Realty
Partners, Inc. and Island Realty Service Group, Inc.) whose results of
operations, due to the timing of the acquisitions, are not included in the
Company's financial statements for the nine months ended March 31, 1999.
The following unaudited pro forma financial information reflects the operations
of the Company for the nine months ended March 31, 1999, assuming the above
acquisitions had occurred on July 1, 1998 (in thousands, except share data):
Nine months
ended
March 31,
1999
---------------
Total revenue $257,189
Income before taxes 10,221
Net income 6,275
Earnings per share:
Basic .32
Diluted .29
The Company's results of operations for the nine months ended March 31, 2000,
which include operations acquired from Landauer Associates, Inc. subsequent to
the date of acquisition, do not materially differ from pro forma results that
would have been obtained for that period.
Pro forma information does not purport to be indicative of the results that
would have been obtained had these events occurred at the beginning of the
periods presented, and is not intended to be a projection of future results.
8
GRUBB & ELLIS COMPANY
Notes to Condensed Consolidated Financial Statements
5. Credit Facility Debt
On October 15, 1999 the Company entered into a new credit agreement ("Credit
Agreement") arranged by Bank of America, N.A. ("BofA"), and simultaneously
repaid and terminated its prior credit facility. The Credit Agreement consists
of a $40 million reducing revolver credit facility to be used for acquisitions
and stock repurchases (of which $15 million is uncommitted), along with a $10
million revolving credit facility for working capital purposes. Interest on
outstanding borrowings is due quarterly in arrears and is based upon BofA's
prime rate and/or the LIBOR rate plus, in either case, an additional margin
based upon a particular financial ratio of the Company, and will vary depending
upon which interest rate options the Company chooses to be applied to specific
borrowings. Both credit facilities mature on October 15, 2004, however, the
total available commitment on the reducing revolver will be reduced by 20%, 35%
and 45% during the third, fourth and fifth year of the facility, respectively.
Borrowings totaling $3 million from the new Credit Agreement were used to repay
loans under the prior agreement which were outstanding as of September 30, 1999,
along with related financing costs of the new facility which are being amortized
over the term of the Credit Agreement. As of March 31, 2000, there were no loans
outstanding.
Performance of the Company's obligations under the Credit Agreement is
collateralized by substantially all of the Company's assets. The Credit
Agreement also contains certain restrictive covenants, including, among other
things, the prohibition of the payment of dividends, restrictions on the
redemption or repurchase of capital stock, and the maintenance of certain
financial ratios.
6. Segment Information
The Company has two reportable segments - Advisory Services and Management
Services, and evaluates segment performance and allocates resources based on
earnings before interest expense, taxes, depreciation and amortization
("EBITDA") (in thousands).
Advisory Management Company
Services Services Totals
-------- ---------- --------
Nine months ended March 31, 2000
Total revenue $257,522 $48,533 $306,055
EBITDA 24,757 3,508 28,265
Total assets as of March 31, 2000 60,932 23,516 84,448
Nine months ended March 31, 1999
Total revenue $195,306 $39,466 $234,772
EBITDA 12,435 2,403 14,838
Total assets as of March 31, 1999 54,191 23,374 77,565
9
GRUBB & ELLIS COMPANY
Notes to Condensed Consolidated Financial Statements
7. Commitments and Contingencies
The Company previously disclosed in its Annual Report on Form 10-K for the year
ended June 30, 1999, information concerning a lawsuit filed on January 23, 1995
in the United States District Court for the Western District of Pennsylvania,
entitled John W. Matthews, et al. v. Kidder, Peabody & Co., et al. and HSM Inc.,
et al. During the nine months ended March 31, 2000, there were no material
developments in this matter.
The Company is involved in various claims and lawsuits arising out of the
conduct of its business, as well as in connection with its participation in
various joint ventures and partnerships, many of which may not be covered by the
Company's insurance policies. In the opinion of management, the eventual outcome
of such claims and lawsuits is not expected to have a material adverse effect on
the Company's financial position or results of operations.
10
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements which may involve known and
unknown risks, uncertainties and other factors that may cause the Company's
actual results and performance in future periods to be materially different from
any future results or performance suggested by these statements. Such factors,
which could adversely affect the Company's ability to obtain these results
include, among other things, (i) the volume of transactions and prices for real
estate in the real estate markets generally, (ii) a general or regional economic
downturn which could create a recession in the real estate markets, (iii) the
Company's debt level and its ability to make interest and principal payments,
(iv) an increase in expenses related to new initiatives, investments in
personnel and technology, and service improvements, (v) the success of new
initiatives and investments, (vi) the ability of the Company to integrate
acquired companies and assets, and (vii) other factors described in the
Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1999.
RESULTS OF OPERATIONS
Revenue
The Company's revenue is derived principally from advisory services fees related
to commercial real estate, which include commissions from leasing, acquisition
and disposition transactions as well as fees from valuation, consulting and
asset management assignments. Management services fees comprise the remainder of
the Company's revenues, and include fees related to both property management and
facilities management outsourcing, business services and agency leasing.
Revenue in any given quarter during the three fiscal year period ended June 30,
1999, as a percentage of total annual revenue, ranged from a high of 31.4% to a
low of 19.1%, with revenue earned in the third quarters of each of the last
three fiscal years ranging from 19.1% to 21.3%. The Company has typically
experienced its lowest quarterly revenue in the quarter ending March 31 of each
year with higher and more consistent revenue in the quarters ended June 30 and
September 30, and its highest quarterly revenue in the quarter ending December
31, due to increased activity caused by the desire of clients to complete
transactions by calendar year-end.
Total revenue for the nine months ended March 31, 2000 was $306.1 million, an
increase of 30.4% over revenue of $234.8 million for the same period last year,
reflecting stronger real estate markets overall and increased business activity
across the Company's service lines. This improvement related primarily to a
$62.2 million increase in advisory services fees over the same period in 1999,
which was due to an increased amount of strategic and select corporate account
activity and the effect of acquisitions completed during or after the
11
second quarter of fiscal 1999. Management services fees of $48.5 million for the
nine months ended March 31, 2000 increased by $9.1 million, or 23.0%, as a
result of increased activity in business services and property management and
facilities management outsourcing assignments.
Total revenue for the quarter ended March 31, 2000 was $93.6 million, an
increase of 56% over revenue of $60 million for the same period last year.
Advisory services fees increased $30 million or 64.1% over the prior year
period, while management services fees increased by $3.6 million, or 27.2%.
Costs and Expenses
Advisory services commission expense is the Company's major expense and is a
direct function of transaction related revenue levels, which include advisory
service commissions and other fees. Professionals participate in advisory
services fees at rates which increase upon achievement of certain levels of
production. As a percentage of gross transaction revenue, related commission
expense increased by 158 basis points and 110 basis points for the nine months
and quarter ended March 31, 2000, respectively, as compared to the same periods
in 1999. This increase was due to higher participation rates in effect at some
of the companies acquired over the past two years as well as larger percentages
of the fiscal 2000 revenue generated by professionals in the higher commission
brackets.
Total costs and expenses, other than advisory services commissions and
depreciation and amortization, increased by $17.6 million, or 16.5%, for the
first nine months of fiscal year 2000 compared to the same period in fiscal year
1999. For the quarter ended March 31, 2000, these same costs and expenses
increased by $6.8 million, or 19.1%, compared to the same quarter in fiscal year
1999. The rise in these operating costs is attributable partially to the
incremental operating and integration costs associated with the acquisition of
Landauer Associates, Inc. in the first quarter of fiscal 2000, along with
additional costs and expenses related to fiscal 1999 acquisitions and
infrastructure and personnel to support the overall revenue growth of the
Company.
Depreciation and amortization expense for the quarter and nine months ended
March 31, 2000 increased to $2.6 million from $2.0 million and to $7.7 million
from $5.1 million, respectively, in the comparable periods last year, as the
Company placed in service numerous technology infrastructure improvements during
the latter part of fiscal year 1999 and through the first half of fiscal year
2000. Amortization of the goodwill related to the Company's various business
acquisitions during 1998 and 1999 also contributed to this increase. The
Company also signed multi-year service contracts with certain key advisory
professionals, the costs of which are being amortized over the lives of the
respective contracts which are generally two to three years. Amortization
expense relating to these contacts of $538,000 and $1,506,000 was recognized in
the quarter and nine months ended March 31, 2000, respectively, compared to
$376,000 and $791,000 for each of the same periods in the prior year. In
previously filed financial statements, these costs were included in advisory
services commissions expense, and have been reclassified for comparative
purposes for all periods presented.
12
Net Income
Net income for the nine months ended March 31, 2000 was $11.7 million, or $.56
per common share on a diluted basis, as compared to net income of $5.7 million,
or $.26 per common share for the same period in fiscal year 1999, primarily due
to stronger operations in the third quarter of fiscal 2000. Net income for the
quarter ended March 31, 2000 of $2.7 million, or $.13 per common share on a
diluted basis, was an increase of $.25 per common share over the same period in
fiscal 1999, due primarily to increased advisory services revenues achieved
without a commensurate increase in fixed infrastructure costs.
LIQUIDITY AND CAPITAL RESOURCES
The Company generated cash flow from operations of approximately $18.0 million
in the nine months ended March 31, 2000. Investing activities totaling $9.3
million were funded using this cash, including $6.3 million of purchases of
equipment, software and leasehold improvements and $3.0 million related to new
business acquisitions and investments. The Company also funded net financing
activities of $11.7 million, including $9.6 million for net credit facility and
acquisition debt repayments, and $2 million for the repurchase of its common
stock.
The Company has historically experienced the highest use of operating cash in
the quarter ended March 31, primarily related to the payment of incentive and
deferred commission payable balances which attain peak levels as a result of the
high volume of advisory services activity during the quarter ended December 31.
Deferred commissions balances of approximately $17.1 million, related to
revenues earned in calendar year 1999, were paid in the quarter ending March 31,
2000.
On October 15, 1999 the Company entered into a new credit agreement ("Credit
Agreement") arranged by Bank of America, N.A. ("BofA"), and simultaneously
repaid and terminated its prior credit facility. The Credit Agreement consists
of a $40 million reducing revolver credit facility to be used for acquisitions
and stock repurchases (of which $15 million is uncommitted), along with a $10
million revolving credit facility for working capital purposes. Borrowings from
the new Credit Agreement were used to repay outstanding loans, along with
related financing costs of the new facility which are being amortized over the
term of the Credit Agreement. See Note 5 of Notes to Condensed Consolidated
Financial Statements for additional information. During the three months ended
March 31, 2000, all remaining loans under the current facility were repaid.
In August 1999 the Company announced a program through which it may purchase up
to $3 million of its common stock on the open market from time to time as market
conditions warrant. As of March 31, 2000, the Company had repurchased 359,900
shares at a total cost of approximately $1,980,000.
13
The Company believes that its short-term and long-term operating cash
requirements will be met by operating cash flow. In addition, the Company's
credit facility is available for additional capital needs. In the event of
adverse economic conditions or other unfavorable events, and to the extent that
the Company's cash requirements are not met by operating cash flow or borrowings
under its credit facility, the Company may find it necessary to reduce
expenditure levels or undertake other actions as may be appropriate under the
circumstances.
The Company continues to explore additional strategic acquisition opportunities
that have the potential to broaden its geographic reach, increase its market
share to a significant portion and/or expand the depth and breadth of its
current lines of business. The sources of consideration for such acquisitions
could be cash, the Company's current credit facility, new debt, and/or the
issuance of stock. Although it is the Company's intent to actively pursue this
strategy, no assurances can be made that any additional acquisitions will be
made.
In March 2000, the Company announced that it had established a global strategic
alliance with Knight Frank, a London based international real estate services
company, to create a common service platform to provide consistent quality
service worldwide. The alliance calls for an exclusive referral arrangement in
areas of shared capability, and will entail, among other initiatives, the
coordination of marketing efforts, integration of market research capabilities
and interconnection of technology systems. As part of the agreement, Grubb &
Ellis Europe Inc., a subsidiary of the Company, will be integrated into Knight
Frank.
14
PART II
OTHER INFORMATION
(Items 1 through 5 are not applicable
for the quarter ended March 31, 2000)
15
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
(3) Articles of Incorporation and Bylaws
3.1 Certificate of Incorporation of the Registrant, as restated effective
November 1, 1994, incorporated herein by reference to Exhibit 3.2 to the
Registrant's Annual Report on Form 10-K filed on March 31, 1995 (Commission
File No. 1-8122).
3.2 Certificate of Retirement with Respect to 130,233 Shares of Junior
Convertible Preferred Stock of Grubb & Ellis Company, filed with the
Delaware Secretary of State on January 22, 1997, incorporated herein by
reference to Exhibit 3.3 to the Registrant's Quarterly Report on Form 10-Q
filed on February 13, 1997 (Commission File No. 1-8122).
3.3 Certificate of Retirement with Respect to 8,894 Shares of Series A Senior
Convertible Preferred Stock, 128,266 Shares of Series B Senior Convertible
Preferred Stock, and 19,767 Shares of Junior Convertible Preferred Stock of
Grubb & Ellis Company, filed with the Delaware Secretary of State on
January 22, 1997, incorporated herein by reference to Exhibit 3.4 to the
Registrant's Quarterly Report on Form 10-Q filed on February 13, 1997
(Commission File No. 1-8122).
3.4 Grubb & Ellis Company Bylaws, as amended and restated effective June 1,
1994, incorporated herein by reference to Exhibit 3.2 to the Registrant's
Quarterly Report on Form 10-Q filed on November 13, 1996 (Commission File
No. 1-8122).
(4) Instruments Defining the Rights of Security Holders, including indentures.
4.1 Credit Agreement among the Registrant, certain subsidiaries of the
Registrant, Bank of America, N.A., American National Bank and Trust of
Chicago and LaSalle Bank National Association, dated as of October 15,
1999, incorporated herein by reference to Exhibit 4.1 to the Registrant's
Quarterly Report on Form 10-Q filed on November 12, 1999 (Commission File
No. 1-8122).
4.2 Revolving Credit Loan Note executed by the Registrant in favor of Bank of
America, N.A. in the amount of $3,714,285.71 dated as of October 15, 1999,
incorporated herein by reference to Exhibit 4.2 to the Registrant's
Quarterly Report on Form 10-Q filed on November 12, 1999 (Commission File
No. 1-8122).
4.3 Revolving Credit Loan Note executed by the Registrant in favor of American
National Bank and Trust of Chicago in the amount of $3,428,571.43 dated as
of October 15, 1999, incorporated herein by reference to Exhibit 4.3 to the
Registrant's
16
Quarterly Report on Form 10-Q filed on November 12, 1999 (Commission File
No. 1-8122).
4.4 Revolving Credit Loan Note executed by the Registrant in favor of LaSalle
Bank National Association in the amount of $2,857,142.86 dated as of
October 15, 1999, incorporated herein by reference to Exhibit 4.4 to the
Registrant's Quarterly Report on Form 10-Q filed on November 12, 1999
(Commission File No. 1-8122).
4.5 Reducing Revolving Credit Loan Note executed by the Registrant in favor of
Bank of America, N.A. in the amount of $9,285,714.29 dated as of October
15, 1999, incorporated herein by reference to Exhibit 4.5 to the
Registrant's Quarterly Report on Form 10-Q filed on November 12, 1999
(Commission File No. 1-8122).
4.6 Reducing Revolving Credit Loan Note executed by the Registrant in favor of
American National Bank and Trust of Chicago in the amount of $8,571,428.57
dated as of October 15, 1999, incorporated herein by reference to Exhibit
4.6 to the Registrant's Quarterly Report on Form 10-Q filed on November 12,
1999 (Commission File No. 1-8122).
4.7 Reducing Revolving Credit Loan Note executed by the Registrant in favor of
LaSalle Bank National Association in the amount of $7,142,857.14 dated as
of October 15, 1999, incorporated herein by reference to Exhibit 4.7 to the
Registrant's Quarterly Report on Form 10-Q filed on November 12, 1999
(Commission File No. 1-8122).
4.8 Swingline Loan Note executed by the Registrant in favor of Bank of America,
N.A. in the amount of $2,000,000 dated as of October 15, 1999, incorporated
herein by reference to Exhibit 4.8 to the Registrant's Quarterly Report on
Form 10-Q filed on November 12, 1999 (Commission File No. 1-8122).
On an individual basis, instruments other than Exhibits listed above under
Exhibit 4 defining the rights of holders of long-term debt of the Registrant and
its consolidated subsidiaries and partnerships do not exceed ten percent of
total consolidated assets and are, therefore, omitted; however, the Company will
furnish supplementally to the Commission any such omitted instrument upon
request.
(10) Material Contracts
10.1 Pledge Agreement between the Registrant and Bank of America, N.A., as
Administrative Agent, dated as of October 15, 1999, incorporated herein by
reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-
Q filed on November 12, 1999 (Commission File No. 1-8122).
10.2 Pledge Agreement between Grubb & Ellis Management Services, Inc. and Bank
of America, N.A., as Administrative Agent, dated as of October 15, 1999,
incorporated herein by reference to Exhibit 10.2 to the Registrant's
Quarterly Report on Form 10-Q filed on November 12, 1999 (Commission File
No. 1-8122).
17
10.3 Pledge Agreement between HSM Inc. and Bank of America, N.A., as
Administrative Agent, dated as of October 15, 1999, incorporated herein by
reference to Exhibit 10.3 to the Registrant's Quarterly Report on Form 10-
Q filed on November 12, 1999 (Commission File No. 1-8122).
10.4 Guarantee and Collateral Agreement by the Registrant and certain of its
Subsidiaries in favor of Bank of America, N.A., as Administrative Agent,
dated as of October 15, 1999, incorporated herein by reference to Exhibit
10.4 to the Registrant's Quarterly Report on Form 10-Q filed on November
12, 1999 (Commission File No. 1-8122).
10.5 Collateral Trademark Security Agreement by the Registrant in favor of Bank
of America, N.A., as Administrative Agent, dated as of October 15, 1999,
incorporated herein by reference to Exhibit 10.5 to the Registrant's
Quarterly Report on Form 10-Q filed on November 12, 1999 (Commission File
No. 1-8122).
10.6 Amendment No. 1 to the Grubb & Ellis Company Executive Change of Control
Plan, effective as of February 10, 2000.
10.7 First Amendment to the Grubb & Ellis Company 1998 Stock Option Plan,
effective as of February 10, 2000.
(27) Financial Data Schedule.
(b) Reports on Form 8-K
None.
18
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GRUBB & ELLIS COMPANY
---------------------
(Registrant)
Date: May 12, 2000 /s/ Blake W. Harbaugh
-------------------------------------
Blake W. Harbaugh
Senior Vice President and
Chief Financial Officer
19
Grubb & Ellis Company and Subsidiaries
EXHIBIT INDEX
for the quarter ended March 31, 2000
------------------------------------
Exhibit
- -------
(10) Material Contracts
10.6 Amendment No. 1 to the Grubb & Ellis Company Executive Change of Control
Plan, effective February 10, 2000.
10.7 First Amendment to the Grubb & Ellis Company 1998 Stock Option Plan,
effective as of February 10, 2000.
(27) Financial Data Schedule
20