SANTA ANA, CA-Grubb & Ellis Co., which is going through a review process on whether to sell or merge the struggling firm, has furloughed for 90 days about two dozen employees at the large commercial real estate brokerage firm’s headquarters here, sources say.
The review process with New York City-based C-III Capital Partners and an affiliate of Santa Monica, CA-based Colony Capital LLC is due to be completed in 60 days, about 30 days before the furloughs end.
A spokeswoman for the firm confirms to GlobeSt.com that there has been a “small percentage” of furloughs in the past couple weeks. She would not comment further. It’s not clear why the firm chose the furlough method over layoffs.
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A former employee source who left the firm earlier this month tells GlobeSt.com that the executives were furloughed about a week before Thanksgiving.
The firm has been going through a rough time this past year. The company’s stock price dropped to its lowest price Tuesday, to 28 cents per share at 4 p.m. The company’s price hit a high of $14.50 in 2003, but by 2009 had dropped to 34 cents a share in early 2009. The firm initiated its first review process in March “to explore strategic alternatives for the company,” indicating the desire for a sale or merger with another firm. The firm hired JMP Securities for this process.
Many employees, including top regional executives such as Managing Director Shawn Mobley in Chicago, started quitting soon after for other firms, as is common following a merger or sale announcement. The exodus has continued through this month, with Joseph Kupiec leaving the firm to take over Avison Young’s new office in Las Vegas.
In October, the company entered into exclusive negotiations with C-III and Colony, and C-III invested $10 million into Grubb & Ellis, gaining a stake in the company. Earlier this month, Grubb & Ellis Healthcare REIT II Inc. pulled out of the firm, and will soon be co-sponsored by Newport Beach, CA-based American Healthcare Investors LLC and Los Angeles-based Griffin Capital Corp.
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