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Grubb & Ellis announces merger with NNN Realty.

Grubb & Ellis Company and NNN Realty Advisors, Inc. announced that they have entered into a definitive merger agreement, creating a real estate services company with a total capitalization of approximately $725 million.

The merger, which has been approved by the board of directors of both Grubb & Ellis and NNN Realty Advisors, will combine one of the world's leading full-service commercial real estate organizations with a leading sponsor of commercial real estate programs to create a diversified real estate services business providing a complete range of transaction, management and consulting services, and possessing a strong platform for continued growth.

The company will retain the Grubb & Ellis name and will continue to be listed on the NYSE under the ticker symbol "GBE."

Pursuant to the merger agreement, the merger will be effected through the issuance of 0.88 shares of Grubb & Ellis common stock for each share of NNN Realty Advisors common stock outstanding. The transaction is expected to close in the third or fourth quarter of 2007, subject to approval by stockholders of both companies and other customary closing conditions of transactions of this type. Upon closing, Grubb & Ellis is expected to begin paying an annual dividend of $0.41 per share.

Following the merger, Grubb & Ellis stockholders will own approximately 41% of the combined company and NNN Realty Advisors stockholders will own approximately 59% of the combined company.

C. Michael Kojaian, chairman of Grubb & Ellis Company stated "The stock for stock transaction offers significant benefits to stockholders of both companies by combining two industry leaders in their respective segments of the commercial real estate industry. We believe that the combination of the two companies will be accretive in the first full year of operations subsequent to closing and will generate significant cash flow to fuel long term growth." Tony Thompson, founder, chairman of NNN Realty Advisors and its largest stockholder stated

"With access to Grubb & Ellis' leading brokerage network, we believe the cross-selling opportunities are enormous, both with respect to growing our commercial real estate programs but also as we look to ways to expand the multitude of services we are able to provide to our clients. I look forward to a promising future with Grubb & Ellis and its management."

Scott D. Peters, chief executive pfficer and president of NNN Realty Advisors will become chief executive officer of the combined entity. The combined company will be headquartered in Santa Ana, CA. Upon closing, the Grubb & Ellis Board will be increased to nine members which will include six nominees from NNN Realty Advisors and three nominees from Grubb & Ellis.

Grubb & Ellis' financial advisor for the transaction was JMP Securities LLC and NNN's financial advisor was Lehman Brothers Inc. Grubb & Ellis' legal advisor was Zukerman Gore & Brandeis, LLP and NNN Realty Advisors' legal advisor was Alston + Bird LLP.
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Comment:Grubb & Ellis announces merger with NNN Realty.
Publication:Real Estate Weekly
Date:May 30, 2007
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