Zacks_Analysts' Blog : Grubb & Ellis Divests - Analyst Blog

Grubb & Ellis Company (GBE) has recently announced the sale of all of its assets of its investment fund business, Alesco Global Advisors, to Lazard Asset Management LLC. The deal is subject to approval of the shareholders and the board and is expected to close by the third quarter 2011. Financial terms of the transaction were not disclosed.

Grubb & Ellis had acquired a 51% stake in Alesco Global Advisors through its Daymark subsidiary. Alesco Global Advisors is a registered investment advisor that focuses on real estate securities and manages three registered mutual funds.

During the first quarter of 2011, the company reported FFO (fund from operations) of $1.3 million or 7 cents per share compared with a loss of $0.7 million or 29 cents per share in the year-earlier quarter. Fund from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

Grubb & Ellis has been exploring strategic options after incurring losses.  The company is executing plans to maximize returns for its shareholders and build up the company’s competitive position.

Grubb & Ellis is one of the largest commercial real estate services and investment companies in the world. The firm’s transaction, management, consulting and investment services are supported by highly regarded proprietary market research and extensive local expertise. The company is a leading sponsor of real estate investment programs through its investment management business.

Grubb & Ellis currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock. One of its competitors, CB Richard Ellis Group, Inc (CBG) currently retains a Zacks #3 Rank.