IPO

The merger was approved by the board of directors from both companies. NNN Realty Advisors, the parent company of Triple Net Properties (the sponsor of funds and REITs), Triple Net Properties Realty Inc. (the brokerage company) and NNN Capital Corp. (the broker/dealer), will now operate using the Grubb & Ellis name. However, the new company will operate out of Santa Ana, and the new board will include three members nominated by Grubb & Ellis and six members nominated by NNN. Specifically, Anthony W. Thompson, founder and chairman of the board of NNN Realty Advisors, will join Grubb & Ellis as chairman of the board. C. Michael Kojaian, chairman of the Grubb & Ells board, will remain on the board. Scott D. Peters, president and CEO of NNN, will join the board and will become CEO of the combined firm.

A Grubb & Ellis spokeswoman says she cannot comment on the deal, but that more details will be released in a conference call at 4 pm Thursday, EDT. A representative at the Chicago NNN Realty office says she had not heard of the deal, but was supposed to be on an important conference call a few minutes later. Grubb & Ellis officials contacted said they could not comment on the deal. "It's news to us as well," said one of the officials, who asked not to be named.

Kojaian said in the statement that the transaction benefits both companies. "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."

The deal will occur through the issuance of 0.88 shares of Grubb & Ellis common stock for each share of NNN common stock outstanding. The deal will close in the third or fourth quarter of this year, subject to approval by stockholders and other requirements. The new company will pay a dividend of 41 cents per share. Following the deal, Grubb & Ellis stockholders will own about 41% of the combined company and NNN Realty will own about 59% of the company.

As of the end of 2006, NNN Realty Advisors provided management services for 32 million sf in 152 properties across the US. The types of properties include healthcare office, multifamily and retail.

Instant Insights /

NNN, Grubb & Ellis Strike Merger Accord

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