NNN Execs Expect Broader Investor Base

Thompson also said that capital raising by NNN "will drive revenues to multiple G&E business lines," with the brokerage operations that Grubb & Ellis brings to the table earning fees from NNN's acquisitions, disposition and other activities. The fees that the arrangement will generate for Grubb & Ellis are just one of the revenue streams that will grow from the merger, according to Scott Peters, president and CEO of NNN.

"The real powerful part of this combination is the revenue growth for our platforms," Peters said in the conference call. He pointed out that NNN will now be able to call on the the Grubb & Ellis brokerage network to "touch and create and educate potential 1031 investors who will help drive our high-margin tenant-in-common platform."

In addition, Peters said, the Grubb & Ellis reputation and brand name "will drive investor awareness for our non-traded REITs and help both our broker-dealers and their reps sell both our reputation and credibility in our programs." Citing NNN's 15% share of the TIC market, Peters said that the company estimates that it will buy $3 billion worth of properties this year and dispose of $1.1 billion after buying $3 billion of properties in 2006 and selling $1.6 billion.

The merged companies, which will be based in Santa Ana, will keep the Grubb & Ellis name for its broad recognition and reputation in the marketplace. The combined firm will begin with a market capitalization of more than $723 million.

Thursday's conference call did not address some of the questions that have been on the minds of industry watchers since the merger plan was announced, such as where Grubb & Ellis CEO Mark Rose will end up. The merger is expected to close in the latter part of this year, with Grubb & Ellis stockholders to own about 41% of the combined company and NNN Realty to own about 59%.