Thompson Faults Grubb & Ellis, Seeks Board Seat

Neither Thompson nor Grubb & Ellis officials could be reached for comment Thursday afternoon, but Grubb & Ellis issued a statement by board chairman Glenn L. Carpenter saying, "The board has received Mr. Thompson's letter and will respond in due course." Thompson's request for a board seat comes days after the abrupt resignation of Robert Osbrink as chairman of transaction services for Grubb & Ellis and a month after the company reported a quarterly loss of $5.9 million.

Thompson's SEC filing says that, as the second-largest shareholder of Grubb & Ellis with a 13.9% stake, he has "watched in shock over the past three months as the company's stock price has plunged nearly 42%, losing approximately 21% of its value in the last three days alone." Grubb & Ellis stock was trading at about $3.85 on Thursday, down from its 52-week high of $12.15.

The special purpose vehicle Thompson says, in his filing, "unceremoniously failed" was Grubb and Ellis Realty Advisors, which Grubb & Ellis formed in 2006. In its quarterly earnings conference call last month, Grubb & Ellis blamed most of its quarterly loss on Grubb and Ellis Realty Advisors, writing off $5.8 million before taxes and $3.4 million after taxes for the special purpose entity.

Thompson, the tenant-in-common industry pioneer who engineered the merger of his NNN Realty Advisors with Grubb & Ellis last year, says in his SEC filing that he has "a carefully thought-through strategy" that can get Grubb & Ellis back on track. "Although I fully understand the challenges presented by competition and the market, I refuse to accept that Grubb & Ellis' stock should be permitted to significantly under-perform that of its industry peers, which it has thus far this year," Thompson's filing says.

Grubb & Ellis board chairman Carpenter's response Thursday said, "The board believes that the company has made considerable progress over the past six months integrating Grubb & Ellis and NNN Realty Advisors, making the changes, during very difficult market conditions, necessary to position the company for increased growth and shareholder value over the long-term."

Thompson asks to be reappointed to the Grubb & Ellis board when it meets on July 10. Thompson became chairman of Grubb & Ellis on Dec. 7 last year when the company's merger with NNN Realty Advisors was completed, at which time Grubb & Ellis named Carpenter as chairman of the board. Since leaving the firm in February, he has founded Thompson National Properties LLC, an Irvine-based firm that specializes in value-added investments and asset management for high-net-worth domestic, foreign and institutional investors.