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NORTHBROOK, IL-Net income at Grubb & Ellis Co. fell 42% in the fiscal year ending June 30, which the commercial real estate company blamed largely on the economic slowdown. However, President and Chief Executive Officer Barry M. Barovick is aiming to make the company recession-resistant, if not recession-proof, in the future.

The company says it will unveil specifics in October, but wants to add a strategic planning and consulting business practice to its menu of services. Brokers involved in that effort, Barovick says, will have expertise in the specific industry to go with their knowledge of the client’s real estate needs. That will give Grubb & Ellis a three-pronged approach with its transaction-related and property management services.

“Over the past several months our new management has begun to develop a strategy that we believe will help to insulate Grubb & Ellis from the cyclical nature of the real estate industry and move the company toward the realization of higher profit margins,” Barovick says.

For now, Grubb & Ellis remains heavily dependent on transaction-related income. Advisory services fees, including commissions, valuation, asset management and consulting fees, made up 61.6% of the company’s total revenue of $411.8 million for the fiscal year. While that transaction-related fee income was up almost 1% for the year, overall revenues were down 0.4%.

When company officials look into the future, they foresee those transaction-related revenues falling. Their argument is backed up by fourth-quarter results, which saw advisory services fees fall 26% in the quarter ending June 30. The share of the revenue pie for those commissions and fees dropped to 57.2%, down from 60% the previous year.

Meanwhile, property management fees were down 8% for the year to $60.2 million. Grubb & Ellis points to dropping a $3-million-a-year account it deemed marginally profitable for the dip. Instead of 150 million sf, Grubb & Ellis now manages 142 million sf.

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