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NORTHBROOK, IL-Grubb & Ellis Co. is operating with significantly more breathing room thanks to cash provided by chairman and controlling stockholder C. Michael Kojaian, who has injected $36 million into the real estate services company. Kojaian Ventures, L.L.C. has bought a $32-million credit facility from Bank of America, helping Grubb & Ellis avoid default, while Kojaian Funding, L.L.C. put up $4 million in working capital.

However, the infusion is not without cost for Grubb & Ellis, whose shares are now traded over the counter. The working capital comes in the form of a loan bearing 10% interest, and comes due in July 2004. Terms of the deal involving the $32-million credit facility were not disclosed.

Before Kojaian stepped up, Grubb & Ellis had twice gotten extensions on waivers on financial covenants involved in the credit facility from its lenders, which included LaSalle Bank and Bank One in addition to Bank of America. According to Securities & Exchange Commission filings, the company had failed to hit minimum adjusted earnings before interest, taxes, depreciation and amortization targets for the fourth quarter of 2002 and first quarter of 2003.

“The fact that our majority stockholder has agreed to take on the additional role as our creditor underscores Michael’s commitment to Grubb & Ellis,” says CFO Brian Parker in a statement. “His actions should significantly improve our financial strength and position us to focus on executing our growth strategy.”

The first quarter is usually the hardest on the company’s working cash fund, according to Grubb & Ellis’ most recent earnings report, because incentive and deferred commission payments come due.

Between shares he owns and other holdings he controls, Kojaian has a 19% stake in the company.

For the nine months ending March 31, Grubb & Ellis reported EBITDA of $3.6 million, compared to a loss of nearly $2 million for the same period a year ago.

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