"The loss includes the GAAP treatment of the exchange of thecompany's preferred shares for common stock in conjunction with the10-million-share public equity offering that closed in July 2006,as well as a gain from the company's sale of marketable securitiesin the second quarter of fiscal 2007," Pehlke says. Without those,there was a net loss of only $294,000, or 1 cent per dilutedshare.

The company began a five-year growth plan 18 months ago and hashired 250 brokers while it "transitioned out more than 200 brokers,most of whom were lower producers," chief executive officer MarkRose said in the conference call. During the quarter, 51 brokerswere "transitioned out," he says.

Of the brokers that have left the company since the beginning oflast year, 82% were earning less than $200,000 in annualcommissions, he says. Grubb & Ellis does not expect to continuethe "culling," as one caller termed it. "We expect to stabilize andfocus management attention on more traditional turnover rates,"Rose says.