CHICAGO-There are many questions about the merger between NNN Realty Advisors, based in Santa Ana, CA, and locally based Grubb & Ellis. Though officials from both companies insist there is no buyer, just a combination of equals, NNN clearly has an upper hand with top positions on the new board of directors and the move of the company to California.

That’s why two questions immediately come to mind: Why keep the Grubb name, and where will the former company’s CEO, Mark Rose, end up? Officials with NNN tell that they’ll keep Grubb, but won’t comment on Rose’s future there.

Tuesday, the two companies announced their plan to form a company with a total capitalization of $725 million. NNN Realty Advisors, the parent company of Triple Net Properties (the sponsor of funds and REITs), Triple Net Properties Realty Inc. (the brokerage company) and NNN Capital Corp. (the broker/dealer), will now operate using the Grubb & Ellis name. However, the new company will operate out of Santa Ana, and the new board will include three members nominated by Grubb & Ellis and six members nominated by NNN. Specifically, Anthony W. Thompson, founder and chairman of the board of NNN Realty Advisors, will join Grubb & Ellis as chairman of the board. C. Michael Kojaian, chairman of the Grubb & Ells board, will remain on the board. Scott D. Peters, president and CEO of NNN, will join the board and will become CEO of the combined firm.

Rose came over to Grubb & Ellis in March 2005, when he left his job as chief operating officer at Jones Lang LaSalle, and subsequently brought over a number of JLL employees to the brokerage firm. Though Rose has been trumpeting a five-year repositioning plan, it’s been rumored by company insiders in past months that his main job has been to position the company for sale.

Peters tells that since the merger is not complete, it’s not clear what capacity Rose will play in the new company. But Peters did say the name decision is clear. “Grubb & Ellis is a 50-year brand name that’s synonymous with real estate internationally.”

The companies have announced that they will provide more details in a conference call and live webcast at 3 p.m. central, 4 p.m. eastern time. A slide presentation will be available at the website prior to the call. Executives of both companies will review the proposed transaction and respond to investor questions during the call.

Peters tells that the synergies of the two companies seem to mesh well. As of the end of 2006, NNN Realty Advisors provided management services for 32 million sf in 152 properties across the US, including healthcare office, multifamily and retail.

Kojaian said in the statement that the transaction benefits both companies. “We believe that the combination of the two companies will be accretive in the first full year of operations subsequent to closing, and will generate significant cash flow to fuel long-term growth.”

The deal will occur through the issuance of 0.88 shares of Grubb & Ellis common stock for each share of NNN common stock outstanding. The deal will close in the third or fourth quarter of this year, subject to approval by stockholders and other requirements. The new company will pay a dividend of 41 cents per share. Following the deal, Grubb & Ellis stockholders will own about 41% of the combined company and NNN Realty will own about 59% of the company.

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