SANTA ANA, CA – Grubb & Ellis Company (NYSE: GBE), a leading real estate services and investment firm, will expand its presence in Ohio with the opening of company-owned offices in Columbus and Cincinnati, as part of the company’s strategy to distinguish itself as the leading provider of integrated real estate services.
To further support this objective, the company plans to significantly enhance its owned-office presence in key markets over the next 24 months.
“Over the past two years, we’ve restructured our Real Estate Services business, and we’ve been aggressive about bringing top talent into the company and strengthening and expanding our service platform to better meet the needs of our clients and enhance the company’s overall profitability. Our decision to open owned offices in Columbus and Cincinnati is consistent with those efforts,” said Thomas P. D’Arcy, (top right photo) president and chief executive officer of Grubb & Ellis.
“In addition to providing an increased level of service, having an owned office allows us to better control the size, shape and composition of operations in these markets going forward, and as a company we will be better positioned to benefit from their success.”
Vineet Sahgal, executive vice president in the company’s Chicago office, will work with Bob Nosal, the company’s Cleveland market leader, to establish Grubb & Ellis’ owned offices in Cincinnati and Columbus.
Contact: Janice McDill, Phone: 312.698.6707, Email: janice.mcdill@grubb-ellis.com
U.S. Office Market First Look: 2010-Q1
SANTA ANA, CA--The following summary was prepared by Bob Bach, (middle right photo) Grubb & Ellis Co. senior vice president and chief economist.
· The economy is in recovery mode, but it’s hard to tell by looking at the U.S. office market. The pace of softening accelerated in the first quarter as the vacancy rate rose by 50 basis points to 17.9 percent versus an increase of 30 basis points in the fourth quarter of 2009.
· First quarter absorption remained about even with the fourth quarter of 2009 at minus 7.3 million square feet.
· On the supply side of the market, developers delivered 8.2 million square feet of new space, down slightly from 9.3 million in the prior quarter. Space still in the construction pipeline drifted lower for a seventh consecutive quarter to 25.7 million square feet. This is equivalent to 0.6 percent of the inventory, the lowest level in more than 14 years.
There have been anecdotes of landlords in Class A properties in primary markets pulling back on their concession packages, but this would most likely impact effective rates before asking rates. It will be interesting to see if the market can sustain this plateau next quarter.
Forecast
The office market appears on track to bottom out by year-end. During the prior softening cycle in the early 2000s, payroll employment hit bottom in the second quarter of 2003, three quarters before the office vacancy rate peaked in the first quarter of 2004.
How quickly the market recovers after it hits bottom will depend on the vitality of the employment rebound and on the supply of shadow space – cubes and offices emptied by layoffs but officially counted as still occupied. That space will have to be re-occupied before net absorption can gain any traction. Most likely, the market will not return to equilibrium for at least three years after the vacancy rate peaks, meaning 2013 or 2014.
Contact: Janice McDill, Senior Vice President, Marketing & Communications, Grubb & Ellis Company, 500 West Monroe Street, Suite 2700, Chicago, IL 60661. Direct: 312.698.6707• Fax: 312.698.5941, janice.mcdill@grubb-ellis.com, http://www.grubb-ellis.com/
Grubb & Ellis Healthcare REIT II Acquires Parkway Medical Center Near Cleveland
Located at 3609 and 3619 Park East Drive, Parkway Medical Center is approximately 10 miles from the Cleveland Central Business District and just one-half-mile from the 53-acre Ahuja Medical Center currently being developed by University Hospitals, one of the top 10 health systems in the nation based on performance, according to a study released in 2009 by Thomson Reuters. Parkway Medical Center also enjoys close proximity to Interstate 271, affording tenants easy access to all of Greater Cleveland.
“Parkway Medical Center is well located in a major metropolitan region and less than one mile from what will be a significant new hospital,” said Danny Prosky (lower right photo) , president and chief operating officer.
“As we build Grubb & Ellis Healthcare REIT II, we are not only targeting attractive, performing medical-related assets located near significant medical campuses, we are also seeking to attain geographic diversification, which we are clearly achieving with our initial acquisitions.”
Including Parkway Medical Center, Grubb & Ellis Healthcare REIT II has acquired properties near Cleveland, New Orleans and St. Cloud, Minn. A fourth potential acquisition is located near Denver.
The larger of Parkway Medical Center’s two buildings, approximately 51,000 square feet, was built in 1972, while the smaller building, approximately 37,000 square feet, was built in 1987.
Since 2004, nearly $1.6 million has been invested in capital improvements at Parkway Medical Center, including upgraded lobbies, hallways, replaced parking lots, roofs and lighting, as well as the installation of new HVAC systems and boilers.
The facility is currently 87 percent leased to 35 tenants, including University Hospitals of Cleveland, Rapid Medical Research, The MetroHealth System and ID Consultants.
Parkway Medical Center was acquired from Parkway Medical Center, LLC, an unaffiliated third party represented by Bob Nosal (lower left photo) of Grubb & Ellis Company. Grubb & Ellis Healthcare REIT II financed the acquisition using cash proceeds received from its offering.
Contact: Damon Elder, Senior Director, Communications, Grubb & Ellis Equity Advisors, LLC, 1551 N. Tustin Ave., Suite 200, Santa Ana, Calif. 92705, 714.975.2659 (direct), 714.356.1460 (cell), http://equityadvisors.grubb-ellis.com/
