Grubb & Ellis in Exclusive Talks with C-III Capital & Colony Capital

The service firm is getting a major infusion of capital from two new stakeholders in a move that could point to a sale or other large strategic investment.

October 17, 2011

By Paul Rosta, Senior Editor

Grubb & Ellis Co. is getting a major infusion of capital from two new stakeholders in a move that could point to a sale or other large strategic investment. The service firm disclosed today that it is in exclusive discussions about a strategic transaction with a pair of private investors: C-III Capital Partners—an affiliate of Island Capital Group L.L.C.—and its partner, Colony Capital L.L.C.

“Grubb & Ellis is a long-time leader in the real estate industry and we share management’s vision of strengthening the platform and growing the company. C-III Capital Partners and Colony have the capital base and industry expertise necessary to bolster Grubb & Ellis’ client offerings and position the company for long-term success,” said Andrew L. Farkas, chairman and CEO of C-III Capital Partners. As CEO of Insignia Financial Group Inc., Farkas was a central figure in the company’s 2003 merger with CB Richard Ellis.

As a preliminary step, a C-III Capital affiliate is investing $10 million in Grubb & Ellis through the expansion of the company’s existing $18 million credit facility with Colony Capital. C-III Capital  will also purchase $4 million of Colony’s existing facility, a move that will establish both C-III and Colony Capital as major stakeholders in Grubb & Ellis.

Check back at cpexecutive.com for additional details on this developing story.