##### Table of Contents



UNITED STATES
 SECURITIES AND EXCHANGE
    COMMISSION
 Washington, D.C.
    20549
  FORM 10-Q
  þ

QUARTERLY REPORT PURSUANT TO
    SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
    1934For the quarter ended March 31, 2009ORo

TRANSITION REPORT PURSUANT TO
    SECTION 13 OR 15(d) OF THE  SECURITIES EXCHANGE ACT OF
    1934For the transition period
    from          to   Commission file number 1-8122
  GRUBB & ELLIS
    COMPANY
 (Exact name of registrant as
    specified in its charter)
  Delaware(State or other jurisdiction
    of
    incorporation or organization)

94-1424307(IRS Employer
    Identification No.)   1551 North Tustin Avenue, Suite 300, Santa Ana,
    California 92705
 (Address of principal executive offices) (Zip Code)
  (714) 667-8252
 (Registrants telephone number, including area code)
  Securities registered pursuant to Section 12(b) of the
    Act:
  þ o
  o o
  Rule 12b-2
  Large accelerated filer
    o

Accelerated filer
    þ

Non-accelerated filer
    o

Smaller reporting company
    o(Do
    not check if a smaller reporting company)   Rule 12b-2 o þ




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TABLE OF CONTENTS  Part I -- FINANCIAL INFORMATIONItem 1. Financial Statements.CONSOLIDATED STATEMENTS OF OPERATIONSCONSOLIDATED STATEMENTS OF CASH FLOWSNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.RESULTS OF OPERATIONSItem 3. Quantitative and Qualitative Disclosures About Market Risk.PART II OTHER INFORMATIONItem 1. Legal Proceedings.Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.Item 6. Exhibits.SIGNATURESGrubb & Ellis Company EXHIBIT INDEXEX-31.1EX-31.2EX-32.1    Table of Contents  
  Part I 
    FINANCIAL INFORMATION
 
  Item 1.
    Financial
    Statements.  GRUBB &
    ELLIS COMPANY
  CONSOLIDATED
    BALANCE SHEETS
 (In
    thousands, except share and per share amounts)
  March 31, 2009


December 31, 2008(Unaudited)ASSETSCurrent assets:Cash and cash equivalents

$
14,104


$
32,985Restricted cash


37,522



36,047Investment in marketable securities


1,698



1,510Current portion of accounts receivable from related
    parties  net


16,124



22,630Current portion of advances to related parties  net


1,738



2,982Notes receivable from related party  net


9,100



9,100Service fees receivable  net


18,316



26,987Current portion of professional service contracts  net


2,866



4,326Real estate deposits and pre-acquisition costs


1,525



5,961Properties held for sale including investments in unconsolidated
    entities  net


161,723



167,408Identified intangible assets and other assets held for
    sale  net


37,556



37,145Prepaid expenses and other assets


24,695



22,770Total current assets


326,967



369,851Accounts receivable from related parties  net


15,902



11,072Advances to related parties  net


10,028



11,499Professional service contracts  net


10,829



10,320Investments in unconsolidated entities


4,916



8,733Property, equipment and leasehold improvements  net


13,654



14,009Identified intangible assets  net


90,721



91,527Other assets  net


3,028



3,266Total assets

$
476,045


$
520,277LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable and accrued expenses

$
65,057


$
70,222Due to related parties


2,052



2,447Current portion of line of credit


63,000



63,000Current portion of capital lease obligations


319



333Notes payable of properties held for sale including investments
    in unconsolidated entities


216,189



215,959Liabilities of properties held for sale  net


15,559



16,843Other liabilities


37,861



35,762Deferred tax liability


4,134



2,080Total current liabilities


404,171



406,646Long-term liabilities:Senior notes


16,277



16,277Capital lease obligations


130



203Other long-term liabilities


5,900



6,077Deferred tax liabilities


15,245



17,298Total liabilities


441,723



446,501Commitments and contingencies (See Note 15)






Stockholders equity:Preferred stock: $0.01 par value; 10,000,000 shares
    authorized as of March 31, 2009 and December 31, 2008;
    no shares issued and outstanding as of March 31, 2009 and
    December 31, 2008






Common stock: $0.01 par value; 100,000,000 shares
    authorized; 65,286,065 and 65,382,601 shares issued and
    outstanding as of March 31, 2009 and December 31,
    2008, respectively


653



654Additional paid-in capital


405,712



402,780Accumulated deficit


(374,765
)


(333,263
)Total Grubb & Ellis Company stockholders equity


31,600



70,171Noncontrolling interests


2,722



3,605Total equity


34,322



73,776Total liabilities and stockholders equity

$
476,045


$
520,277    1




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##### Table of Contents



GRUBB &
    ELLIS COMPANY

    CONSOLIDATED STATEMENTS OF OPERATIONS
    (In thousands, except per share amounts)
    (Unaudited)
  For the Three MonthsEnded March 31,2009


2008REVENUEManagement services

$
65,531


$
61,756Transaction services


33,533



59,148Investment management


15,498



25,306Rental related


3,743



4,158Total revenue


118,305



150,368OPERATING EXPENSECompensation costs


113,271



122,173General and administrative


26,913



21,652Depreciation and amortization


2,441



2,478Rental related


4,015



3,789Interest


1,970



878Merger related costs






2,869Real estate related impairments


5,222



Total operating expense


153,832



153,839OPERATING LOSS


(35,527
)


(3,471
)OTHER (EXPENSE) INCOMEEquity in losses of unconsolidated entities


(1,231
)


(5,505
)Interest income


145



305Other


(725
)


(520
)Total other expense


(1,811
)


(5,720
)Loss from continuing operations before income tax (provision)
    benefit


(37,338
)


(9,191
)Income tax (provision) benefit


(2,328
)


3,839Loss from continuing operations


(39,666
)


(5,352
)Discontinued operationsLoss from discontinued operations  net of taxes


(3,614
)


(1,015
)Gain on disposal of discontinued operations  net of
    taxes






73Total loss from discontinued operations


(3,614
)


(942
)Net loss


(43,280
)


(6,294
)Net (loss) income attributable to noncontrolling interests


(1,778
)


4Net loss attributable to Grubb & Ellis Company

$
(41,502
)

$
(6,298
)Basic loss per shareLoss from continuing operations attributable to
    Grubb & Ellis Company

$
(0.60
)

$
(0.08
)Loss from discontinued operations attributable to
    Grubb & Ellis Company


(0.05
)


(0.02
)Net loss per share

$
(0.65
)

$
(0.10
)Diluted loss per shareLoss from continuing operations attributable to
    Grubb & Ellis Company

$
(0.60


$
(0.08
)Loss from discontinued operations attributable to
    Grubb & Ellis Company


(0.05
)


(0.02
)Net loss per share

$
(0.65
)

$
(0.10
)Basic weighted average shares outstanding


63,525



63,521Diluted weighted average shares outstanding


63,525



63,521Dividends declared per share

$



$
0.1025    2




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##### Table of Contents



GRUBB &
    ELLIS COMPANY

    CONSOLIDATED STATEMENTS OF CASH FLOWS
    (In thousands)
    (Unaudited)
  For the Three MonthsEnded March 31,2009


2008CASH FLOWS FROM OPERATING ACTIVITIESNet loss

$
(43,280
)

$
(6,294
)Adjustments to reconcile net loss to net cash used in operating
    activities:Equity in losses of unconsolidated entities


1,231



5,505Depreciation and amortization (including amortization of signing
    bonuses)


4,204



5,057Loss on disposal of property, equipment and leasehold
    improvements


75



Impairment of real estate


12,022



Stock-based compensation


2,964



2,531Compensation expense on profit sharing arrangements


108



Amortization/write-off of intangible contractual rights


67



423Amortization of deferred financing costs


215



547Loss on marketable equity securities


485



Deferred income taxes


1



(322
)Allowance for uncollectible accounts


4,746



343Loss on write-off of real estate deposit and pre-acquisition
    costs


159



Other operating noncash gains






(617
)Changes in operating assets and liabilities:Accounts receivable from related parties


621



(2,365
)Prepaid expenses and other assets


4,452



2,072Accounts payable and accrued expenses


(5,165
)


(48,230
)Other liabilities


(1,907
)


(4,078
)Net cash used in operating activities


(19,002
)


(45,428
)CASH FLOWS FROM INVESTING ACTIVITIESPurchases of property and equipment


(1,187
)


(1,472
)Purchases of marketable equity securities


(672
)


Advances to related parties


(2,097
)


(1,577
)Proceeds from repayment of advances to related parties


1,452



951Payments to related parties


(395
)


(747
)Repayment of notes receivable from related parties






7,600Investments in unconsolidated entities


301



5,941Distributions of capital from unconsolidated entities


(4
)


Acquisition of properties


(893
)


(27,488
)Real estate deposits and pre-acquisition costs






(1,612
)Proceeds from collection of real estate deposits and
    pre-acquisition costs


4,277



9,013Restricted cash


(1,475
)


(468
)Other investing activities






(805
)Net cash used in investing activities


(693
)


(10,664
)CASH FLOWS FROM FINANCING ACTIVITIESAdvances on line of credit






30,000Borrowings on notes payable and capital lease obligations


267



20,370Repayments of notes payable and capital lease obligations


(124
)


(16,033
)Other financing costs


(34
)


193Deferred financing costs


(83
)


(6
)Rate lock deposits






(1,469
)Dividends paid to common stockholders






(1,733
)Contributions from noncontrolling interests


788



833Distributions to noncontrolling interests






(544
)Net cash provided by financing activities


814



31,611NET DECREASE IN CASH AND CASH EQUIVALENTS


(18,881
)


(24,481
)Cash and cash equivalents  Beginning of period


32,985



49,328Cash and cash equivalents  End of period

$
14,104


$
24,847SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIESDividends accrued

$



$
6,701    3




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##### Table of Contents



GRUBB
    & ELLIS COMPANY
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
  1.
    SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES  Overview
  tenant-in-common
      Basis
    of Presentation
  Form 10-Q Regulation S-X. Form 10-K
  tenant-in-common
  and/or
 4




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##### Table of Contents



GRUBB
    & ELLIS COMPANY
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
    Use of
    Estimates
    Credit
    Facility
    Reclassifications
    Restricted
    Cash
    Fair
    Value Measurements
  Fair
    Value Measurements No. FAS 157-2, Effective Date of FASB Statement No. 157
   5




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##### Table of Contents



GRUBB
    & ELLIS COMPANY
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
      Quoted Prices inActive Markets


Significant Other


Significantfor Identical


Observable


Unobservable


TotalAssets


Inputs


Inputs


ImpairmentAssets (in thousands)

March 31, 2009


Level 1


Level 2


Level 3


LossesInvestments in marketable equity securities

$
1,698


$
1,698


$



$



$
Properties held for sale

$
161,723


$



$



$
161,723


$
(6,800
)Investments in unconsolidated entities

$
4,916


$



$



$
4,916


$
(5,222
)   Noncontrolling
    Interests
  Noncontrolling Interests in Consolidated Financial
    Statements  An Amendment of ARB No. 51,
  Noncontrolling Interests in Consolidated Financial
    Statements  An Amendment of Accounting Research
    Bulletin No. 51
 6




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##### Table of Contents



GRUBB
    & ELLIS COMPANY
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
    As PreviouslyAs of December 31, 2008

Reported


Adjustment


As AdjustedMinority interests

$
3,605


$
(3,605
)

$
Noncontrolling interest equity

$



$
3,605


$
3,605Total equity

$
70,171


$
3,605


$
73,776   As PreviouslyThree Months Ended March 31, 2008

Reported


Adjustment


As AdjustedMinority interest in income

$
(4
)

$
4


$
Net loss

$
(6,298
)

$
4


$
(6,294
)Income attributable to noncontrolling interests

$



$
4


$
4   Recently
    Issued Accounting Pronouncements
  Business Combinations,
  Disclosures about Derivative Instruments and Hedging
    Activities
  SFAS No. 142-3, Determination of the Useful Life of Intangible Assets, SFAS 142-3). SFAS 142-3 Goodwill and Other Intangible Assets, SFAS 142-3 SFAS 142-3 SFAS 142-3
 7




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##### Table of Contents



GRUBB
    & ELLIS COMPANY
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  SFAS 142-3 SFAS 142-3
  EITF 03-6-1, Determining Whether Instruments Granted in
    Share-Based
    Payment Transactions Are Participating Securities EITF 03-6-1) , Earnings per Share EITF 03-6-1, EITF 03-6-1
  2.
    MARKETABLE
    SECURITIES    Investments
    in Limited Partnerships
  EITF 04-05 Determining Whether a General Partner, or the General
    Partners as a Group Controls a Limited Partnership of Similar
    Entity When the Limited Partners Have Certain Rights:
      As of March 31, 2009


As of December 31, 2008Gross Unrealized








Gross UnrealizedFair











FairHistorical








Market


Historical








Market(In thousands)

Cost


Gains


Losses


Value


Cost


Gains


Losses


Value(Unaudited)Equity securities

$
1,945


$
74


$
(321
)

$
1,698


$
1,933


$
12


$
(435
)

$
1,510   8




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##### Table of Contents



GRUBB
    & ELLIS COMPANY
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  For the Three Months Ended March 31, 2009


For the Three Months Ended March 31, 2008Investment











Investment(In thousands)

Income


Realized


Unrealized


Total


Income


Realized


Unrealized


Total(Unaudited)








(Unaudited)Equity securities

$
85


$
(305
)

$
(180
)

$
(400
)

$
41


$
(1,391
)

$
961


$
(389
)Less investment expenses


(9
)










(9
)


(68
)










(68
)$
76


$
(305
)

$
(180
)

$
(409
)

$
(27
)

$
(1,391
)

$
961


$
(457
)   3.
    RELATED
    PARTIES    Accounts
    Receivable
    March 31, 2009


December 31, 2008(In thousands)Accrued property management fees

$
22,227


$
23,298Accrued lease commissions


7,578



7,720Other accrued fees


3,648



3,372Other receivables


1,158



647Accrued asset management fees


1,367



1,725Accounts receivable from sponsored REITs


6,147



4,768Accrued real estate acquisition fees


618



1,834Total


42,743



43,364Allowance for uncollectible receivables


(10,717
)


(9,662
)Accounts receivable from related parties  net


32,026



33,702Less portion classified as current


(16,124
)


(22,630
)Non-current
    portion

$
15,902


$
11,072   Advances
    to Related Parties
    March 31, 2009


December 31, 2008(In thousands)Advances to properties of related parties

$
15,203


$
14,714Advances to related parties


3,028



2,937Total


18,231



17,651Allowance for uncollectible advances


(6,465
)


(3,170
)Advances to related parties  net


11,766



14,481Less portion classified as current


(1,738
)


(2,982
)Non-current
    portion

$
10,028


$
11,499      9




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##### Table of Contents



GRUBB
    & ELLIS COMPANY
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
    Notes
    Receivable From Related Party
  interest-only
  interest-only interest-only
  interest-only
    4.
    VARIABLE
    INTEREST ENTITIES       10




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##### Table of Contents



GRUBB
    & ELLIS COMPANY
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  non-recourse
  No. 78-9, Accounting for Investments in Real Estate Ventures (SOP 78-9), No. 04-5, Determining Whether a General Partner, or the General
    Partners as a Group, Controls a Limited Partnership or Similar
    Entity When the Limited Partners Have Certain Rights (EITF 04-5).
  non-recourse non-recourse
  5.
    INVESTMENTS
    IN UNCONSOLIDATED ENTITIES     11




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##### Table of Contents



GRUBB
    & ELLIS COMPANY
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
          6.
    BUSINESS
    COMBINATIONS AND GOODWILL  Merger
    of Grubb & Ellis Company with NNN
  non-traded
  Black-Scholes option-pricing risk-free
     12




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##### Table of Contents



GRUBB
    & ELLIS COMPANY
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
      7.
    PROPERTY
    ACQUISITIONS  Acquisition of Properties for TIC Sponsored Programs
    8.
    IDENTIFIED
    INTANGIBLE ASSETS    Useful Life

March 31, 2009


December 31, 2008(In thousands)Contract rightsContract rights, established for the legal right to future
    disposition fees of a portfolio of real estate properties under
    contract

Amortize per disposition
    transactions

$
11,924


$
11,924Accumulated amortization  contract rights




(4,700
)


(4,700
)Contract rights, net




7,224



7,224Other identified intangible assetsTrade name

Indefinite


64,100



64,100Affiliate agreement

20 years


10,600



10,600Customer relationships

5 to 7 years


5,436



5,436Internally developed software

4 years


6,200



6,200Other contract rights

5 to 7 years


1,418



1,418Non-compete
    and employment agreements

3 to 4 years


97



9787,851



87,851Accumulated amortization




(4,354
)


(3,548
)Other identified intangible assets, net




83,497



84,303Total identified intangible assets, net



$
90,721


$
91,527      13




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##### Table of Contents



GRUBB
    & ELLIS COMPANY
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  9.
    ACCOUNTS
    PAYABLE AND ACCRUED EXPENSES    March 31, 2009


December 31, 2008(In thousands)Salaries and related costs

$
13,960


$
13,643Accounts payable


12,739



14,323Accrued liabilities


11,884



11,502Bonuses


11,174



9,741Broker commissions


8,733



14,002Property management fees and commissions due to third parties


3,793



2,940Severance


1,437



2,957Interest


660



651Other


677



463Total

$
65,057


$
70,222   10.
    CAPITAL
    LEASE OBLIGATIONS    March 31, 2009


December 31, 2008(In thousands)Capital leases obligations

$
449


$
536Total


449



536Less portion classified as current


(319
)


(333
)Non-current
    portion

$
130


$
203   11.  NOTES PAYABLE
    OF PROPERTIES HELD FOR SALE INCLUDING INVESTMENTS IN
    UNCONSOLIDATED ENTITIES
    March 31, 2009


December 31, 2008(In thousands)Mortgage debt payable to various financial institutions, with
    variable interest rates based on London Interbank Offered Rate
    (LIBOR) and include an interest rate cap through
    April 15, 2009 for LIBOR at 6.00% (interest rates ranging
    from 2.95% to 6.00% per annum as of March 31, 2009). The
    notes require monthly
    interest-only
    payments and mature in July 2009 and have three
    one-year
    extension options

$
108,940


$
108,677Mortgage debt payable to various financial institutions. Fixed
    interest rates range from 6.29% to 6.32% per annum. The notes
    mature at various dates through February 2017. As of
    March 31, 2009, all notes require monthly
    interest-only
    payments


107,000



107,000Unsecured notes payable to
    third-party
    investors with fixed interest at 6.00% per annum and matures on
    December 2011. Principal and interest payments are due quarterly


249



282Total

$
216,189


$
215,959  14




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##### Table of Contents



GRUBB
    & ELLIS COMPANY
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  12.
    LINE OF
    CREDIT  three-month
             15




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##### Table of Contents



GRUBB
    & ELLIS COMPANY
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
           16




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##### Table of Contents



GRUBB
    & ELLIS COMPANY
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
    
    assets sales,
    conversions of Investments (as defined in the Credit Agreement),
    the refund of any taxes or the sale of equity interests by the
    Company or its subsidiaries,
    the issuance of debt securities, or
    any other transaction or event occurring outside the ordinary
    course of business of the Company or its subsidiaries;  provided, however
        13.
    SEGMENT
    DISCLOSURE    Management Services
  Transaction Services
  Investment Management
 17




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##### Table of Contents



GRUBB
    & ELLIS COMPANY
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  dealer-manager broker-dealer,
    non-operating
  Management


Transaction


InvestmentThree Months Ended March 31, 2009

Services


Services


Management


Total(In thousands)Revenue

$
65,531


$
33,533


$
15,498


$
114,562Compensation costs


59,812



34,446



9,986



104,244General and administrative


2,862



8,803



8,692



20,357Segment operating (loss) income

$
2,857


$
(9,716
)

$
(3,180
)

$
(10,039
)   Management


Transaction


InvestmentThree Months Ended March 31, 2008

Services


Services


Management


Total(In thousands)Revenue

$
61,756


$
59,148


$
25,306


$
146,210Compensation costs


56,738



49,498



7,730



113,966General and administrative


2,348



9,565



3,838



15,751Segment operating income

$
2,670


$
85


$
13,738


$
16,493     Three Months EndedMarch 31,2009


2008(In thousands)Reconciliation to net loss attributable to
    Grubb & Ellis Company:Total segment operating (loss) income

$
(10,039
)

$
16,493Non-segment:Rental operations, net of rental related expenses


(596
)


347Corporate overhead (compensation, general and
    administrative costs)


(15,259
)


(14,086
)Other operating expenses


(9,633
)


(6,225
)Other expense


(1,811
)


(5,720
)Loss (income) attributable to noncontrolling interests


1,778



(4
)Income tax (provision) benefit


(2,328
)


3,839Loss from discontinued operations


(3,614
)


(942
)Net loss attributable to Grubb & Ellis Company

$
(41,502
)

$
(6,298
)  18




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##### Table of Contents



GRUBB
    & ELLIS COMPANY
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  14.  PROPERTIES
    HELD FOR SALE INCLUDING INVESTMENTS IN UNCONSOLIDATED ENTITIES
    AND DISCONTINUED OPERATIONS
    March 31, 2009


December 31, 2008(In thousands)Cash and cash equivalents

$
631


$
922Restricted cash


34,896



33,142Properties held for sale including investments in unconsolidated
    
    entities  net


161,723



167,408Identified intangible assets and other assets held for
    sale  net


37,556



37,145Other assets


615



Total assets

$
235,421


$
238,617Notes payable of properties held for sale including investments
    in unconsolidated entities

$
216,189


$
215,959Liabilities of properties held for sale  net


15,559



16,843Other liabilities


4,579



2,407Total liabilities

$
236,327


$
235,209   ,
    Accounting for Sales of Real Estate 98-8,
 19




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##### Table of Contents



GRUBB
    & ELLIS COMPANY
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
        Three Months EndedMarch 31,2009


2008(In thousands)Rental income

$
8,781


$
9,466Rental expense


(5,051
)


(5,618
)Interest expense (including amortization of deferred financing
    costs)


(2,704
)


(4,808
)Real estate related impairments


(6,800
)


Depreciation and amortization


(169
)


(740
)Tax benefit


2,329



685Loss from discontinued
    operations-net
    of taxes


(3,614
)


(1,015
)Gain on disposal of discontinued operations  net of
    taxes






73Total loss from discontinued operations

$
(3,614
)

$
(942
)   15.
    COMMITMENTS
    AND CONTINGENCIES  Operating Leases non-cancelable
    Operating Leases  Other non-cancelable 10-year
    multi-family non-cancelable
 20




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##### Table of Contents



GRUBB
    & ELLIS COMPANY
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  10-year
      TIC Program Exchange Provision -
  Capital Lease Obligations
  General
  Guarantees non-recourse
 21




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##### Table of Contents



GRUBB
    & ELLIS COMPANY
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
    March 31, 2009


December 31, 2008(In thousands)Non-recourse/carve-out
    guarantees of debt of properties under management(1)

$
3,411,415


$
3,414,433Non-recourse/carve-out
    guarantees of the Companys debt(1)


107,000


$
107,000Recourse guarantees of debt of properties under management


41,164


$
42,426Recourse guarantees of the Companys debt


10,000


$
10,000     (1)
    
    A
    non-recourse/carve-out
    guarantee imposes liability on the guarantor in the event the
    borrower engages in certain acts prohibited by the loan
    documents.  Accounting for Contingencies
  Environmental Obligations off-site
  Real Estate Licensing Issues
    Alesco Seed Capital
 22




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##### Table of Contents



GRUBB
    & ELLIS COMPANY
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  earn-out earn-out
  Deferred Compensation Plan  non-stock whole-life
    16.
    EARNINGS
    (LOSS) PER SHARE  Earnings Per Share weighted-average weighted-average
 23




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##### Table of Contents



GRUBB
    & ELLIS COMPANY
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  weighted-average
 Three Months EndedMarch 31,2009


2008Numerator:Loss from continuing operations attributable to Grubb &
    Ellis Company, net of tax

$
(37,888
)

$
(5,356
)Loss from discontinued operations attributable to Grubb &
    Ellis Company, net of tax


(3,614
)


(942
)Net loss attributable to Grubb & Ellis Company

$
(41,502
)

$
(6,298
)(In thousands, except per share amounts)Denominator:Denominator for basic loss per share:Weighted-average
    number of common shares outstanding


63,525



63,521
(1)Effect of dilutive securities:Non-vested
    restricted stock and stock options



(1)



(1)Denominator for diluted loss per share:Weighted-average
    number of common and common equivalent shares outstanding


63,525



63,521Basic loss per shareLoss from continuing operations attributable to Grubb &
    Ellis Company, net of tax

$
(0.60
)

$
(0.08
)Loss from discontinued operations attributable to Grubb &
    Ellis Company, net of tax


(0.05
)


(0.02
)Basic loss per share

$
(0.65
)

$
(0.10
)Diluted loss per shareLoss from continuing operations attributable to Grubb &
    Ellis Company, net of tax

$
(0.60
)

$
(0.08
)Loss from discontinued operations attributable to Grubb &
    Ellis Company, net of tax


(0.05
)


(0.02
)Diluted loss per share

$
(0.65
)

$
(0.10
)     (1)
    
    Outstanding
    non-vested
    restricted stock and options to purchase shares of common stock
    and restricted stock, the effect of which would be
    anti-dilutive,
    were approximately 2.7 million and 2.3 million as of
    March 31, 2009 and 2008, respectively. These shares were
    not included in the computation of diluted earnings per share
    because an operating loss was reported or the option exercise
    price was greater than the average market price of the common
    shares for the respective periods. In addition, excluded from
    the calculation of diluted
    weighted-average
    common shares as of March 31, 2009 and 2008 were
    approximately 5.6 million and 344,000 shares,
    respectively, that may be awarded to employees related to the
    deferred compensation plan. 24




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##### Table of Contents



GRUBB
    & ELLIS COMPANY
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
   17.
    COMPREHENSIVE
    LOSS    Three Months EndedMarch 31,2009


2008(In thousands)Net loss

$
(43,280
)

$
(6,294
)Other comprehensive (loss):Net unrealized loss on investments, net of taxes






(51
)Elimination of net unrealized loss on investment in GERA warrants






223Total comprehensive loss


(43,280
)


(6,122
)Comprehensive (loss) income attributable to noncontrolling
    interests


(1,778
)


4Comprehensive loss attributable to Grubb & Ellis Company

$
(41,502
)

$
(6,126
)   18.
    OTHER
    RELATED PARTY TRANSACTIONS  Offering Costs and Other Expenses Related to Public
    Non-Traded
    REITs
    Management Fees
  Other Related Party
 25




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##### Table of Contents



GRUBB
    & ELLIS COMPANY
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  wholly-owned
  wholly-owned
       26




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##### Table of Contents



GRUBB
    & ELLIS COMPANY
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
        19.
    INCOME
    TAXES    Three Months EndedMarch 31,2009


2008(In thousands)Current:Federal

$
(1,763
)

$
(3,978
)State


(360
)


(134
)(2,123
)


(4,112
)Deferred:Federal


4,810



342State


(359
)


(69
)4,451



273$
2,328


$
(3,839
)       Accounting for Income Taxes
 27




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##### Table of Contents



GRUBB
    & ELLIS COMPANY
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
      Three Months EndedMarch 31,2009


2008(In
    thousands)Federal income taxes at the statutory rate

$
(12,446
)

$
(3,218
)State income taxes net of federal benefit


(1,412
)


(468
)Credits






38Non-deductible
    expenses


984



(220
)Change in valuation allowance


15,205



Other


(3
)


29(Benefit) provision for income taxes

$
2,328


$
(3,839
)  28




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##### Table of Contents



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.  Forward-Looking
    Statements
  forward-looking forward-looking forward-looking forward-looking tenant-in-common Form 10-K
  Overview
    and Background
  Disclosures about Segments
    of an Enterprise and Related Information dealer-manager broker-dealer,
  Critical
    Accounting Policies
  Form 10-K
 29




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##### Table of Contents



Recently
    Issued Accounting Pronouncements
  Fair
    Value Measurements No. FAS 157-2, Effective Date of FASB Statement No. 157 non-financial non-financial non-financial non-financial
  Business Combinations, acquisition-date
  Noncontrolling Interests in Consolidated Financial
    Statements  An Amendment of ARB No. 51, non-controlling re-measured
  Disclosures about Derivative Instruments and Hedging
    Activities risk-related. cross-referencing
 30




---



##### Table of Contents



SFAS No. 142-3, Determination of the Useful Life of Intangible Assets, SFAS 142-3). SFAS 142-3 Goodwill and Other Intangible Assets, SFAS 142-3 SFAS 142-3 SFAS 142-3 SFAS 142-3 SFAS 142-3
  EITF 03-6-1, Determining Whether Instruments Granted in
    Share-Based
    Payment Transactions Are Participating Securities EITF 03-6-1) , share-based two-class Earnings per
    Share EITF 03-6-1, share-based EITF 03-6-1 EITF 03-6-1
  FAS No. 107-1 28-1, Interim Disclosures about Fair Value of Financial
    Instruments, FAS No. 107-1 No. 28-1. SFAS No. 107-1 No. 28-1 FAS 107-1 28-1 SFAS No. 107-1 No. 28-1
 
  RESULTS
    OF OPERATIONS
  Overview
    non-cash stock-based
 31




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##### Table of Contents



Accounting
    for the Impairment or Disposal of
    Long-Lived
    Assets,
 32




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##### Table of Contents



Three
    Months Ended March 31, 2009 Compared to Three Months Ended
    March 31, 2008
    Three Months EndedMarch 31,


Change2009


2008


$


%(In thousands)RevenueManagement services

$
65,531


$
61,756


$
3,775



6.1
%Transaction services


33,533



59,148



(25,615
)


(43.3
)Investment management


15,498



25,306



(9,808
)


(38.8
)Rental related


3,743



4,158



(415
)


(10.0
)Total revenue


118,305



150,368



(32,063
)


(21.3
)Operating ExpenseCompensation costs


113,271



122,173



(8,902
)


(7.3
)General and administrative


26,913



21,652



5,261



24.3Depreciation and amortization


2,441



2,478



(37
)


(1.5
)Rental related


4,015



3,789



226



6.0Interest


1,970



878



1,092



124.4Merger related costs






2,869



(2,869
)


(100.0
)Real estate related impairments


5,222







5,222



Total operating expense


153,832



153,839



(7
)


Operating Loss


(35,527
)


(3,471
)


(32,056
)


(923.5
)Other (Expense) IncomeEquity in losses of unconsolidated entities


(1,231
)


(5,505
)


4,274



77.6Interest income


145



305



(160
)


(52.5
)Other expense


(725
)


(520
)


(205
)


(39.4
)Total other income (expense)


(1,811
)


(5,720
)


3,909



68.3Loss from continuing operations before income tax (provision)
    benefit


(37,338
)


(9,191
)


(28,147
)


(306.2
)Income tax (provision) benefit


(2,328
)


3,839



(6,167
)


(160.6
)Loss from continuing operations


(39,666
)


(5,352
)


(34,314
)


(641.1
)Discontinued OperationsLoss from discontinued operations, net of taxes


(3,614
)


(1,015
)


(2,599
)


(256.1
)Gain on disposal of discontinued operations, net of taxes






73



(73
)


(100.0
)Total loss discontinued operations


(3,614
)


(942
)


(2,672
)


(283.7
)Net loss


(43,280
)


(6,294
)


(36,986
)


(587.6
)Net (loss) income from noncontrolling interests


(1,778
)


4



(1,782
)


(44,550.0
)Net loss attributable to Grubb & Ellis Company

$
(41,502
)

$
(6,298
)

$
(35,204
)


(559.0
)   Revenue
  Transaction
    and Management Services Revenue
   33




---



##### Table of Contents



year-end.
      Investment
    Management Revenue
    non-traded non-traded
  quarter-over-quarter non-traded
    year-over-year year-over-year.
 34




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##### Table of Contents



Rental
    Revenue
  pass-through
  Operating
    Expense Overview
    Compensation
    Costs
    General
    and Administrative
      Depreciation
    and Amortization
    Rental
    Expense
  pass-through
  Interest
    Expense
   35




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##### Table of Contents



Real
    Estate Related Impairments
  Discontinued Operations
  Discontinued
    Operations
    Income
    Tax
    Net
    Loss Attributable to Grubb & Ellis
    Company
    Liquidity
    and Capital Resources
  twelve-month short-term
 36




---



##### Table of Contents



37




---



##### Table of Contents




    assets sales,
    conversions of Investments (as defined in the Credit Agreement),
    the refund of any taxes or the sale of equity interests by the
    Company or its subsidiaries,
    the issuance of debt securities, or
    any other transaction or event occurring outside the ordinary
    course of business of the Company or its subsidiaries;  provided, however
 38




---



##### Table of Contents



Commitments,
    Contingencies and Other Contractual Obligations
  Contractual Obligations non-cancelable
    TIC Program Exchange Provision -
 39




---



##### Table of Contents



Guarantees non-recourse
    March 31, 2009


December 31, 2008(In thousands)Non-recourse/carve-out
    guarantees of debt of properties under management(1)

$
3,411,415


$
3,414,433Non-recourse/carve-out
    guarantees of the Companys debt(1)

$
107,000


$
107,000Recourse guarantees of debt of properties under management

$
41,164


$
42,426Recourse guarantees of the Companys debt

$
10,000


$
10,000     (1)
    
    A
    non-recourse/carve-out
    guarantee imposes liability on the guarantor in the event the
    borrower engages in certain acts prohibited by the loan
    documents.    Deferred Compensation Plan  non-stock whole-life
   40




---



##### Table of Contents



Item 3.
    Quantitative
    and Qualitative Disclosures About Market Risk.  Interest
    Rate Risk
  Derivatives and/or two-year 30-day
  short-term
  short-term
      Item 4.
    Controls
    and Procedures.  Form 10-K.
 41




---



##### Table of Contents



Rules 13a-15(c) 15d-15(e) Form 10-K.
  Form 10-Q
  Changes
    in Internal Controls over Financial Reporting
   
  PART II
    OTHER
    INFORMATION1
 
  Item 1.
    Legal
    Proceedings.   
  Item 2.
    Unregistered
    Sales of Equity Securities and Use of Proceeds.  Deferred Compensation Plan  non-stock whole-life
   
  Item 6.
    Exhibits.      1
 42




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##### Table of Contents



SIGNATURES
    GRUBB & ELLIS COMPANY(Registrant)   
       43




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##### Table of Contents



Grubb &
    Ellis Company
  EXHIBIT INDEX
  For
    the quarter ended March 31, 2009
  Exhibit(31)


Section 302 Certifications(32)


Section 906 Certification      
    
    Filed herewith. 44