##### Table of Contents





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

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2007ORo

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

94-1424307(State or other jurisdiction
    of
    Incorporation or organization)

(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:
  Title of each class

Name of each exchange on which registeredCommon Stock

New York Stock Exchange   Securities registered pursuant to Section 12(g) of the
    Act: None
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  Large
    accelerated
    filer  o
    Accelerated
    filer  þ
    Non-accelerated
    filer  o
    Smaller
    reporting
    company  o   Rule 12b-2 o þ




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##### 





GRUBB &
    ELLIS COMPANYFORM 10-K
  TABLE OF CONTENTS
  PageCover PageTable of Contents


2Part IItem 1.

Business


3Item 1A.

Risk Factors


12Item 1B.

Unresolved Staff Comments


28Item 2.

Properties


28Item 3.

Legal Proceedings


28Item 4.

Submission of Matters to a Vote of Security Holders


29Part IIItem 5.

Market for Registrants Common Equity and Related
    Stockholder Matters


31Item 6.

Selected Financial Data


34Item 7.

Managements Discussion and Analysis of Financial Condition
    and Results of Operations


36Item 7A.

Quantitative and Qualitative Disclosures About Market Risk


56Item 8.

Financial Statements and Supplementary Data


57Item 9.

Changes in and Disagreements with Accountants on Accounting and
    Financial Disclosure


110Item 9A.

Controls and Procedures


110Part IIIItem 10.

Directors, Executive Officers and Corporate Governance


112Item 11.

Executive Compensation


117Item 12.

Security Ownership of Certain Beneficial Owners and Management
    and Related Stockholder Matters


138Item 13.

Certain Relationships and Related Transactions and Director
    Independence


141Item 14.

Principal Accountant Fees and Services


147Part IVItem 15.

Exhibits and Financial Statement Schedules


149Signatures


158Exhibit Index


159EXHIBIT 10.26EXHIBIT 10.27EXHIBIT 10.28EXHIBIT 10.29EXHIBIT 10.30EXHIBIT 10.31EXHIBIT 10.41EXHIBIT 21.1EXHIBIT 23.1EXHIBIT 23.2EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32   2




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GRUBB &
    ELLIS COMPANY
  PART I
  Item 1.
    Business  General
        Business
    Segment Reporting
    Disclosures about Segments of an Enterprise and Related
    Information
   3




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Transaction
    Services
          Management
    Services
         4




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best-in-class
    Investment
    Management
             5




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Our
    Opportunity
      The
    Merger
       6




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Secured
    Credit Facility
     7




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Certain
    Real Estate Held for Sale
             8




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Industry
    and Competition
        and/or
   9




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Environmental
    Regulation
  and/or
    and/or
  Seasonality
   10




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Regulation
  Transaction
    and Property Management Services
    Dealer-Manager
    Services
    Service
    Marks
    Real
    Estate Markets
    Employees
    Availability
    of this Report
  www.grubb-ellis.com Form 10-K, Form 10-Q, Form 8-K Form 10-K
 11




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Item 1A.
    Risk
    Factors  Risks
    Related to the Company in General
  A
    downturn in the general economy or the real estate market would
    harm the Companys business.
    
    a decline in acquisition, disposition and leasing activity;
    a decline in the supply of capital invested in commercial real
    estate;
    a decline in the value of real estate and in rental rates, which
    would cause the Company to realize lower revenue from:  
    property management fees, which in certain cases are calculated
    as a percentage of the revenue of the property under management;
    and
    commissions or fees derived from property valuation, sales and
    leasing, which are typically based on the value, sale price or
    lease revenue commitment, respectively.    The
    Company is in a highly competitive business with numerous
    competitors, some of which may have greater financial and
    operational resources than it does.
    As a
    service-oriented company, the Company depends on key personnel,
    and the loss of its current personnel or its failure to hire and
    retain additional personnel could harm its
    business.
   12




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If the
    Company fails to meet its payment or other obligations under its
    senior secured credit facility, then the lenders under the
    secured credit facility could foreclose on, and acquire control
    of, substantially all of its assets.
    Although
    the Company intends to declare quarterly dividends, there can be
    no assurances when or whether the Company will declare future
    dividends or the amount of any dividends that may be declared in
    the future.
      The
    Company plans to expand its business to include international
    operations that could subject it to social, political and
    economic risks of doing business in foreign
    countries.
    
    difficulties and costs of staffing and managing international
    operations;
    currency restrictions, which may prevent the transfer of capital
    and profits to the United States;
    adverse foreign currency fluctuations;
    changes in regulatory requirements;
    potentially adverse tax consequences;
    the responsibility of complying with multiple and potentially
    conflicting laws;
    the impact of regional or country-specific business cycles and
    economic instability;
    the geographic, time zone, language and cultural differences
    among personnel in different areas of the world;
    political instability; and
    foreign ownership restrictions with respect to operations in
    certain countries.   13




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Delaware
    law and provisions of the Companys amended and restated
    certificate of incorporation and restated bylaws contain
    provisions that could delay, deter or prevent a change of
    control.
    
    the authority of the Companys board to issue, without
    stockholder approval, preferred stock with such terms as the
    Companys board may determine;
    the authority of the Companys board to adopt, amend or
    repeal the Companys bylaws; and
    a prohibition on holders of less than a majority of the
    Companys outstanding shares of capital stock calling a
    special meeting of the Companys stockholders.  The
    Company has the ability to issue blank check preferred stock,
    which could adversely affect the voting power and other rights
    of the holders of its common stock.
    The
    Company has registration rights outstanding, which could have a
    negative impact on its share price if exercised.
    Future
    sales of the Companys common stock could adversely affect
    its stock price.
   14




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and/or
    As a
    consequence of the Merger and the amendments to the
    Companys amended and restated certificate of
    incorporation, the Company has a staggered board, which may
    entrench management and discourage unsolicited stockholder
    proposals that may be in the best interests of
    stockholders.
    Failure
    to manage future growth effectively may have a material adverse
    effect on the Companys financial condition and results of
    operations.
    The
    Company may not be able to obtain additional financing when the
    Company needs it or on acceptable terms, and any such financing,
    or the failure to obtain financing, may adversely affect the
    market price of the Companys common stock.
   15




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The
    NYSE may delist the Companys common stock from quotation
    on its exchange which could limit stockholders ability to
    make transactions in its common stock and subject it to
    additional trading restrictions.
    
    a limited availability of market quotations for the
    Companys common stock;
    a more limited amount of news and analyst coverage for the
    Company;
    a decreased ability to issue additional common stock, other
    securities or obtain additional financing in the future; and
    a decreased ability of the Companys stockholders to sell
    their common stock in certain states.  The
    Company will not be required to furnish an auditors report
    on its internal control over financial reporting until December
    2008.
  Form 10-K
  Risks
    Related to the Merger
  The
    Company may be unable to successfully integrate its operations
    with the operations of NNN or to realize the anticipated
    benefits of the Merger which could have a material adverse
    effect on the business and results of operations and result in a
    decline in value of the Companys common
    stock.
     16




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Charges
    to earnings resulting from the application of the purchase
    method of accounting may adversely affect the market value of
    the Companys common stock.
  and/or
  The
    Company incurred significant transaction and merger-related
    costs in connection with the Merger.
    Risks
    Related to the Companys Transaction Services and
    Management Services Business
  GERA,
    the special purpose acquisition company sponsored by and an
    affiliate of the Company, must liquidate and dissolve, which
    could damage the Companys reputation, and will cause the
    Company to lose its investment and potential
    revenue.
    
    It could damage the Companys reputation, because of its
    close association withGERA.  The liquidation and
    dissolution of GERA could damage the Companys reputation
    and, as a result, may hinder its ability to retain or attract
    new customers and clients.
    The Company will lose its entire investment inGERA.  The Company will write off in the first
    quarter of 2008 its investment in GERA of approximately
    $5.6 million, including its stock and warrant purchases,
    operating advances and third party costs.
    The Company will continue to own the three commercial
    properties and is required to sell them by September 30,
    2008.As a result of GERAs liquidation, the
    Company will continue to own the three commercial real estate
    properties it intended to transfer to GERA. These properties are
    subject to mortgage loans provided by Wachovia Bank, N.A. for an
    aggregate principal amount of $120.5 million. Under the
    terms of its current credit facility, the Company is required to
    sell these properties by September 30, 2008.
    No assurance that the Company will not suffer a loss upon
    resale.  As noted directly above, the Company is
    required under its credit facility to sell the properties by
    September 30, 2008. Given the 17




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recent downturn in the credit markets, there can be no
    assurances that these properties can be sold for an amount that
    will cover the Companys costs of acquiring and holding the
    properties, or that the Company will not suffer a loss on the
    disposition of the properties.  
    The Company will lose the opportunity to earn revenues and
    fees in accordance with the terms and conditions of its
    agreements withGERA.  The Company entered
    into various agreements with GERA, pursuant to which the Company
    was to serve as its exclusive provider of commercial real estate
    brokerage and consulting services related to real property
    acquisitions, dispositions, project management and agency
    leasing, and was to also serve as the sole exclusive managing
    agent for all real property acquired by GERA. The liquidation
    and dissolution of GERA will prevent the Company from earning
    any fees under these agreements.  The
    Companys quarterly operating results are likely to
    fluctuate due to the seasonal nature of its business and may
    fail to meet expectations, which may cause the price of its
    securities to decline.
    If the
    properties that the Company manages fail to perform, then its
    business and results of operations could be
    harmed.
    
    the Companys ability to attract and retain creditworthy
    tenants;
    the magnitude of defaults by tenants under their respective
    leases;
    the Companys ability to control operating expenses;
    governmental regulations, local rent control or stabilization
    ordinances which are in, or may be put into, effect;
    various uninsurable risks;
    financial conditions prevailing generally and in the areas in
    which these properties are located;
    the nature and extent of competitive properties; and
    the general real estate market.   18




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If the
    Company fails to comply with laws and regulations applicable to
    real estate brokerage and mortgage transactions and other
    business lines, then it may incur significant financial
    penalties.
    The
    Company may have liabilities in connection with real estate
    brokerage and property and facilities management
    activities.
      Environmental
    regulations may adversely impact the Companys business
    and/or cause the Company to incur costs for cleanup of hazardous
    substances or wastes or other environmental
    liabilities.
  and/or
     19




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and/or
  Risks
    Related to the Companys Asset Management and Broker-Dealer
    Business
  The
    Company currently provides its transaction and management
    services primarily to its programs. Its revenue depends on the
    number of its programs, on the price of the properties acquired
    or disposed of by these programs, and on the revenue generated
    by the properties under its management.
    The
    Company may be unable to grow its programs, which would cause it
    to fail to satisfy its business strategy.
    The
    inability to access investors for the Company programs
    through broker-dealers or other intermediaries could have a
    material adverse effect on its business.
    The
    termination of any of the Companys broker-dealer
    relationships, especially given the limited number of key
    broker-dealers, could have a material adverse effect on its
    business.
   20




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Misconduct
    by third-party selling broker-dealers or the Companys
    sales force, could have a material adverse effect on its
    business.
    A
    significant amount of the Companys revenue is derived from
    fees earned through the transaction structuring and property
    management of its TIC programs, which programs rely primarily on
    Section 1031 of the Internal Revenue Code to provide for
    deferral of capital gains taxes to make these programs
    attractive. A change in this tax code section or a complete
    revocation of this section as it relates specifically to TICs
    could result in a loss of a significant part of the
    Companys business, and as a result, a significant amount
    of revenue.
    A
    significant amount of the Companys programs are structured
    to provide favorable tax treatment to investors or REITs. If a
    program fails to satisfy the requirements necessary to permit
    this favorable tax treatment, the Company could be subject to
    claims by investors and its reputation for structuring these
    transactions would be negatively affected, which would have an
    adverse effect on its financial condition and results of
    operations.
  i.e.
 21




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Any
    future co-investment activities the Company undertakes could
    subject it to real estate investment risks which could lead to
    the need for substantial capital contributions, which may impact
    its cash flows and financial condition and, if it is unable to
    make them, could damage its reputation and result in adverse
    consequences to its holdings.
    Geographic
    concentration of program properties may expose the
    Companys programs to regional economic downturns that
    could adversely impact their operations and, as a result, the
    fees the Company is able to generate from them, including fees
    on disposition of the properties as the Company may be limited
    in its ability to dispose of properties in a challenging real
    estate market.
    The
    failure of Triple Net Properties, LLC, recently renamed
    Grubb & Ellis Realty Investors, LLC (GERI)
    and Triple Net Properties Realty, Inc. (Realty),
    subsidiaries of the Company acquired in the Merger, to hold
    certain required real estate licenses may subject Realty and the
    Company to penalties, such as fines, restitution payments and
    termination of management agreements, and to the suspension or
    revocation of certain broker licenses.
   22




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If
    third-party managers providing property management services for
    the Companys programs office, healthcare office,
    retail and multi-family properties are negligent in their
    performance of, or default on, their management obligations, the
    tenants may not renew their leases or the Company may become
    subject to unforeseen liabilities. If this occurs, it could have
    an adverse effect on the Companys financial condition and
    operating results.
    The
    Company or its new programs may be required to incur future
    indebtedness to raise sufficient funds to purchase
    properties.
    The
    Company may be required to repay loans the Company guaranteed
    that were used to finance properties acquired by the
    Companys programs.
    December 31,(In thousands)

2007Non-recourse/carve-out guarantees of debt of properties under
    management(1)

$
3,167,447Non-recourse/carve-out guarantees of the Companys debt(1)

$
221,430Guarantees of the Companys mezzanine debt

$
48,790Recourse guarantees of debt of properties under management

$
47,399Recourse guarantees of the Companys debt

$
10,000     (1)
    
    A non-recourse/carve-out guaranty imposes personal
    liability on the guarantor in the event the borrower engages in
    certain acts prohibited by the loan documents. 23




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Guarantors Accounting and Disclosure Requirements for
    Guarantees, Including Indirect Guarantees of Indebtedness of
    Others
  The
    revenue streams from the Companys management services may
    be subject to limitation or cancellation.
    The
    Companys revenue is subject to volatility in capital
    raising efforts by it.
    Future
    pressures to lower, waive or credit back the Companys fees
    could reduce the Companys revenue and
    profitability.
    Regulatory
    uncertainties related to the Companys broker-dealer
    services could harm the Companys business.
  cease-and-desist
 24




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The
    Company depends upon its programs tenants to pay rent, and
    their inability to pay rent may substantially reduce the fees
    the Company receives which are based on gross rental
    amounts.
    
    downturns in national or regional economic conditions where the
    Companys programs properties are located, which
    generally will negatively impact the demand and rental rates;
    changes in local market conditions such as an oversupply of
    properties, including space available by sublease or new
    construction, or a reduction in demand for properties in the
    Companys programs, making it more difficult for the
    Companys programs to lease space at attractive rental
    rates or at all;
    competition from other available properties, which could cause
    the Companys programs to lose current or prospective
    tenants or cause them to reduce rental rates; and
    changes in federal, state or local regulations and controls
    affecting rents, prices of goods, interest rates, fuel and
    energy consumption.      Conflicts
    of interest inherent in transactions between the Companys
    programs and the Company, and among its programs, could create
    liability for the Company that could have a material adverse
    effect on its results of operations and financial
    condition.
    
    the Company experiences conflicts of interests with certain of
    its directors, officers and affiliates from time to time with
    regard to any of its investments, transactions and agreements in
    which it holds a direct or indirect pecuniary interest;
    since the Company receives both management fees and acquisition
    and disposition fees for its programs properties, the
    Company could be in conflict with its programs over whether
    their properties should be sold or held by the program and the
    Company may make decisions or take actions based on factors
    other than in the best interest of investors of a particular
    sponsored investor program;
    a component of the compensation of certain of the Companys
    executives is based on the performance of particular programs,
    which could cause the executives to favor those programs over
    others;
    the Company may face conflicts of interests as to how it
    allocates property acquisition opportunities or prospective
    tenants among competing programs;
    the Company may face conflicts of interests if programs sell
    properties to each other or invest in each other;
    all agreements and arrangements, including those relating to
    compensation, among the Company and its programs, are generally
    not the result of arms-length negotiations; and 25




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
    the Companys executive officers will devote only as much
    of their time to a program as they determine is reasonably
    required, which may be substantially less than their full time;
    during times of intense activity in other programs, these
    officers may devote less time and fewer resources to a program
    than are necessary or appropriate to manage the programs
    business.    The
    ongoing SEC investigation of Triple Net Properties and its
    affiliates could adversely impact the Companys ability to
    conduct its real estate investment programs.
  In the matter of Triple Net Properties, LLC.
      The
    offerings conducted to raise capital for the Companys TIC
    programs are done in reliance on exemptions from the
    registration requirements of the Securities Act. A failure to
    satisfy the requirements for the appropriate exemption could
    void the offering or, if it is already completed, provide the
    investors with rescission rights, either of which would have a
    material adverse effect on the Companys reputation and as
    a result its business and results of operations.
   26




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An
    increase in interest rates may negatively affect the equity
    value of the Companys programs or cause the Company to
    lose potential investors to alternative investments, causing the
    fees the Company receives for transaction and management
    services to be reduced.
    Increasing
    competition for the acquisition of real estate may impede the
    Companys ability to make future acquisitions which would
    reduce the fees the Company generates from these programs and
    could adversely affect the Companys operating results and
    financial condition.
    Illiquidity
    of real estate investments could significantly impede the
    Companys ability to respond to adverse changes in the
    performance of the Companys programs properties and
    harm the Companys financial condition.
   27




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Uninsured
    and underinsured losses may adversely affect
    operations.
      Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties    Item 3.
    Legal
    Proceedings  SEC
    Investigation
  In the matter of Triple
    Net Properties, LLC.
   28




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General
    Item 4.
    Submission
    of Matters to a Vote of Security Holders                 29




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GRUBB &
    ELLIS COMPANY
  PART II
  Item 5.
    Market
    for Registrants Common Equity and Related Stockholder
    Matters  Market
    and Price Information
    2007


2006High


Low


High


LowFirst Quarter

$
11.90


$
10.23


$
14.20


$
9.04Second Quarter

$
13.25


$
10.69


$
14.50


$
9.00Third Quarter

$
12.15


$
7.00


$
10.21


$
7.91Fourth Quarter

$
9.57


$
4.95


$
12.61


$
8.76       Sales of
    Unregistered Securities
  1 3
  
   31




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Equity
    Compensation Plan Information
    Number of securitiesremaining available forfuture issuance underNumber of securities to be


Weighted average


equity compensationissued upon exercise of


exercise price of


plans (excludingoutstanding options,


outstanding options,


securities reflected inwarrants and rights


warrants and rights


column (a))Plan Category

(a)


(b)


(c)Equity compensation plans approved by security holders


1,755,759


$
8.65



2,898,184Equity compensation plans not approved by security holders










Total


1,755,759


$
8.65



2,898,184  32




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Grubb &
    Ellis Stock Performance
  The following section entitled, Grubb & Ellis
    Stock Performance is not to be deemed to be
    soliciting material or to be filed with
    the SEC or subject to Regulation 14A or 14C or to the
    liabilities of Section 18 of the Exchange Act, except to
    the extent that the Company specifically requests that such
    information be treated as soliciting material or specifically
    incorporates it by reference into any filing under the
    Securities Act or the Exchange Act.
  54-month 6/30/2003 12/31/2007.
  COMPARISON
    OF 54-MONTH
    CUMULATIVE TOTAL RETURN*
  Among
    Grubb & Ellis Company, The S&P 500 Index
 And A Peer
    Group
  
  *
    $100 invested on 6/30/03 in stock
    or index-including reinvestment of dividends. Fiscal year ending
    December 31.  Copyright
    ©
    2008, Standard & Poors, a division of The
    McGraw-Hill Companies, Inc. All rights reserved.
    www.researchdatagroup.com/S&P.htm
  6/03


6/04


6/05


6/06


6/07


12/07Grubb & Ellis Company


100.00



169.36



595.74



787.23



987.23



554.19S&P 500


100.00



119.11



126.64



137.57



165.90



163.63Peer Group


100.00



171.44



352.04



629.07



884.74



533.36   The stock price performance included in this graph is not
    necessarily indicative of future stock price performance.
 33




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Item 6.
    Selected
    Financial Data    Year Ended December 31,(In thousands, except per share data)

2007(1)


2006(2)


2005(3)


2004(3)


2003(3)Consolidated Statement of Operations Data:Total services revenue

$
201,287


$
99,082


$
89,106


$
64,900


$
34,426Total revenue


231,430



108,306



92,859



67,211



36,700Total compensation costs


104,109



49,449



29,873



19,717



9,964Total operating expense


198,576



97,334



74,215



51,082



28,681Operating income


32,854



10,972



18,644



16,129



8,019Income from continuing operations


21,050



16,098



18,124



16,247



8,543
(4)Net income


20,842



16,094



18,124



16,247



8,291Basic earnings per share:

$
0.54


$
0.82


$
1.05


$
0.93


$
0.51Diluted earnings per share:

$
0.54


$
0.82


$
1.05


$
0.93


$
0.51Shares used in computing basic earnings per share


38,652



19,681



17,200



17,407



16,791Shares used in computing diluted earnings per share


38,653



19,694



17,200



17,407



16,791Dividends declared per share

$
0.36



0.10











Consolidated Statement of Cash Flow Data:Net cash provided by operating activities

$
33,641


$
15,201


$
23,536


$
17,214


$
10,941Net cash used in investing activities


(232,244
)


(57,112
)


(35,183
)


(13,046
)


(1,851
)Net cash provided by (used in) financing activities


145,449



143,589



10,251



(7,647
)


(4,662
)   December 31,2007


2006


2005


2004


2003Consolidated Balance Sheet Data (at end of period):Total assets

$
969,412


$
328,043


$
86,336


$
42,911


$
31,380Line of credit


8,000







8,500



3,545



2,535Notes payable


137,411



4,933



17,242







19Senior and participating notes


16,277



10,263



2,300



4,845



6,345Redeemable preferred liability










6,077



5,717



5,564Stockholders equity


408,645



221,944



28,777



16,783



7,154     (1)
    
    Based on Generally Accepted Accounting Principles (GAAP), the
    operating results for the year ended December 31, 2007
    includes the results of legacy NNN for the full periods
    presented and the results of the legacy Grubb & Ellis
    business for the period from December 8, 2007 through
    December 31, 2007. 34




---



##### Table of Contents



(2)
    
    Includes a full year of operating results of GERI, one and
    one-half months of Realty (acquired on November 16,
    2006) and one-half month of GBE Securities (formerly NNN
    Capital Corp.) (acquired on December 14, 2006). GERI was
    treated as the acquirer in connection with these transactions.(3)
    
    Based on GAAP, reflects operating results of GERI.(4)
    
    Income from continuing operations before cumulative effect of
    change in accounting principle of $18,000 related to adoption of
    Statement of Financial Accounting Standards No. 150,
    Accounting for Certain Financial Instruments with
    Characteristics of both Liabilities and Equity(SFAS No. 150) issued in May 2003, which
    established standards for how an issuer classifies and measures
    certain financial instruments with characteristics of both
    liabilities and equity. SFAS No. 150 requires that an
    issuer classify a financial instrument that is within its scope,
    which may have previously been reported as equity, as a
    liability (or an asset in some circumstances). This statement
    was effective for financial instruments entered into or modified
    after May 31, 2003 and otherwise was effective at the
    beginning of the first interim period beginning after
    June 15, 2003, except for mandatory redeemable financial
    instruments of nonpublic companies for which the effective date
    was the fiscal period beginning after December 15, 2004.
    Management elected to adopt SFAS No. 150 effective
    July 1, 2003. NNN, accordingly, recorded a cumulative
    effect of a change in accounting principle of $18,000 relating
    to the reclassification of its redeemable preferred membership
    interests. These interests were reported as liabilities in the
    December 31, 2003 consolidated balance sheet, and
    thereafter, in accordance with SFAS No. 150. 35




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##### Table of Contents



Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Note
    Regarding Forward-Looking Statements
  This Annual Report contains statements that are
    forward-looking and as such are not historical facts. Rather,
    these statements constitute projections, forecasts or
    forward-looking statements within the meaning of the Private
    Securities Litigation Reform Act of 1995. You should not place
    undue reliance on these statements. Forward-looking statements
    include information concerning the Companys liquidity and
    possible or assumed future results of operations, including
    descriptions of the Companys business strategies. These
    statements often include words such as believe,
    expect, anticipate, intend,
    plan, estimate seek,
    will, may or similar expressions. These
    statements are based on certain assumptions that the Company has
    made in light of its experience in the industry as well as its
    perceptions of the historical trends, current conditions,
    expected future developments and other factors the Company
    believes are appropriate under these circumstances.
  All such forward-looking statements speak only as of the date
    of this Annual Report. The Company expressly disclaims any
    obligation or undertaking to release publicly any updates or
    revisions to any forward-looking statements contained herein to
    reflect any change in the Companys expectations with
    regard thereto or any change in events, conditions or
    circumstances on which any such statement is based.
  As you read this Annual Report, you should understand that
    these statements are no guarantees of performance or results.
    They involve risks, uncertainties and assumptions. You should
    understand the risks and uncertainties discussed in
    Item 1A  Risk Factors and elsewhere
    in this Annual Report, could affect the Companys actual
    financial results and could cause actual results to differ
    materially from those expressed in the forward-looking
    statements. Some important factors include, but are not limited
    to:
  
    changes in general economic and business conditions, including
    interest rates, the cost and availability of capital for
    investment in real estate, clients willingness to make
    real estate commitments and other factors impacting the value of
    real estate assets;
    our ability to retain major clients and renew related contracts;
    the failure of properties managed by us to perform as
    anticipated;
    our ability to compete in specific geographic markets or
    business segments that are material to us;
    an economic downturn in the real estate market;
    significant variability in our results of operations among
    quarters;
    our ability to retain our senior management and attract and
    retain qualified and experienced employees;
    our ability to comply with the laws and regulations applicable
    to real estate brokerage and mortgage transactions;
    our exposure to liabilities in connection with real estate
    brokerage and property management activities;
    changes in the key components of revenue growth for large
    commercial real estate services companies, including
    consolidation of client accounts and increasing levels of
    institutional ownership of commercial real estate;
    reliance of companies on outsourcing for their commercial real
    estate needs;
    liquidity and availability of additional or continued sources of
    financing for the Companys investment programs;
    trends in use of large, full-service real estate providers;
    diversification of our client base; 36




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##### Table of Contents




    improvements in operating efficiency;
    protection of our brand;
    trends in pricing for commercial real estate services; and
    the effect of implementation of new tax and accounting rules and
    standards.  Overview
    and Background
             37




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##### Table of Contents



Critical
    Accounting Policies
    Revenue
    Recognition
  Transaction
    Services
    Investment
    Management
        Management
    Services
  on-site
 38




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##### Table of Contents



Purchase
    Price Allocation
  Business Combinations lease-up
  liabilities-net
    Impairment
    of Long-Lived Assets
  Accounting for the
    Impairment or Disposal of Long-Lived Assets
  Goodwill and Other Intangible Assets
 39




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##### Table of Contents



Insurance
    and Claim Reserves
      Recently
    Issued Accounting Pronouncements
  Fair Value
    Measurements No. FAS 157-2,
  The
    Fair Value Option for Financial Assets and Financial Liabilities
  Business Combinations
  Noncontrolling Interests in Consolidated Financial
    Statements  An Amendment of ARB No. 51
 40




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##### Table of Contents



RESULTS
    OF OPERATIONS
  Overview
      Disclosures about Segments
    of an Enterprise and Related Information
  Year
    Ended December 31, 2007 Compared to Year Ended
    December 31, 2006
    Year EndedDecember 31,


Change(In thousands)

2007(1)


2006(2)


$


%RevenueTransaction services

$
35,522


$



$
35,522




%Investment management


149,400



99,082



50,318



50.8Management services


16,365







16,365



Rental


30,143



9,224



20,919



226.8Total revenue


231,430



108,306



123,124



113.7 41




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##### Table of Contents



Year EndedDecember 31,


Change(In thousands)

2007(1)


2006(2)


$


%Operating ExpenseCompensation costs


104,109



49,449



54,660



110.5General and administrative


44,251



30,545



13,706



44.9Depreciation and amortization


9,543



2,086



7,457



357.5Rental


22,722



9,718



13,004



133.8Interest


11,566



6,236



5,330



85.5Impairment and other






(700
)


700



100.0Merger related costs


6,385







6,385



Total operating expense


198,576



97,334



101,242



104.0Operating Income


32,854



10,972



21,882



199.4Other Income (Expense)Equity in earnings (losses) of unconsolidated entities


(339
)


491



(830
)


(169.0
)Interest income


2,994



713



2,281



319.9Other


(650
)






(650
)


Total other income


2,005



1,204



801



66.5Income from continuing operations before minority interest and
    income tax provision


34,859



12,176



22,683



186.3Minority interest in income (losses) of consolidated entities


459



(308
)


767



249.0Income from continuing operations before income tax provision
    (benefit)


35,318



11,868



23,450



197.6Income tax provision (benefit)


14,268



(4,230
)


18,498



437.3Income from continuing operations


21,050



16,098



4,952



30.8Discontinued OperationsLoss from discontinued operations  net of taxes


(460
)


(72
)


(388
)


(538.9
)Gain on disposal of discontinued operations  net of
    taxes


252



68



184



270.6Total loss from discontinued operations


(208
)


(4
)


(204
)


(5100.0
)Net Income

$
20,842


$
16,094


$
4,748



29.5     (1)
    
    Based on GAAP, the operating results for twelve months ended
    December 31, 2007 includes the results of NNN for the full
    periods presented and the results of the legacy
    Grubb & Ellis business for the period from
    December 8, 2007 through December 31, 2007.(2)
    
    Based on GAAP, the operating results for the twelve months ended
    December 31, 2006 represents legacy NNN business.  Revenue
  Transaction
    Services
   42




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Investment
    Management
             43




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##### Table of Contents



Management
    Services
    Rental
    Operating
    Expense Overview
    Compensation
    costs
   44




---



##### Table of Contents



General
    and Administrative
    Depreciation
    and Amortization
    Rental
    Expense
    Interest
    Expense
    Discontinued
    Operations
   45




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##### Table of Contents



Income
    Tax
    Net
    Income
    Year
    Ended December 31, 2006 Compared to Year Ended
    December 31, 2005
    Year EndedDecember 31,


Change(In thousands)

2006(1)


2005(2)


$


%RevenueTransaction services

$



$



$





%Investment management


99,082



89,106



9,976



11.2Management services














Rental


9,224



3,753



5,471



145.8Total Revenue


108,306



92,859



15,447



16.6Operating ExpenseCompensation costs


49,449



29,873



19,576



65.5General and administrative


30,545



31,525



(980
)


(3.1
)Depreciation and amortization


2,086



2,825



(739
)


(26.2
)Rental


9,718



4,469



5,249



117.5Interest


6,236



1,611



4,625



287.1Impairment and other


(700
)


3,912



(4,612
)


(117.9
)Total operating expense


97,334



74,215



23,119



31.2Operating Income


10,972



18,644



(7,672
)


(41.1
)Other Income (Expense)Equity in earnings (losses) of unconsolidated entities


491



(520
)


1,011



194.4Interest income


713







713



Other














Total other income (expense)


1,204



(520
)


1,724



331.5 46




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##### Table of Contents



Year EndedDecember 31,


Change(In thousands)

2006(1)


2005(2)


$


%Income from continuing operations before minority interest and
    income tax provision


12,176



18,124



(5,948
)


(32.8
)Minority interest in income (losses) of consolidated entities


(308
)






(308
)


Income from continuing operations before income tax provision
    (benefit)


11,868



18,124



(6,256
)


(34.5
)Income tax provision (benefit)


(4,230
)






(4,230
)


Income from continuing operations


16,098



18,124



(2,026
)


(11.2
)Discontinued OperationsLoss from discontinued operations  net of taxes


(72
)






(72
)


Gain on disposal of discontinued operations  net of
    taxes


68







68



Total loss from discontinued operations


(4
)






(4
)


Net Income

$
16,094


$
18,124


$
(2,030
)


(11.2
)%     (1)
    
    Includes a full year of operating results of GERI, one and
    one-half months of Realty (acquired on November 16,
    2006) and one-half month of GBE Securities (formerly NNN
    Capital Corp.) (acquired on December 14, 2006).(2)
    
    Includes operating results of GERI.  Revenue
  Investment
    Management
         47




---



##### Table of Contents



Rental
   48




---



##### Table of Contents



Operating
    Expense
    Investment
    Management Expense
        Captive
    Management Services Expense
   49




---



##### Table of Contents



Dealer-Manager
    Services Expense
    Other
    Operating Expense
      Operating
    Income
   50




---



##### Table of Contents



Discontinued
    Operations
    Income
    Tax Benefit
    Net
    Income
    Liquidity
    and Capital Resources
    Current
    Sources of Capital and Liquidity
         51




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##### Table of Contents



Long-Term
    Liquidity Needs
    Factors
    That May Influence Future Sources of Capital and
    Liquidity
  In the matter of Triple Net Properties,
    LLC.
       52




---



##### Table of Contents



Cash
    Flow
  Year
    Ended December 31, 2007 Compared to Year Ended
    December 31, 2006
     53




---



##### Table of Contents



Year
    Ended December 31, 2006 Compared to Year Ended
    December 31, 2005
          Commitments,
    Contingencies and Other Contractual Obligations
  Contractual
    Obligations
   54




---



##### Table of Contents



Payments Due by PeriodLess Than








More Than1 Year


1-3 Years


3-5 Years


5 Years(In thousands)

2008


(2009-2010)


(2011-2012)


(After 2012)


TotalPrincipal  unsecured debt

$



$
8,000


$



$



$
8,000Interest  unsecured debt


620



1,207











1,827Principal  properties held for investment


30,096



278



37



107,000



137,411Interest  properties held for investment


7,488



13,036



13,013



20,737



54,274Principal  properties held for sale


211,520















211,520Interest  properties held for sale


13,757















13,757Principal  senior notes










16,277







16,277Interest  senior notes


1,424



2,848



843







5,115Operating lease obligations  others


9,535



20,605



21,884



30,822



82,846Operating lease obligations  general


19,898



29,905



19,813



18,166



87,782Capital lease obligations


351



415



24







790Total

$
294,689


$
76,294


$
71,891


$
176,725


$
619,599   Off-Balance Sheet Arrangements.
    December 31,(In thousands)

2007


2006Non-recourse/carve-out guarantees of debt of properties under
    management(1)

$
3,167,447


$
2,391,183Non-recourse/carve-out guarantees of the Companys debt(1)


221,430



41,060Guarantees of mezzanine debt of properties under management






11,139Guarantees of the Companys mezzanine debt


48,790



15,246Recourse guarantees of debt of properties under management


47,399



28,685Recourse guarantees of the Companys debt


10,000



     (1)
    
    A non-recourse/carve-out guaranty imposes personal
    liability on the guarantor in the event the borrower engages in
    certain acts prohibited by the loan documents.  Guarantors Accounting and Disclosure Requirements for
    Guarantees, Including Indirect Guarantees of Indebtedness of
    Others
 55




---



##### Table of Contents



Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk  Interest
    Rate Risk
  Derivatives and/or 30-day
         56




---



##### 



Item 8.
    Financial
    Statements and Supplementary Data  INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
  Grubb & Ellis CompanyReports of Independent Registered Public
    Accounting Firms


58Consolidated Balance Sheets as of
    December 31, 2007 and 2006


60Consolidated Statements of Operations for the
    years ended December 31, 2007, 2006 and 2005


61Consolidated Statements of Stockholders
    Equity for the years ended December 31, 2007, 2006 and
    2005


62Consolidated Statements of Cash Flows for the
    years ended December 31, 2007, 2006 and 2005


63Notes to Consolidated Financial Statements for
    the years ended December 31, 2007, 2006 and 2005


65   57




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm          ERNST &
    YOUNG LLP
   58




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
    (
       
 59




---



##### Table of Contents



GRUBB &
    ELLIS COMPANY
  CONSOLIDATED
    BALANCE SHEETS
 (In
    thousands, except share and per share amounts)
  December 31,2007


2006ASSETSCurrent assets:Cash and cash equivalents

$
49,072


$
102,226Restricted cash


27,325



4,009Investment in marketable securities


9,052



2,334Current portion of accounts receivable from related
    parties  net


27,465



28,843Current portion of advances to related parties  net


8,328



9,668Notes receivable from related party  net


7,600



10,008Service fees receivable  net


19,522



Current portion of professional service contract  net


7,235



Real estate deposits and pre-acquisition costs


15,296



17,169Properties held for sale


219,622



40,260Identified intangible assets and other assets held for
    sale  net


65,742



9,333Prepaid expenses and other assets


18,399



3,420Deferred tax assets


7,854



Total current assets


482,512



227,270Accounts receivable from related parties  net


10,360



Advances to related parties  net


3,751



Professional service contract  net


13,088



Investments in unconsolidated entities


16,884



11,413Properties held for investment  net


134,894



3,835Property, equipment and leasehold improvements  net


16,265



4,123Goodwill


169,317



60,183Identified intangible assets  net


119,060



20,306Other assets  net


3,281



913Total assets

$
969,412


$
328,043LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS
    EQUITYCurrent liabilities:Accounts payable and accrued expenses

$
101,147


$
33,601Due to related parties


2,953



4,095Current portion of notes payable and capital lease obligations


30,447



4,675Mortgage loans payable secured by properties held for sale


211,520



46,906Liabilities of properties held for sale  net


9,829



595Other liabilities


14,190



726Total current liabilities


370,086



90,598Long-term liabilities:Line of credit


8,000



Senior notes


16,277



10,263Notes payable and capital lease obligations


107,754



843Other long-term liabilities


7,088



Deferred tax liabilities


32,837



3,184Total liabilities


542,042



104,888Commitment and contingencies (Note 20)






Minority interest


18,725



1,211Stockholders equity:Preferred stock: $0.01 par value; 50,000,000 and 4,400,000,
    shares authorized as of December 31, 2007 and 2006,
    respectively; no shares issued and outstanding as of
    December 31, 2007 and 2006






Common stock: $0.01 par value; 100,000,000 and
    83,600,000 shares authorized; 64,824,777 and
    37,282,438 shares issued and outstanding as of
    December 31, 2007 and 2006, respectively


648



373Additional paid-in capital


393,665



212,685Retained earnings


15,381



8,912Other comprehensive loss


(1,049
)


(26
)Total stockholders equity


408,645



221,944Total liabilities, minority interest and stockholders
    equity

$
969,412


$
328,043    60




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
 (In
    thousands, except per share data)
  Year Ended December 31,2007


2006


2005REVENUETransaction services

$
35,522


$



$
Investment management


149,400



99,082



89,106Management services


16,365







Rental


30,143



9,224



3,753Total revenue


231,430



108,306



92,859OPERATING EXPENSE (INCOME)Compensation costs


104,109



49,449



29,873General and administrative


44,251



30,545



31,525Depreciation and amortization


9,543



2,086



2,825Rental


22,722



9,718



4,469Interest


11,566



6,236



1,611Impairment and other






(700
)


3,912Merger related costs


6,385







Total operating expense


198,576



97,334



74,215OPERATING INCOME


32,854



10,972



18,644OTHER INCOME (EXPENSE)Equity in earnings (losses) of unconsolidated entities


(339
)


491



(520
)Interest income


2,994



713



Other


(650
)






Total other income (expense)


2,005



1,204



(520
)Income from continuing operations before minority interest and
    income tax provision (benefit)


34,859



12,176



18,124Minority interest in income (losses) of consolidated entities


459



(308
)


Income from continuing operations before income tax provision
    (benefit)


35,318



11,868



18,124Income tax provision (benefit)


14,268



(4,230
)


Income from continuing operations


21,050



16,098



18,124Discontinued operationsLoss from discontinued operations  net of taxes


(460
)


(72
)


Gain on disposal of discontinued operations  net of
    taxes


252



68



Total loss from discontinued operations


(208
)


(4
)


NET INCOME

$
20,842


$
16,094


$
18,124Basic earnings per shareIncome from continuing operations

$
0.54


$
0.82


$
1.05Loss from discontinued operations










Net earnings per share

$
0.54


$
0.82


$
1.05Diluted earnings per shareIncome from continuing operations

$
0.54


$
0.82


$
1.05Loss from discontinued operations










Net earnings per share

$
0.54


$
0.82


$
1.05Shares used in computing basic earnings per share


38,652



19,681



17,200Shares used in computing diluted earnings per share


38,653



19,694



17,200    61




---



##### Table of Contents



GRUBB &
    ELLIS COMPANY
  CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY
 (In
    thousands)
  AccumulatedAdditional


Other





TotalCommon Stock


Paid-In


Comprehensive


Retained


StockholdersShares


Amount


Capital


Loss


Earnings


EquityBalance as of January 1, 2005


17,580


$
176


$
4,032


$



$
12,575


$
16,783Repurchase of common stock


(208
)


(2
)


(130
)










(132
)Dividends declared


















(5,998
)


(5,998
)Net income


















18,124



18,124Balance as of December 31, 2005


17,372



174



3,902







24,701



28,777Dividends declared


















(31,883
)


(31,883
)Issuance of common stock to acquire Realty and Capital
    Corp.


5,289



53



60,361











60,414Issuance of common stock


14,080



141



159,859











160,000Offering costs










(13,885
)










(13,885
)Issuance of restricted shares to directors and officers


541



5















5Stock compensation expense










2,448











2,448Change in unrealized (loss) on marketable securities, net of
    taxes














(26
)






(26
)Net income


















16,094



16,094Comprehensive income






















16,068Balance as of December 31, 2006


37,282



373



212,685



(26
)


8,912



221,944Dividends declared


















(14,373
)


(14,373
)Stock compensation expense










9,027











9,027Common stock for merger transaction


26,196



262



171,953











172,215Issuance of restricted shares to directors, officers and
    employees


1,450



14















14Cancellation of non-vested restricted shares


(103
)


(1
)














(1
)Change in unrealized loss on marketable securities, net of taxes














(1,023
)






(1,023
)Net income


















20,842



20,842Comprehensive income






















19,819Balance as of December 31, 2007


64,825


$
648


$
393,665


$
(1,049
)

$
15,381


$
408,645    62




---



##### Table of Contents



GRUBB &
    ELLIS COMPANY
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
 (In
    thousands)
  Year Ended December 31,2007


2006


2005CASH FLOWS FROM OPERATING ACTIVITIESNet income

$
20,842


$
16,094


$
18,124Adjustments to reconcile net income to net cash provided by
    operating activities:Deferred income taxes


(5,918
)


(4,936
)


Depreciation and amortization


9,668



2,086



2,743Stock-based compensation


9,041



3,865



Amortization/write-off of intangible contractual rights


3,249



410



Amortization of deferred financing costs


1,713



31



82Equity in (earnings) losses of unconsolidated entities


339



(491
)


502Allowance for uncollectible accounts


859



1,408



3,116Minority interest in income (losses) of consolidated entities


(459
)


308



Other operating activities


(119
)


(448
)


360Changes in operating assets and liabilities:Accounts receivable from related parties


(8,907
)


(2,636
)


(9,156
)Prepaid expenses and other assets


366



(1,062
)


(1,109
)Accounts payable and accrued expenses


1,110



51



8,753Other liabilities


1,857



521



121Net cash provided by operating activities


33,641



15,201



23,536CASH FLOWS FROM INVESTING ACTIVITIESPurchases of property and equipment


(2,693
)


(1,984
)


(4,979
)Investment in marketable securities


(2,087
)


(2,360
)


Advances to related parties


(5,340
)


(19,268
)


(10,451
)Proceeds from repayment of advances to related parties


3,072



16,713



11,824Note receivable from related party


(7,600
)


(10,000
)


Proceeds from repayment of note receivable from related party


10,000



777



186Investments in unconsolidated entities


(2,250
)


596



(10,899
)Acquisition of businesses  net of cash acquired


339



(7,398
)


Purchases of properties held for investment


(142,563
)


(290
)


Purchases of properties held for sale


(481,668
)


(68,475
)


Purchases of identified intangible assets and other assets held
    for sale


(53,161
)


(12,140
)


Proceeds from sale of properties held for sale


472,553



31,684



500Real estate deposits and pre-acquisition costs


(11,686
)


(15,948
)


(20,142
)Proceeds from collection of real estate deposits and
    pre-acquisition costs


12,749



33,768



Restricted cash


(21,909
)


(2,787
)


(1,222
)Net cash used in investing activities


(232,244
)


(57,112
)


(35,183
)   63




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS  (Continued)
 (In
    thousands)
  Year Ended December 31,2007


2006


2005CASH FLOWS FROM FINANCING ACTIVITIES(Repayments to) advances on lines of credit


(30,000
)


(8,500
)


4,955Proceeds from issuance of notes payable


140,000







17,242Principal payments on notes payable and capital lease obligations


(7,858
)


(12,620
)


(323
)(Repayments to) proceeds from related parties


(3,080
)


(106
)


2,631Rate lock deposits


850



(881
)


(5,579
)Proceeds from issuance of senior notes


6,015



10,263



Repayments of participating notes






(2,300
)


(2,545
)Proceeds from issuance of mortgage loans payable secured by
    properties held for sale


99,888



71,106



Repayments of mortgage loans payable secured by properties held
    for sale


(55,016
)


(24,200
)


Redemption of redeemable preferred membership units






(5,506
)


Deferred financing costs


(2,310
)


(1,515
)


Net proceeds from issuance of common stock






146,000



Dividends paid to common stockholders


(16,449
)


(28,070
)


(5,998
)Contributions from minority interests


13,409



904



Other financing activities






(986
)


(132
)Net cash provided by financing activities


145,449



143,589



10,251NET (DECREASE) INCREASE IN CASH


(53,154
)


101,678



(1,396
)Cash and cash equivalents  Beginning of year


102,226



548



1,944Cash and cash equivalents  End of year

$
49,072


$
102,226


$
548SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATIONCash paid during the period for:Interest

$
10,148


$
5,784


$
1,519Income taxes

$
22,622


$
179


$
69SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIESEquipment acquired with capital lease obligations

$
541


$
355


$
237Dividends accrued

$
1,733


$
3,813


$
Assets acquired in acquisition

$
462,730


$
26,657


$
Liabilities assumed in acquisition

$
259,659


$
19,342


$
    64




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES
    TO CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
  1.
    ORGANIZATION  50-year
        2.
    SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES  Basis of Presentation and Principles of
    Consolidation Consolidation of Variable Interest Entities
   65




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
    Use of Estimates
  Cash and cash equivalents 
  Restricted Cash 
  Accounts Receivable from Related Parties
  Allowance for Uncollectible Receivables
  Real Estate Deposits and Pre-acquisition
    Costs
    
    the costs are directly identifiable with the specific property;
    the costs would be capitalized if the property were already
    acquired; and
    acquisition of the property or an option to acquire the property
    is probable. This condition requires that the Company is
    actively seeking to acquire the property and have the ability to
    finance or obtain financing for the acquisition and that there
    is no indication that the property is not available for sale.  Purchase Price Allocation Business Combinations
    (SFAS No. 141)
 66




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
  lease-up
      Identified Intangible Assets
  Properties Held for Investment
  Property Held for Sale Accounting for the Impairment or
    Disposal of Long-Lived Assets
   67




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
    Property, Equipment and Leasehold
    Improvements
  Impairment of Long-Lived Assets
  Goodwill and Other Intangible Assets
  Revenue
    Recognition
  Transaction
    Services
    Investment
    Management
   68




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
        Management
    Services
  on-site
  Professional Service Contracts
  Fair Value of Financial Instruments Disclosures About Fair Value of
    Financial Instruments
   69




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
    Stock-Based Compensation Share Based Payment
  Earnings per share Earnings Per Share
  Concentration of Credit Risk cash-in-bank
  Accrued Claims and Settlements
  Income Taxes Accounting for Income Taxes
   70




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
      Marketable Securities Accounting for
    Certain Investments in Debt and Equity Securities
    Comprehensive Income Reporting Comprehensive Income
  Guarantees Guarantors Accounting and Disclosure Requirements for
    Guarantees, Including Indirect Guarantees of Indebtedness of
    Others
  Segment Disclosure Disclosures about Segments
    of an Enterprise and Related Information
 71




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
  Derivative Instruments and Hedging Activities Accounting for Derivative Instruments and Hedging
    Activities Accounting for Certain Derivative Instruments and Certain
    Hedging Activities Derivative Instruments and Hedging Activities
  Recently
    Issued Accounting Pronouncements
  Fair Value
    Measurements No. FAS 157-2,
  The
    Fair Value Option for Financial Assets and Financial Liabilities
  Business Combinations
  Noncontrolling Interests in Consolidated Financial
    Statements  An Amendment of ARB No. 51
 72




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
  3.
    MARKETABLE
    SECURITIES    As of December 31, 2007


As of December 31, 2006Historical


Gross Unrealized


Market


Historical


Gross Unrealized


MarketCost


Gains


Losses


Value


Cost


Gains


Losses


Value(In thousands)




(Unaudited)Equity securities

$
4,440


$



$
(1,355
)

$
3,085


$
2,360


$



$
(26
)

$
2,334     Investments
    in Limited Partnerships
    No. 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 ofDecember 31, 2007Original


Gross Unrealized


MarketTrading Securities

Cost


Gains


Losses


Value(In thousands)AGA Strategic Realty LP

$
6,479


$
100


$
(1,272
)

$
5,307AGA Global Realty LP


545



31



(100
)


476AGA Realty Partners LP


226



3



(45
)


184$
7,250


$
134


$
(1,417
)

$
5,967   73




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
  Investment


Net Gain (Loss)Income


Realized


Unrealized


TotalEquity securities

$
163


$
(185
)

$
(618
)

$
(640
)Less investment expenses


(40
)










(40
)$
123


$
(185
)

$
(618
)

$
(680
)   4.
    RELATED
    PARTIES    Accounts
    Receivable
    December 31,2007


2006(In thousands)Accrued property management fees

$
20,428


$
13,207Accrued lease commissions


9,994



3,364Accrued asset management fees


1,206



24Accrued real estate acquisitions fees


103



6,136Other receivables


3,086



3,293Other accrued fees


4,041



3,542Total


38,858



29,566Allowance for uncollectible receivables


(1,033
)


(723
)Accounts receivable from related parties  net


37,825



28,843Less portion classified as current


(27,465
)


(28,843
)Non-current portion

$
10,360


$
  74




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
  Advances
    to Related Parties
    December 31,2007


2006(In thousands)Advances to properties of related parties

$
10,166


$
6,608Advances to sponsored REITs


1,318



Advances to related parties


2,434



4,460Total


13,918



11,068Allowance for uncollectible receivables


(1,839
)


(1,400
)Advances to related parties  net


12,079



9,668Less portion classified as current


(8,328
)


(9,668
)Non-current portion

$
3,751


$
     Notes
    Receivable From Related Party
       75




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
  5.
    SERVICE
    FEES RECEIVABLE, NET    December 31,2007


2006(In thousands)Transaction services fees receivable

$
11,289


$
Management services fees receivable


8,903



Allowance for uncollectible accounts


(343
)


Total


19,849



Less portion classified as current


(19,522
)


Non-current portion (included in other assets)

$
327


$
   6.
    INVESTMENTS
    IN UNCONSOLIDATED ENTITIES             76




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
  7.
    PROPERTIES
    HELD FOR INVESTMENT    December 31,Useful Life


2007


2006(In thousands)Building and capital improvement


39 years


$
116,585


$
2,697Tenant Improvement


1-8 years



5,903



163Accumulated depreciation






(3,982
)


(227
)Total






118,506



2,633Land






16,388



1,202Properties held for investment  net





$
134,894


$
3,835     8.
    PROPERTY,
    EQUIPMENT AND LEASEHOLD IMPROVEMENTS    December 31,Useful Life


2007


2006(In thousands)Computer equipment


3-5 years


$
32,002


$
6,207Automobiles


5 years



11



63Capital leases


1-5 years



1,519



1,221Furniture and fixtures


7 years



25,283



994Leasehold improvements


1-5 years



7,233



1,241Total






66,048



9,726Accumulated depreciation and amortization






(49,783
)


(5,603
)Property and equipment  net





$
16,265


$
4,123     9.
    BUSINESS
    COMBINATIONS AND GOODWILL  Merger
    of Grubb & Ellis Company with NNN
     77




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
          Current assets

$
189,214Other assets


29,797Identified intangible assets acquired


86,600Goodwill: excess purchase price over fair value of net assets
    acquired


107,507Total assets


413,118Current liabilities


233,894Other liabilities


7,022Total liabilities


240,916Total purchase price

$
172,202     Acquisition
    of NNN/ROC Apartment Holdings, LLC
   78




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
  Acquisition
    of Alesco Global Advisors, LLC
    Acquisition
    of Triple Net Properties, Realty, and Capital
    Corp.
      
    TNP Merger Sub, LLC, a Delaware limited liability company and
    wholly-owned subsidiary of NNN, entered into an agreement and
    plan of merger with Triple Net Properties, a Virginia limited
    liability company owned by Anthony W. Thompson (former Chairman
    of the Board), Scott D. Peters (executive officer and director),
    Louis J. Rogers (former director and former executive officer of
    Triple Net Properties) and a number of other employees and
    third-party investors. In connection with the merger agreement,
    NNN entered into contribution agreements with the holders of a
    majority of the common membership interests of Triple Net
    Properties. Under the merger agreement and the contribution
    agreements, NNN issued 17,372,438 shares of the
    Companys common stock (to the accredited investor members)
    and $986,000 in cash (to the unaccredited investor members in
    lieu of 0.5% of the shares of the Companys common stock
    they would otherwise be entitled to receive, which was valued at
    the $11.36 offering price to investors in the 144A offering) in
    exchange for all the common member interests. Concurrently with
    the closing of the 144A offering on November 16, 2006,
    Triple Net Properties became a wholly-owned subsidiary of NNN.
    For accounting purposes, Triple Net Properties was considered
    the acquirer of Realty and Capital Corp.
    NNN entered into a contribution agreement with Mr. Thompson
    and Mr. Rogers pursuant to which they contributed all of
    the outstanding shares of Realty, to the Company in exchange for
    4,124,120 shares of the Companys common stock and,
    with respect to Mr. Thompson, $9.4 million in cash in
    lieu of the shares of NNN he would otherwise be entitled to
    receive, which was valued at the $11.36 offering price to
    investors in the 144A offering. Concurrently with the closing of
    the 144A offering on November 16, 2006, Realty became a
    wholly-owned subsidiary of NNN.
    NNN entered into a contribution agreement with
    Mr. Thompson, Mr. Rogers and Kevin K. Hull pursuant to
    which they contributed all of the outstanding shares of Capital
    Corp. to the Company in exchange for 1,164,680 shares of
    the Companys common stock and, with respect to
    Mr. Thompson, 79




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
  $2.7 million in cash in lieu of the shares of NNN he would
    otherwise be entitled to receive, which was valued at the $11.36
    offering price to investors in the 144A offering. Capital Corp.
    became a wholly-owned subsidiary of NNN on December 14,
    2006.            (In thousands except share and per share data)Purchase of shares of Realty for cash





$
9,435Purchase of shares of Realty for stock






46,865Total purchase price






56,300Adjusted beginning equity

$
1,733Adjustment for fair value of intangible contract rights


(20,538
)Adjustment to goodwill to reflect deferred tax liability arising
    from allocation of purchase price to intangible contract rights


8,214Less: fair value of net assets acquired






(10,591
)Goodwill: Excess purchase price over fair value of net assets
    acquired





$
45,709  80




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
    Assets:Current assets

$
5,326Intangible contract rights


20,538Total assets


25,864Liabilities:Current liabilities


7,059Long-term deferred tax liability


8,214Total liabilities


15,273Fair value of net assets acquired

$
10,591     Realty fair value

$
56,300Cash payment toward purchase


(9,435
)Value of shares issued

$
46,865Price per share issued

$
10.00Shares issued to Realty owners


4,686,500     (In thousands, except share and per share data)Purchase of shares of GBE Securities for cash

$
2,665Purchase of shares of GBE Securities for stock


13,235Total purchase price


15,900Less: fair value of net assets acquired


(1,426
)Goodwill: Excess purchase price over fair value of net assets
    acquired

$
14,474     Assets:Current assets

$
5,391Property and equipment


104Total assets


5,495Liabilities:Current liabilities


4,069Total liabilities


4,069Fair value of net assets acquired

$
1,426  81




---



##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
    GBE Securities fair value

$
15,900Cash payment toward purchase


(2,665
)Value of shares issued

$
13,235Price per share issued

$
10.00Shares issued to GBE Securities owners


1,323,500   Acquisition
    of Properties Held For Investment
    Supplemental
    information (unaudited)
    Unaudited Pro Forma ResultsYear Ended December 31,2007


2006(In thousands, except per share data)Revenue

$
732,844


$
659,337Income from continuing operations

$
2,679


$
1,187Net income (loss)

$
18,701


$
(99,946
)Basic earnings (losses) per share

$
0.29


$
(1.58
)Weighted average shares outstanding for basic earnings per share


63,393



63,393Diluted earnings (losses) per share

$
0.29


$
(1.58
)Weighted average shares outstanding for diluted earnings per
    share


64,785



64,785  82




---



##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
  Goodwill
  InvestmentManagement


Total(In thousands)Balance as of December 31, 2005

$



$
Goodwill acquired


60,183



60,183Impairment charge off






Balance as of December 31, 2006


60,183



60,183Goodwill acquired


1,627



1,627Goodwill acquired  unassigned(1)






107,507Impairment charge off






Balance as of December 31, 2007

$
61,810


$
169,317     (1)
    
    The fair values of the assets and liabilities recorded on the
    date of acquisition related to the Merger are preliminary and
    subject to refinement as additional valuation information is
    received. The goodwill recorded in connection with the
    acquisition has not yet been assigned to the individual
    reporting units pursuant to FASB Statement No. 142.  10.
    PROPERTY
    ACQUISITIONS  2007
    Acquisitions
    2006
    Acquisitions
     83




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
    December 31,2007


2006(In thousands)Land

$
16,395


$
8,584Building and improvements


79,946



62,764In place leases


5,560



5,072Above market leases


450



6Tenant relationships


6,931



5,496Net assets acquired

$
109,282


$
81,922Below market leases

$
(233
)

$
(676
)Net liabilities assumed

$
(233
)

$
(676
)         11.
    IDENTIFIED
    INTANGIBLE ASSETS    December 31,(In thousands)

Useful Life

2007


2006Contract rightsContract rights, established for the legal right to future
    disposition fees of a portfolio of real estate properties under
    contract

Amortize per
    disposition
    transactions

$
20,538


$
20,538Accumulated amortization  contract rights




(3,521
)


(410
)Contract rights, net




17,017



20,128     84




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
  December 31,(In thousands)

Useful Life

2007


2006Other identified intangible assetsTrade name

Indefinite


64,100



Affiliate agreement

20 years


10,600



Customer relationships

5 to 7 years


5,579



Internally developed software

4 years


6,200



Customer backlog

1 year


300



Other contract rights

5 to 7 years


1,418



Non-compete and employment agreements

3 to 4 years


597



88,794



Accumulated amortization




(338
)


Other identified intangible assets, net




88,456



     December 31,(In thousands)

Useful Life

2007


2006Identified intangible assets  propertiesIn place leases and tenant relationships,

42 to 102 months


14,737



270Above market leases

42 months


2,472



9917,209



369Accumulated amortization  properties




(3,622
)


(191
)Identified intangible assets, net properties




13,587



178Total identified intangible assets, net



$
119,060


$
20,306      85




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
    (In thousands)2008

$
3,5962009


2,6152010


1,9922011


1,5702012


1,238Thereafter


2,576$
13,587   12.
    ACCOUNTS
    PAYABLE AND ACCRUED EXPENSES    December 31,2007


2006(In thousands)Broker-dealer commissions

$
26,517


$
2,013Accrued liabilities


18,421



8,824Bonuses


14,933



10,447Salaries and related costs


12,575



4,562Accounts payable


12,702



1,472Severance


4,965



Property management fees and commissions due to third parties


4,491



975Other


3,591



Dividends


1,733



3,813Organizational marketing expense allowance (OMEA)
    related costs


1,219



1,495Total

$
101,147


$
33,601    86




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
  13.
    NOTES PAYABLE
    AND CAPITAL LEASE OBLIGATIONS    December 31,2007


2006(In thousands)Mezzanine debt payable to financial institutions, with variable
    interest rates based on London Interbank Offered Rate
    (LIBOR) (ranging from 11.31% to 12.00% per annum at
    December 31, 2007), require monthly interest only payments,
    maturing from February 29, 2008 to April 15, 2008

$
30,000


$
Mortgage loan payables to financial institutions, secured by two
    properties acquired in 2007, with fixed interest rates (ranging
    from 5.95% to 6.32% per annum as of December 31, 2007),
    require monthly interest only payments, maturing on
    July 10, 2014 and February 11, 2017, respectively


107,000



Mortgage loan payable to a financial institution, secured by a
    property acquired in 2005, with variable interest paid monthly
    (7.90% as of December 31, 2006) and default interest
    of 5.00%. The debt was extinguished at February 2007






4,400Unsecured notes payable to third-party investors with fixed
    interest at 6.00% per annum and matures on December 2011.
    Principal and interest is due quarterly beginning March 31,
    2006. Scheduled principal payments are $96 for the year ended
    December 31, 2008, $135 in 2009, $143 in 2010 and $37 in
    2011


411



533Capital leases obligations


790



585Total


138,201



5,518Less portion classified as current


(30,447
)


(4,675
)Non-current portion

$
107,754


$
843       (In thousands)2008

$
30,0962009


1352010


1432011


372012


Thereafter


107,000$
137,411  87




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
    (In thousands)2008

$
3512009


3472010


1722011


24894Less imputed interest


(104
)$
790   14.
    MORTGAGE
    LOANS PAYABLE SECURED BY PROPERTIES HELD FOR SALE    December 31,2007


2006(In thousands)Mortgage debt payable to various financial institutions for real
    estate held for sale. Fixed interest rates range from 6.14% to
    6.79% per annum. The notes mature at various dates through
    January 2018. As of December 31, 2007, all notes require
    monthly interest-only payments

$
72,230


$
31,660Mezzanine debt payable to various financial institutions for
    real estate held for sale, fixed and variable interest rates
    range from 6.86% to 10.23% per annum. Notes mature at various
    dates through December 2008. As of December 31, 2007, all
    notes require monthly interest-only payments


18,790



15,246Mortgage debt payable to various financial institutions for real
    estate held for sale, which bear interest at LIBOR plus
    250 basis points and include an interest rate cap for LIBOR
    at 6.00% (approximately 7.24% per annum as of December 31,
    2007)


120,500



Total

$
211,520


$
46,906     15.
    LINES OF
    CREDIT     88




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
          16.
    SENIOR
    NOTES  pari passu
    Date


Maturity


December 31,


Current


CallOwnership

Subsidiary

Issued


Date


2007


2006


Rate


Date(In thousands)100%


Senior Notes Program


08/01/2006



08/01/2011


$
16,277


$
10,263



8.75%



N/A  89




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
  17.
    REDEEMABLE
    PREFERRED MEMBERSHIP    18.
    SEGMENT
    DISCLOSURE    Transaction Services
  Investment Management
  Management Services
      Transaction


Investment


ManagementYear Ended December 31, 2007

Services


Management


Services


Total(In thousands)Revenue

$
35,522


$
149,400


$
16,365


$
201,287Compensation costs


27,081



62,454



14,574



104,109General and administrative


3,894



39,535



822



44,251Segment operating income

$
4,547


$
47,411


$
969


$
52,927Segment assets

$
141,348


$
480,498


$
14,469


$
636,315   90




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
  Transaction


Investment


ManagementYear Ended December 31, 2006

Services


Management


Services


Total(In thousands)Revenue

$



$
99,082


$



$
99,082Compensation costs






49,449







49,449General and administrative






30,545







30,545Segment operating income

$



$
19,088


$



$
19,088Segment assets

$



$
274,048


$



$
274,048   Transaction


Investment


ManagementYear Ended December 31, 2005

Services


Management


Services


Total(In thousands)Revenue

$



$
89,106


$



$
89,106Compensation costs






29,873







29,873General and administrative






31,525







31,525Segment operating income

$



$
27,708


$



$
27,708Segment assets

$



$
77,279


$



$
77,279     Year Ended December 31,2007


2006


2005(In thousands)Reconciliation to consolidated net income:Total segment operating income

$
52,927


$
19,088


$
27,708Non-segment:Rental


30,143



9,224



3,753Operating expenses


(50,216
)


(17,340
)


(12,817
)Other income


2,005



1,204



(520
)Minority interest in income (losses) of consolidated entities


459



(308
)


Income tax provision (benefit)


14,268



(4,230
)


Loss from discontinued operations


(208
)


(4
)


Net income

$
20,842


$
16,094


$
18,124Reconciliation of segment assets to consolidated balance
    sheet:Segment assets

$
636,315


$
274,048


$
77,279Corporate assets


333,097



53,995



9,057Total assets

$
969,412


$
328,043


$
86,336Corporate expenditures

$
2,693


$
1,984


$
4,979Total capital expenditures

$
2,693


$
1,984


$
4,979  91




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
  19.
    PROPERTIES
    HELD FOR SALE AND DISCONTINUED OPERATIONS    December 31,2007


2006(In thousands)Operating properties

$
219,622


$
40,260Identified intangible assets and other assets


65,742



9,333Total assets

$
285,364


$
49,593Mortgage loans payable

$
211,520


$
46,906Liabilities of properties held for sale


9,829



595Total liabilities

$
221,349


$
47,501       components-
  Year Ended December 31,2007


2006


2005(In thousands)Rental income

$
8,445


$
1,291


$
Rental expense


(3,508
)


(567
)


Interest expense (including amortization of deferred financing
    costs)


(5,703
)


(857
)


Tax benefit


306



61



Loss from discontinued
    operations-net
    of taxes


(460
)


(72
)


Gain on disposal of discontinued
    operations-net
    of taxes


252



68



Total loss from discontinued operations

$
(208
)

$
(4
)

$
   20.
    COMMITMENTS
    AND CONTINGENCIES  Operating Leases
   92




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
      (In thousands)2008

$
19,8982009


17,0552010


12,8502011


10,6622012


9,151Thereafter


18,166$
87,782   Operating Leases  Other 10-year
  Rental RelatedExpense(In thousands)2008

$
9,5352009


9,7932010


10,8122011


10,9422012


10,942Thereafter


30,822$
82,846     Capital Lease Obligations
  SEC Investigation  In the matter of Triple Net Properties, LLC.
 93




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
        General
    Guarantees
    December 31,2007


2006(In thousands)Non-recourse/carve-out guarantees of debt of properties under
    management(1)

$
3,167,447


$
2,391,183Non-recourse/carve-out guarantees of the Companys debt(1)


221,430



41,060Guarantees of mezzanine debt of properties under management






11,139Guarantees of the Companys mezzanine debt


48,790



15,246Recourse guarantees of debt of properties under management


47,399



28,685Recourse guarantees of the Companys debt


10,000



  94




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
    (1)
    
    A non-recourse/carve-out guarantee imposes personal
    liability on the guarantor in the event the borrower engages in
    certain acts prohibited by the loan documents.    Environmental Obligations
  Real Estate Licensing Issues
    21.
    EARNINGS
    PER SHARE  Earnings Per Share
 95




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
          Year Ended December 31,2007


2006


2005(In thousands, except per share amounts)Numerator:Income from continuing operations, net of tax

$
21,050


$
16,098


$
18,124(Loss) from discontinued operations, net of tax


(208
)


(4
)


Net income

$
20,842


$
16,094


$
18,124Denominator:Denominator for basic earnings per share:Weighted-average number of common shares outstanding


38,652



19,681
(2)


17,200
(1)(2)Effect of dilutive securities:Non vested restricted stock


1
(3)


13
(3)


Denominator for diluted net income per share:Weighted-average number of common and common equivalent shares
    outstanding


38,653



19,694



17,200Basic earnings per shareIncome from continuing operations, net of tax

$
0.54


$
0.82


$
1.05(Loss) from discontinued operations, net of tax










Basic earnings per share

$
0.54


$
0.82


$
1.05Diluted earnings per shareIncome from continuing operations, net of tax

$
0.54


$
0.82


$
1.05(Loss) from discontinued operations, net of tax










Diluted earnings per share

$
0.54


$
0.82


$
1.05  96




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
    (1)
    
    Common membership units of Grubb & Ellis Realty
    Investors, LLC of 27,488,000 as December 31, 2005, are
    converted to the Companys common shares for earnings per
    share disclosure purpose.(2)
    
    Shares of NNNs common stock as December 31, 2006, are
    converted to the Companys common shares outstanding by
    applying December 7, 2007 merger exchange ratio for
    earnings per share disclosure purpose.(3)
    
    Excluded from the calculation of diluted weighted-average common
    shares were approximately 2.0 million and
    181,000 shares of options and restricted stock that have an
    anti-dilutive effect when applying the treasury stock method as
    of December 31, 2007 and 2006, respectively.  22.
    OTHER
    RELATED PARTY TRANSACTIONS  Due to Related Parties
  Management Fees
  Other Related Party
       97




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
        gross-up
  gross-up
 98




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
  gross-up
  gross-up
             99




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
      23.
    EMPLOYEE
    BENEFIT PLANS  Stock
    Incentive Plans
    2006 Omnibus Equity Plan 
    Non-Qualified Stock Options.
     100




---



##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
    Weighted-Average


Weighted-Weighted-


Remaining


AverageAverage


Contractual


Grant DateNumber of


Exercise Price


Term


Fair ValueShares


per Share


(In Years)


per ShareOptions outstanding as of January 1, 2005


Options granted


Options exercised


Options forfeited or expired


Options outstanding as of December 31, 2005


Options granted


180,400


$
11.36






$
4.16Options exercised


Options forfeited or expired


Options outstanding as of December 31, 2006


180,400


$
11.36



9.87


$
4.16Options granted


610,940


$
11.36






$
3.61Options exercised


Options forfeited or expired


(140,800
)

$
11.36






$
3.78Options converted and vested related to acquired company


1,105,219


$
7.06






$
3.60Options outstanding as of December 31, 2007


1,755,759


$
8.65



6.14


$
3.65Options vested and exercisable as of December 31, 2007


1,196,152


$
7.39



4.79


$
3.64Options expected to vest as of December 31, 2007


433,178


$
11.36



9.04


$
3.67Options vested and expected to vest as of December 31, 2007


1,629,330


$
8.44



5.93


$
3.65   Restricted Stock.
   101




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
      Weighted-AverageGrant DateNumber of


Fair ValueShares


per ShareNon vested shares outstanding as of January 1, 2005


Shares issued


Shares vested


Shares forfeited


Non vested shares outstanding as of December 31, 2005


Shares issued


541,200


$
10.83Shares vested






Shares forfeited






Non vested shares outstanding as of December 31, 2006


541,200


$
10.83Shares issued upon merger


40,000


$
12.49Shares issued


1,409,372


$
10.31Shares vested


(456,133
)

$
10.78Shares forfeited


(102,667
)

$
10.89Non vested shares outstanding as of December 31, 2007


1,431,772


$
10.37     Year Ended December 31,2007


2006


2005Exercise price

$
8.59


$
11.36


N/AExpected term (in years)


5.0



6.0


N/ARisk-free interest rate


3.97
%


4.67
%

N/AExpected volatility


81.79
%


43.94
%

N/AExpected dividend yield


4.1
%


4.1
%

N/AFair value at date of grant

$
3.45


$
3.66


N/A    102




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
    Employment Agreements.
  Other stock award.
  Other Equity Awards
   103




---



##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
      401k Plan
  24.
    INCOME
    TAXES  non-amortizable non-amortizable
     104




---



##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
    Year Ended December 31,(In thousands)

2007


2006


2005Current:Federal

$
16,991


$
375


$
State


3,195



331



20,186



706



Deferred:Federal


(5,313
)


(3,956
)


State


(605
)


(980
)


(5,918
)


(4,936
)


$
14,268


$
(4,230
)

$
        105




---



##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
    Year Ended December 31,(In thousands)

2007


2006


2005Federal income taxes at the statutory rate

$
12,366


$
4,035


$
Income of properties not subject to corporate income tax(1)






(5,171
)


Tax benefit of change in tax status






(2,875
)


State income taxes net of federal benefit


1,864



(51
)


Credits


(250
)






Other


(251
)






Non-taxable income






(238
)


Non-deductible expenses


460



70



Change in valuation allowance


79







$
14,268


$
(4,230
)

$
     (1)
    
    Represents Grubb & Ellis Realty Investors, LLC income
    for the period January 1, 2006 through November 15,
    2006.    (In thousands)

December 31, 2007Stock compensation

$
968Accrued expenses


3,096Severance accrual


1,986Allowance for bad debts


1,608Deferred revenue


1,750Workers compensation reserves


703Net operating losses


2,559Other


535Less valuation allowance


(1,561
)Current deferred tax assets:


11,644Intangible assets


(2,532
)Prepaid service contracts


(1,076
)Other


(182
) 106




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
  (In thousands)

December 31, 2007Current deferred tax liabilities:


(3,790
)Net current deferred tax assets

$
7,854Stock compensation

$
2,616Capitalized cost of member redemption


935Property and equipment


2,568Legal reserve


2,067Other


731Net operating losses


4,125Less valuation allowance


(1,542
)Noncurrent deferred tax assets


11,500Intangible assets


(43,693
)Other


(644
)Noncurrent deferred tax liabilities


(44,337
)Net noncurrent deferred tax liabilities

$
(32,837
)Net deferred tax liabilities:

$
(24,983
)     (In thousands)

December 31, 2006Deferred tax assets:Stock compensation

$
959Accrued expenses


241Property and equipment


1,075Allowance for bad debts


833Deferred revenue


736Capitalized cost of member redemption


923Discontinued operations


16Equity in unconsolidated entities


55Net operating losses


34Total gross deferred tax assets:


4,872Deferred tax liabilities:State income taxes


Other


(3
)Intangible assets


(8,053
)Total gross deferred tax liabilities:


(8,056
)Deferred tax
    liabilities-net:

$
(3,184
)  107




---



##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
        12-month
  25.
    SELECTED
    QUARTERLY FINANCIAL DATA (unaudited)  For The Year Ended December 31, 2007(In thousands, except per share amounts)

First Quarter


Second Quarter


Third Quarter


Fourth QuarterTotal revenue

$
31,748


$
43,337


$
53,143


$
103,202Operating income

$
5,445


$
15,058


$
6,268


$
6,083Net income to common stockholders

$
3,637


$
10,234


$
4,054


$
2,917Income per common share:Basic 

$
0.10


$
0.28


$
0.11


$
0.07Weighted average common shares outstanding


36,910



36,910



36,910



43,821Diluted 

$
0.10


$
0.28


$
0.11


$
0.07Weighted average common shares outstanding


36,949



36,979



37,072



43,826   108




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
    YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005 
    (Continued)
  For The Year Ended December 31, 2006(In thousands, except per share amounts)

First Quarter


Second Quarter


Third Quarter


Fourth QuarterTotal revenue

$
28,679


$
25,009


$
24,003


$
30,615Operating income (loss)

$
10,521


$
5,631


$
(488
)

$
(4,692
)Net income (loss) to common stockholders

$
10,617


$
5,972


$
(540
)

$
45Income (loss) per common share:Basic 

$
0.62


$
0.35


$
(0.03
)

$
0.00Weighted average common shares outstanding


17,194



17,194



17,246



27,057Diluted 

$
0.62


$
0.35


$
(0.03
)

$
0.00Weighted average common shares outstanding


17,194



17,194



17,246



27,107   26.
    SUBSEQUENT
    EVENTS       109




---



##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure  Changes
    in Registrants Certifying Accountant
  Form 8-K
    Regulation S-K
    Material weakness related to stock based
    compensation 
   Item 9A.     Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures
   110




---



##### Table of Contents



Rules 13a-15(c) 15d-15(e)
  Changes
    in Internal Controls over Financial Reporting
    No
    Managements Report on Internal Control over Financial
    Reporting
  Form 10-K
  No
    Auditors Report on Internal Control
  Form 10-K Risk Factors  Risks Related to the Company
    in General  The Company will not be required to
    furnish an auditors report on its internal control over
    financial reporting until December 2008.
 111




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##### Table of Contents



GRUBB &
    ELLIS COMPANY
  PART III
  Item 10.
    Directors,
    Executive Officers and Corporate Governance  Information
    about the Directors
      Scott D. Peters
    
    50, has served as the Companys Chief Executive Officer and
    President and as a director of the Company since December 2007.
    Mr. Peters joined NNNs predecessor, GERI, in
    September 2004 as Executive Vice President and Chief Financial
    Officer. Mr. Peters served as Chief Executive Officer and
    President of NNN since November 2006, a director since September
    2006 and Chairman since December 2007. Mr. Peters has also
    served as Chairman, President and Chief Executive Officer of
    Grubb & Ellis Healthcare REIT, Inc. since April 2006,
    Executive Vice President and a director of Grubb &
    Ellis Apartment REIT, Inc. since January 2006 and April 2007,
    respectively, and President and Chief Executive Officer of
    G REIT, Inc., from December 2005 to January 2008, having
    previously served as that companys Executive Vice
    President and Chief Financial Officer from September 2004 to
    December 2005. Mr. Peters served as Senior Vice President
    and Chief Financial Officer and a director of Golf
    Trust America, Inc., a publicly traded real estate
    investment trust, from February 1997 to February 2007.Harold H. Greene
    
    69, has served as a director of the Company since December 2007.
    Mr. Greene also has served as a director of NNN from
    November 2006 to December 2007. Mr. Greene is a
    40-year
    veteran of the commercial and residential real estate lending
    industry. He most recently served as the Managing Director for
    Bank of Americas California Commercial Real Estate
    Division from 1998 to his retirement in 2001, where he was
    responsible for lending to commercial real estate developers in
    California and managed an investment portfolio of approximately
    $2.6 billion. From 1990 to 1998, Mr. Greene was the
    Executive Vice President of SeaFirst Bank in Seattle, Washington
    and prior to that he served as the Vice Chairman of MetroBank
    from 1989 to 1990 and in various positions, including Senior
    Vice President in charge of the Asset Based Finance Group, with
    Union Bank, where he worked for 27 years. Mr. Greene
    currently serves as a director of Garys and Company
    (mens clothing retailer), as a director and member of the
    audit committee of Paladin Realty Income Properties, Inc., and
    as a director and member of the audit, compensation and
    nominating and corporate governance committees of William Lyon
    Homes.D. Fleet Wallace
    
    40, has served as a director of the Company since December 2007.
    Mr. Wallace also has served as a director of NNN from
    November 2006 to December 2007. Mr. Wallace is a principal
    and co-founder of McCann Realty Partners, LLC, an apartment
    investment company focusing on garden apartment properties in
    the Southeast formed in October 2004. Mr. Wallace also
    serves as principal of 112




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##### Table of Contents



Greystone Capital Management, LLC, formed in September 2001, and
    helps manage Greystone Fund, L.P. Greystone Fund, L.P. is a
    professionally managed opportunity fund invested primarily in
    promising venture capital opportunities and distressed assets.
    From April 1998 to August 2001, Mr. Wallace served as
    corporate counsel and assistant secretary of United Dominion
    Realty Trust, Inc., a publicly-traded real estate investment
    trust. From September 1994 to April 1998, Mr. Wallace was
    in the private practice of law with McGuire Woods in Richmond,
    Virginia. Mr. Wallace has also served as a Trustee of
    G REIT Liquidating Trust since January 2008.    Robert J. McLaughlin
    
    75, has served as a director of the Company since July 2004.
    Mr. McLaughlin previously served as a director of the
    Company from September 1994 to March 2001. He founded The Sutter
    Group in 1982, a management consulting company that focuses on
    enhancing shareholder value, and currently serves as its
    President. Previously, Mr. McLaughlin served as President
    and Chief Executive Officer of Tru-Circle Corporation, an
    aerospace subcontractor, from November 2003 to April 2004, and
    as Chairman of the Board of Directors of Imperial Sugar Company
    from August 2001 to February 2003, and as Chairman and Chief
    Executive Officer from October 2001 to April 2002. He is also a
    director of Imperial Sugar Company.Gary H. Hunt
    
    59, has served as a director of the Company since December 2007.
    Mr. Hunt also has served as a director of NNN from November
    2006 to December 2007. Mr. Hunt has served as the managing
    partner of California Strategies, LLC, a privately held
    consulting firm in Irvine, California that works with large
    homebuilders, real estate companies and government entities
    since 2001. Prior to serving with California Strategies,
    Mr. Hunt was the executive vice president and served on the
    board of directors and on the Executive Committee of the Board
    of The Irvine Company, a
    110-year-old
    privately held company that plans, develops and invests in real
    estate primarily in Orange County, California for 25 years.
    He also serves on the board of directors of Glenair Inc., The
    Beckman Foundation and William Lyon Homes. Mr. Hunt has
    also served as a Trustee of G REIT Liquidating Trust since
    January 2008.Glenn L. Carpenter
    
    65, has served as a director of the Company since December 2007
    and has served as Chairman of the Board of the Company since
    February 8, 2008. Mr. Carpenter also has served as a
    director of NNN from November 2006 to December 2007. Since
    August 2001, Mr. Carpenter has served as the Chief
    Executive Officer, President and Chairman of FountainGlen
    Properties, LP, a privately held company in Newport Beach,
    California, that develops, owns and operates apartment
    communities for active seniors. Prior to serving with
    FountainGlen, from 1994 to 2001, Mr. Carpenter was the
    Chief Executive Officer and founder of Pacific Gulf Properties
    Inc., a publicly traded REIT that developed and operated
    industrial business parks and various types of apartment
    communities. From 1970 to 1994, Mr. Carpenter served as
    Chief Executive Officer and President, and other officer
    positions of Santa Anita Realty Enterprises Inc., a publicly
    traded REIT that owned and managed industrial office buildings,
    apartments and shopping centers. He has received numerous honors
    in the real estate field including the 2000 Real Estate Man of
    the Year Award and was voted the 1999 Orange County Entrepreneur
    of the Year for real estate. Mr. Carpenter sits on the
    board of councilors of the School of Gerontology at the
    University of Southern California and is a 113




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##### Table of Contents



council and executive board member of the American Seniors
    Housing Association.    C. Michael Kojaian
    
    46, has served as a director of the Company since December 1996,
    and served as the Chairman of the Board of Directors of the
    Company from June 2002 until December 7, 2007. He has been
    the President of Kojaian Ventures, L.L.C. and also Executive
    Vice President, a director and a shareholder of Kojaian
    Management Corporation, both of which are investment firms
    headquartered in Bloomfield Hills, Michigan, since 2000 and
    1985, respectively. He is also a director of Arbor Realty Trust,
    Inc. Mr. Kojaian has also served as the Chairman of the
    Board of Directors of Grubb & Ellis Realty Advisors,
    Inc., an affiliate of the Company, since its inception in
    September 2005, and as its Chief Executive Officer since
    December 13, 2007.Rodger D. Young
    
    61, has served as a director of the Company since April 2003.
    Mr. Young has been a name partner of the law firm of
    Young & Susser, P.C. since its founding in 1991,
    a boutique firm specializing in commercial litigation with
    offices in Southfield, Michigan and New York City, since its
    founding in 1991. In 2001, Mr. Young was named Chairman of
    the Bush Administrations Federal Judge and U.S. Attorney
    Qualification Committee by Governor John Engler and
    Michigans Republican Congressional Delegation.
    Mr. Young is a member of the American College of Trial
    Lawyers and was listed in the 2007 edition of Best Lawyers of
    America. Mr. Young was named by Chambers International
    and by Best Lawyers in America as one of the top commercial
    litigators in the United States.  Communications
    with the Directors
  c/o Corporate c/o Corporate
  Information
    About Executive Officers
    Andrea R. Biller
    
    58, has served as Executive Vice President, General Counsel and
    Secretary of the Company since December 2007. She joined GERI in
    March 2003 as General Counsel and served as NNNs General
    Counsel, Executive Vice President and Secretary since November
    2006 and director since December 2007. Ms. Biller also has
    served as Executive Vice President and Secretary of
    Grubb & Ellis Healthcare REIT, Inc. since April 2006,
    Secretary of Grubb & Ellis Apartment REIT, Inc. since
    January 2006. Ms. Biller served as Executive Vice President
    of G REIT, Inc. from December 2005 to January 2008 and
    Secretary of G REIT from June 2004 to January 2008.
    Ms. Biller served as Special Counsel at the Securities and
    Exchange Commission, Division of Corporate Finance, in
    Washington D.C. from
    1995-2000,
    and as a private attorney specializing in corporate and
    securities law from
    1990-1995
    and 114




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##### Table of Contents



2000-2002.
    Ms. Biller is licensed to practice law in California,
    Virginia, and Washington, D.C.Jeffrey T. Hanson
    
    37, has served as Chief Investment Officer of the Company since
    January 2008. He has served as Chief Investment Officer of NNN
    since November and joined NNN in July 2006 as the President and
    Chief Executive Officer of Realty. From 1996 to July 2006,
    Mr. Hanson was a Senior Vice President with the Grubb and
    Ellis Institutional Investment Group in Grubb &
    Ellis Newport Beach office. Mr. Hanson served as a
    real estate broker with CB Richard Ellis from 1996 to 1997.
    Mr. Hanson is a member of the Sterling College Board of
    Trustees and formerly served as a member of the
    Grubb & Ellis Presidents Counsel and
    Institutional Investment Group Board of Advisors.Francene LaPoint
    
    43, has served as the Companys Executive Vice President,
    Accounting and Finance since December 2007. She has served as
    Chief Financial Officer of NNN since November 2006 and director
    since December 2007. Ms. LaPoint joined GERI as Senior Vice
    President and Controller in July 2004 and was named Executive
    Vice President and Controller in August 2005. Ms. LaPoint
    served as Senior Vice President and Corporate Controller of
    Hawthorne Savings, FSB (Hawthorne Financial Corporation), a
    publicly traded financial institution, from June 1999 to June
    2004. From January 1996 to June 1999, Ms. LaPoint served
    with PricewaterhouseCoopers from where she obtained her CPA
    license.Robert H. Osbrink
    
    61, has served as Executive Vice President of the Company since
    December 2001 and was named President of Transaction Services in
    February 2004. During the five years prior to December 2001,
    Mr. Osbrink served in a progression of regional managerial
    positions in the Los Angeles and Southwestern United States
    areas for the Company. Mr. Osbrink also acted as a Co-Chief
    Executive Officer of the Company from April 2003 until March
    2005.Richard W. Pehlke
    
    54, has served as the Executive Vice President and Chief
    Financial Officer of the Company since February 2007. Prior to
    joining the Company, Mr. Pehlke served as Executive Vice
    President and Chief Financial Officer and a member of the board
    of directors of Hudson Highland Group, a publicly held global
    professional staffing and recruiting business, from 2003 to
    2005. From 2001 to 2003, Mr. Pehlke operated his own
    consulting business specializing in financial strategy and
    leadership development. In 2000, he was Executive Vice President
    and Chief Financial Officer of ONE, Inc. a privately held
    software implementation business. Prior to 2000, Mr. Pehlke
    held senior financial positions in the telecommunications,
    financial services and food and consumer products industries.Dylan Taylor
    
    37, has served as Executive Vice President of the Company since
    January 2008, and President of its Corporate Services Group
    since October 2007. He was named Acting President of Global
    Client Services and Grubb and Ellis Management Services, Inc. in
    January 2008. Mr. Taylor joined the Company in 2005 as
    Executive Vice President, Regional Managing Director, Corporate
    Services. Prior to joining the Company, Mr. Taylor spent
    more than five years as Senior Vice President, Corporate
    Solutions at Jones Lang LaSalle.  Section 16(a)
    Beneficial Ownership Reporting Compliance
   115




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Code of
    Ethics
    www.grubb-ellis.com
  Corporate
    Governance Guidelines
    Audit
    Committee
   116




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Corporate
    Governance and Nominating Committee
    Certifications
   Item 11.     Executive
    Compensation  Compensation
    Discussion and Analysis
  Form 10-K.
    Compensation
    Committee Overview
   117




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##### Table of Contents



www.grubb-ellis.com
  Use of
    Consultants
        Role of
    Executives in Establishing Compensation
   118




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##### Table of Contents



Certain
    Compensation Committee Activity
    Compensation
    Philosophy, Goals and Objectives
      
    Compensate management, key employees, independent contractors
    and consultants on a competitive basis to attract, motivate and
    retain high quality, high performance individuals who will
    achieve the Companys short-term and long term goals; and    
    Motivate and reward executive officers whose knowledge, skill
    and performance are critical to the Companys success;
    Align the interests of the Companys executive officers and
    stockholders through equity-based long-term incentive awards
    that motivate executive officers to increase stockholder value
    and reward executive officers when stockholder value increases;
    and
    Ensure fairness among the executive management team by
    recognizing contributions each executive officer makes to the
    companys success.    Compensation
    During Term of Employment
   119




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##### Table of Contents



Base
    Salary
        Annual
    Bonus Incentive Compensation
           120




---



##### Table of Contents



,
  Annual
    Bonus Incentive Compensation
  Calendar 2007

Calendar 2006% of Bonus Based Upon

% of Bonus Based UponBonus



Business



Bonus



BusinessTarget as



Unit/

Personal

Target as



Unit/

Personal% of Base

Company

Function

Goals and

% of Base

Company

Function

Goals andSalary

EBIT

EBIT

Objectives

Salary

EBIT

EBIT

ObjectivesMark E. Rose


200
%


90
%






10
%


200
%


60
%






40
%Former Chief Executive OfficerScott D. Peters


200
%


























Current Chief Executive OfficerRichard W. Pehlke


50
%(1)


90
%






10
%














Chief Financial OfficerFrancene LaPoint


100
%


























Executive Vice President,
    Accounting and FinanceChief Financial Officer, NNNAndrea R. Biller


150
%


























Executive Vice President, General Counsel and SecretaryMaureen A. Ehrenberg


80
%


30
%


60
%


10
%


80
%


30
%


60
%


10
%Executive Vice President, and President Global Client ServicesJeffrey T. Hanson


100
%


























Chief Investment Officer     (1)
    
    Mr. Pehlke has a minimum guaranteed bonus of $125,000 for
    calendar 2007, prorated based on his hire date (equal to
    $110,577).  Stock-Based
    Compensation and Incentives
   121




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##### Table of Contents



Profit
    Sharing Plan
    Retirement
    Plans
    Personal
    Benefits and Perquisites
  ,
  Summary
    Compensation Table
   122




---



##### Table of Contents



Change inPension ValueAndNon-Equity

NonqualifiedYear







Option

Incentive Plan

Deferred

All otherName and

Ended

Salary

Bonus

Stock

Awards

Compensation

Compensation

CompensationPrincipal Position

December

($)

($)

Awards($)(5)

($)(6)

($)

Earnings

($)(3)(7)(8)

TotalMark E. Rose


2007


$
527,600


$



$
1,583,344


$
633,638


$
62,900






$
2,345,589
(9)

$
5,153,071Former Chief Executive Officer


2006



500,000



377,368



458,329



534,129











16,878



1,886,704Scott D. Peters


2007



587,808



1,825,800



2,610,555



91,250











655,621



5,771,034Current Chief Executive Officer


2006



611,250



1,125,900
(2)


1,834,669



81,345











977,260



4,630,424Richard W. Pehlke(10)


2007



299,500



200,000



49,770



198,808















748,078Executive Vice President, and Chief Financial Officer


2006































Francene LaPoint


2007



350,000



280,800



763,913



73,000











24,090



1,491,803Executive Vice President, Accounting and Finance


2006



277,899



270,720



237,500



65,076











23,449



874,644Andrea R. Biller


2007



400,000



451,000



1,286,413



73,000











592,134



2,802,547Executive Vice President, General Counsel and Secretary


2006



391,674



501,200
(2)


411,667



65,076











72,834



1,442,451Maureen A. Ehrenberg


2007



360,000







166,646







74,100







1,219,186
(9)


1,819,932Executive Vice President, and President, Global Client Services


2006



360,000



247,326



166,680















2,650



776,656Jeffrey T. Hanson


2007



350,000



500,350



3,410,352



45,625











425,106



4,731,433Chief Investment Officer


2006



117,628
(1)


1,212,180
(4)


726,079



40,673











1,083



2,097,643     (1)
    
    Mr. Hansons annual salary for fiscal 2006 was
    $250,000. The $117,628 represents amounts paid or to be paid to
    Mr. Hanson from July 29, 2006 (the date Mr. Hanson
    joined GERI) through December 31, 2006.(2)
    
    Bonus amounts include bonuses of $100,000 earned in fiscal 2006
    to each of Mr. Peters and Ms. Biller upon the receipt
    by NNN from G REIT, a public non-traded REIT that NNN
    sponsored, of net commissions aggregating $5 million or
    more from the sale of G REIT properties pursuant to a plan
    of liquidation approved by G REIT stockholders.(3)
    
    All other compensation also includes: (i) cash
    distributions based on membership interests of $159,418 and
    $50,000 earned by each of Mr. Peters and Ms. Biller
    from Grubb & Ellis Apartment Management, LLC for each
    of the calendar years ended December 31, 2007 and December
    2006, respectively; and (ii) cash distributions based on
    membership interests of $413,546 and $0 earned by each of
    Messrs. Peters and Hanson and Ms. Biller from
    Grubb & Ellis Healthcare Management, LLC for each of
    the calendar years ended December 31, 2007 and December
    2006, respectively.(4)
    
    Mr. Hanson was appointed GERIs Managing Director,
    Real Estate on July 29, 2006. His bonus amount included a
    $750,000 sign-on bonus that was paid in September 2006. Amount
    also included a special bonus paid to Mr. Hanson pursuant
    to his employment agreement for being the procuring cause of at
    least $25 million in equity from new sources, which equity
    was received by GERI during the fiscal year, for real estate
    investments sourced by GERI.(5)
    
    The amounts shown are the amounts of compensation cost related
    to the grants of restricted stock, as well as the compensation
    expense associated with the accelerated vesting of the
    restricted stock at the Merger date, as described in Statement
    of Financial Accounting Standards No. 123R, utilizing the
    assumptions discussed in Note 23 to the consolidated
    financial statements included in Item 8 of this Report.(6)
    
    The amounts shown are the amounts of compensation cost related
    to the grants of stock options, as well as compensation expense
    associated with the accelerated vesting of the stock options at
    the Merger date, as described in Statement of Financial
    Accounting Standards No. 123R, utilizing the assumptions
    discussed in Note 23 to the consolidated financial
    statements included in Item 8 of this Report. 123




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##### Table of Contents



(7)
    
    The amounts shown include the Companys incremental cost
    for the provision to the named executive officers of certain
    specified perquisites in fiscal 2007 and 2006, as follows:  Living


Travel


Tax Gross Up


Medical & DentalNamed Executive Officer

Year


Expenses


Expenses


Payment


Premiums


TotalMark E. Rose


2007


$



$



$



$



$
2006



















Scott D. Peters


2007



27,314



29,573



0



8,340



65,2272006



24,557



31,376



853,668



1,043



910,644Richard W. Pehlke


2007



















2006



















Francene LaPoint


2007















6,660



6,6602006















833



833Andrea R. Biller


2007















1,740



1,7402006















218



218Maureen A. Ehrenberg


2007



















2006



















Jeffrey T. Hanson


2007















8,340



8,3402006















1,043



1,043   (8)
    
    The amounts shown also include the following 401(k) matching
    contributions made by the Company, income attributable to life
    insurance coverage and contributions to the profit-sharing plan
    in fiscal 2007 and 2006, as follows:  401(k) Plan





Profit-Sharing PlanCompany


Life Insurance


CompanyNamed Executive Officer

Year


Contributions


Coverage


Contributions


TotalMark E. Rose


2007


$
2,250


$
2,700


$



$
4,9502006



2,200



2,400







4,600Scott D. Peters


2007



3,100



120



14,210



17,4302006







116



16,500



16,616Richard W. Pehlke


2007















2006















Francene LaPoint


2007



3,100



120



14,210



17,4302006



6,000



116



16,500



22,616Andrea R. Biller


2007



3,100



120



14,210



17,4302006



6,000



116



16,500



22,616Maureen A. Ehrenberg


2007



2,250



1,040







3,2902006



2,200



450







2,650Jeffrey T. Hanson


2007



3,100



120







3,2202006







40







40   (9)
    
    Includes payments made on termination of employment in
    connection with a change of control, totaling $2,340,639 for
    Mr. Rose and $1,215,896 for Ms. Ehrenberg, to be paid
    over a
    12-month
    period.  (10)
    
    Table does not include Donald D. Olinger, the Companys SVP
    and Chief Accounting Officer who provided services as the
    interim Chief Financial Officer of the Company for the
    approximately six week period from January 1, 2007
    through February 14, 2007 prior to Mr. Pehlke joining
    the Company and subsequent to the departure of
    Mr. Pehlkes predecessor. 124




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##### Table of Contents



Grants of
    Plan-Based Awards
    All OtherAll Other


Option Awards:


Exercise orStock Awards:


Number of


Base Price


Grant Date FairNumber of


Securities


of Option


Value of StockGrant


Shares of


Underlying


Awards


and OptionName

Date


Stock or Units


Options(3)


($/Share)


Awards(4)Mark E. Rose


3/8/07



71,158
(1)





$
10.54


$
750,000Scott D. Peters


6/27/07



462,000
(1)






11.36



5,250,00012/7/07



528,000
(2)






6.43



3,396,000Richard W. Pehlke


2/15/07







25,000



11.75



198,808Francene LaPoint


6/27/07



26,400
(1)






11.36



300,000Andrea R. Biller


6/27/07



26,400
(1)






11.36



300,000Maureen A. Ehrenberg


















Jeffery T. Hanson


6/27/07



17,600
(1)






11.36



200,000     (1)
    
    Amounts shown with respect to Messrs. Peters and Hanson and
    Ms. LaPoint and Ms. Biller represent restricted stock,
    with a grant date of June 27, 2007, issued under NNNs
    2006 Long Term Incentive Plan, that vest in three equal
    installments on June 27, 2008, June 27, 2009 and
    June 27, 2010, subject to continued service with the
    Company. The stock award to Mr. Rose represents shares
    issued by legacy Grubb & Ellis pursuant to his
    employment agreement as Chief Executive Officer in March, 2005,
    which shares became fully vested upon the Merger as a result of
    change in control provisions related to the award.(2)
    
    Amount shown represents shares of common stock received by
    Mr. Peters from Anthony W. Thompson on December 7,
    2007 and are subject to five year vesting and
    Mr. Peters continued employment with the Company.(3)
    
    Amount shown represents a stock option award granted to
    Mr. Pehlke in connection with his employment agreement with
    the Company, which becomes exercisable in three equal
    installments on the business day immediately preceding the
    first, second and third anniversaries of the grant date,
    generally subject to continued employment with the Company. The
    options have a maximum term of ten years.(4)
    
    The grant date fair value of the shares of restricted stock and
    stock options granted were computed in accordance with
    SFAS No. 123R. 125




---



##### Table of Contents



Outstanding
    Equity Awards at Fiscal Year-End
    Option Awards


Stock AwardsNumber of


Number of








Number of


Market ValueSecurities


Securities








Shares or


of SharesUnderlying


Underlying








Units of


or UnitsUnexercised


Unexercised


Option


Option


Stock that


of Stock ThatOptions


Options


Exercise


Expiration


Have Not


Have NotName

Exercisable


Unexercisable(1)


Price


Date


Vested


Vested(4)Mark E. Rose


500,000






$
4
.70



12/11/2009






$
Scott D. Peters


29,333



14,667



11
.36



11/16/2016



462,000(2
)


5,250,000528,000(3
)


3,396,000Richard W. Pehlke






25,000



11
.75



2/15/2017







Francene LaPoint


23,467



11,733



11
.36



11/16/2016



26,400(2
)


300,000Andrea R. Biller


23,467



11,733



11
.36



11/16/2016



26,400(2
)


300,000Maureen A. Ehrenberg


137,022







9
.00(5
)


4/1/2008







Jeffery T. Hanson


14,667



7,333



11
.36



11/16/2016



17,600(2
)


200,000     (1)
    
    Amounts shown represent options granted in fiscal year 2007 and
    2006 under NNNs 2006 Long Term Incentive Plan that vest
    and become exercisable with respect to one-third of the
    underlying shares of the Companys common stock on each of
    November 16, 2006, November 16, 2007 and
    November 16, 2008, subject to the executives
    continued employment with the Company, and have a maximum term
    of ten-years.(2)
    
    Amounts shown represent restricted stock granted on
    June 27, 2007 under NNNs 2006 Long Term Incentive
    Plan. The June 27, 2007 restricted stock vests in three
    equal installments on June 27, 2008, June 27, 2009 and
    June 27, 2010, subject to continued service with the
    Company.(3)
    
    Represents shares of common stock received by Mr. Peters
    from Anthony W. Thompson on December 7, 2007 and are
    subject to five year vesting and continued employment with the
    Company.(4)
    
    The grant date fair value of the shares of restricted stock
    granted on June 27, 2007, as computed in accordance with
    SFAS No. 123R and is reflected in the table, Grants of
    Plan-Based Awards.(5)
    
    Amount represents the weighted average option exercise price for
    multiple awards, all expiring on April 1, 2008.  Employment
    Contracts and Compensation Arrangements
  Scott D.
    Peters
     126




---



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127




---



##### Table of Contents



Potential
    Payments upon Termination or Change in Control
    Scott D. Peters
  InvoluntaryNot for


Involuntary


ResignationExecutive Payments

Voluntary


Early


Normal


Cause


for Cause


for Good


Change inUpon Termination

Termination


Retirement


Retirement


Termination


Termination


Reason


Control


Death


DisabilitySeverance Payments

$



$



$



$
3,162,500


$



$
3,162,500


$
4,950,000


$



$
Bonus Incentive Compensation


































Long Term Incentive Plan


































Stock Options (unvested and accelerated)


































Restricted Stock (unvested and accelerated)














8,646,000







8,646,000



8,646,000







Performance Shares (unvested and accelerated)


































Benefit Continuation














2,086







2,086



2,086







Tax Gross-Up


























968,996







Total Value

$



$



$



$
11,810,586


$



$
11,810,586


$
14,567,082


$



$
   Mark E.
    Rose
       128




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##### Table of Contents



Richard
    W. Pehlke
           129




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##### Table of Contents



Potential
    Payments upon Termination or Change in Control
    Richard W. Pehlke
  InvoluntaryNot for


Involuntary


ResignationExecutive Payments

Voluntary


Early


Normal


Cause


for Cause


for Good


Change inUpon Termination

Termination


Retirement


Retirement


Termination


Termination


Reason


Control


Death


DisabilitySeverance Payments

$



$



$



$
700,000


$



$
700,000


$
700,000


$



$
Bonus Incentive Compensation

























$
350,000







Long Term Incentive Plan


































Stock Options (unvested and accelerated)(1)


































Restricted Stock (unvested and accelerated)


































Performance Shares (unvested and accelerated)


































Benefit Continuation


































Tax Gross-Up


































Total Value

$



$



$



$
700,000


$



$
700,000


$
1,050,000


$



$
     (1)
    
    Mr. Pehlkes agreement provides for immediate vesting
    of all stock options in the event of involuntary termination not
    for cause, resignation for good reason, or in the event of
    change in control; the option exercise price is $11.75 and the
    closing price on the NYSE on December 31, 2007 was $6.41,
    therefore, as of December 31, 2007, Mr. Pehlkes
    options were out of the money.  Andrea R.
    Biller
       130




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##### Table of Contents



Potential
    Payments upon Termination or Change in Control
    Andrea R. Biller
  InvoluntaryNot for


Involuntary


ResignationExecutive Payments

Voluntary


Early


Normal


Cause


for Cause


for Good


Change inUpon Termination

Termination


Retirement


Retirement


Termination


Termination


Reason


Control


Death


DisabilitySeverance Payments

$



$



$



$
1,916,667


$



$
1,916,667


$
3,000,000


$



$
Bonus Incentive Compensation


































Long Term Incentive Plan


































Stock Options (unvested and accelerated)


































Restricted Stock (unvested and accelerated)














300,000







300,000



300,000







Performance Shares (unvested and accelerated)


































Benefit Continuation














436







436



436







Tax Gross-Up


























1,343,817







Total Value

$



$



$



$
2,217,103


$



$
2,217,103


$
4,644,253







   Francene
    LaPoint
   131




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##### Table of Contents



132




---



##### Table of Contents



Potential
    Payments upon Termination or Change in Control
    Francene LaPoint
  InvoluntaryNot for


Involuntary


ResignationExecutive Payments

Voluntary


Early


Normal


Cause


for Cause


for Good


Change inUpon Termination

Termination


Retirement


Retirement


Termination


Termination


Reason


Control


Death


DisabilitySeverance Payments

$



$



$



$
1,341,667


$



$
1,341,667


$
2,100,000


$



$
Bonus Incentive Compensation


































Long Term Incentive Plan


































Stock Options (unvested and accelerated)


































Restricted Stock (unvested and accelerated)














300,000







300,000



300,000







Performance Shares (unvested and accelerated)


































Benefit Continuation














436







436



436







Tax Gross-Up


























806,788







Total Value

$



$



$



$
1,642,103


$



$
1,642,103


$
3,207,244


$



$
   Jeffrey
    T. Hanson
       133




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134




---



##### Table of Contents



Potential
    Payments upon Termination or Change in Control
    Jeffrey T. Hanson
  InvoluntaryNot for


Involuntary


ResignationExecutive Payments

Voluntary


Early


Normal


Cause


for Cause


for Good


Change inUpon Termination

Termination


Retirement


Retirement


Termination


Termination


Reason


Control


Death


DisabilitySeverance Payments

$



$



$



$
1,341,667


$



$
1,341,667


$
2,100,000


$



$
Bonus Incentive Compensation


































Long Term Incentive Plan


































Stock Options (unvested and accelerated)


































Restricted Stock (unvested and accelerated)














200,000







200,000



200,000







Performance Shares (unvested and accelerated)


































Benefit Continuation














2,086







2,086



2,086







Tax Gross-Up


























2,789,450







Total Value

$



$



$



$
1,543,753


$



$
1,543,753


$
5,091,536


$



$
   Maureen
    A. Ehrenberg
      Compensation
    of Directors
      Philosophy
   135




---



##### Table of Contents



case-by-case
             136




---



##### Table of Contents



Director
    Compensation Table
  Fees Earnedor Paid in


StockDirector

Cash(1)


Awards(2)(3)


TotalGlenn L. Carpenter

$
44,000


$
89,294


$
133,294Harold H. Greene


69,133



89,294



158,427C. Michael Kojaian


1,500



1,667



3,167Gary H. Hunt


68,667



89,294



157,961Robert J. McLaughlin


91,000



130,833



221,833D. Fleet Wallace


60,500



89,294



149,794Rodger D. Young


78,750



130,833



209,583     (1)
    
    Represents annual retainers plus all meeting and committee
    attendance fees earned by non-employee directors in 2007.(2)
    
    The amounts shown are the compensation costs recognized by the
    Company in 2007 in accordance with SFAS No. 123R,
    Share-Based Payment(SFAS No. 123R).
    Includes $66,666 in compensation expense each for
    Messrs. Carpenter, Greene, Hunt and Wallace related to the
    accelerated vesting of the restricted stock issued in November
    2006 upon the closing of the Merger. Each of the outside
    directors received a grant of 8,996 shares on
    December 10, 2007 which vest in three equal increments on
    each of the next three annual anniversary dates of the grant.
    The grant date fair value of the 8,996 shares of restricted
    stock was $60,000, as computed in accordance with
    SFAS No. 123R, based on a market price of $6.67 per
    share on the date of grant. In addition, Messrs. Carpenter,
    Greene, Hunt and Wallace each received a grant of
    11,000 shares of restricted stock on June 27, 2007,
    which also vest in three equal increments on each of the next
    three annual anniversary dates of the grant. The grant date fair
    value of the 11,000 shares of restricted stock was $125,000
    based on a value of $11.36 per share on the date of grant.(3)
    
    The following table shows the aggregate number of unvested stock
    awards and option awards granted to non-employee directors and
    outstanding as of December 31, 2007:  Stock AwardsOptions Outstanding


Outstanding atDirector

at Fiscal Year End


Fiscal Year EndGlenn L. Carpenter


0



19,996Harold H. Greene


0



19,996C. Michael Kojaian


0



8,996Gary H. Hunt


0



19,996Robert J. McLaughlin


10,000



8,996D. Fleet Wallace


0



19,996Rodger D. Young


10,000



8,996   Stock
    Ownership Policy for Outside Directors
    Compensation
    Committee Interlocks and Insider Participation
   137




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##### Table of Contents



Regulation S-K
  Compensation
    Committee Report
  The following Compensation Committee Report is not to be
    deemed to be soliciting material or to be
    filed with the SEC or subject to Regulation 14A
    or 14C or to the liabilities of Section 18 of the Exchange
    Act, except to the extent that the Company specifically requests
    that such information be treated as soliciting material or
    specifically incorporates it by reference into any filing under
    the Securities Act of 1933, as amended (the Securities
    Act) or the Exchange Act.
    The Compensation Committee
  
  Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters.  Equity
    Compensation Plan Information
    Stock
    Ownership Table
   138




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##### Table of Contents



Amount and Nature of


Percent ofBeneficial Ownership


Class(1)Persons affiliated with Kojaian Ventures, L.L.C.(2)


9,455,583



14.53
%Anthony W. Thompson(3)


8,937,808



13.73
%Wellington Management Company, LLP(4)


4,646,888



7.14
%Executive Officers and DirectorsGlenn L. Carpenter


37,400
(5)


*Harold H. Greene


19,800
(5)


*Gary H. Hunt


19,800
(5)


*C. Michael Kojaian


12,516,109
(5)(6)


19.23
%Robert J. McLaughlin


107,555
(5)(7)


*Scott D. Peters


1,401,416
(8)


2.15
%D. Fleet Wallace


19,800
(5)


*Rodger D. Young


28,245
(5)(9)


*Andrea R. Biller


326,077
(10)


*Jeffrey Hanson


323,962
(11)


*Francene LaPoint


115,867
(10)


*Stanley J. Olander, Jr.


360,800
(12)


*Robert H. Osbrink


84,278
(13)


*Richard W. Pehlke


15,833
(14)


*Dylan Taylor


0
(15)


Jacob Van Berkel


0
(16)All Current Directors and Executive Officers as a Group
    (16 persons)


15,376,942
(17)


23.62
%     *
    
    Less than one percent.(1)
    
    The percentage of shares of capital stock shown for each person
    in this column and in this footnote assumes that such person,
    and no one else, has exercised any currently outstanding
    warrants, options or convertible securities held by him or her.(2)
    
    Kojaian Ventures, L.L.C. is affiliated with both C. Michael
    Kojaian, a director of the Company and Kojaian Holdings LLC (see
    footnote 6 below). The address of Kojaian Ventures, L.L.C. is
    39400 Woodward Ave., Suite 250, Bloomfield Hills,
    Michigan 48304.(3)
    
    Anthony Thompson is deemed to be the beneficial owner of
    8,937,808 shares of Common Stock and includes:
    (i) 7,367,502 shares held directly by Mr. Thompson;
    (ii) 784,175 shares held by AWT Family, L.P., a
    California limited partnership; and 786,131 shares of
    common stock held by Cunningham Stafford, LLC, a Nevada limited
    liability company. Mr. Thompsons address is 1901 Main
    St., Suite 108, Irvine, California 92614.(4)
    
    Wellington Management Company, LLP (Wellington), in
    its capacity as investment advisor, may be deemed to
    beneficially own 4,646,888 shares of the Company which are
    held of record by clients of Wellington. Wellingtons
    address is 75 State Street, Boston, Massachusetts 02109.(5)
    
    Beneficially owned shares do not include 2,999 shares of
    restricted stock that vest on December 10, 2008,
    2,999 shares of restricted stock that vest on
    December 10, 2009 or 2,998 shares of restricted stock
    that vest on December 10, 2010, all of these
    8,996 shares are subject to certain terms and conditions
    contained in each of those certain Restricted Stock Agreements
    between the Company and Messrs. Carpenter, Greene, Hunt,
    Kojaian, McLaughlin, Wallace and Young, respectively, dated
    December 10, 2007.(6)
    
    Beneficially owned shares include 3,060,526 shares directly
    held by by Kojaian Holdings LLC. C. Michael Kojaian, a
    director of the Company, is affiliated with Kojaian Ventures,
    L.L.C. and Kojaian 139




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##### Table of Contents



Holdings LLC. Pursuant to rules established by the SEC, the
    foregoing parties may be deemed to be a group, as
    defined in Section 13(d) of the Exchange Act, and
    C. Michael Kojaian is deemed to have beneficial ownership
    of the shares directly held by Kojaian Ventures, L.L.C. and the
    shares directly held by Kojaian Holdings LLC.(7)
    
    Beneficially owned shares include 10,000 shares of common
    stock issuable upon exercise of fully vested outstanding options.(8)
    
    Beneficially owned shares include 29,333 shares of common
    stock issuable upon exercise of fully vested outstanding
    options. Beneficially owned shares do not include
    14,667 shares of Company common stock issuable upon
    exercise of outstanding options which do not vest until
    November 16, 2008 subject to Mr. Peters
    continued employment with the Company.(9)
    
    Beneficially owned shares include 10,000 shares of common
    stock issuable upon exercise of fully vested outstanding options.(10)
    
    Beneficially owned shares include 23,467 shares of common
    stock issuable upon exercise of fully vested outstanding
    options. Beneficially owned shares do not include
    11,733 shares of the Companys common stock issuable
    upon the exercise of options which will vest on
    November 16, 2008 subject to continued employment with the
    Company.(11)
    
    Beneficially owned shares include 14,667 shares of common
    stock issuable upon exercise of fully vested outstanding
    options. Beneficially owned shares do not include
    7,333 shares of the Companys common stock issuable
    upon the exercise of options which will vest on
    November 16, 2008 subject to Mr. Hansons
    continued employment with the Company.(12)
    
    Stanley J. Olander, Jr. directly owns 8,800 shares of the
    Companys common stock and indirectly owns
    352,000 shares of Company common stock owned of record by
    ROC Advisors, LLC of which Mr. Olander is one of three
    members and is the managing member.(13)
    
    Beneficially owned shares do not include 25,000 shares of
    restricted stock that vest on January 24, 2009,
    25,000 shares of restricted stock that vest on
    January 24, 2010 or 25,000 shares of restricted stock
    that vest on January 24, 2011, all of these
    75,000 shares are subject to certain terms and conditions
    contained in that certain Restricted Stock Agreement between the
    Company and Mr. Osbrink dated January 24, 2008.
    However, beneficially do include 15,000 shares of Company
    common stock is issuable upon exercise of fully vested
    outstanding options.(14)
    
    Beneficially owned shares include 8,333 shares of common
    stock issuable upon exercise of fully vested outstanding
    options. Beneficially owned shares do not include
    8,333 shares of Company common stock issuable upon exercise
    of outstanding options which do not vest until February 15,
    2009 nor do they include 8,334 shares of Company common
    stock issuable upon exercise of outstanding options which do not
    vest until February 15, 2010. Nor do beneficially owned
    shares include 25,000 shares of restricted stock that vest
    on January 24, 2009, 25,000 shares of restricted stock
    that vest on January 24, 2010 or 25,000 shares of
    restricted stock that vest on January 24, 2011, all of
    these 75,000 shares are subject to certain terms and
    conditions contained in that certain Restricted Stock Agreement
    between the Company and Mr. Pehlke dated January 24,
    2008.(15)
    
    Beneficially owned shares do not include 13,333 shares of
    restricted stock that vest on January 24, 2009,
    13,333 shares of restricted stock that vest on
    January 24, 2010 or 13,334 shares of restricted stock
    that vest on January 24, 2011, all of these
    40,000 shares are subject to certain terms and conditions
    of the Companys 2006 Omnibus Equity Plan.(16)
    
    Beneficially owned shares do not include 17,600 shares of
    the Companys restricted stock which vest in equal 33 1/3
    portions on each first business day after December 4, 2008,
    2009 and 2010. Nor do beneficially owned shares include
    80,000 shares of Company restricted stock that were awarded
    to Mr. Van Berkel pursuant to the Companys 2006
    Omnibus Equity Plan which will vest in equal
    331/3
    portions on each first business day after January 24, 2009,
    2010, and 2011.(17)
    
    Beneficially owned shares include the following shares of common
    stock issuable upon exercise of outstanding options which are
    exercisable at February 15, 2008 or within ninety days
    thereafter under the Companys various stock option plans:
    Mr. McLaughlin  10,000 shares,
    Mr. Peters  29,333 shares, 140




---



##### Table of Contents



Mr. Young  10,000 shares,
    Ms. Biller  23,467 shares,
    Ms. LaPoint  23,467 shares,
    Mr. Hanson  14,667 shares,
    Mr. Osbrink  15,000 shares,
    Mr. Pehlke  8,333 shares, and all current
    directors and executive officers as a group 
    134,267 shares.  Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence  Related
    Party Transaction Review Policy
          Related
    Party Transactions
    Grubb &
    Ellis Realty Advisors, Inc.
  and/or %
 141




---



##### Table of Contents



Rule 10b5-1 60-day
        60-day
   142




---



##### Table of Contents



Other
    Related Party Transactions
   143




---



##### Table of Contents



and/or
         144




---



##### Table of Contents



gross-up
         145




---



##### Table of Contents



Independence
    of Directors
      No
    Material Relationship
    Employment
  daughters-in-law;
  Other
    Compensation
    Auditor
    Affiliation
   146




---



##### Table of Contents



Interlocking
    Directorships
    Business
    Transactions
    Item 14.
    Principal
    Accountant Fees and Services    2007


2006Audit Fees(1)Audit of consolidated financial statements

$
652,250


$
270,375Audit of internal control over financial reporting


324,450



28,000Timely quarterly reviews


47,750



45,750SEC filings, including comfort letters, consents and comment
    letters


236,000



176,100Total Audit Fees


1,260,450



520,225Audit Related Fees(2)Employee benefit plans


25,500



17,000Audits in connection with acquisitions and other accounting
    consultations


318,804



37,500Due diligence services on pending merger


161,306



SAS No. 70 attestation report


85,000



Total Audit-Related Fees


590,610



54,500Tax Fees(2)Tax return preparation


69,500



66,000Tax planning






12,500Total Tax Fees


69,500



78,500Total Fees

$
1,920,560


$
653,225     (1)
    
    Includes fees and expenses related to the year-end audit and
    interim reviews, notwithstanding when the fees and expenses were
    billed or when the services were rendered.(2)
    
    Includes fees and expenses for services rendered from January
    through December of the year, notwithstanding when the fees and
    expenses were billed.   147




---



##### Table of Contents



2007


2006Audit Fees(1)Audit of consolidated financial statements

$
881,297


$
803,769Timely quarterly reviews


756,970



80,219SEC filings, including comfort letters, consents and comment
    letters






760,023Total Audit Fees


1,638,267



1,644,011Audit Related Fees(2)Audits in connection with acquisitions and other accounting
    consultations


373,996



43,240Due diligence services on pending merger


19,798



Total Audit-Related Fees


393,794



43,240Tax Fees(2)Tax return preparation


61,850



Total Tax Fees


61,850



Total Fees

$
2,093,911


$
1,687,251     (1)
    
    Includes fees and expenses related to the year-end audit and
    interim reviews, notwithstanding when the fees and expenses were
    billed or when the services were rendered.(2)
    
    Includes fees and expenses for services rendered from January
    through December of the year, notwithstanding when the fees and
    expenses were billed. 148




---



##### Table of Contents



PART IV.
  Item 15.
    Exhibits
    and Financial Statement Schedules  The following documents are filed as part of this
    report:
  (a)
    The following Report of Independent Registered Public Accounting
    Firm and Consolidated Financial Statements are submitted
    herewith:              (b)
    Consolidated Financial Statements Schedules      (c)
    Exhibits required to be filed by Item 601 of
    Regulation S-K:  (2) Plan of Acquisition, Reorganization, Arrangement,
    Liquidation or Succession
  2.1
    Agreement and Plan of Merger, dated as of May 22, 2007,
    among NNN Realty Advisors, Inc., B/C Corporate Holdings, Inc.
    and the Registrant, incorporated herein by reference to
    Exhibit 2.1 to the Registrants Current Report on
    Form 8-K filed on May 23, 2007.  (3) Articles of Incorporation and Bylaws
  3.1
    Restated Certificate of Incorporation of the Registrant,
    incorporated herein by reference to Exhibit 3.2 to the
    Registrants Annual Report on Form 10-K filed on
    March 31, 1995.3.2
    Amendment to the Restated Certificate of Incorporation of the
    Registrant as filed with the Delaware Secretary of State on
    December 9, 1997, incorporated herein by reference to
    Exhibit 4.4 to the Registrants Statement on
    Form S-8 filed on December 19, 1997 (File
    No. 333-42741).3.3
    Certificate of Amendment to the Amended and Restated Certificate
    of Incorporation of Grubb & Ellis Company as filed with the
    Delaware Secretary of State on December 7, 2007,
    incorporated herein by reference to Exhibit 3.1 to the
    Registrants Current Report on
    Form 8-K
    filed on December 13, 2007.3.4
    Certificate of Retirement with Respect to 130,233 Shares of
    Junior Convertible Preferred Stock of Grubb & Ellis
    Company, filed with the Delaware Secretary of State on
    January 22, 1997, incorporated herein by reference to
    Exhibit 3.3 to the Registrants Quarterly Report on
    Form 10-Q
    filed on February 13, 1997.3.5
    Certificate of Retirement with Respect to 8,894 Shares of
    Series A Senior Convertible Preferred Stock,
    128,266 Shares of Series B Senior Convertible Preferred
    Stock, and 19,767 Shares of Junior Convertible Preferred
    Stock of Grubb & Ellis Company, filed with the Delaware
    Secretary State on January 22, 1997, incorporated herein by
    reference to Exhibit 3.4 to the Registrants Quarterly
    Report on
    Form 10-Q
    filed on February 13, 1997. 149




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##### Table of Contents



3.6
    Bylaws of the Registrant, as amended and restated effective
    May 31, 2000, incorporated herein by reference to
    Exhibit 3.5 to the Registrants Annual Report on
    Form 10-K
    filed on September 28, 2000.3.7
    Amendment to the Amended and Restated By-laws of the Registrant,
    effective as of December 7, 2007, incorporated herein by
    reference to Exhibit 3.2 to Registrants Current
    Report on
    Form 8-K
    filed on December 13, 2007.3.8
    Amendment to the Amended and Restated By-laws of the Registrant,
    effective as of January 25, 2008, incorporated herein by
    reference to Exhibit 3.1 to Registrants Current
    Report on
    Form 8-K
    filed on January 31, 2008.3.9
    Amended and Restated Certificate of Designations, Number, Voting
    Powers, Preferences and Rights of Series A Preferred Stock
    of Grubb & Ellis Company, as filed with the Secretary of
    State of Delaware on September 13, 2002, incorporated
    herein by reference to Exhibit 3.8 to the Registrants
    Annual Report on
    Form 10-K
    filed on October 15, 2002.3.10
    Certificate of Designations, Number Voting Posers, Preferences
    and Rights of Series A-1 Preferred Stock of Grubb &
    Ellis Company, as filed with the Secretary of State of Delaware
    on January 4, 2005, incorporated herein by reference to
    Exhibit 2 to the Registrants Current Report on Form
    8-K filed on January 6, 2005.3.11
    Preferred Stock Exchange Agreement, dated as of
    December 30, 2004, between the Registrant and Kojaian
    Ventures, LLC, incorporated herein by reference to Exhibit 1 to
    the Registrants Current Report on
    Form 8-K
    filed on January 6, 2005.3.12
    Certificate of Designations, Number, Voting Powers, Preferences
    and Rights of
    Series A-1
    Preferred Stock of Grubb & Ellis Company, as filed with the
    Secretary of State of Delaware on January 4, 2005,
    incorporated herein by reference to Exhibit 2 to the
    Registrants Current Report on
    Form 8-K
    filed on January 6, 2005.  (4) Instruments Defining the Rights of Security Holders,
    including Indentures.
  4.1
    Registration Rights Agreement, dated as of April 28, 2006,
    between the Registrant, Kojaian Ventures, LLC and Kojaian
    Holdings, LLC, incorporated herein by reference to
    Exhibit 99.2 to the Registrants Current Report on
    Form 8-K
    filed on April 28, 2006.4.2
    Second Amended and Restated Credit Agreement, dated as of
    December 7, 2007, among the Registrant, certain of its
    subsidiaries (the Guarantors), the
    Lender (as defined therein), Deutsche Bank
    Securities, Inc., as syndication agent, sole book-running
    manager and sole lead arranger, and Deutsche Bank Trust Company
    Americas, as initial issuing bank, swing line bank and
    administrative agent, incorporated herein by reference to
    Exhibit 10.1 to Registrants Current Report on
    Form 8-K
    filed on December 13, 2007.4.3
    Second Amended and Restated Security Agreement, dated as of
    December 7, 2007, among the Registrant, certain of its
    subsidiaries and Deutsche Bank Trust Company Americas, as
    administrative agent, for the Secured Parties (as
    defined therein), incorporated herein by reference to
    Exhibit 10.2 to Registrants Current Report on
    Form 8-K
    filed on December 13, 2007.4.4
    Mortgage, Security Agreement, Assignment of Rents and Fixture
    Filing between GERA 6400 Shafer LLC to Wachovia Bank,
    National Association dated as of June 15, 2007,
    incorporated herein by reference to Exhibit 10.2 to the
    Registrants Current Report on
    Form 8-K
    filed on June 19, 2007.4.5
    Open-end Mortgage, Security Agreement, Assignment of Rents and
    Fixture Filing between GERA Danbury LLC to Wachovia Bank,
    National Association dated as of June 15, 2007,
    incorporated herein by reference to Exhibit 10.3 to the
    Registrants Current Report on
    Form 8-K
    filed on June 19, 2007. 150




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##### Table of Contents



4.6
    Letter Agreement by and among Wachovia Bank, National
    Association, GERA Abrams Centre LLC and GERA 6400 Shafer LLC,
    dated September 28, 2007, incorporated herein by reference
    to Exhibit 10.1 to the Registrants Current Report on
    Form 8-K filed on October 4, 2007.4.7
    Letter Agreement by and between Wachovia Bank, National
    Association and GERA Danbury, LLC, dated September 28,
    2007, incorporated herein by reference to Exhibit 10.2 to
    the Registrants Current Report on
    Form 8-K
    filed October 4, 2007.  
  (10) Material Contracts
  10.1*
    Employment Agreement entered into on November 9, 2004,
    between Robert H. Osbrink and the Registrant, effective
    January 1, 2004, incorporated herein by reference to
    Exhibit 10.1 to the Registrants Quarterly Report on
    Form 10-Q
    filed on November 15, 2004.10.2*
    First Amendment to Employment Agreement entered into between
    Robert Osbrink and the Registrant, dated as of September 7,
    2005, incorporated herein by reference to Exhibit 10.6 to
    the Registrants Report on
    Form 10-K
    filed on September 28, 2005.10.3*
    Employment Agreement, dated as of January 1, 2005, between
    Maureen A. Ehrenberg and the Registrant, incorporated herein by
    reference to Exhibit 1 to the Registrants Current
    Report on
    Form 8-K
    filed on June 10, 2005.10.4*
    Employment Agreement entered into on March 8, 2005, between
    Mark E. Rose and the Registrant, incorporated herein by
    reference to Exhibit 10.1 to the Registrants Current
    Report on
    Form 8-K
    filed on March 11, 2005.10.5*
    Form of Restricted Stock Agreement between the Registrant and
    each of the Registrants Outside Directors, dated as of
    September 22, 2005, incorporated herein by reference to
    Exhibit 10.15 to Amendment No. 1 to the
    Registrants Registration Statement on
    Form S-1
    filed on June 19, 2006 (File
    No. 333-133659).10.6*
    Employment Agreement entered into on April 1, 2006, between
    Frances P. Lewis and the Registrant, incorporated herein by
    reference to Exhibit 10.17 to the Registrants Current
    Report on
    Form 10-K
    filed on September 28, 2006.10.7*
    Grubb & Ellis Company 2006 Omnibus Equity Plan
    effective as of November 9, 2006, incorporated herein by
    reference to Appendix A to the Registrants Proxy
    Statement for the 2006 Annual Meeting of Stockholders filed on
    October 10, 2006.10.8
    Purchase and Sale Agreement between Abrams Office Center Ltd and
    GERA Property Acquisition LLC, a wholly-owned subsidiary of the
    Registrant, dated as of October 24, 2006, incorporated
    herein by reference to Exhibit 99.1 to the
    Registrants Current Report on
    Form 8-K
    filed on October 30, 2006.10.9*
    Second Amendment to Employment Agreement entered into between
    Robert H. Osbrink and the Registrant, dated as of
    November 15, 2006, incorporated herein by reference to
    Exhibit 1 to the Registrants Current Report on
    Form 8-K
    filed on November 21, 2006.10.10
    Letter Agreement between Abrams Office Centre and GERA Property
    Acquisition LLC, a wholly owned subsidiary of the Registrant,
    dated December 8, 2006, incorporated herein by reference to
    Exhibit 99.1 to the Registrants Current Report on
    Form 8-K
    filed December 14, 2006. 151




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##### Table of Contents



10.11
    Second Amendment to the Purchase and Sale Agreement between
    Abrams Office Centre, Ltd. and GERA Property Acquisition LLC, a
    wholly owned subsidiary of the Registrant, dated
    December 15, 2006, incorporated herein by reference to
    Exhibit 99.1 to the Registrants Current Report on
    Form 8-K
    filed December 21, 2006.10.12
    Letter Agreement between Abrams Office Centre, Ltd. and GERA
    Property Acquisition LLC, a wholly owned subsidiary of the
    Registrant, dated December 29, 2006, incorporated herein by
    reference to Exhibit 99.1 to the Registrants Current
    Report on
    Form 8-K
    filed January 5, 2007.10.13
    Letter Agreement between Abrams Office Centre, Ltd. and GERA
    Property Acquisition LLC, a wholly owned subsidiary of the
    Registrant, dated December 29, 2006, incorporated herein by
    reference to Exhibit 99.2 to the Registrants Current
    Report on
    Form 8-K
    filed January 5, 2007.10.14
    Letter Agreement between Abrams Office Centre, Ltd. and GERA
    Property Acquisition LLC, a wholly owned subsidiary of the
    Registrant, dated January 4, 2007, incorporated herein by
    reference to Exhibit 99.3 to the Registrants Current
    Report on
    Form 8-K
    filed January 5, 2007.10.15
    Letter Agreement between Abrams Office Centre, Ltd. and GERA
    Property Acquisition LLC, a wholly owned subsidiary of the
    Registrant, dated January 19, 2007, incorporated herein by
    reference to Exhibit 99.1 to the Registrants Current
    Report on
    Form 8-K
    filed January 25, 2007.10.16
    Purchase and Sale Agreement between F/B 6400 Shafer Ct.
    (Rosemont), LLC and GERA Property Acquisition LLC, a wholly
    owned subsidiary of the Registrant, dated as of February 9,
    2007, incorporated herein by reference to Exhibit 99.1 to
    the Registrants Current Report on
    Form 8-K
    filed on February 9, 2007.10.17*
    Employment Agreement between Richard W. Pehlke and the
    Registrant, as of February 9, 2007, incorporated herein by
    reference to Exhibit 99.1 to the Registrants Current
    Report on
    Form 8-K
    filed on February 15, 2007.10.18
    Purchase and Sale Agreement between Danbury Buildings Co., L.P.,
    Danbury Buildings, Inc. and GERA Property Acquisition LLC, a
    wholly owned subsidiary of the Registrant, dated
    February 20, 2007, incorporated herein by reference to
    Exhibit 99.2 to the Registrants Current Report on
    Form 8-K
    filed on February 22, 2007.10.19
    Letter Agreement between Danbury Buildings Co., L.P., Danbury
    Buildings, Inc. and GERA Property Acquisition LLC, a wholly
    owned subsidiary of the Registrant, dated March 16, 2007,
    incorporated herein by reference to Exhibit 99.1 to the
    Registrants Current Report on
    Form 8-K
    filed on March 21, 2007.10.20
    Amendment to Purchase and Sale Agreement between Danbury
    Buildings, Inc. and Danbury Buildings Co., L.P. and GERA
    Property Acquisition LLC, a wholly owned subsidiary of the
    Registrant, dated February 20, 2007, incorporated herein by
    reference to Exhibit 99.1 to the Registrants Current
    Report on
    Form 8-K
    filed on May 3, 2007.10.21
    Letter Amendment to Purchase and Sale Agreement between Danbury
    Buildings, Inc. and Danbury Buildings Co., L.P. and GERA
    Property Acquisition LLC, a wholly owned subsidiary of the
    Registrant, dated as of April 30, 2007, incorporated herein
    by reference to Exhibit 99.2 to the Registrants
    Current Report on
    Form 8-K
    filed on May 3, 2007.10.22
    Form of Voting Agreement between Registrant and certain
    stockholders or NNN Realty Advisors, Inc., incorporated herein
    by reference to Exhibit 10.1 to the Registrants
    Current Report on
    Form 8-K
    filed on May 23, 2007. 152




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##### Table of Contents



10.23
    Form of Voting Agreement between NNN Realty Advisors, Inc. and
    certain stockholders of the Registrant, incorporated herein by
    reference to Exhibit 10.2 to the Registrants Current
    Report on
    Form 8-K
    filed on May 23, 2007.10.24
    Form of Escrow Agreement between NNN Realty Advisors, Inc.,
    Wilmington Trust Company and the Registrant, incorporated
    herein by reference to Exhibit 10.3 to the
    Registrants Current Report on
    Form 8-K
    filed on May 23, 2007.10.25
    Deed of Trust, Security Agreement, Assignment of Rents and
    Fixture Filing by and among GERA Abrams Centre LLC, Rebecca S.
    Conrad, as Trustee for the benefit of Wachovia Bank, National
    Association, dated as of June 15, 2007 incorporated herein
    by reference to Exhibit 10.1 to the Registrants
    Current Report on
    Form 8-K
    filed on June 19, 2007.10.26*
    Employment Agreement between NNN Realty Advisors, Inc. and Scott
    D. Peters10.27*
    Employment Agreement between NNN Realty Advisors, Inc. and
    Andrea R. Biller10.28*
    Employment Agreement between NNN Realty Advisors, Inc. and
    Francene LaPoint10.29*
    Employment Agreement between NNN Realty Advisors, Inc. and
    Jeffrey T. Hanson10.30
    Indemnification Agreement dated as of October 23, 2006
    between Anthony W. Thompson and NNN Realty Advisors, Inc.10.31
    Indemnification and Escrow Agreement by and among Escrow Agent,
    NNN Realty Advisors, Inc., Anthony W. Thompson, Louis J. Rogers
    and Jeffrey T. Hanson, together with Certificate as to
    Authorized Signatures.10.32
    Commercial Offer to purchase by and between Aurora Health Care,
    Inc. and Triple Net Properties, LLC, dated November 21,
    2007, incorporated herein by reference to Exhibit 10.1 to
    the Registrants Current Report on
    Form 8-K
    filed on December 28, 2007.10.33
    First Amendment to Offer to Purchase by and between Aurora
    Medical Group, Inc. and Triple Net Properties, LLC, dated
    November 29, 2007, incorporated herein by reference to
    Exhibit 10.2 to the Registrants Current Report on
    Form 8-K
    filed on December 28, 2007.10.34
    Form of Lease among NNN Eastern Wisconsin Medical Portfolio, LLC
    and Aurora Medical Group, Inc., dated as of December 21,
    2007, incorporated herein by reference to Exhibit 10.3 to
    the Registrants Current Report on
    Form 8-K
    filed on December 28, 2007.10.35
    Form of Subordination, Non-Disturbance and Attornment Agreement,
    between Aurora Medical Group, Inc. and PNC Bank, National
    Association dated as of December 21, 2007, incorporated
    herein by reference to Exhibit 10.4 to the
    Registrants Current Report on
    Form 8-K
    filed on December 28, 2007.10.36
    Form of Estoppel Certificate from Aurora Medical Group, Inc. to
    PNC Bank, National Association, dated as of December 21,
    2007 incorporated herein by reference to Exhibit 10.5 to
    the Registrants Current Report on
    Form 8-K
    filed on December 28, 2007.10.37
    Form of Guaranty executed by Aurora Health Care, Inc. in favor
    of NNN Eastern Wisconsin Medical Portfolio, LLC dated
    December 21, 2007, incorporated herein by reference to
    Exhibit 10.6 to the Registrants Current Report on
    Form 8-K
    filed on December 28, 2007.10.38
    Promissory Note for $32,300,000 senior loan of NNN Eastern
    Wisconsin Medical Portfolio, LLC to the order of PNC Bank,
    National Association, dated December 21, 2007, incorporated
    herein by reference to Exhibit 10.7 to the
    Registrants Current Report on
    Form 8-K
    filed on December 28, 2007.10.39
    Promissory Note for $3,400,000 mezzanine loan by NNN Eastern
    Wisconsin Medical Portfolio, LLC to the order of PNC Bank,
    National Association, dated December 21, 2007, 153




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##### Table of Contents



incorporated herein by reference to Exhibit 10.8 to the
    Registrants Current Report on
    Form 8-K
    filed on December 28, 2007.  10.40
    Mortgage, Security Agreement, Assignment of Leases and Rents and
    Fixture Filing by NNN Eastern Wisconsin Medical Portfolio, LLC
    in favor of PNC Bank, National Association, dated
    December 21, 2007, incorporated herein by reference to
    Exhibit 10.9 to the Registrants Current Report on
    Form 8-K
    filed on December 28, 2007.10.41*
    Form of Indemnification Agreement executed by Andrea R. Biller,
    Glenn L. Carpenter,  Howard H. Greene, Jeffrey T. Hanson, Gary
    H. Hunt, C. Michael Kojaian, Francene LaPoint, Robert J.
    McLaughlin, Robert H. Osbrink, Richard W. Pehlke, Scott D.
    Peters, Dylan Taylor, Jack Van Berkel, D. Fleet Wallace and
    Rodger D. Young.  (14) Code of Ethics
  14.1
    Amendment to Code of Business Conduct and Ethics of the
    Registrant, incorporated herein by reference to
    Exhibit 14.1 to the Registrants Current Report on
    Form 8-K
    filed on January 31, 2008.  (16) Change in Certifying Accountants
  16.1
    Letter from Deloitte & Touche LLP to the Securities and
    Exchange Commission, dated December 14, 2007, incorporated
    herein by reference to Exhibit 16.1 to the
    Registrants Current Report on
    Form 8-K
    filed on December 14, 2007.  (21)
    Subsidiaries of the Registrant  (23)
    Consent of Independent Registered Public Accounting Firm  23.1
    Consent of Ernst & Young LLP23.2
    Consent of Deloitte & Touche LLP  (31.1)
    Section 302 Certifications(32)
    Section 906 Certification     154




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##### Table of Contents



SCHEDULE II 
    VALUATION AND QUALIFYING ACCOUNTS
  GRUBB &
    ELLIS COMPANY
  December 31, 2007
  Balance at


Charged toBeginning of


Costs and





Balance at End(In thousands)

Period


Expenses


Deductions(1)


of PeriodAllowance for accounts receivableYear Ended December 31, 2007

$
723


$
709


$
(56
)

$
1,376Year Ended December 31, 2006

$
153


$
886


$
(316
)

$
723Year Ended December 31, 2005

$
992


$
153


$
(992
)

$
153Allowance for advances and notes receivableYear Ended December 31, 2007

$
1,400


$
451


$
(12
)

$
1,839Year Ended December 31, 2006

$
562


$
811


$
27


$
1,400Year Ended December 31, 2005

$
1,186


$
3,957


$
(4,581
)

$
562     (1)
    
    Uncollectible accounts written off, net of recoveries 155




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##### Table of Contents





Schedule III 
    REAL ESTATE AND ACCUMULATED DEPRECIATION
  GRUBB &
    ELLIS COMPANY
  MaximumLife onWhichDepreciationCosts








in LatestInitial Costs to Company


Capitalized








Income


Gross Amount at Which Carried at December 31, 2007Buildings and


Subsequent to


Date


Date


Statement





Buildings and





Accumulated(In thousands)

Encumbrance


Land


Improvements


Acquisition


Constructed


Acquired


is Computed


Land


Improvements


Total


DepreciationProperty Held for InvestmentRocky Mountain Exchange (Office)

$
411


$
1,202


$
2,559


$




1984



6/8/2005



39 years


$
1,200


$
2,551


$
3,751



290Denver, COPark at Spring Creek (Residential)



[1]










142



1997-1999



6/8/2005



39 years







142



142



30Tomball, TXSanctuary at Highland Oaks (Residential)



[1]










276



1999



7/29/2005



39 years







276



276



57Tampa, FLSt. Charles (Residential)



[1]










100



1998



9/27/2005



39 years







100



100



24Kennesaw, GAROC Apartment Holdings (Residential)














56



1974-2005



Various



39 years







56



56



3Various States200 Galleria


84,000



7,440



64,591







1984



1/31/2007



39 years



7,440



64,591



72,031



2,641Atlanta, GAThe Avallon Complex


53,000



7,748



54,771







1986-2001



7/10/2007



39 years



7,748



54,771



62,519



937Austin, TXProperty Held for SalePark Central (Office)


21,549



4,475



20,494







1986



11/29/2007



N/A



4,475



20,494



24,969



Atlanta, GAEmberwood (Residential)


17,390



2,123



20,456







1985



12/4/2007



N/A



2,123



20,456



22,579



Lafayette, LAWoodside (Office)


25,380



4,112



22,161







1985-1999



12/13/2007



N/A



4,112



22,161



26,273



Beaverton, OreganExchange South (Office)


20,800



5,685



16,067







1990-1996



12/13/2007



N/A



5,685



16,067



21,752



Jacksonville, FLNNN Townley, LLC


2,500















1985



12/21/2007



N/A















Phoenix, AZNNN Eastern Wisconsin, LLC


3,400















2000-2007



12/21/2007



N/A















WisconsinDanbury Corporate Center


78,000



16,242



64,967







1981



12/7/2007



N/A



16,242



64,967



81,209



Danbury, CTAbrams Centre


20,540



4,065



16,260







1983



12/7/2007



N/A



4,065



16,260



20,325



Dallas, TX6400 Shafer


21,961



4,503



18,013







1979



12/7/2007



N/A



4,503



18,013



22,516



Rosemont, IL$
348,931


$
57,595


$
300,339


$
574














$
57,593


$
300,905


$
358,498



3,982


156




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##### Table of Contents



(In thousands)Balance at December 31, 2006

$
44,325Acquisitions


354,229Additions


209Disposals


(40,265
)Balance at December 31, 2007

$
358,498     (In thousands)Balance at December 31, 2006

$
230Additions


3,752Disposals


Balance at December 31, 2007

$
3,982     (In thousands)Balance at December 31, 2005

$
3,772Acquisitions


40,264Additions


289Disposals


Balance at December 31, 2006

$
44,325     (In thousands)Balance at December 31, 2005

$
78Additions


152Disposals


Balance at December 31, 2006

$
230     (1)
    
    The Company is a master lessee of these residential properties
    and therefore does not own the asset. 157




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##### Table of Contents



SIGNATURES    Grubb & Ellis Company
 (Registrant)
  /s/  Scott
    D.
    PetersScott
    D. PetersChief Executive Officer and Director(Principal
    Executive Officer)

March 17, 2008     Signature

Title

Date/s/  Scott
    D. PetersScott
    D. Peters

Chief Executive Officer and Director
    (Principal Executive Officer)

March 17, 2008/s/  Richard
    W. PehlkeRichard
    W. Pehlke

Chief Financial Officer
    (Principal Financial and Accounting Officer)

March 17, 2008/s/  Glenn
    L. CarpenterGlenn
    L. Carpenter

Director

March 17, 2008/s/  Harold
    H. GreeneHarold
    H. Greene

Director

March 17, 2008/s/  Gary
    H. HuntGary
    H. Hunt

Director

March 17, 2008/s/  C.
    Michael KojaianC.
    Michael Kojaian

Director

March 17, 2008/s/  Robert
    J. McLaughlinRobert
    J. McLaughlin

Director

March 17, 2008/s/  D.
    Fleet WallaceD.
    Fleet Wallace

Director

March 17, 2008/s/  Rodger
    D. YoungRodger
    D. Young

Director

March 17, 2008  158




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##### Table of Contents



EXHIBIT INDEX  (2)
    Plan of Acquisition, Reorganization, Arrangement, Liquidation
    or Succession  2.1
    Agreement and Plan of Merger, dated as of May 22, 2007,
    among NNN Realty Advisors, Inc.,
    B/C Corporate
    Holdings, Inc. and the Registrant, incorporated herein by
    reference to Exhibit 2.1 to the Registrants Current
    Report on
    Form 8-K
    filed on May 23, 2007.  (3)
    Articles of Incorporation and Bylaws  3.1
    Restated Certificate of Incorporation of the Registrant,
    incorporated herein by reference to Exhibit 3.2 to the
    Registrants Annual Report on
    Form 10-K
    filed on March 31, 1995.3.2
    Amendment to the Restated Certificate of Incorporation of the
    Registrant as filed with the Delaware Secretary of State on
    December 9, 1997, incorporated herein by reference to
    Exhibit 4.4 to the Registrants Statement on
    Form S-8
    filed on December 19, 1997 (File
    No. 333-42741).3.3
    Certificate of Amendment to the Amended and Restated Certificate
    of Incorporation of Grubb & Ellis Company as filed
    with the Delaware Secretary of State on December 7, 2007,
    incorporated herein by reference to Exhibit 3.1 to the
    Registrants Current Report on Form
    8-K filed on
    December 13, 2007.3.4
    Certificate of Retirement with Respect to 130,233 Shares of
    Junior Convertible Preferred Stock of Grubb & Ellis
    Company, filed with the Delaware Secretary of State on
    January 22, 1997, incorporated herein by reference to
    Exhibit 3.3 to the Registrants Quarterly Report on
    Form 10-Q
    filed on February 13, 1997.3.5
    Certificate of Retirement with Respect to 8,894 Shares of
    Series A Senior Convertible Preferred Stock,
    128,266 Shares of Series B Senior Convertible
    Preferred Stock, and 19,767 Shares of Junior Convertible
    Preferred Stock of Grubb & Ellis Company, filed with
    the Delaware Secretary State on January 22, 1997,
    incorporated herein by reference to Exhibit 3.4 to the
    Registrants Quarterly Report on Form
    10-Q filed
    on February 13, 1997.3.6
    Bylaws of the Registrant, as amended and restated effective
    May 31, 2000, incorporated herein by reference to
    Exhibit 3.5 to the Registrants Annual Report on Form
    10-K filed
    on September 28, 2000.3.7
    Amendment to the Amended and Restated By-laws of the Registrant,
    effective as of December 7, 2007, incorporated herein by
    reference to Exhibit 3.2 to Registrants Current
    Report on
    Form 8-K
    filed on December 13, 2007.3.8
    Amendment to the Amended and Restated By-laws of the Registrant,
    effective as of January 25, 2008, incorporated herein by
    reference to Exhibit 3.1 to Registrants Current
    Report on
    Form 8-K
    filed on January 31, 2008.3.9
    Amended and Restated Certificate of Designations, Number, Voting
    Powers, Preferences and Rights of Series A Preferred Stock
    of Grubb & Ellis Company, as filed with the Secretary
    of State of Delaware on September 13, 2002, incorporated
    herein by reference to Exhibit 3.8 to the Registrants
    Annual Report on
    Form 10-K
    filed on October 15, 2002.3.10
    Certificate of Designations, Number Voting Posers, Preferences
    and Rights of
    Series A-1
    Preferred Stock of Grubb & Ellis Company, as filed
    with the Secretary of State of Delaware on January 4, 2005,
    incorporated herein by reference to Exhibit 2 to the
    Registrants Current Report on
    Form 8-K
    filed on January 6, 2005.3.11
    Preferred Stock Exchange Agreement, dated as of
    December 30, 2004, between the Registrant and Kojaian
    Ventures, LLC, incorporated herein by reference to Exhibit 1 to
    the Registrants Current Report on Form
    8-K filed on
    January 6, 2005. 159




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##### Table of Contents



3.12
    Certificate of Designations, Number, Voting Powers, Preferences
    and Rights of
    Series A-1
    Preferred Stock of Grubb & Ellis Company, as filed
    with the Secretary of State of Delaware on January 4, 2005,
    incorporated herein by reference to Exhibit 2 to the
    Registrants Current Report on
    Form 8-K
    filed on January 6, 2005.  (4)
    Instruments Defining the Rights of Security Holders,
    including Indentures.  4.1
    Registration Rights Agreement, dated as of April 28, 2006,
    between the Registrant, Kojaian Ventures, LLC and Kojaian
    Holdings, LLC, incorporated herein by reference to
    Exhibit 99.2 to the Registrants Current Report on
    Form 8-K
    filed on April 28, 2006.4.2
    Second Amended and Restated Credit Agreement, dated as of
    December 7, 2007, among the Registrant, certain of its
    subsidiaries (the Guarantors), the
    Lender (as defined therein), Deutsche Bank
    Securities, Inc., as syndication agent, sole book-running
    manager and sole lead arranger, and Deutsche Bank
    Trust Company Americas, as initial issuing bank, swing line
    bank and administrative agent, incorporated herein by reference
    to Exhibit 10.1 to Registrants Current Report on Form
    8-K filed on
    December 13, 2007.4.3
    Second Amended and Restated Security Agreement, dated as of
    December 7, 2007, among the Registrant, certain of its
    subsidiaries and Deutsche Bank Trust Company Americas, as
    administrative agent, for the Secured Parties (as
    defined therein), incorporated herein by reference to
    Exhibit 10.2 to Registrants Current Report on
    Form 8-K
    filed on December 13, 2007.4.4
    Mortgage, Security Agreement, Assignment of Rents and Fixture
    Filing between GERA 6400 Shafer LLC to Wachovia Bank, National
    Association dated as of June 15, 2007, incorporated herein
    by reference to Exhibit 10.2 to the Registrants
    Current Report on
    Form 8-K
    filed on June 19, 2007.4.5
    Open-end Mortgage, Security Agreement, Assignment of Rents and
    Fixture Filing between GERA Danbury LLC to Wachovia Bank,
    National Association dated as of June 15, 2007,
    incorporated herein by reference to Exhibit 10.3 to the
    Registrants Current Report on
    Form 8-K
    filed on June 19, 2007.4.6
    Letter Agreement by and among Wachovia Bank, National
    Association, GERA Abrams Centre LLC and GERA 6400 Shafer LLC,
    dated September 28, 2007, incorporated herein by reference
    to Exhibit 10.1 to the Registrants Current Report on
    Form 8-K
    filed on October 4, 2007.4.7
    Letter Agreement by and between Wachovia Bank, National
    Association and GERA Danbury, LLC, dated September 28,
    2007, incorporated herein by reference to Exhibit 10.2 to
    the Registrants Current Report on
    Form 8-K
    filed October 4, 2007.    (10)  Material
    Contracts
  10.1*
    Employment Agreement entered into on November 9, 2004,
    between Robert H. Osbrink and the Registrant, effective
    January 1, 2004, incorporated herein by reference to
    Exhibit 10.1 to the Registrants Quarterly Report on
    Form 10-Q
    filed on November 15, 2004.10.2*
    First Amendment to Employment Agreement entered into between
    Robert Osbrink and the Registrant, dated as of September 7,
    2005, incorporated herein by reference to Exhibit 10.6 to
    the Registrants Report on
    Form 10-K
    filed on September 28, 2005.10.3*
    Employment Agreement, dated as of January 1, 2005, between
    Maureen A. Ehrenberg and the Registrant, incorporated herein by
    reference to Exhibit 1 to the Registrants Current
    Report on
    Form 8-K
    filed on June 10, 2005. 160




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##### Table of Contents



10.4*
    Employment Agreement entered into on March 8, 2005, between
    Mark E. Rose and the Registrant, incorporated herein by
    reference to Exhibit 10.1 to the Registrants Current
    Report on
    Form 8-K
    filed on March 11, 2005.10.5*
    Form of Restricted Stock Agreement between the Registrant and
    each of the Registrants Outside Directors, dated as of
    September 22, 2005, incorporated herein by reference to
    Exhibit 10.15 to Amendment No. 1 to the
    Registrants Registration Statement on
    Form S-1
    filed on June 19, 2006 (File
    No. 333-133659).10.6*
    Employment Agreement entered into on April 1, 2006, between
    Frances P. Lewis and the Registrant, incorporated herein by
    reference to Exhibit 10.17 to the Registrants Current
    Report on
    Form 10-K
    filed on September 28, 2006.10.7*
    Grubb & Ellis Company 2006 Omnibus Equity Plan
    effective as of November 9, 2006, incorporated herein by
    reference to Appendix A to the Registrants Proxy
    Statement for the 2006 Annual Meeting of Stockholders filed on
    October 10, 2006.10.8
    Purchase and Sale Agreement between Abrams Office Center Ltd and
    GERA Property Acquisition LLC, a wholly-owned subsidiary of the
    Registrant, dated as of October 24, 2006, incorporated herein by
    reference to Exhibit 99.1 to the Registrants Current
    Report on
    Form 8-K
    filed on October 30, 2006.10.9*
    Second Amendment to Employment Agreement entered into between
    Robert H. Osbrink and the Registrant, dated as of
    November 15, 2006, incorporated herein by reference to
    Exhibit 1 to the Registrants Current Report on
    Form 8-K
    filed on November 21, 200610.10
    Letter Agreement between Abrams Office Centre and GERA Property
    Acquisition LLC, a wholly owned subsidiary of the Registrant,
    dated December 8, 2006, incorporated herein by reference to
    Exhibit 99.1 to the Registrants Current Report on
    Form 8-K
    filed December 14, 2006.10.11
    Second Amendment to the Purchase and Sale Agreement between
    Abrams Office Centre, Ltd. and GERA Property Acquisition LLC, a
    wholly owned subsidiary of the Registrant, dated
    December 15, 2006, incorporated herein by reference to
    Exhibit 99.1 to the Registrants Current Report on
    Form 8-K
    filed December 21, 2006.10.12
    Letter Agreement between Abrams Office Centre, Ltd. and GERA
    Property Acquisition LLC, a wholly owned subsidiary of the
    Registrant, dated December 29, 2006, incorporated herein by
    reference to Exhibit 99.1 to the Registrants Current
    Report on
    Form 8-K
    filed January 5, 2007.10.13
    Letter Agreement between Abrams Office Centre, Ltd. and GERA
    Property Acquisition LLC, a wholly owned subsidiary of the
    Registrant, dated December 29, 2006, incorporated herein by
    reference to Exhibit 99.2 to the Registrants Current
    Report on
    Form 8-K
    filed January 5, 2007.10.14
    Letter Agreement between Abrams Office Centre, Ltd. and GERA
    Property Acquisition LLC, a wholly owned subsidiary of the
    Registrant, dated January 4, 2007, incorporated herein by
    reference to Exhibit 99.3 to the Registrants Current
    Report on
    Form 8-K
    filed January 5, 2007.10.15
    Letter Agreement between Abrams Office Centre, Ltd. and GERA
    Property Acquisition LLC, a wholly owned subsidiary of the
    Registrant, dated January 19, 2007, incorporated herein by
    reference to Exhibit 99.1 to the Registrants Current
    Report on
    Form 8-K
    filed January 25, 2007.10.16
    Purchase and Sale Agreement between F/B 6400 Shafer Ct.
    (Rosemont), LLC and GERA Property Acquisition LLC, a wholly
    owned subsidiary of the Registrant, dated as of February 9,
    2007, incorporated herein by reference to Exhibit 99.1 to
    the Registrants Current Report on
    Form 8-K
    filed on February 9, 2007.10.17*
    Employment Agreement between Richard W. Pehlke and the
    Registrant, as of February 9, 2007, incorporated herein by
    reference to Exhibit 99.1 to the Registrants Current
    Report on
    Form 8-K
    filed on February 15, 2007. 161




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##### Table of Contents



10.18
    Purchase and Sale Agreement between Danbury Buildings Co., L.P.,
    Danbury Buildings, Inc. and GERA Property Acquisition LLC, a
    wholly owned subsidiary of the Registrant, dated
    February 20, 2007, incorporated herein by reference to
    Exhibit 99.2 to the Registrants Current Report on
    Form 8-K
    filed on February 22, 2007.10.19
    Letter Agreement between Danbury Buildings Co., L.P., Danbury
    Buildings, Inc. and GERA Property Acquisition LLC, a wholly
    owned subsidiary of the Registrant, dated March 16, 2007,
    incorporated herein by reference to Exhibit 99.1 to the
    Registrants Current Report on
    Form 8-K
    filed on March 21, 2007.10.20
    Amendment to Purchase and Sale Agreement between Danbury
    Buildings, Inc. and Danbury Buildings Co., L.P. and GERA
    Property Acquisition LLC, a wholly owned subsidiary of the
    Registrant, dated February 20, 2007, incorporated herein by
    reference to Exhibit 99.1 to the Registrants Current
    Report on
    Form 8-K
    filed on May 3, 2007.10.21
    Letter Amendment to Purchase and Sale Agreement between Danbury
    Buildings, Inc. and Danbury Buildings Co., L.P. and GERA
    Property Acquisition LLC, a wholly owned subsidiary of the
    Registrant, dated as of April 30, 2007, incorporated herein
    by reference to Exhibit 99.2 to the Registrants
    Current Report on
    Form 8-K
    filed on May 3, 2007.10.22
    Form of Voting Agreement between Registrant and certain
    stockholders or NNN Realty Advisors, Inc., incorporated herein
    by reference to Exhibit 10.1 to the Registrants
    Current Report on
    Form 8-K
    filed on May 23, 2007.10.23
    Form of Voting Agreement between NNN Realty Advisors, Inc. and
    certain stockholders of the Registrant, incorporated herein by
    reference to Exhibit 10.2 to the Registrants Current
    Report on
    Form 8-K
    filed on May 23, 2007.10.24
    Form of Escrow Agreement between NNN Realty Advisors, Inc.,
    Wilmington Trust Company and the Registrant, incorporated herein
    by reference to Exhibit 10.3 to the Registrants
    Current Report on
    Form 8-K
    filed on May 23, 2007.10.25
    Deed of Trust, Security Agreement, Assignment of Rents and
    Fixture Filing by and among GERA Abrams Centre LLC, Rebecca S.
    Conrad, as Trustee for the benefit of Wachovia Bank, National
    Association, dated as of June 15, 2007 incorporated herein
    by reference to Exhibit 10.1 to the Registrants
    Current Report on Form
    8-K filed on
    June 19, 2007.10.26*
    Employment Agreement between NNN Realty Advisors, Inc. and Scott
    D. Peters10.27*
    Employment Agreement between NNN Realty Advisors, Inc. and
    Andrea R. Biller10.28*
    Employment Agreement between NNN Realty Advisors, Inc. and
    Francene LaPoint10.29*
    Employment Agreement between NNN Realty Advisors, Inc. and
    Jeffrey T. Hanson10.30
    Indemnification Agreement dated as of October 23, 2006
    between Anthony W. Thompson and NNN Realty Advisors, Inc.10.31
    Indemnification and Escrow Agreement by and among Escrow Agent,
    NNN Realty Advisors, Inc., Anthony W. Thompson, Louis J. Rogers
    and Jeffrey T. Hanson, together with Certificate as to
    Authorized Signatures.10.32
    Commercial Offer to purchase by and between Aurora Health Care,
    Inc. and Triple Net Properties, LLC, dated November 21,
    2007, incorporated herein by reference to Exhibit 10.1 to
    the Registrants Current Report on
    Form 8-K
    filed on December 28, 2007.10.33
    First Amendment to Offer to Purchase by and between Aurora
    Medical Group, Inc. and Triple Net Properties, LLC, dated
    November 29, 2007, incorporated herein by reference to
    Exhibit 10.2 to the Registrants Current Report on
    Form 8-K
    filed on December 28, 2007. 162




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##### Table of Contents



10.34
    Form of Lease among NNN Eastern Wisconsin Medical Portfolio, LLC
    and Aurora Medical Group, Inc., dated as of December 21,
    2007, incorporated herein by reference to Exhibit 10.3 to
    the Registrants Current Report on
    Form 8-K
    filed on December 28, 2007.10.35
    Form of Subordination, Non-Disturbance and Attornment Agreement,
    between Aurora Medical Group, Inc. and PNC Bank, National
    Association dated as of December 21, 2007, incorporated
    herein by reference to Exhibit 10.4 to the
    Registrants Current Report on
    Form 8-K
    filed on December 28, 2007.10.36
    Form of Estoppel Certificate from Aurora Medical Group, Inc. to
    PNC Bank, National Association, dated as of December 21,
    2007 incorporated herein by reference to Exhibit 10.5 to
    the Registrants Current Report on
    Form 8-K
    filed on December 28, 2007.10.37
    Form of Guaranty executed by Aurora Health Care, Inc. in favor
    of NNN Eastern Wisconsin Medical Portfolio, LLC dated
    December 21, 2007, incorporated herein by reference to
    Exhibit 10.6 to the Registrants Current Report on
    Form 8-K
    filed on December 28, 2007.10.38
    Promissory Note for $32,300,000 senior loan of NNN Eastern
    Wisconsin Medical Portfolio, LLC to the order of PNC Bank,
    National Association, dated December 21, 2007, incorporated
    herein by reference to Exhibit 10.7 to the
    Registrants Current Report on
    Form 8-K
    filed on December 28, 2007.10.39
    Promissory Note for $3,400,000 mezzanine loan by NNN Eastern
    Wisconsin Medical Portfolio, LLC to the order of PNC Bank,
    National Association, dated December 21, 2007, incorporated
    herein by reference to Exhibit 10.8 to the
    Registrants Current Report on
    Form 8-K
    filed on December 28, 2007.10.40
    Mortgage, Security Agreement, Assignment of Leases and Rents and
    Fixture Filing by NNN Eastern Wisconsin Medical Portfolio, LLC
    in favor of PNC Bank, National Association, dated
    December 21, 2007, incorporated herein by reference to
    Exhibit 10.9 to the Registrants Current Report on
    Form 8-K
    filed on December 28, 2007.10.41*
    Form of Indemnification Agreement executed by Andrea R. Biller,
    Glenn L. Carpenter, Howard H. Greene, Jeffrey T. Hanson, Gary H.
    Hunt, C. Michael Kojaian, Francene LaPoint, Robert J.
    McLaughlin, Robert H. Osbrink, Richard W. Pehlke, Scott D.
    Peters, Dylan Taylor, Jack Van Berkel, D. Fleet Wallace and
    Rodger D. Young.  (14) Code of Ethics
  14.1
    Amendment to Code of Business Conduct and Ethics of the
    Registrant, incorporated herein by reference to
    Exhibit 14.1 to the Registrants Current Report on
    Form 8-K
    filed on January 31, 2008.  (16) Change in Certifying Accountants
  16.1
    Letter from Deloitte & Touche LLP to the Securities and
    Exchange Commission, dated December 14, 2007, incorporated
    herein by reference to Exhibit 16.1 to the
    Registrants Current Report on
    Form 8-K
    filed on December 14, 2007.  (21)
    Subsidiaries
    of the Registrant  (23) Consent
    of Independent Registered Public Accounting Firm
  23.1
    Consent of Ernst & Young LLP23.2
    Consent of Deloitte & Touche LLP  (31.1)
    Section 302 Certifications(32)
    Section 906 Certification     163