Document:

EXHIBIT 10.4

                              EMPLOYMENT AGREEMENT

       THIS AGREEMENT (the "Agreement"), is made and entered into as of July 5,
2001, between GRUBB & ELLIS COMPANY, a Delaware corporation (the "Company"), and
MARK R. COSTELLO (the "Executive").

       1.     POSITION AND DUTIES. The Executive shall have the title and
position of Chief Operating Officer of the Company. Subject to control of the
Board of Directors of the Company (the "Board"), the Executive shall have such
duties and responsibilities commensurate with his title and position, and shall
report to the Chief Executive Officer of the Company. Subject to the senior role
of the Chief Executive Officer of the Company, Executive's responsibilities
shall include, without limitation, responsibilities relating to business
development, management, operations, real estate advisory services, consulting
services, real estate and facilities management and overall profitability of the
Company's divisions.

       2.     LOCATION OF EMPLOYMENT. Executive's principal place of employment
during the entire Period of Contract Employment shall be New York, New York.

       3.     PERIOD OF CONTRACT EMPLOYMENT. The term "Period of Contract
Employment," as used in this Agreement, means the period beginning on July 23,
2001 and ending on the earlier of July 23, 2004 (the "Expiration Date") or,
subject to the terms hereof, upon termination of the Executive's employment with
the Company. Upon Executive's written request, therefor, no sooner than 180 days
and no later than 120 days prior to the Expiration Date, the Company will advise
the Executive of the Company's preliminary intentions regarding renewal of
Executive's employment (without any obligation regarding a renewal).

       4.     ANNUAL BASE SALARY. During the Period of Contract Employment, the
Company agrees to pay the Executive a base salary (the "Base Salary") in the
annual amount of $600,000 for the first year of the Period of Contract
Employment, $650,000 for the second year of the Period of Contract Employment,
and $700,000 for the third year of the Period of Contract Employment. The Base
Salary shall be payable as current salary, in installments (not less frequently
than monthly) subject to all applicable withholding and deductions, in
accordance with the Company's customary payroll practices applicable to all
employees in positions comparable to the Executive.

       5.     BONUS COMPENSATION. During the Period of Contract Employment, the
Executive shall receive annual bonus compensation ("Bonus Compensation") as
follows:

              PERIOD                                 BONUS COMPENSATION

              Sign On Bonus Payable in full within   $250,000
              five (5) days of Executive's
              commencement of employment with
              the Company

<PAGE>

              July 23, 2001 through July 23, 2002    $250,000 guaranteed (in the
                                                     absolute discretion of the
                                                     Company, Executive may be
                                                     paid an additional bonus in
                                                     respect of this period).

              Annually thereafter through the end    Targeted bonus of 50% of
              of the Period of Contract Employment   Base Salary; maximum bonus
                                                     of 50% of Base Salary

              Bonus Compensation shall be based upon the performance of both the
Executive and the Company of goals to be established by the Chief Executive
Officer of the Company, in consultation with the Executive, within three (3)
months of the Executive's commencement of employment. All Bonus Compensation
(other than the Sign On Bonus) shall be payable after July 23rd of the year to
which the Bonus Compensation is applicable in one lump sum, subject to all
applicable withholding and deductions, in accordance with the Company's
customary payroll and bonus payment practices applicable to all employees in
positions comparable to the Executive.

       6.     STOCK OPTIONS. Pursuant to the Company's 2000 Stock Option Plan
(referred to throughout this Agreement as the "Plan"), subject to the approval
of the Compensation Committee of the Board, on the date of commencement of the
Executive's employment, the Board shall grant the Executive a stock option (the
"Option") to purchase an aggregate of two hundred fifty thousand (250,000)
shares of the Company's common stock, $.01 par value per share (the "Common
Stock"), at an exercise price, pursuant to the terms of the Plan, equal to the
closing price of the Common Stock on The New York Stock Exchange on the trading
day next preceding the date of grant (the "Exercise Price"). Additional Options
to purchase an aggregate of two hundred thousand (200,000) shares of Common
Stock at the then applicable Exercise Price shall be granted at the end of
Executive's second year of employment, based on the achievement of milestones to
be determined by the Chief Executive Officer of the Company, in consultation
with Executive, within three (3) months of the Executive's commencement of
employment. The terms of the Options shall be set forth in an agreement between
the Company and the Executive, which shall reflect the terms hereof and the
terms and conditions set forth in the Company's standard form of option
agreement (the "Option Agreement") which shall not be less favorable to the
Executive than the terms of this Agreement. The Options shall become exercisable
twenty percent (20%) on the day preceding the first anniversary of the date of
grant, an additional twenty percent (20%) on the day proceeding the second
anniversary of the date of grant, and the remaining sixty percent (60%) on the
day preceding the third anniversary of the date of grant and shall expire ten
(10) years after the date of grant; provided, however, that in the event that
the Executive's employment with the Company is terminated by the Company for any
reason other than for "Cause", the Executive resigns for Good Reason or the
Period of Contract Employment is not extended, the Executive shall have the
right to exercise vested Options (i.e., Options which are exercisable as of the
termination date) for a period of six (6) months after such termination date.
Notwithstanding the foregoing, (i) in the event of a "Change of Control" as
defined in the Plan, or (ii) if the Executive terminates his employment for
"Good Reason" as defined herein, or (iii) if the Executive is terminated by the
Company other than for "Cause" as defined herein, then, in any of such events,
all unvested Options shall immediately vest and become exercisable and remain so
for a period of six (6) months unless otherwise cancelled or

                                       2
<PAGE>

assumed following a Change of Control as provided by the terms of the Plan. In
the event of any conflict between this Agreement and the Plan, the terms of this
Agreement shall control.

       7.     BENEFITS. During the Period of Contract Employment, and in the
event of a termination under Section 9(a) or 9(d) of this Agreement during the
Severance Period (as defined below), as applicable, the Executive shall be
entitled to participate in or receive benefits equivalent to any employee
benefit plan or other arrangement, including but not limited to any medical,
dental, retirement, disability, life insurance, sick leave and vacation plans or
arrangements, generally made available by the Company to its employees having a
title and position equivalent to Executive's, subject to or on a basis
consistent with the terms, conditions and overall administration of such plans
or arrangements; PROVIDED, that such plans and arrangements are made available
at the discretion of the Company and nothing in this Agreement establishes any
right of the Executive to the availability or continuance of any such plan or
arrangement. The Company shall reimburse the Executive for up to seven thousand
five hundred dollars ($7,500) in attorneys' fees expended in the negotiation of
this Agreement. Provided that Executive is insurable at commercially reasonable
rates, during the Period of Contract Employment, the Company shall pay the cost
of providing to Executive $1,000,000 of term life insurance coverage naming the
Executive's estate or designated beneficiary as the beneficiary thereof.

       8.     LOAN. The Company shall, at Executive's sole discretion, loan
Executive three hundred thousand dollars ($300,000) (the "Loan"), which the
Executive may elect to borrow from the Company upon commencement of his
employment. The interest rate on the Loan shall be the lowest applicable federal
interest rate (or such other higher rate of interest, if required, to constitute
a market rate of interest as contemplated by the Rules and Regulations of the
Financial Accounting Standards Board and the U.S. Securities and Exchange
Commission) on the day the Loan is issued. Interest shall accrue annually, but
shall be deferred and all interest and principal shall be due at the end of the
Period of Contract Employment. The Company shall provide a compensation program
for the Executive which shall provide compensation, in consideration of
continued employment with the Company, in an amount at least sufficient to repay
the Loan, including accrued interest and principal of the Loan. In addition,
such compensation shall be accelerated upon the following events: (1) following
a Change of Control, as defined in the Plan or (ii) if the Executive is
terminated by the Company other than for "Cause" (as defined herein) but not by
the reason of death or disability. The Company shall increase the Executive's
compensation in an amount sufficient to pay on an after tax basis the interest
on the Loan. The Loan shall be memorialized in a promissory note or notes which
shall include as an acceleration event the termination of the Executive's
employment other than without Cause or his voluntarily resignation other than
for Good Reason at any time during the Period of Contract Employment.

       9.     TERMINATION. The following termination provisions and benefits are
in lieu of the benefits available under the Company's Executive Change of
Control Plan. Executive agrees that his termination provisions and benefits
shall not be governed by such Plan.

              (a)    TERMINATION BY THE COMPANY WITHOUT CAUSE. The Company may
       terminate the Executive's employment under this Agreement without Cause
       at any time by giving written notice to the Executive. Such termination
       will become effective upon the date specified in such notice (the
       "Effective Date"), provided that such date is at least

                                       3
<PAGE>

       30 days after the date of such notice. Upon any such termination, the
       Company will pay the Executive, within five days of the Effective Date of
       termination and subject to the Executive's execution and delivery of such
       documents of release as the Company may reasonably request: (i) all
       earned but unpaid Base Salary and vacation pay through the Effective
       Date, payable in a lump sum within five (5) days after the Effective
       Date; and (ii) all Base Salary payable in accordance with the Company's
       customary payroll practices, and the benefits set forth in Section 7
       below for the period (the "Severance Period") of either twelve (12)
       months following the Effective Date or through the end of the Contract
       Period of Employment, whichever period is shorter (the "Severance
       Benefit").

              (b)    TERMINATION BY THE COMPANY FOR CAUSE. The Company may
       immediately terminate the Executive's employment at any time for Cause by
       giving written notice to the Executive. Upon any such termination for
       Cause, the Executive shall have no right to compensation under Section
       9(a)(ii), including, without limitation, and except as required by law,
       to participate in any employee benefit programs under Section 7 for any
       period subsequent to the date of termination. For purposes of this
       Section 9(b), "Cause" shall mean: (i) the Executive is convicted of or
       pleads guilty or nolo contendere to a felony; (ii) the Executive, in
       carryout out his duties hereunder, commits acts involving dishonesty
       (including, without limitation, misappropriation and embezzlement) or
       fraud or is guilty of gross negligence or willful misconduct; or (iii)
       the Executive refuses to comply with any reasonable lawful directive of
       the Board that is commensurate with the Executive's duties within 15 days
       after written notice has been given to the Executive by the Company.

              (c)    DEATH OR DISABILITY. This Agreement and the obligations of
       the Company hereunder will, upon the Company's election in writing to the
       Executive within 30 (thirty) days thereafter, terminate upon the death or
       disability of the Executive. For purposes of this Section 9(c),
       "disability" shall mean that for a period of more than twelve (12) weeks
       in any twelve (12) month period the Executive is unable to perform the
       essential functions of his duties because of physical, mental or
       emotional incapacity resulting from injury, sickness or disease.

              (d)    TERMINATION BY THE EXECUTIVE FOR GOOD REASON. The Executive
       may terminate his employment under this Agreement at any time for Good
       Reason by giving written notice to the Company. For purposes of this
       Section 9(d), "Good Reason" shall mean: (i) there is a Change of Control;
       (ii) the Executive's principal place of employment is moved to a location
       other than in New York City; (iii) the Executive suffers a reduction in
       title or is required to report to other than the Chief Executive Officer
       of the Company; (iv) a material breach of the Agreement by the Company
       that is not cured fifteen (15) days after written notice of the breach
       has been given to the Company by the Executive or (v) a material
       reduction in Executive's responsibilities or the assignment of duties
       inconsistent with Executive's position and title. In the event of such a
       termination, the Executive shall be entitled to the Severance Benefit set
       forth in Section 9(a) and benefits set forth in Section 7 during the
       Severance Period.

                                       4
<PAGE>

              (e)    TERMINATION BY THE EXECUTIVE WITHOUT GOOD REASON. The
       Executive may terminate his employment under this Agreement without Good
       Reason at any time by giving written notice to the Company. Such
       termination will become effective upon the date specified in such notice,
       provided that such date is at least 30 days after the date of delivery of
       the notice. Upon any such termination, the Company shall be relieved of
       all of its obligations under this Agreement, except for payment of salary
       and the provision of benefits through the effective date of termination.

       10.    NO SOLICITATION. The Executive hereby covenants and agrees that
during the Period of Contract Employment and for one (1) year following the
expiration or termination of employment with the Company, he will not, for
himself or any third party, directly or indirectly: (i) divert or attempt to
divert from the Company any business of any kind in which the Company is
engaged; except that the foregoing restriction shall not preclude Executive from
soliciting business from the entities and/or individuals listed on Schedule A
attached hereto with whom Executive has a pre-existing relationship, or (ii)
employ or solicit for employment any person employed by the Company during the
period of such person's employment.

       11.    COMPETING BUSINESS. The Executive hereby covenants and agrees
that, during the Period of Contract Employment, the Executive will not have any
investment in a Competing Business (as defined in this Section) other than an
equity interest of less than five percent (5%) of any company whose securities
are listed on The New York Stock Exchange, The American Stock Exchange or quoted
on NASDAQ and will not render personal services to any Competing Business in any
manner, including, without limitation, as owner, partner, director, trustee,
officer, employee, consultant or advisor thereof.

              For purposes of this Agreement, "Competing Business" shall mean
any business which derives a substantial portion of its revenue from business
similar or competitive to that now, or at any time during the Period of Contract
Employment, conducted by the Company, in any metropolitan area, city, county or
other political subdivision, where the Company presently does business or, at
any time during the Period of Contract Employment, will do business.

              If the Executive breaches the agreement contained in this Section,
such breach may render the Executive liable to the Company for damages therefor
and entitle the Company to enjoin the Executive from making such investment or
from rendering such personal services. In addition, the Company shall have the
right in such event to enjoin the Executive from disclosing any confidential
information concerning the Company to any Competing Business, to enjoin any
Competing Business from receiving from the Executive or using such confidential
information and/or to enjoin any Competing Business from retaining or seeking to
retain any other employees or other associates of the Company.

       12.    CONFIDENTIALITY. The Executive hereby covenants and agrees, for a
period of five (5) years from the date hereof (the "Restricted Period"), he will
not, directly or indirectly, make use of or divulge to any other person, firm or
corporation any trade or business secret, process, method or means or any other
confidential information concerning the business or policies of the Company or
any subsidiary thereof. The Executive's obligations shall not apply to any
information which (i) is known publicly; (ii) is in the public domain or
hereafter enters the public domain without the fault of the Executive; (iii) is
known to the Executive prior to his

                                       5
<PAGE>

receipt of such information from the Company or any of its subsidiaries, as
evidenced by the Executive's written records; (iv) is disclosed to the Executive
by a third party not under an obligation of confidence to the Company; or (v) is
required to be disclosed by law or legal proceeding, provided, however that
Executive must provide the Company with at least three (3) days prior written
notice to making such disclosure.

       13.    SEVERABILITY, ENFORCEABILITY. In the event that the provisions of
the Sections captioned "Competing Business" or "No Solicitation" or
"Confidentiality" or any portion thereof, should ever be adjudicated by a court
of competent jurisdiction in proceedings to which the Company is a proper party
to exceed the time or geographic or other limitations permitted by applicable
law, then such provisions will be deemed reformed to the maximum time or other
limitations permitted by applicable law, as determined by such court in such
action, the parties hereby acknowledging their desire that in such event such
action be taken. Without limiting the foregoing, the covenants contained herein
will be construed as separate covenants covering their respective subject
matters, including, without limitation, with respect to (a) each of the separate
cities, counties, metropolitan areas, and each other political subdivision of
the United States in which any of the Company or its successors now transact any
business or propose to transact business, (b) each business now conducted by the
Company or its successors, and (c) the Company and its successors separately. In
addition to the above, all provisions of this Agreements are severable, and the
invalidity or unenforceability of any provision or provisions of this Agreement
or portions or aspects thereof will not affect the validity or enforceability of
any other provision, or portion of this Agreement, which will remain in full
force and effect as if executed with the unenforceable or invalid provision or
portion or aspect thereof modified, as set forth above.

       14.    GOVERNING LAW. This Agreement is being made and executed in and is
intended to be performed in the State of New York and shall be governed,
construed, interpreted and enforced in accordance with the substantive laws of
the State of New York, without regard to the conflict of laws principles
thereof.

       15.    ENTIRE AGREEMENT. This Agreement and the Option Agreement comprise
the entire agreement between the parties hereto relating to the subject matter
hereof and, as of the date hereof, supersede, cancel and annul all previous
employment agreements between the Company (and/or its predecessors) and the
Executive, as the same may have been amended or modified, and any right of the
Executive thereunder other than for compensation accrued thereunder as of the
date hereof, and supersede, cancel and annul all other prior written and oral
agreements between the Executive and the Company or any predecessor to the
Company. The terms of this Agreement and the Option Agreement are intended by
the parties to be the final expression of their agreement with respect to the
employment of the Executive by the Company and may not be contradicted by
evidence of any prior or contemporaneous agreement. The parties acknowledge that
the award of Options is a material inducement to Executive in entering into this
Agreement with the Company.

       16.    DISPUTES. Any dispute or controversy arising under, out of, in
connection with or in relation to this Agreement shall be finally determined and
settled by arbitration. Arbitration shall be initiated by one party making
written demand upon the other party and simultaneously filing the demand
together with required fees in the office of the American Arbitration

                                       6
<PAGE>

Association in New York, New York. The arbitration proceeding shall be conducted
in New York, New York by a single arbitrator in accordance with the Expedited
Procedures of the Employment Dispute Resolution Rules required by the
arbitrator, the parties shall have no obligation to comply with discovery
requests made in the arbitration proceeding. The arbitration award shall be a
final and binding determination of the dispute and shall be fully enforceable as
an arbitration award in any court having jurisdiction and venue over such
parties. The prevailing party (as determined by the arbitrator) shall be awarded
by the arbitrator such party's attorneys' fees and expenses in connection with
such proceeding, in addition to any other relief that may be granted. The
non-prevailing party shall pay the arbitrator's fees and expenses.

       17.    NOTICES. Any notice, request, claim, demand, document and other
communication hereunder to any party will be effective upon receipt (or refusal
of receipt) and will be in writing and delivered personally or sent by telecopy
or certified or registered mail, postage prepaid, as follows: if to the Company,
addressed to the attention of its General Counsel at 2215 Sanders Road, Suite
400, Northbrook, IL 60062; and if to the Executive, at:

              Mark R. Costello
              6 Alpine Lane
              Darien, Connecticut 06820

       Either party may change the notice address by notifying the other party
in writing.

       18.    AMENDMENTS; WAIVERS. This Agreement may not be modified, amended,
or terminated except by an instrument in writing, approved by the Board and
signed by the Executive and the Company. By an instrument in writing similarly
executed, the Executive or the Company may waive compliance by the other party
with any provision of this Agreement that such other party was or is obligated
to comply with or perform; provided, that such waiver shall not operate as a
waiver of, or estoppel with respect to, any other or subsequent failure. No
failure to exercise and no delay in exercising any right, remedy or power
hereunder shall preclude any other or further exercise of any other right,
remedy or power provided herein or by law or in equity.

       IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.

GRUBB & ELLIS COMPANY

By: /s/ BARRY M. BAROVICK                      /s/ MARK R. COSTELLO
    -------------------------------------      ---------------------------------
    Barry M. Barovick                          Mark R. Costello
    Chief Executive Officer and President

                                       7
<PAGE>

                                                                    EXHIBIT 10.4

                                   SCHEDULE A
                                   ----------

AIG
VNU
Thomson Corp.
Pitney Bowes
McGraw Hill
Louis Dreyfus Corp.
Pharmacia Corp.
Scholastic, Inc.
Verizon
The Walt Disney Corporation

The above  list  shall be deemed to  include  each  company's  subsidiaries  and
affiliates.EXHIBIT 10.5

                                 LOAN AGREEMENT

       THIS AGREEMENT (the "Loan Agreement") is made and entered into as of July
23, 2001 between GRUBB & ELLIS COMPANY, a Delaware  corporation (the "Company"),
and MARK R. COSTELLO ("Executive").

       WHEREAS,  the Company  and  Executive  have  entered  into an  employment
agreement  effective as of July 1, 2001 (the  "Employment  Agreement"),  whereby
Executive will be Chief Operating Officer of the Company; and

       WHEREAS,  the Employment Agreement provides for a loan in an amount of up
to three hundred thousand dollars ($300,000) (the "Loan"),  to be evidenced by a
promissory note (the "Note").

       NOW,  THEREFORE,  in  consideration  of the  foregoing  and of the mutual
covenants and terms hereafter set forth, it is agreed as follows:

       1.     COMMITMENT  TO LEND.  The Company  offers to lend to Executive the
principal  sum  of up to  three  hundred  thousand  dollars  ($300,000)  on  the
following terms.

       2.     BORROWING.  Executive  may borrow up to  $300,000 on and after the
commencement date of his employment with the Company.  The Company's  commitment
to lend to  Executive  hereunder  shall  expire  on the  earliest  to  occur  of
termination  of  Executive's  employment  with the Company  for any  reason,  or
December 31, 2001.

       3.     PROMISSORY  NOTES.  Executive may request a Loan of up to $300,000
on or after July 23, 2001,  by executing a Note in the form  attached  hereto as
Exhibit A and incorporated herein by reference,  and by delivering the original,
executed Note to the Chief  Financial  Officer of the Company,  accompanied by a
request to borrow. The date of funding shall be the "Borrowing Date."

       4.     TERM OF LOAN.  The term of the Loan  hereunder  shall extend for a
period ending July 23, 2004 (the "Loan Due Date").

       5.     INTEREST  RATE.  The interest  rate per annum on the Loan shall be
the short-term  applicable  federal rate of interest under Internal Revenue Code
Section  1274(d) on the Borrowing Date for loans on which interest is compounded
annually.  Interest  shall  accrue  annually  from the  date of each  Borrowing.
Interest on the Loan shall compound annually.

       6.     REPAYMENT AND  AMORTIZATION OF THE LOAN. The principal on the Loan
shall be amortized annually over the period commencing on the Borrowing Date and
ending on each July 23 of 2002, 2003 and 2004.

                                       1
<PAGE>

       7.     ACCELERATION OF THE LOAN DUE DATE.  Notwithstanding the provisions
of Paragraph 6, upon  termination of Executive's  employment with the Company by
Executive  without  "Good  Reason" or by the Company for "Cause," as those terms
are  defined  in  the  Employment  Agreement  and  are  incorporated  herein  by
reference,  before  the Loan Due  Date,  the  outstanding  balance  of the Loan,
including accrued interest, shall be immediately due and payable in cash.

       8.     USE OF  PROCEEDS.  Executive  represents  and  warrants  that  the
proceeds  from the Loan will not be used to finance  the  purchase  of shares of
capital stock of the Company.

       9.     TAXES.  Executive represents that he has reviewed with his own tax
advisor the federal,  state, local and foreign tax consequences,  if any, of the
Loan and the transactions contemplated by this Loan Agreement. Executive further
represents  that he has relied solely on such advisor and not on any  statements
or  representations  of the  Company  or any of its agents  with  respect to tax
matters in  connection  with this Loan  Agreement.  Executive  understands  that
Executive  (and  not the  Company)  shall be  responsible  for  Executive's  tax
liability  that  may  arise  as  a  result  of  the  Loan  or  the  transactions
contemplated by this Loan Agreement.

       10.    TRANSFER OF THE COMPANY'S  RIGHTS AND OBLIGATIONS  HEREUNDER.  The
Company is  entitled  to  transfer  its rights and  obligations  under this Loan
Agreement to one or more persons or entities,  and all covenants and  agreements
hereunder  shall inure to the benefit of, and be  enforceable  by the  Company's
successors and assigns.  If the Company undergoes a "Change of Control," as that
term  is  defined  in  the  Employment  Agreement  and  incorporated  herein  by
reference,  then the Company  shall use its best efforts to cause any  surviving
corporation or entity or acquiring  corporation or entity,  or affiliate of such
corporation  or entity,  to assume  the  Company's  obligations  under this Loan
Agreement.

       11.    RIGHTS TO CONTINUATION OF EMPLOYMENT.  Executive  acknowledges and
understands  that  the  benefits  conferred  upon  Executive  hereunder  do  not
constitute  an express  or implied  promise  of  continued  employment  with the
Company,  and that this Loan Agreement  shall not be construed as obligating the
Company to employ or retain Executive for any specific period of time.

       12.    DISPUTES.  Any  dispute  arising  in  connection  with  this  Loan
Agreement shall be finally  determined and settled by  arbitration.  Arbitration
shall be initiated by one party making  written  demand upon the other party and
simultaneously  filing the demand  together  with required fees in the office of
the American  Arbitration  Association in New York,  New York.  The  arbitration
proceeding  shall be conducted in New York,  New York by a single  arbitrator in
accordance with the Expedited  Procedures of the Employment  Dispute  Resolution
Rules of the American  Arbitration  Association,  except as  otherwise  provided
herein.  Except  as  required  by the  arbitrator,  the  parties  shall  have no
obligation to comply with discovery requests made in the arbitration proceeding.
The arbitration award shall be a final and binding  determination of the dispute
and shall be fully  enforceable  as an  arbitration  award in any  court  having
jurisdiction and venue over such parties.

                                       2
<PAGE>

       13.    NO WAIVER;  SEVERABILITY.  Either  party's  failure to enforce any
provision  hereunder  shall not in any way be  construed as a waiver of any such
provision,  nor prevent  that party from  thereafter  enforcing  such  provision
and/or  any  other  provision  of this Loan  Agreement.  The  invalidity  of any
provision of this Loan Agreement  shall not in any manner affect the validity or
enforceability. of any other provisions hereof.

       14.    NOTICES.  Any  notice  to be given  under  the  terms of this Loan
Agreement to the Company  shall be addressed to the Company in care of the Chief
Legal  Officer,  2215 Sanders Road,  Suite 400,  Northbrook,  IL 60062;  and any
notice to be given to  Executive  shall be  addressed  to him at his  address of
record on file with the  Company.  By a notice given  pursuant to this  Section,
either party may hereafter designate a different address for notices to be given
to him.  Any notice  which is required to be given to the  Executive  shall,  if
Executive is then deceased,  be given to Executive's personal  representative if
such  representative  has  previously  informed  the  Company  of his status and
address by written  notice under this  Section.  Any notice to any party will be
effective  upon  receipt  (or refusal of  receipt),  and shall be in writing and
delivered  personally  or sent by  telecopy or  certified  or  registered  mail,
postage prepaid.

       15.    TITLES.  Titles are provided herein for  convenience  only and are
not to serve as a basis for interpretation or construction of this Agreement.

       16.    GOVERNING LAW; ENTIRE AGREEMENT;  AMENDMENTS.  This Loan Agreement
shall be  administered,  interpreted and enforced under the internal laws of the
State of New  York,  without  regard to  conflicts  of laws  thereof.  This Loan
Agreement  represents the entire  agreement  between the parties with respect to
the Loan as provided for in Executive's  employment  agreement with the Company,
and supersedes all prior  understandings of the parties with regard thereto.  In
the event of a conflict between the provisions of his employment  agreement with
the  Company  and this Loan  Agreement,  the terms of the Loan  Agreement  shall
prevail.  This Loan Agreement may not be modified  except in a writing signed by
both parties.

       This Loan Agreement may be signed in counterpart,  each of which shall be
deemed an original for all purposes and both of which together shall  constitute
one instrument.

       IN WITNESS WHEREOF,  this Loan Agreement has been executed by the parties
as indicated below.

EXECUTIVE                                  GRUBB & ELLIS COMPANY

/s/ MARK R. COSTELLO                       By: /s/ BARRY M. BAROVICK
-----------------------------------            ---------------------------------
Mark R. Costello                           Barry M. Barovick
                                           President and Chief Executive Officer

Date:  JULY 26, 2001                       Date:  JULY 26, 2001
       ----------------------------               ------------------------------

                                       3
<PAGE>

EXHIBIT A TO LOAN AGREEMENT

                                                   PROMISSORY NOTE - PAGE 1 OF 2

[GRAPHIC OMITTED]

$------- 300,0000-------        NEW YORK,        NEW YORK        JULY 30, 2001
------------------------     ---------------  --------------  ------------------
                                 (City)           (State)           (Date)

On or, as indicated  below,  before JULY 23 , 2004 (the  "Maturity  Date"),  for
value received,  the undersigned Mark R. Costello  ("Maker")  promises to pay to
Grubb & Ellis Company,  a Delaware  corporation,  or its wholly owned subsidiary
named below  (hereinafter,  "Grubb & Ellis Company"),  or order, at 2215 Sanders
Road, Suite 400,  Northbrook,  Illinois 60062, or such other place as the holder
shall  designate,  the amount  financed as set forth above  ("principal"),  plus
interest  thereon  at the rate of 4.07 per cent per annum  ("interest"),  or the
highest rate permitted by law,  whichever is less.  Principal and interest shall
be payable  in lawful  money of the United  States  and  payments  made shall be
applied first to accrued interest and then to unpaid principal.

The  principal  shall be amortized  and paid in  installments  at the  following
dates:

                                  JULY 23, 2002
                                  JULY 23, 2003
                                  JULY 23, 2004

Interest shall accrue annually on the outstanding principal balance of this Note
on each July 23 of 2002, 2003 and 2004.

NOTWITHSTANDING THE FOREGOING REPAYMENT PROVISIONS,  UPON TERMINATION OF MAKER'S
EMPLOYMENT  WITH THE COMPANY BY MAKER WITHOUT GOOD REASON AS DEFINED IN THE LOAN
AGREEMENT OR BY THE COMPANY FOR CAUSE, AS DEFINED IN THE LOAN AGREEMENT,  BEFORE
THE  MATURITY  DATE,  THE  OUTSTANDING  BALANCE OF THE LOAN,  INCLUDING  ACCRUED
INTEREST, SHALL BE IMMEDIATELY DUE AND PAYABLE IN CASH.

The Maker  reserves the right to prepay all or any part of the unpaid  principal
and accrued interest at any time without any penalty or charge therefor.

Except to the extent  expressly  prohibited  by  applicable  law,  bonuses under
Maker's  Retention  Bonus  Program dated as of July 23, 2001 that are payable to
Maker by Grubb & Ellis  Company at any time  after  this Note is signed,  to the
extent that any balance of principal or interest remains unpaid under this Note,
shall be  applied  to the  outstanding  balance  of this Note  until it has been
repaid in full.  The Maker hereby  assigns all  foregoing  sums to Grubb & Ellis
Company;  provided,  however, that such repayment shall not relieve Maker of his
obligation to repay

                                       1
<PAGE>

                                                   PROMISSORY NOTE - PAGE 2 OF 2

amounts  owing under this Note in the event that such bonuses to be received are
not sufficient or timely to meet Maker's obligations hereunder. The Maker agrees
to pay all  reasonable  attorneys'  fees and  costs  incurred  by the  holder to
collect  all sums due under this note  whether or not any  arbitration  or legal
action is commenced or concluded.

The Maker  warrants,  represents  and  agrees  that he has not  relied  upon any
statement by Grubb & Ellis  Company with respect to the matters  covered by this
Note  except for the matters  expressly  stated in this Note.  The Maker  hereby
waives  presentment  for  payment,  notice of  non-payment,  notice of dishonor,
demand for payment and any notices in connection with the delivery, presentment,
acceptance, performance, default or enforcement of this Note.

In the event a claim or  controversy  arises  concerning any failure by Maker to
pay holder all or any  portion of the  amounts  provided  herein,  such claim or
controversy shall be finally determined and settled by arbitration.  Arbitration
shall be initiated by one party making  written  demand upon the other party and
simultaneously  filing the demand  together  with required fees in the office of
the American  Arbitration  Association in New York,  New York.  The  arbitration
proceeding  shall be conducted in New York,  New York by a single  arbitrator in
accordance with the Expedited  Procedures of the Employment  Dispute  Resolution
Rules of the American  Arbitration  Association,  except as  otherwise  provided
herein.  Except  as  required  by the  arbitrator,  the  parties  shall  have no
obligation to comply with discovery requests made in the arbitration proceeding.
The arbitration award shall be a final and binding  determination of the dispute
and shall be fully  enforceable  as an  arbitration  award in any  court  having
jurisdiction  and  venue  over  such  parties.  In  the  event  any  arbitration
proceeding  or legal  action  to  enforce  an  arbitration  award  is  commenced
hereunder,  the  prevailing  party shall be entitled to recover its expenses and
reasonable attorneys' fees incurred therein from the unsuccessful party.

This Note shall be governed by and  construed  in  accordance  with the internal
laws of the state of New York, without regard to the conflict-of-law provisions.

                                              MAKER

                                              ----------------------------
                                              Mark R. Costello

                                       2
<PAGE>

                             RETENTION BONUS PROGRAM
                                  JULY 23, 2001
                                MARK R. COSTELLO

1.     ELIGIBILITY  FOR BONUSES.  You are eligible to receive a retention  bonus
       ("Bonus")  for  each  of  the  following   periods   commencing  on  your
       Commencement  Date and ending  three years from your  Commencement  Date,
       upon the continuation of your employment with the Company in the capacity
       of Chief Operating Officer,  and according to such other terms as are set
       forth below.

                                      YEAR

                             First (ending 7/23/02)

                           Second (7/23/02 - 7/23/03)

                            Third (7/23/03 - 7/23/04)

2.     CALCULATION OF THE BONUSES. Each bonus will be calculated as follows: you
       will be paid,  at the last day of each of the  above  periods,  an amount
       equal  to  the  accrued   interest  and  principal  due  under  the  Loan
       outstanding  under the Loan  Agreement  dated as of July 23, 2001 between
       you and the Company (the "Loan  Agreement"),  plus an amount necessary to
       pay applicable income and employment taxes on the bonus.

3.     ACCELERATION  OF BONUSES UPON CERTAIN  EVENTS.  Upon any of the following
       events,  you shall  receive a bonus equal to the  outstanding  and unpaid
       accrued interest and principal under the Loan outstanding  under the Loan
       Agreement,  plus  an  amount  necessary  to  pay  applicable  income  and
       employment taxes on the bonus:

       (i)    Following a "Change of  Control."  "Change of Control"  shall have
              the  meaning  set  forth  in your  employment  agreement  with the
              Company dated as of July 1, 2001, which is incorporated  herein by
              reference (the "Employment Agreement"),  and such definition shall
              be incorporated herein by reference:

       (ii)   if your  employment  with the Company is terminated by the Company
              other than for "Cause."  "Cause"  shall have the meaning set forth
              in  your  Employment  Agreement,  and  such  definition  shall  be
              incorporated herein by reference.

5.     APPLICATION OF BONUS PAYMENTS.  You agree that all bonuses paid hereunder
       will be applied to outstanding principal and accrued interest of the Loan
       issued to you under the Loan Agreement  between you and the Company dated
       as of July 23, 2001 (the "Loan Agreement") as evidenced by the promissory
       note that you have  executed  in favor of the Company as of July 30, 2001
       (the "Loan").

                                       1
<PAGE>

6.     REPORTING OF INCOME.  You  acknowledge  and agree that each bonus payment
       hereunder,  whether or not  applied to  repayment  of the Loan,  shall be
       reported by the Company to the Internal  Revenue  Service as compensation
       income to you upon earning the bonus.

       This Retention Bonus Program may be signed in counterpart,  each of which
shall be deemed an original for all purposes  and both of which  together  shall
constitute one instrument.

       IN WITNESS WHEREOF, this Retention Bonus Program has been executed by the
parties as indicated below.

EXECUTIVE                                  GRUBB & ELLIS COMPANY

                                           By:
----------------------------------------   -------------------------------------
Mark R. Costello                           Barry M. Barovick
                                           President and Chief Executive Officer

Date:                                      Date:
     -----------------------------------        --------------------------------

                                       2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00030-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00030-of-00352.parquet"}]]