Ooh, ooh! A proxy fight at Grubb & Ellis!

I guess Tony Thompson wants back in at Grubb & Ellis (the name of the consolidated company after the Triple Net Properties deal -- as you know Tony started that company):

Thompson, who has criticized Grubb & Ellis management for some time after leaving the company early this year, has mailed a letter to Grubb & Ellis stockholders that says, “We have watched in dismay over the past nine months as Grubb & Ellis has, in our view, lost its way.”

Thompson is just not happy that G&E has lost 82% of its value since he left. Join the club, bucko. The market's tough out there. Grubb responds by saying that Thompson may just want his company bought out or absorbed, also noting:

Thompson's suggestions offer “nothing that has not already been implemented or considered” by the board and “completely ignores the realities of the current economic environment and real estate market,” the company said in a letter to shareholders.

I do not have a dog or current client in this fight, although I did represent NNN in the past on some small matters. I guess if I had to choose sides I would go with present management. Nothing against Thompson, but he had his run and can go run his own company now. If someone knows something else or can shed additional light on this I'd like to know more.

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G&E/Triple Net off the hook

The SEC has closed its investigation of Triple Net Properties (it merged, as you may recall with Grubb & Ellis last year, and Tony Thompson, the founder of Triple Net, went off to start his own new company) without taking any enforcement action.

I'm really glad to hear this. Without naming names, I was in the past a little worried sometimes about some of the players in this field. I remember one deal where the buyer was literally taking little old ladies to look at a shopping mall being acquired in a NNN deal and levered to the hilt. I wondered aloud whether this was an appropriate investment vehicle for them. Yes, it was not my client.

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Wow - an honest assessment

It takes guts to say, "I don't know." As a lawyer I have to do that sometimes. Yes, the answer to a question is just not always in my head or at my fingertips and I may have to look in a book to make sure my gut instinct (if I have one) is right. I'd rather be right than shoot from the hip and be wrong.

That's probably why this story made me chuckle, as a net real estate fund said this in a report: "The market," it asserts in the first paragraph, "is difficult to make sense of at the moment." Why? According to Boulder Net Lease Funds, you have pressure on one side from tough debt markets, rising oil prices and decreased demand, but you also have cap rates shifting as well. (You also have lower interest and bank borrowing costs that can play a factor.)

Before you just discount the source, let me tell you that the Boulder folks are smart. I have had them on the other side of deals in the past and I know they know what they are doing. So, if you are befuddled by the market, I guess you should not feel bad. And if someone tells you that s/he has this all figured out, check the hip for a gun.

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