Grubb & Ellis has been through the wringer. In October 2002, the Northbrook, Ill.-based real estate services firm was delisted from the New York Stock Exchange because a depressed stock price reduced its market cap to well below the $50 million threshold. Then in March 2003, the company's top two executives, CEO Barry Barovick and CFO Ian Bress, resigned and efforts to financially stabilize Grubb & Ellis went into overdrive. Brian Parker, who had served as the CFO from 1996 to 2000, promptly rejoined the firm.

In June, Grubb & Ellis improved its financial strength when an affiliated entity of Michael Kojaian, the chairman and controlling stockholder of Grubb & Ellis, acquired the firm's outstanding senior credit facility. In effect, the Kojaian-affiliated entity was successful in deferring principal payments due under the credit facility until Sept. 30, 2004, and eliminating certain financial performance covenants through June 30, 2004. Another encouraging sign: revenues rose 6% to $62.1 million in the first quarter of 2003 compared with a year ago. NREI recently spoke with Parker about the company's travails.

NREI: This is your second stint with the firm. How is it performing today?

Parker: When Barry came aboard, he tried to push for his senior team to be in New York. I wanted to stay in Chicago, so I left. I came back in March 2003, initially as a consultant. Part of our mission was to work on the balance sheet and to look at our financing and equity. As we worked with the bank to get an extension on bank covenant waivers, Michael Kojaian presented the possibility of purchasing the whole senior credit facility. We're now hopeful we will be able to get beyond the financial stability question and focus on generating business and serving clients.

NREI: The company was delisted by the NYSE. What's the net effect?

Parker: We are still a publicly traded company, even though we are no longer traded on the New York Stock Exchange. We are still traded over the counter (OTC). Thus, we have a limited number of shareholders. Our market cap is $20 million. There are about 1,200 shareholders in the company and about 80% of the company is in the hands of a few players: Goldman Sachs, Warburg Pincus and Kojaian. We trade about 4,000 shares each day.

NREI: Is there any plan to go back on the NYSE?

Parker: If that happens that would be great, but our goal is to service our clients and increase our revenues. We have gone through a cost-cutting initiative. We lowered our infrastructure by an additional $15 million on an annualized basis. We're trying to generate cash so that we can further lower our debt and provide a return to our shareholders.

NREI: Will there be a new CEO and what is the timetable for that decision?

Parker: When Barry left, Michael and the board believed we needed to take steps using the existing senior management team to stabilize the organization. They believed that injecting a new CEO into that process — which would include building a new mission and a set of goals — wasn't the right thing to do. Now that we've stabilized the company, you will see more of an emphasis on recruiting a CEO. At this point, there is no specific timeline.