10-Q/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

(Amendment No. 2)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended June 30, 2011

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For 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:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o	Accelerated filer o	Non-accelerated filer þ	Smaller reporting company o
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

The number of shares outstanding of the registrant’s common stock as of August 10, 2011 was 69,818,327 shares.

EXPLANATORY NOTE

     This Amendment No. 2 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2011 (the “Second Amended 10-Q”), amends the Amendment No. 1 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, filed with the Securities and Exchange Commission (“SEC”) on August 16, 2011 (the “Amended 10-Q”). This Second Amended 10-Q amends the Amended 10-Q solely to furnish Exhibit 101 to the Form 10-Q in accordance with Rule 405 of Regulation S-T. Exhibit 101 to this report provides the consolidated financial statements and related notes from the Form 10-Q formatted in XBRL (eXtensible Business Reporting Language).

     No other changes have been made to the Form 10-Q. This Amendment No. 2 to the Form 10-Q speaks as of the original filing date of our Form 10-Q for the quarter ended June 30, 2011, filed with the SEC on August 15, 2011 (the “Original 10-Q”), does not reflect events occurring after the filing of the Original 10-Q, and does not modify or update in any way disclosures made in the Amended 10-Q.

     Pursuant to Rule 406T of Regulation S-T, the interactive data files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

GRUBB & ELLIS COMPANY
(Registrant)
 

/s/ Michael J. Rispoli  

Michael J. Rispoli 

Chief Financial Officer
(Principal Financial Officer) 

Date: August 31, 2011

EXHIBIT INDEX

Pursuant to Item 601(a)(2) of Regulation S-K, this Exhibit Index immediately precedes the exhibits.

The following exhibits are included, or incorporated by reference, in this Quarterly Report on Form 10-Q/A for the period ended June 30, 2011 (and are numbered in accordance with 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.
2.2	Merger Agreement, dated as of January 22, 2009, by and among the Registrant, GERA Danbury LLC, GERA Property Acquisition, LLC, Matrix Connecticut, LLC and Matrix Danbury, LLC, incorporated herein by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed on January 29, 2009.
2.3	First Amendment to Merger Agreement, dated as of January 22, 2009, by and among the Registrant, GERA Danbury LLC, GERA Property Acquisition, LLC, Matrix Connecticut, LLC and Matrix Danbury, LLC, incorporated herein by reference to Exhibit 2.2 to the Registrant’s Current Report on Form 8-K filed on January 29, 2009.
2.4	Second Amendment to Merger Agreement, dated as of May 19, 2009, by and among the Registrant, GERA Danbury LLC, GERA Property Acquisition, LLC, Matrix Connecticut, LLC and Matrix Danbury, LLC, incorporated herein by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed on May 26, 2009.

(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	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.
3.3	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.
3.4	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).
3.5	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.
3.6	Amendment to the Restated Certificate of Incorporation of the Registrant as filed with the Delaware Secretary of State on December 17, 2009, incorporated herein by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on December 23, 2009.
3.7	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.
3.8	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.
3.9	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.
3.10	Amendment to the Amended and Restated By-laws of the Registrant, effective as of October 26, 2008, incorporated herein by reference to Exhibit 3.1 to Registrant’s Current Report on Form 8-K filed on October 29, 2008.
3.11	Amendment to the Amended and Restated By-laws of the Registrant, effective as of February 5, 2009, incorporated herein by reference to Exhibit 3.1 to Registrant’s Current Report on Form 8-K filed on February 9, 2009.
3.12	Amendment to the Amended and Restated Bylaws of the Registrant, effective December 17, 2009, incorporated herein by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed on December 23, 2009.

(4) Instruments Defining the Rights of Security Holders, including Indentures.

4.1	Certificate of Incorporation, as amended and restated. See Exhibits 3.1, 3.4 — 3.6.
4.2	By-laws, as amended and restated. See Exhibits 3.7 — 3.12.
4.3	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.
4.4	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.
4.5	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.
4.6	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.
4.7	Warrant Agreement, dated as of May 18, 2009, by and between the Registrant, Deutsche Bank Trust Company Americas, Fifth Third Bank, JPMorgan Chase, N.A. and KeyBank, National Association, incorporated herein by reference to Exhibit 4.2 to the Registrant’s Annual Report on Form 10-K filed on May 27, 2009.
4.8	Registration Rights Agreement, dated as of October 27, 2009, by and among the Registrant and each of the persons listed on the Schedule of Initial Holders attached thereto as Schedule A, incorporated herein by reference to Exhibit 4.3 to the Registrant’s Amendment No. 1 to Registration Statement on Form S-1 Annual Report on Form 10-K filed on December 28, 2009.
4.9	Amendment No. 1 to Registration Rights Agreement, dated as of November 4, 2009, by and among the Registrant and each of the persons listed on the Schedule of Initial Holders attached thereto as Schedule A, incorporated herein by reference to Exhibit 4.3 to the Registrant’s Amendment No. 1 to Registration Statement on Form S-1 Annual Report on Form 10-K filed on December 28, 2009.
4.10	Certificate of the Powers, Designations, Preferences and Rights of the 12% Cumulative Participating Perpetual Convertible Preferred Stock, as filed with the Secretary of State of Delaware on November 4, 2009, incorporated herein by reference to Annex B to the Registrant’s Schedule 14A filed on November 6, 2009.
4.11	Indenture for the 7.95% Convertible Senior Securities due 2015, dated as of May 7, 2010, between Grubb & Ellis Company, as Issuer, and U.S. Bank National Association, as Trustee, incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on May 7, 2010.
4.12	Registration Rights Agreement, dated as of May 7, 2010, between Grubb & Ellis Company and JMP Securities LLC, as Initial Purchaser, incorporated herein by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on May 7, 2010.
4.13	Form of Warrant Agreement, dated as of April 15, 2011, among Grubb & Ellis Company and CDCF II GNE Holding, LLC and CFI GNE Warrant Investor, LLC, incorporated herein by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on April 20, 2011.
4.14	Registration Rights Agreement, dated as of April 15, 2011, among Grubb & Ellis Company and CDCF II GNE Holding, LLC and CFI GNE Warrant Investor, LLC, incorporated herein by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed on April 20, 2011.
4.15	Amendment No. 1 To Warrants to Purchase Shares of Common Stock of Grubb & Ellis Company, dated as of July 22, 2011, among Grubb & Ellis Company and CFI GNE Warrant Investor, LLC, incorporated herein by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed on July 28, 2011.
4.16	Amendment No. 1 To Warrants to Purchase Shares of Common Stock of Grubb & Ellis Company, dated as of July 22, 2011, among Grubb & Ellis Company and CDCF II GNE Holding, LLC, incorporated herein by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed on July 28, 2011.

On an individual basis, instruments other than Exhibits listed above under Exhibit 4 defining the rights of holders of long-term debt of the Registrant and our consolidated subsidiaries and partnerships do not exceed ten percent of total consolidated assets and are, therefore, omitted; however, the Company will furnish supplementally to the Commission any such omitted instrument upon request.

(10) Material Contracts

10.1	*	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).
10.2	*	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.
10.3	*	Employment Agreement between Richard W. Pehlke and 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 15, 2007.
10.4	*	Amendment No. 1 Employment Agreement between Richard W. Pehlke and the Registrant dated as of December 23, 2008, incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on December 23, 2008.
10.5	*	Consulting and Separation Agreement and General Release of All Claims by and between Grubb & Ellis Company and Richard W. Pehlke, dated May 3, 2010, incorporated herein by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on May 4, 2010.
10.6	*	Employment Agreement between NNN Realty Advisors, Inc. and Andrea R. Biller incorporated herein by reference to Exhibit 10.27 to the Registrant’s Annual Report on Form 10-K filed on March 17, 2008.
10.7	*	Separation Agreement and General Release of All Claims, between Andrea R. Biller and Grubb & Ellis Company, dated October 22, 2010, incorporated herein by reference to Exhibit 10.26 to the Registrant’s Current Report on Form 8-K filed on October 28, 2010.
10.8	*	Membership Interest Assignment Agreement by and among Andrea R. Biller, Grubb & Ellis Equity Advisors, LLC and Grubb & Ellis Equity Advisors Property Management, Inc., dated as of October 22, 2010, incorporated herein by reference to Exhibit 10.26 to the Registrant’s Current Report on Form 8-K filed on October 28, 2010.
10.9	*	Employment Agreement between NNN Realty Advisors, Inc. and Jeffrey T. Hanson incorporated herein by reference to Exhibit 10.29 to the Registrant’s Annual Report on Form 10-K filed on March 17, 2008.
10.10		Indemnity Agreement dated as of October 23, 2006 between Anthony W. Thompson and NNN Realty Advisors, Inc., incorporated herein by reference to Exhibit 10.30 to the Registrant’s Annual Report on Form 10-K filed on March 17, 2008.
10.11		Indemnity 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 incorporated herein by reference to Exhibit 10.31 to the Registrant’s Annual Report on Form 10-K filed on March 17, 2008.

10.12	*	Form of Indemnity 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, Devin I. Murphy, Robert H. Osbrink, Richard W. Pehlke, Scott D. Peters, Dylan Taylor, Jacob Van Berkel, D. Fleet Wallace and Rodger D. Young incorporated herein by reference to Exhibit 10.41 to the Registrant’s Annual Report on Form 10-K filed on March 17, 2008.
10.13	*	Change of Control Agreement dated December 23, 2008 by and between Jacob Van Berkel and the Company, incorporated herein by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed on December 24, 2008.
10.14		Third Amended and Restated Credit Agreement, dated as of May 18, 2009, 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 10.61 to the Registrant’s Annual Report on Form 10-K filed on May 27, 2009.
10.15		Third Amended and Restated Security Agreement, dated as of May 18, 2009, 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 10.62 to the Registrant’s Annual Report on Form 10-K filed on May 27, 2009.
10.16	*	Employment Agreement between Thomas P. D’Arcy and the Registrant, dated as of November 16, 2009, incorporated herein by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q/A filed on November 19, 2009.
10.17	*	First Amendment to Employment Agreement by and between Grubb & Ellis Company and Thomas P. D’Arcy, dated as of August 11, 2010, incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on August 11, 2010.
10.18		First Letter Amendment to Third Amended and Restated Credit Agreement, dated as of September 30, 2009, by and among Grubb & Ellis Company, the guarantors named therein, Deutsche Bank Trust Company Americas, as administrative agent, the financial institutions identified therein as lender parties, Deutsche Bank Trust Company Americas, as syndication agent, and Deutsche Bank Securities Inc., as sole book running manager and sole lead arranger, incorporated herein by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K filed on October 2, 2009.
10.19		First Letter Amendment to Warrant Agreement, dated as of September 30, 2009, by and between Grubb & Ellis Company and the holders identified in Exhibit B thereto, incorporated herein by reference to Exhibit 99.2 to the Registrant’s Current Report on Form 8-K filed on October 2, 2009.
10.20		First Letter Amendment to the Third Amended and Restated Security Agreement, dated as of September 30, 2009, made by the grantors referred to therein in favor of Deutsche Bank Trust Company Americas, as administrative agent for the secured parties referred to therein, incorporated herein by reference to Exhibit 99.3 to the Registrant’s Current Report on Form 8-K filed on October 2, 2009.
10.21		Senior Subordinated Convertible Note dated October 2, 2009 issued by Grubb & Ellis Company to Kojaian Management Corporation, incorporated herein by reference to Exhibit 99.4 to the Registrant’s Current Report on Form 8-K filed on October 2, 2009.
10.22		Subordination Agreement dated October 2, 2009 by and among Kojaian Management Corporation, Grubb & Ellis Company and Deutsche Bank Trust Company Americas, incorporated herein by reference to Exhibit 99.5 to the Registrant’s Current Report on Form 8-K filed on October 2, 2009.
10.23		Form of Purchase Agreement by and between Grubb & Ellis Company and the accredited investors set forth on Schedule A attached thereto, incorporated herein by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K filed on October 26, 2009.

10.24	Agreement regarding Tremont Net Funding II, LLC Loan Arrangement with GERA 6400 Shafer LLC and GERA Abrams Centre LLC, dated as of December 29, 2009, by and among GERA Abrams Centre LLC and GERA 6400 Shafer LLC, collectively as Borrower, Grubb & Ellis Company, as Guarantor, Grubb & Ellis Management Services, Inc., as both Abrams Manager and Shafer Manager, incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on January 6, 2010.
10.25	Form of Assignment of Personal Property, Name, Service Contracts, Warranties and Leases for GERA Abrams Centre LLC, incorporated herein by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on January 6, 2010.
10.26	Form of Assignment of Personal Property, Name, Service Contracts, Warranties and Leases for GERA 6400 Shafer LLC, incorporated herein by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed on January 6, 2010.
10.27	Form of Special Warranty Deed for GERA Abrams Centre LLC, incorporated herein by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed on January 6, 2010.
10.28	Form of Special Warranty Deed for GERA 6400 Shafer LLC, incorporated herein by reference to Exhibit 10.5 to the Registrant’s Current Report on Form 8-K filed on January 6, 2010.
10.29	Form of Restricted Stock Award Grant Notice and Restricted Stock Award Agreement by and between the Company and Jeffrey T. Hanson dated March 10, 2010, incorporated herein by reference to Exhibit 10.75 to the Registrant’s Annual Report on Form 10-K filed on March 16, 2010.
10.30	Form of Restricted Stock Award Grant Notice and Restricted Stock Award Agreement by and between the Company and Jacob Van Berkel dated March 10, 2010, incorporated herein by reference to Exhibit 10.76 to the Registrant’s Annual Report on Form 10-K filed on March 6, 2010.
10.31	Form of Amended and Restated Restricted Stock Award Grant Notice for Annual Restricted Stock Award to Non-Management Directors, incorporated herein by reference to Exhibit 10.77 to the Registrant’s Annual Report on Form 10-K filed on March 16, 2010.
10.32	Special Warranty Deed for GERA Abrams Centre LLC recorded on March 31, 2010, incorporated herein by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K filed on April 6, 2010.
10.33	Purchase Agreement between Grubb & Ellis Company and JMP Securities LLC, dated May 3, 2010, incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on May 4, 2010.
10.34	Shared Services Agreement by and among Grubb & Ellis Company, Daymark Realty Advisors, Inc., Grubb & Ellis Management Services, Inc., Grubb & Ellis Equity Advisors, LLC, Grubb & Ellis Advisors of California, Inc., Grubb & Ellis Affiliates, Inc., Grubb & Ellis of Arizona, Inc., Grubb & Ellis Europe, Inc., G&E Landauer Valuation Advisory Services, LLC, G&E — Mortgage Group, Inc., G&E — New York, Inc., G&E — Michigan, Inc., G&E of Nevada, Inc., G&E Consulting Services Co., HSM Inc., Wm. A. White/G&E Inc., Grubb & Ellis Capital Corp., NNN Realty Advisors, Inc., Triple Net Properties Realty, Inc., Grubb & Ellis Realty Investors, LLC, and Grubb & Ellis Residential Management, Inc., dated as of March 25, 2011, incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on March 28, 2011.
10.35	Exclusivity Agreement by and between Colony Capital Acquisitions, LLC and Grubb & Ellis Company, dated as of March 30, 2011, incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on March 30, 2011.
10.36	Commitment Letter for $18,000,000 Senior Secured Term Loan Facility by and between Colony Capital Acquisitions, LLC and Grubb & Ellis Company, dated as of March 30, 2011, incorporated herein by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on March 30, 2011.

	10.37		Credit Agreement, dated as of April 15, 2011, by and among Grubb & Ellis Company, Grubb & Ellis Management Services, Inc., the lenders party thereto, and ColFin GNE Loan Funding, LLC, an affiliate of Colony Capital LLC, incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on April 20, 2011.
	10.38		Guarantee and Collateral Agreement, dated as of April 15, 2011, by and among Grubb & Ellis Company, Grubb & Ellis Management Services, Inc., certain other subsidiaries of Grubb & Ellis Company, and ColFin GNE Loan Funding, LLC, in its capacity as administrative agent, incorporated herein by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on April 20, 2011.
	10.39	*	Consulting Agreement, dated as of June 10, 2011, between Grubb & Ellis Company and Mathieu Streiff, incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on June 16, 2011.
	10.40	*	Separation Agreement and General Release of All Claims, dated as of June 10, 2011, by and between Mathieu B. Streiff and Grubb & Ellis Company, incorporated herein by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on June 16, 2011.
	10.41	*	Agreement, dated as of June 15, 2011, by and between Grubb & Ellis Company and Michael Rispoli, incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on June 21, 2011.
	10.42	*	Agreement, dated as of June 15, 2011, by and between Grubb & Ellis Company and Matthew Engel, incorporated herein by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on June 21, 2011.
	10.43		Amendment No. 1 to Credit Agreement, dated as of July 22, 2011, by and among Grubb & Ellis Company, Grubb & Ellis Management Services, Inc., certain other subsidiaries of Grubb & Ellis Company, and ColFin GNE Loan Funding, LLC, in its capacity as administrative agent, incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on July 28, 2011.
	10.44		Waiver to Commitment Letter, dated as of July 22, 2011, among Colony Capital Acquisitions, LLC, Grubb & Ellis Company and Grubb & Ellis Management Services, Inc., incorporated herein by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on July 28, 2011.
	10.45		Stock Purchase Agreement, dated as of August 10, 2011, by and between Grubb & Ellis Company and IUC-SOV, LLC, incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on August 1, 2011.
	10.46		Promissory Note, dated as of August 10, 2011, by Grubb & Ellis Company, incorporated herein by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on August 1, 2011.
	10.47		Intercompany Balance Settlement And Release Agreement, dated as of August 10, 2011, by and between Grubb & Ellis Company and IUC-SOV, LLC, incorporated herein by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed on August 1, 2011.
	31.1	†	Certification of Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	31.2	†	Certification of Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	32	††	Certification of Chief Executive Officer and Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002
101.INS**			XBRL Instance Document
101.SCH**			XBRL Taxonomy Extension Schema Document
101.CAL**			XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB**			XBRL Taxonomy Extension Label Linkbase Document
101.PRE**			XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF**			XBRL Taxonomy Extension Definition Linkbase Document

†	Previously filed.
††	Previously furnished.
*	Management contract or compensatory plan arrangement.
**	Furnished herewith.

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Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Jun. 30, 2011	Dec. 31, 2010
Current assets:
Cash and cash equivalents from VIEs	$ 14,722	$ 30,919
Service fees receivable - net from VIEs	32,302	31,048
Assets held for sale from VIEs	90,930	100,314
Other assets - net from VIEs	2,494	2,030
Current liabilities:
Accounts payable and accrued expenses from VIEs	63,951	69,470
Liabilities held for sale from VIEs	116,884	122,478
Long-term liabilities:
Cumulative participating perpetual convertible Preferred stock dividend rate	12.00%	12.00%
Cumulative participating perpetual convertible Preferred stock, par value	$ 0.01	$ 0.01
Cumulative participating perpetual convertible Preferred stock, shares authorized	1,000,000	1,000,000
Cumulative participating perpetual convertible Preferred stock, shares issued	965,700	965,700
Cumulative participating perpetual convertible Preferred stock, shares outstanding	965,700	965,700
Shareowners' deficit:
Noncontrolling interests from VIEs	7,367	9,130
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	19,000,000	19,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	69,853,467	70,076,451
Common stock, shares outstanding	69,853,467	70,076,451
Variable Interest Entity, Primary Beneficiary
Current assets:
Cash and cash equivalents from VIEs	244	307
Service fees receivable - net from VIEs	555	915
Assets held for sale from VIEs	15,923	14,943
Other assets - net from VIEs	21	7
Current liabilities:
Accounts payable and accrued expenses from VIEs	727	916
Liabilities held for sale from VIEs	837	822
Shareowners' deficit:
Noncontrolling interests from VIEs	7,367	9,130
Related Parties [Member]
Current assets:
Assets held for sale from VIEs	24,055	24,992
Current liabilities:
Liabilities held for sale from VIEs	$ 1,617	$ 2,178

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Consolidated Statements of Operations (Unaudited) (USD $) In Thousands, except Per Share data	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
REVENUE
Management services	$ 57,913	$ 70,110	$ 116,958	$ 142,558
Transaction services	72,814	54,684	123,266	96,917
Investment management	7,228	2,265	9,989	3,893
Total revenue	137,955	127,059	250,213	243,368
OPERATING EXPENSE
Compensation costs	121,215	119,495	230,641	237,736
General and administrative	18,333	15,515	36,480	31,741
Provision for doubtful accounts	2,569	673	3,807	1,802
Depreciation and amortization	1,980	1,709	4,062	3,314
Interest	915	458	1,688	504
Total operating expense	145,012	137,850	276,678	275,097
OPERATING LOSS	(7,057)	(10,791)	(26,465)	(31,729)
OTHER INCOME (EXPENSE)
Equity in earnings (losses) of unconsolidated entities	235	(190)	71	(383)
Interest income	28	85	66	110
Total other income (expense)	263	(105)	137	(273)
Loss from continuing operations before income tax benefit (provision)	(6,794)	(10,896)	(26,328)	(32,002)
Income tax benefit (provision)	23	(80)	23	(218)
Loss from continuing operations	(6,771)	(10,976)	(26,305)	(32,220)
Discontinued operations
Loss from discontinued operations - net of taxes	(7,946)	(8,219)	(7,096)	(11,027)
Total loss from discontinued operations	(7,946)	(8,219)	(7,096)	(11,027)
NET LOSS	(14,717)	(19,195)	(33,401)	(43,247)
Net loss attributable to noncontrolling interests	(384)	(1,736)	(779)	(2,007)
NET LOSS ATTRIBUTABLE TO GRUBB & ELLIS COMPANY	(14,333)	(17,459)	(32,622)	(41,240)
Preferred stock dividends	(2,897)	(2,897)	(5,794)	(5,794)
NET LOSS ATTRIBUTABLE TO GRUBB & ELLIS COMPANY COMMON SHAREOWNERS	$ (17,230)	$ (20,356)	$ (38,416)	$ (47,034)
Basic loss per share
Loss from continuing operations attributable to Grubb & Ellis Company common shareowners	$ (0.14)	$ (0.18)	$ (0.47)	$ (0.56)
Loss from discontinued operations attributable to Grubb & Ellis Company common shareowners	$ (0.12)	$ (0.13)	$ (0.11)	$ (0.17)
Net loss per share attributable to Grubb & Ellis Company common shareowners	$ (0.26)	$ (0.31)	$ (0.58)	$ (0.73)
Diluted loss per share
Loss from continuing operations attributable to Grubb & Ellis Company common shareowners	$ (0.14)	$ (0.18)	$ (0.47)	$ (0.56)
Loss from discontinued operations attributable to Grubb & Ellis Company common shareowners	$ (0.12)	$ (0.13)	$ (0.11)	$ (0.17)
Net loss per share attributable to Grubb & Ellis Company common shareowners	$ (0.26)	$ (0.31)	$ (0.58)	$ (0.73)
Basic weighted average shares outstanding	65,928	64,644	65,798	64,503
Diluted weighted average shares outstanding	65,928	64,644	65,798	64,503

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Document and Entity Information (USD $)	6 Months Ended
	Jun. 30, 2011	Aug. 10, 2011	Jun. 30, 2010
Document and Entity Information [Abstract]
Entity Registrant Name	GRUBB & ELLIS CO
Entity Central Index Key	0000216039
Document Type	10-Q
Document Period End Date	Jun. 30, 2011
Amendment Flag	false
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Public Float			$ 46,658,151
Entity Common Stock, Shares Outstanding		69,818,327

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Notes Payable And Capital Lease Obligations

6 Months Ended

Jun. 30, 2011

Debt Disclosure [Abstract]

NOTES PAYABLE AND CAPITAL LEASE OBLIGATIONS

7. NOTES PAYABLE AND CAPITAL LEASE OBLIGATIONS

Notes payable and capital lease obligations consisted of the following:

	June 30,			December 31,
(In thousands)	2011			2010
Note payable in connection with business acquisition in November 2010. The note requires monthly principal and interest payments, has a fixed interest rate of 4.0% per annum and matures in November 2012.	$	344		$	459
Note payable in connection with business acquisition in December 2010. The note requires monthly principal and interest payments, has a fixed interest rate of 2.0% per annum and matures in December 2013.		367			425
Capital lease obligations		325			723
Total		1,036			1,607
Less portion classified as current		(584	)		(1,041	)
Non-current portion	$	452		$	566

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Preferred Stock

6 Months Ended

Jun. 30, 2011

Preferred Stock [Abstract]

PREFERRED STOCK

12. PREFERRED STOCK

During the fourth quarter of 2009, we completed a private placement of 965,700 shares of 12% cumulative participating perpetual convertible preferred stock, par value $0.01 per share (“Preferred Stock”), to qualified institutional buyers and other accredited investors, including our directors and management.

Each share of Preferred Stock is convertible, at the holder’s option, into our common stock, par value $.01 per share at a conversion rate of 60.606 shares of common stock for each share of Preferred Stock, which represents a conversion price of approximately $1.65 per share of common stock, a 10.0% premium to the closing price of the common stock on October 22, 2009. As of June 30, 2011, the maximum number of shares of common stock that could be required to be issued upon conversion of the Preferred Stock was 58,527,214 shares of common stock.

The terms of the Preferred Stock provide for cumulative dividends from and including the date of original issuance in the amount of $12.00 per share each year. Dividends on the Preferred Stock will be payable when, as and if declared, quarterly in arrears, on March 31, June 30, September 30 and December 31, beginning on December 31, 2009. In addition, in the event of any cash distribution to holders of the Common Stock, holders of Preferred Stock will be entitled to participate in such distribution as if such holders had converted their shares of Preferred Stock into Common Stock.

During the year ended December 31, 2010, the Board of Directors declared four quarterly dividends of $3.00 per share on our Preferred Stock, which were paid on March 31, 2010, June 30, 2010, September 30, 2010 and December 31, 2010. The Board of Directors determined, as permitted, not to declare a dividend on our 12% Preferred Stock, for the quarters ending March 31, 2011 and June 30, 2011. Since we have missed two consecutive quarterly dividend payments, the dividend rate will automatically be increased by 0.50% of the initial liquidation preference per share per quarter (up to a maximum amount of increase of 2% of the initial liquidation preference per share) until cumulative dividends have been paid in full. In addition, subject to certain limitations, in the event the dividends on the Preferred Stock are in arrears for six or more quarters, whether or not consecutive, holders representing a majority of the shares of Preferred Stock voting together as a class with holders of any other class or series of preferred stock upon which like voting rights have been conferred and are exercisable will be entitled to nominate and vote for the election of two additional directors to serve on the board of directors until all unpaid dividends with respect to the Preferred Stock and any other class or series of preferred stock upon which like voting rights have been conferred or are exercisable have been paid or declared and a sum sufficient for payment has been set aside therefore. Since the terms of the Preferred Stock provide for cumulative dividends, we have accrued the unpaid first and second quarter 2011 dividend payments of $3.00 per share per quarter on our Preferred Stock, which is included in Preferred Stock on our consolidated balance sheet as of June 30, 2011. As of June 30, 2011, the amount of accrued and unpaid dividends totaled $5.8 million.

Holders of Preferred Stock may require us to repurchase all, or a specified whole number, of their Preferred Stock upon the occurrence of a “Fundamental Change” (as defined in the Certificate of Designations) with respect to any Fundamental Change that occurs (i) prior to November 15, 2014, at a repurchase price equal to 110% of the sum of the initial liquidation preference plus accumulated but unpaid dividends, and (ii) from November 15, 2014 until prior to November 15, 2019, at a repurchase price equal to 100% of the sum of the initial liquidation preference plus accumulated but unpaid dividends. On or after November 15, 2014 we may, at our option, redeem the Preferred Stock, in whole or in part, by paying an amount equal to 110% of the sum of the initial liquidation preference per share plus any accrued and unpaid dividends to and including the date of redemption.

In the event of certain events that constitute a “Change in Control” (as defined in the Certificate of Designations) prior to November 15, 2014, the conversion rate of the Preferred Stock will be subject to increase. The amount of the increase in the applicable conversion rate, if any, will be based on the date in which the Change in Control becomes effective, the price to be paid per share with respect to the Common Stock and the transaction constituting the Change in Control.

Except as otherwise provided by law, the holders of the Preferred Stock vote together with the holders of common stock as one class on all matters on which holders of common stock vote. Holders of the Preferred Stock when voting as a single class with holders of common stock are entitled to voting rights equal to the number of shares of common stock into which the Preferred Stock is convertible, on an “as if” converted basis. Holders of Preferred Stock vote as a separate class with respect to certain matters.

Upon any liquidation, dissolution or winding up of the Company, holders of the Preferred Stock will be entitled, prior to any distribution to holders of any securities ranking junior to the Preferred Stock, including but not limited to the common stock, and on a pro rata basis with other preferred stock of equal ranking, a cash liquidation preference equal to the greater of (i) 110% of the sum of the initial liquidation preference per share plus accrued and unpaid dividends thereon, if any, from November 6, 2009, the date of the closing of the Offering, and (ii) an amount equal to the distribution amount each holder of Preferred Stock would have received had all shares of Preferred Stock been converted to common stock.

We accounted for the Preferred Stock transaction in accordance with the requirements of the Derivatives and Hedging Topic and the Distinguishing Liabilities from Equity Topic. Pursuant to those topics, we determined that the Preferred Stock should be accounted for as a single instrument as the terms of the Preferred Stock do not include any embedded derivatives that would require bifurcation from the host instrument. Pursuant to the Distinguishing Liabilities from Equity Topic, we determined that the Preferred Stock should not be classified as a liability as the characteristics of the Preferred Stock are more closely related to equity as there is no mandatory redemption date. According to the terms of the Preferred Stock, the Preferred Stock will only become redeemable at the option of the holder upon a Fundamental Change. In addition, we determined that there are various events and circumstances that would allow for redemption of the Preferred Stock at the option of the holders, however, several of these redemption events are not within our control and, therefore, the Preferred Stock should be classified outside of permanent equity in accordance with the Distinguishing Liabilities from Equity Topic as these events were assessed as not probable of becoming redeemable. We will continuously assess the probability of the Preferred Stock becoming redeemable as facts and circumstances change to determine if such changes warrant a reclassification from outside of permanent equity to a liability.

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Related Parties

6 Months Ended

Jun. 30, 2011

Related Parties And Other Related Party Transactions [Abstract]

RELATED PARTIES

3. RELATED PARTIES

Accounts Receivable

Accounts receivable from related parties consisted of the following:

	June 30,		December 31,
(In thousands)	2011		2010
Accrued property and asset management fees	$	313	$	156
Accrued real estate acquisition fees		2,063		—
Other accrued fees		607		563
Organizational, offering and operating costs from sponsored REIT		2,993		2,741
Total	$	5,976	$	3,460

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Segment Disclosure

6 Months Ended

Jun. 30, 2011

Segment Disclosure [Abstract]

SEGMENT DISCLOSURE

9. SEGMENT DISCLOSURE

Management has determined the reportable segments identified below according to the types of services offered and the manner in which operations and decisions are made. We operate in the following reportable segments:

Management Services — Management Services provides property management and related services for owners of investment properties and facilities management services for corporate owners and occupiers.

Transaction Services — Transaction Services advises buyers, sellers, landlords and tenants on the sale, leasing, financing and valuation of commercial property and includes our national accounts group and national affiliate program operations.

Investment Management — Investment Management includes services for acquisition, financing and disposition with respect to our REITs, asset management services related to our REITs, and dealer-manager services by our securities broker-dealer, which facilitates capital raising transactions for our REITs.

We also have certain corporate-level activities including legal administration, accounting, finance, human resources and management information systems which are not considered separate operating segments.

As a result of reclassifying our Daymark subsidiary to discontinued operations in the second quarter of 2011, our segment disclosure no longer includes a Daymark segment as all of the Daymark segment is included in discontinued operations. In addition, our Daymark subsidiary historically provided some Investment Management services. Accordingly, all revenues and expenses related to our Investment Management segment that were provided by Daymark are also included in discontinued operations.

We evaluate the performance of our segments based upon operating (loss) income. Operating (loss) income is defined as operating revenue less compensation and general and administrative costs and excludes other rental related, rental expense, interest expense, depreciation and amortization and certain other operating and non-operating expenses. The accounting policies of the reportable segments are the same as those described in our summary of significant accounting policies (See Note 1).

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(In thousands)	2011			2010			2011			2010
Management Services
Revenue	$	57,913		$	70,110		$	116,958		$	142,558
Compensation costs		10,192			9,756			18,872			19,310
Transaction commissions and related costs		2,846			4,212			6,624			10,395
Reimbursable salaries, wages and benefits		38,289			49,021			77,843			99,379
General and administrative		2,758			2,543			5,949			4,790
Provision for doubtful accounts		859			448			1,330			789
Segment operating income		2,969			4,130			6,340			7,895
Transaction Services
Revenue		72,814			54,684			123,266			96,917
Compensation costs		15,024			11,210			30,492			22,175
Transaction commissions and related costs		48,715			35,399			81,953			62,398
General and administrative		10,794			8,667			20,690			17,515
Provision for doubtful accounts		1,209			224			1,968			1,029
Segment operating loss		(2,928	)		(816	)		(11,837	)		(6,200	)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(In thousands)	2011			2010			2011			2010
Investment Management
Revenue		7,228			2,265			9,989			3,893
Compensation costs		2,030			2,514			4,164			5,130
Transaction commissions and related costs		892			867			1,755			1,351
General and administrative		1,753			1,441			3,578			2,729
Provision for doubtful accounts		(22	)		—			(14	)		—
Segment operating income (loss)		2,575			(2,557	)		506			(5,317	)
Reconciliation to net loss attributable to Grubb & Ellis Company:
Total segment operating income (loss)		2,616			757			(4,991	)		(3,622	)
Non-segment:
Corporate overhead (compensation, general and administrative costs)		(5,953	)		(6,484	)		(12,390	)		(15,723	)
Stock based compensation		(686	)		(2,778	)		(2,378	)		(5,797	)
Severance and other charges		(139	)		(119	)		(956	)		(2,769	)
Depreciation and amortization		(1,980	)		(1,709	)		(4,062	)		(3,314	)
Interest		(915	)		(458	)		(1,688	)		(504	)
Other income (expense)		263			(105	)		137			(273	)
Loss from continuing operations before income tax benefit (provision)		(6,794	)		(10,896	)		(26,328	)		(32,002	)
Income tax benefit (provision)		23			(80	)		23			(218	)
Loss from continuing operations		(6,771	)		(10,976	)		(26,305	)		(32,220	)
Loss from discontinued operations		(7,946	)		(8,219	)		(7,096	)		(11,027	)
Net loss		(14,717	)		(19,195	)		(33,401	)		(43,247	)
Net loss attributable to noncontrolling interests		(384	)		(1,736	)		(779	)		(2,007	)
Net loss attributable to Grubb & Ellis Company	$	(14,333	)	$	(17,459	)	$	(32,622	)	$	(41,240	)

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Comprehensive Loss

6 Months Ended

Jun. 30, 2011

Comprehensive Loss [Abstract]

COMPREHENSIVE LOSS

14. COMPREHENSIVE LOSS

The components of comprehensive loss, net of tax, are as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(In thousands)	2011			2010			2011			2010
Net loss	$	(14,717	)	$	(19,195	)	$	(33,401	)	$	(43,247	)
Other comprehensive (loss) income:
Net unrealized (loss) gain on investments		56			(46	)		92			80
Total comprehensive loss		(14,661	)		(19,241	)		(33,309	)		(43,167	)
Comprehensive loss attributable to noncontrolling interests		(384	)		(1,736	)		(779	)		(2,007	)
Comprehensive loss attributable to Grubb & Ellis Company	$	(14,277	)	$	(17,505	)	$	(32,530	)	$	(41,160	)

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Discontinued Operations

6 Months Ended

Jun. 30, 2011

Discontinued Operations [Abstract]

DISCONTINUED OPERATIONS

10. DISCONTINUED OPERATIONS

On December 30, 2010, we completed the sale of NNN/SOF Avallon LLC (“Avallon”), a commercial office property located in Austin, Texas, for $37.0 million. We recognized a gain on sale of $1.3 million.

On June 1, 2011, we entered into a definitive agreement for the sale of substantially all of the assets of our real estate investment fund business, Alesco, to Lazard Asset Management LLC. Closing of the transaction is subject to customary approvals and is expected to occur in the third quarter of 2011. We anticipate recognizing a loss on the sale of Alesco of approximately $3.0 million in the third quarter of 2011 due to the deficit balance in noncontrolling interests.

On August 10, 2011, we completed the sale of Daymark for (1) a cash payment of $0.5 million, (2) a $5.0 million promissory note provided to NNNRA, and (3) the assumption by the purchaser of $10.7 million of the net intercompany balance payable from us to NNNRA. We expect to record a gain on sale related to the disposition of Daymark in the third quarter of 2011, after writing off all of the net assets and liabilities associated with Daymark (included in summarized balance sheet below) and recognizing the transactions costs related to such transaction.

In instances when we expect to have significant ongoing cash flows or significant continuing involvement in the component beyond the date of sale, the income (loss) from certain properties and businesses held for sale continue to be fully recorded within continuing operations through the date of sale.

The net results of discontinued operations of Daymark and Alesco (which includes the net results of the Avallon property sold during the year ended December 31, 2010), in which we have no significant ongoing cash flows or significant continuing involvement, are reflected in the consolidated statements of operations as discontinued operations. We will receive certain fee income from Daymark on an ongoing basis that is not considered significant when compared to the operating results of Daymark.

The following table summarizes the assets held for sale and liabilities held for sale as of June 30, 2011 and December 31, 2010:

	June 30,		December 31,
(In thousands)	2011		2010
Restricted cash	$	3,528	$	4,652
Assets under management		848		901
Accounts receivable from related parties — net		13,395		12,718
Notes receivable — net		—		6,126
Notes and advances to related parties — net		10,660		12,275
Prepaid expenses and other assets		767		682
Investments in unconsolidated entities		5,224		5,178
Property held for sale		45,159		45,858
Property, equipment and leasehold improvements — net		906		1,096
Identified intangible assets — net		6,127		7,398
Other assets — net		4,316		3,430
Total assets	$	90,930	$	100,314
Accounts payable and accrued expenses	$	13,518	$	8,098
Due to related parties		1,617		2,178
Other liabilities		15,423		25,704
NNN senior notes		16,277		16,277
Mortgage notes		70,000		70,000
Capital lease obligations		13		22
Deferred tax liabilities		36		199
Total liabilities	$	116,884	$	122,478

From August 1, 2006 to January 2007, NNN Collateralized Senior Notes, LLC (the “NNN Senior Notes Program”), a wholly owned subsidiary of Daymark, issued $16.3 million of notes which mature on August 29, 2011 and bear interest at a rate of 8.75% per annum. Interest on the notes is payable monthly in arrears on the first day of each month, commencing on the first day of the month occurring after issuance. The notes mature five years from the date of first issuance of any of such notes, with two one-year options to extend the maturity date of the notes at the Senior Notes Program’s option. The interest rate will increase to 9.25% per annum during any extension. The Senior Notes Program has the right to redeem the notes, in whole or in part, at par value. The notes are the NNN Senior Notes Program’s senior obligations, ranking pari passu in right of payment with all other senior debt incurred and ranking senior to any subordinated debt it may incur. The notes are effectively subordinated to all present or future debt secured by real or personal property to the extent of the value of the collateral securing such debt. The notes are secured by a pledge of the NNN Senior Notes Program’s membership interest in NNN Series A Holdings, LLC, which is the Senior Notes Program’s wholly owned subsidiary for the sole purpose of making the investments. Each note is guaranteed by Grubb & Ellis Realty Investors, LLC (“GERI”). The guarantee is secured by a pledge of GERI membership interest in the NNN Senior Notes Program. The guarantee requires GERI to maintain at all times during the term the notes are outstanding a net worth of at least $0.5 million. As of June 30, 2011, GERI met the net worth requirement.

On May 13, 2011, pursuant to the terms of the indenture underlying the NNN Senior Notes, the NNN Senior Notes Program notified the trustee and holders of the NNN Senior Notes that the maturity date of the NNN Senior Notes shall be extended by one year, effective as of August 29, 2011 (the “Extension Effective Date”). Accordingly, the maturity date of the NNN Senior Notes is August 29, 2012. In accordance with the terms and provisions of the indenture, the NNN Senior Notes shall bear interest at 8.75% per annum until the Extension Effective Date, and thereafter at 9.25% per annum until the maturity date. The NNN Senior Notes Program may extend the maturity date for an additional year, through August 29, 2013, in accordance with the terms and provisions of the indenture and the NNN Senior Notes.

The following table summarizes the income (loss) and (expense) components — net of taxes that comprised discontinued operations for the three and six months ended June 30, 2011 and 2010:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(In thousands)	2011			2010			2011			2010
Revenue	$	7,088		$	6,101		$	11,058		$	14,544
Rental related revenue		3,346			7,585			7,206			15,299
Compensation costs		(6,762	)		(5,807	)		(11,645	)		(12,311	)
General and administrative		(6,709	)		(2,731	)		(11,409	)		(4,509	)
Provision for doubtful accounts		(1,158	)		(962	)		(2,245	)		(1,500	)
Depreciation and amortization		(900	)		(1,661	)		(2,287	)		(3,314	)
Rental related		(2,263	)		(5,463	)		(4,607	)		(10,851	)
Interest		(1,599	)		(2,272	)		(3,143	)		(4,544	)
Real estate related recoveries (impairments)		834			(1,553	)		9,858			(1,823	)
Intangible asset impairment		—			(1,025	)		(480	)		(1,639	)
Equity in earnings (losses) of unconsolidated entities		163			(202	)		256			(223	)
Interest income		37			31			78			51
Other income (expense)		28			(283	)		315			(238	)
Income tax benefit (provision)		(51	)		23			(51	)		31
Loss from discontinued operations — net of taxes	$	(7,946	)	$	(8,219	)	$	(7,096	)	$	(11,027	)

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Convertible Notes

6 Months Ended

Jun. 30, 2011

Convertible Notes [Abstract]

CONVERTIBLE NOTES

8. CONVERTIBLE NOTES

During the second quarter of 2010, we completed our offering (“Offering”) of $31.5 million of unsecured convertible notes (“Convertible Notes”) to qualified institutional buyers pursuant to Section 144A of the Securities Act of 1933, as amended. The Convertible Notes pay interest at a rate of 7.95% per year semi-annually in arrears on May 1 and November 1 of each year, beginning November 1, 2010. The Convertible Notes mature on May 1, 2015.

We received net proceeds from the Offering of approximately $29.4 million after deducting all estimated offering expenses. We used the net proceeds from the Offering to fund growth initiatives, short-term working capital and for general corporate purposes.

Holders of the Notes may convert notes into shares of our common stock at the initial conversion rate of 445.583 shares per $1,000 principal amount of the Notes (equal to a conversion price of approximately $2.24 per share of our common stock), subject to adjustment in certain events (but not for accrued interest) at any time prior to the close of business on the scheduled trading day before the stated maturity date. In addition, following certain corporate transactions, we will increase the conversion rate for a holder who elects to convert in connection with such corporate transaction by a number of additional shares of our common stock as set forth in the Indenture. As of June 30, 2011, the maximum number of shares of common stock that could be required to be issued upon conversion of the Convertible Notes was 14,035,865 shares of common stock.

No holder of the Notes will be entitled to acquire shares of common stock delivered upon conversion to the extent (but only to the extent) such receipt would cause such converting holder to become, directly or indirectly, a “beneficial owner” (within the meaning of Section 13(d) of the Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder) of more than 14.99% of the shares of our common stock outstanding at such time.

We may not redeem the Convertible Notes prior to May 6, 2013. On or after May 6, 2013 and prior to the maturity date, we may redeem for cash all or part of the Convertible Notes at 100% of the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest, including any additional interest, up to but excluding the redemption date.

Under certain circumstances following a fundamental change, which is substantially similar to a fundamental change with respect to our preferred stock, we will be required to make an offer to purchase all of the Convertible Notes at a purchase price of 100% of their principal amount, plus accrued and unpaid interest, if any, to the date of repurchase.

The Convertible Notes are our unsecured senior obligations that:

• rank equally with all of our other unsecured senior indebtedness;

• effectively rank junior to any of our existing and future secured indebtedness to the extent of the assets securing such indebtedness; and

• will be structurally subordinated to any indebtedness and other liabilities of our subsidiaries.

The Indenture provides for customary events of default, including our failure to pay any indebtedness for borrowed money, other than non-recourse mortgage debt, when due in excess of $1.0 million.

Registration Rights Agreement

In connection with the Offering, we entered into a registration rights agreement pursuant to which we agreed to file with the SEC a shelf registration statement registering the resale of the notes and the shares of common stock issuable upon conversion of the Convertible Notes no later than June 30, 2010, and to use commercially reasonable efforts to cause the shelf registration statement to become effective within 85 days of May 7, 2010, or within 115 days of the closing date of the Offering if the registration statement is reviewed by the SEC. The shelf registration statement was filed on June 25, 2010 and became effective on July 19, 2010.

We have an obligation to continue to keep the shelf registration statement effective for a certain period of time, subject to certain suspension periods under certain circumstances. In the event that we fail to keep the registration statement effective in excess of such permissible suspension periods, we will be obligated to pay additional interest to holders of the Convertible Notes in an amount equal to 0.25% of the principal amount of the outstanding Convertible Notes to and including the 90th day following any such registration default and 0.50% of the principal amount of the outstanding Convertible Notes from and after the 91st day following any such registration default. Such additional interest will accrue until the date prior to the day the default is cured, or until the Convertible Notes are converted.

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2011

Summary of Significant Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Overview

Grubb & Ellis Company and its consolidated subsidiaries are referred to herein as “the Company,” “Grubb & Ellis,” “we,” “us,” and “our.” Grubb & Ellis, a Delaware corporation founded over 50 years ago, is a commercial real estate services and investment company. With over 5,000 professionals in more than 100 company-owned and affiliate offices throughout the United States (“U.S.”), our professionals draw from a platform of real estate services, practice groups and investment products to deliver comprehensive, integrated solutions to real estate owners, tenants, investors, lenders and corporate occupiers. Our range of services includes tenant representation, property and agency leasing, commercial property and corporate facilities management, property sales, appraisal and valuation and commercial mortgage brokerage and investment management. Our transaction, management, consulting and investment services are supported by proprietary market research and extensive local expertise. Through our investment management business, we are a sponsor of real estate investment programs, including public non-traded real estate investment trusts (“REITs”).

Recent Strategic and Financing Initiatives

Credit Facility

On March 21, 2011, we announced that we had retained JMP Securities LLC as an advisor to explore strategic alternatives for the Company, including a potential merger or sale transaction. On March 30, 2011, we entered into a commitment letter and exclusivity agreement with Colony Capital Acquisitions, LLC, pursuant to which, as discussed more fully below, (i) Colony Capital Acquisitions, LLC and one or more of its affiliates (collectively, “Colony”) agreed to provide an $18.0 million senior secured multiple draw term loan credit facility, and (ii) Colony obtained the exclusive right for 60 days, commencing on March 30, 2011, to evaluate the possibility of making a larger strategic transaction with the Company. See Note 6 for further information on the credit facility.

Sale of Daymark

On February 10, 2011, we announced the creation of Daymark Realty Advisors, Inc. (“Daymark”), a wholly owned and separately managed subsidiary that is responsible for the management of our tenant-in-common portfolio. Subsequent thereto we announced that we had retained FBR Capital Markets & Co. to explore strategic alternatives with respect to Daymark and its portfolio, which includes over 8,700 multi-family units and approximately 30.0 million square feet of real estate. Daymark provides specialized services to our tenant-in-common (“TIC”) portfolio, which we believe requires unique expertise and client focus, especially as the commercial real estate industry begins to recover from the significant downturn of the past few years. Daymark will provide strategic asset management, property management, structured finance, accounting and loan advisory services to our existing TIC portfolio.

On August 10, 2011, we entered into a Stock Purchase Agreement (the “Purchase Agreement”) by and between us and IUC-SOV, LLC (the “Purchaser”), an entity affiliated with Sovereign Capital Management and Infinity Real Estate. Pursuant to the Purchase Agreement, we sold to Purchaser all of the shares of common stock of Daymark. The closing (the “Closing”) of the transactions contemplated by the Purchase Agreement (the “Transactions”) was completed on August 10, 2011.

Pursuant to the Purchase Agreement, we sold to Purchaser all of the outstanding shares of Daymark in exchange for (1) a cash payment of $0.5 million (the “Estimated Closing Cash Payment”) from Purchaser and (2) the assumption by Purchaser of $10.7 million of the net intercompany balance payable from us to NNN Realty Advisors, Inc. (“NNNRA”), a wholly-owned subsidiary of Daymark. We expect to record a gain on sale related to the disposition of Daymark in the third quarter of 2011, after writing off all of the net assets and liabilities associated with Daymark and recognizing the transactions costs related to such transaction.

Pursuant to the Purchase Agreement, immediately after the completion of the sale of the Daymark shares (and after NNNRA had become a wholly-owned subsidiary of the Purchaser), the Company (1) paid NNNRA a $0.5 million cash payment and (2) issued to NNNRA a $5.0 million promissory note (the “Promissory Note”) in full satisfaction of the remaining portion of the Company’s net intercompany balance payable to NNNRA that was not assumed by Purchaser.

Pursuant to the Purchase Agreement, we have agreed to indemnify, subject to various limitations, Purchaser and its affiliates against any losses incurred or suffered by them as a result of (1) the breach of any representation or warranty made by us in the Purchase Agreement (subject to applicable survival limitations); (2) the breach of any covenant or agreement made by us in the Agreement; (3) any claim for brokerage or finder’s fees payable by Daymark or any of its subsidiaries in connection with the Transactions; (4) any liabilities or claims to the extent arising from the actions or omissions of (A) the Seller and its subsidiaries (other than Daymark and its subsidiaries) and (B) Daymark and its subsidiaries prior to the Closing, in each case, related to the office building at 7551 Metro Center Drive in Austin Texas (“Met Center 10”) (provided that indemnification for Met Center 10 (x) shall not cover any legal fees and expenses that were paid prior to Closing and (y) shall not cover any legal fees and expenses that have not been paid prior to the Closing except to the extent (and only to the extent) that they exceed $0.65 million); (5) certain liabilities under various employment agreements, plans and policies; or (6) fraud by Seller or any of its subsidiaries (other than Daymark or any of its subsidiaries).

Pursuant to the Purchase Agreement, the Purchaser has agreed to indemnify, subject to limitations, us and our affiliates against any losses incurred or suffered by them as a result of (1) the breach of any representation or warranty made by Purchaser in the Purchase Agreement (subject to applicable survival limitations); (2) the breach of any covenant or agreement made by Purchaser in the Purchase Agreement; (3) any liabilities of, obligations of or claims against us or any of our subsidiaries related to or arising from the business or operations of Daymark or any of its subsidiaries (whether relating to matters that occurred, arose or were asserted prior to the Closing or relating to matters that occur, arise or are asserted after the Closing), including existing and future litigation and claims, non-recourse carve-out guarantees and other guaranty obligations of us and our subsidiaries (provided that Purchaser shall not be obligated to indemnify Seller or its affiliates for losses of Seller or its affiliates that are the result of (x) a certain litigation matter or (y) fraud by Seller); (4) the first $0.65 million of legal fees and expenses relating to Met Center 10 that have not been paid prior to the Closing; and (5) fraud by Purchaser or any of its subsidiaries. Among other indemnification limitations, the liability of Purchaser for indemnifying us and our affiliates for liabilities, obligations or claims related to or arising from the business or operations of Daymark or its subsidiaries as described in clause (3) above (if related solely to any fact, event or circumstances prior to the Closing) shall not exceed $7.5 million in the aggregate.

The $5.0 million principal amount of the Promissory Note issued by us to NNNRA becomes due and payable on August 10, 2016 (the “Maturity Date”). Interest accrues on the unpaid principal of the Promissory Note at a rate equal to 7.95% per annum. Accrued and unpaid interest on the Promissory Note is payable on the last day of each calendar quarter (commencing on September 30, 2011) and on the Maturity Date. We may prepay all or any portion of the Promissory Note at any time without premium or penalty.

Upon a change of control of the Company or certain Company recapitalization events, we will be obligated to prepay, within 10 business days following the date of such event, an amount equal to the sum of (A) an amount of principal (the “Mandatory Principal Prepayment Amount”) equal to the lesser of (i) $3.0 million and (ii) the then-outstanding principal amount of the Promissory Note plus (B) all accrued and unpaid interest on the Mandatory Principal Prepayment Amount.

Events of default under the Promissory Note include (i) a default by us in the payment of any interest or principal on the Promissory Note when due and such default continues for a period of 10 days after written notice from the holder and (ii) we become subject to any final and non-appealable writ, judgment, warrant of attachment, execution or similar process that would cause a material adverse effect on the financial condition of us and our subsidiaries, taken as a whole. Upon the occurrence of an event of default, the holder of the Promissory Note may declare and demand the Promissory Note immediately due and payable.

In connection with the closing of the Transactions, we, Daymark and each of Daymark’s subsidiaries entered into an Intercompany Balance Settlement and Release Agreement dated August 10, 2011 (the “IBSRA”). Pursuant to the IBSRA, Daymark and its subsidiaries released us from any and all claims, obligations, contracts, agreements, debts and liabilities that Daymark and its subsidiaries now have, have ever had or may in the future have against us arising at the time of or prior to the Closing or on account of or arising out of any matter, fact or event occurring at the time of or prior to the Closing, including (1) all rights and obligations under that certain Services Agreement dated as of January 1, 2011 by and among us, Daymark and other parties thereto (the “Services Agreement”), (2) all other contracts and arrangements between Daymark or any of its subsidiaries and us, (3) all intercompany payables and any other financial obligations or amounts owed to Daymark or any of its subsidiaries by us and (4) rights to indemnification or reimbursement from us, subject to various exceptions. Daymark and its subsidiaries also waived rights to coverage under D&O insurance policies maintained by us.

Pursuant to the IBSRA, we released Daymark and each of its subsidiaries from any and all claims, obligations, contracts, agreements, debts and liabilities that we now have, have ever had or may in the future have against Daymark or any of its subsidiaries arising at the time of or prior to the Closing or on account of or arising out of any matter, fact or event occurring at the time of or prior to the Closing, including (1) all rights and obligations under the Services Agreement, (2) all other contracts and arrangements between us and Daymark or any of its subsidiaries, (3) all intercompany payables and any other financial obligations or amounts owed to us by Daymark or any of its subsidiaries and (4) rights to indemnification or reimbursement from Daymark or any of its subsidiaries, subject to various exceptions.

Sale of Alesco

On June 1, 2011, we entered into a definitive agreement for the sale of substantially all of the assets of our real estate investment fund business, Alesco Global Advisors (“Alesco”), to Lazard Asset Management LLC. Closing of the transaction is subject to customary approvals and is expected to occur in the third quarter of 2011. We anticipate recognizing a loss on the sale of Alesco of approximately $3.0 million in the third quarter of 2011 due to the deficit balance in noncontrolling interests.

Basis of Presentation

Our accompanying financial statements have been prepared assuming that we will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business for the twelve month period following the date of these financial statements.

On March 21, 2011, the Company announced that it had engaged an external advisor to explore strategic alternatives, including the potential sale or merger of the Company. During this period, the board of directors also determined, as permitted, not to declare the March 31, 2011 or June 30, 2011 quarterly dividends to holders of its 12% Cumulative Participating Perpetual Convertible Preferred Stock.

On April 15, 2011, we entered into an $18.0 million credit facility with ColFin GNE Loan Funding, LLC, an affiliate of Colony Capital LLC (“Colony”), as further described in Commitments, Contingencies and Other Contractual Obligations below. The Colony credit facility, which addressed the Company’s liquidity needs resulting from operating losses relating to the seasonal nature of the real estate services businesses, investments made in growth initiatives and increased legal expenses related to its Daymark subsidiary, matures on March 1, 2012.

On August 10, 2011 we completed the sale of our Daymark subsidiary. Due in part to operating losses prior to the sale of Daymark and expenses incurred to complete the sale, we may seek additional financing prior to the completion of our review of strategic alternatives. It is anticipated that any strategic alternative would include provisions to retire or refinance the Colony credit facility at or prior to maturity. If the Company is unable to retire or refinance the Colony credit facility prior to maturity, it could create substantial doubt about the Company’s ability to continue as a going concern for the twelve month period following the date of these financial statements. We believe that upon completion of our strategic alternative process we will have sufficient liquidity to operate in the normal course over the next twelve month period.

The consolidated financial statements include our accounts and those of our wholly owned and majority-owned controlled subsidiaries, variable interest entities (“VIEs”) in which we are the primary beneficiary, and partnerships/limited liability companies (“LLCs”) in which we are the managing member or general partner and the other partners/members lack substantive rights. All significant intercompany accounts and transactions are eliminated in consolidation.

Pursuant to the requirements of Accounting Standards Codification (“ASC”) Topic 810, Consolidation, (“Consolidation Topic”), we consolidate entities that are VIEs when we are deemed to be the primary beneficiary of the VIE. We are deemed to be the primary beneficiary of the VIE if we have a significant variable interest in the VIE that provides us with a controlling financial interest in the VIE. Our variable interest provides us with a controlling financial interest if we have both (i) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and (ii) the obligation to absorb losses of the entity that could potentially be significant to the VIE or the right to receive benefits from the entity that could potentially be significant to the VIE. There is subjectivity around the determination of power and which activities of the VIE most significantly impact the entity’s economic performance. As reconsideration events occur, we will reconsider our determination of whether an entity is a VIE and who the primary beneficiary is to determine if there is a change in the original determinations and will report such changes on a quarterly basis. In addition, we will continuously evaluate our VIE’s primary beneficiary as facts and circumstances change to determine if such changes warrant a change in an enterprise’s status as primary beneficiary of the VIEs. For entities in which (i) we are not deemed to be the primary beneficiary, (ii) our ownership is 50.0% or less and (iii) we have the ability to exercise significant influence, we use the equity method of accounting (i.e. at cost, increased or decreased by our share of earnings or losses, plus contributions less distributions). We also use the equity method of accounting for jointly controlled tenant-in-common interests.

Interim Unaudited Financial Data

Our accompanying consolidated financial statements have been prepared by us in accordance with generally accepted accounting principles (“GAAP”) in conjunction with the rules and regulations of the SEC. Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, our accompanying consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. Our accompanying consolidated financial statements reflect all adjustments, which are, in our view, of a normal recurring nature and necessary for a fair presentation of our financial position, results of operations and cash flows for the interim period. Interim results of operations are not necessarily indicative of the results to be expected for the full year; such full year results may be less favorable.

In preparing our accompanying consolidated financial statements, management has evaluated subsequent events through the financial statement issuance date.

We believe that although the disclosures contained herein are adequate to prevent the information presented from being misleading, our accompanying consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto included in our 2010 Annual Report on Form 10-K, as filed with the SEC on March 31, 2011.

Use of Estimates

The financial statements have been prepared in conformity with GAAP, which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities (including disclosure of contingent assets and liabilities) as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications

Certain reclassifications have been made to prior year and prior period amounts in order to conform to the current period presentation. These reclassifications have no effect on reported net loss.

Restricted Cash

Restricted cash is comprised primarily of cash reserve accounts held for the benefit of various insurance providers and lenders. As of June 30, 2011 and December 31, 2010, the restricted cash balance was $4.3 million and $3.8 million, respectively.

Fair Value Measurements

ASC Topic 820, Fair Value Measurements and Disclosures, (“Fair Value Measurements and Disclosures Topic”) defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The Fair Value Measurements and Disclosures Topic applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements; accordingly, the standard does not require any new fair value measurements of reported balances.

The Fair Value Measurements and Disclosures Topic emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, the Fair Value Measurements and Disclosures Topic establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

Level 1 inputs are the highest priority and are quoted prices in active markets for identical assets or liabilities Level 2 inputs reflect other than quoted prices included in Level 1 that are observable directly or through corroboration with observable market data. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs, due to little or no market activity for the asset or liability, such as internally-developed valuation models. If quoted market prices or inputs are not available, fair value measurements are based upon valuation models that utilize current market or independently sourced market inputs, such as interest rates, option volatilities, credit spreads and market capitalization rates. Items valued using such internally-generated valuation techniques are classified according to the lowest level input that is significant to the fair value measurement. As a result, the asset or liability could be classified in either Level 2 or 3 even though there may be some significant inputs that are readily observable. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

We generally use a discounted cash flow model to estimate the fair value of our consolidated real estate investments, unless better market comparable data is available. Management uses its best estimate in determining the key assumptions, including the expected holding period, future occupancy levels, capitalization rates, discount rates, rental rates, lease-up periods and capital expenditure requirements. The estimated fair value is further adjusted for anticipated selling expenses. Generally, if a property is under contract, the contract price adjusted for selling expenses is used to estimate the fair value of the property.

The following table presents financial and nonfinancial assets and liabilities measured at fair value on either a recurring or nonrecurring basis for the six months ended June 30, 2011:

												Total
												Impairment
												Recoveries
												(Losses)
												Incurred
												During the
												Six Months
(In thousands)	June 30,											Ended June 30,
Assets	2011			Level 1		Level 2			Level 3			2011
Investments in marketable equity securities	$	2,034		$	2,034	$	—		$	—		$	—
Assets under management	$	848		$	848	$	—		$	—		$	—
Life insurance contracts	$	371		$	—	$	371		$	—		$	—
Contingent liability — TIC program exchange	$	(10,861	)	$	—	$	—		$	(10,861	)	$	9,024
Warrant derivative liability	$	(239	)	$	—	$	(239	)	$	—		$	—

The following table presents financial and nonfinancial assets measured at fair value on either a recurring or nonrecurring basis for the year ended December 31, 2010:

									Total
									Impairment
									Losses
									Incurred
									During the
									Year Ended
(In thousands)	December 31,								December 31,
Assets	2010		Level 1		Level 2		Level 3		2010
Investments in marketable equity securities	$	1,948	$	1,948	$	—	$	—	$	—
Assets under management	$	901	$	901	$	—	$	—	$	—
Property held for sale	$	45,572	$	—	$	—	$	45,572	$	—
Investments in unconsolidated entities	$	5,178	$	—	$	—	$	5,178	$	(646	)
Life insurance contracts	$	1,062	$	—	$	1,062	$	—	$	—

Fair Value of Financial Instruments

ASC Topic 825, Financial Instruments, (“Financial Instruments Topic”) requires disclosure of fair value of financial instruments, whether or not recognized on the face of the balance sheet, for which it is practical to estimate that value. The Financial Instruments Topic defines fair value as the quoted market prices for those instruments that are actively traded in financial markets. In cases where quoted market prices are not available, fair values are estimated using present value or other valuation techniques. The fair value estimates are made at the end of the reporting period based on unobservable assumptions categorized in Level 3 of the hierarchy, including available market information and judgments about the financial instrument, such as estimates of timing and amount of expected future cash flows. Such estimates do not reflect any premium or discount that could result from offering for sale at one time our entire holdings of a particular financial instrument, nor do they consider the tax impact of the realization of unrealized gains or losses. In many cases, the fair value estimates cannot be substantiated by comparison to independent markets, nor can the disclosed value be realized in immediate settlement of the instrument.

The fair value of our mortgage notes, notes payable, senior notes, convertible notes and preferred stock is estimated using borrowing rates available to us for debt instruments with similar terms and maturities. The amounts recorded for accounts receivable, notes receivable, advances, accounts payable and accrued liabilities and capital lease obligations approximate fair value due to their short-term nature.

The following table presents the fair value and carrying value of our mortgage notes, notes payable, NNN senior notes, credit facility, convertible notes and preferred stock as of June 30, 2011 and December 31, 2010:

	June 30, 2011				December 31, 2010
(In thousands)	Fair Value		Carrying Value		Fair Value		Carrying Value
Mortgage notes — held for sale	$	59,803	$	70,000	$	59,624	$	70,000
Notes payable	$	620	$	711	$	747	$	884
NNN senior notes — held for sale	$	16,235	$	16,277	$	16,054	$	16,277
Credit facility(1)	$	17,747	$	17,747	$	—	$	—
Convertible notes(2)	$	27,515	$	30,291	$	28,832	$	30,133
Preferred stock(3)	$	49,917	$	95,874	$	91,828	$	90,080

(1) Carrying value includes an unamortized debt discount of $0.6 million and accrued interest of $0.3 million as of June 30, 2011.

(2)	Carrying value includes an unamortized debt discount of $1.2 million and $1.4 million as of June 30, 2011 and December 31, 2010, respectively.
(3)	Carrying value includes cumulative unpaid dividends of $5.8 million as of June 30, 2011.

Litigation

We routinely assess the likelihood of any adverse judgments or outcomes related to legal matters, as well as ranges of probable losses. A determination of the amount of the reserves required, if any, for these contingencies is made after analysis of each known issue and an analysis of historical experience. Therefore, we have recorded reserves related to certain legal matters for which we believe it is probable that a loss will be incurred and the range of such loss can be estimated. With respect to other matters, we have concluded that a loss is only reasonably possible or remote, or is not estimable and, therefore, no liability is recorded. Assessing the likely outcome of pending litigation, including the amount of potential loss, if any, is highly subjective. Our judgments regarding likelihood of loss and our estimates of probable loss amounts may differ from actual results due to difficulties in predicting the outcome of jury trials, arbitration hearings, settlement discussions and related activity, and various other uncertainties. Due to the number of claims which are periodically asserted against us, and the magnitude of damages sought in those claims, actual losses in the future could significantly exceed our current estimates.

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Identified Intangible Assets

6 Months Ended

Jun. 30, 2011

Identified Intangible Assets [Abstract]

IDENTIFIED INTANGIBLE ASSETS

4. IDENTIFIED INTANGIBLE ASSETS

Identified intangible assets consisted of the following:

		June 30,			December 31,
(In thousands)	Useful Life	2011			2010
Non-amortizing intangible assets:
Trade name	Indefinite	$	64,100		$	64,100
Amortizing intangible assets:
Identified intangible assets
Affiliate agreements	20 years		10,600			10,600
Customer relationships	5 to 7 years		8,725			8,725
Internally developed software	4 years		6,200			6,200
Customer backlog	1 year		746			746
			26,271			26,271
Accumulated amortization			(11,691	)		(9,673	)
Total identified intangible assets, net		$	78,680		$	80,698

Amortization expense recorded for the identified intangible assets was approximately $1.0 million and $2.0 million for the three and six months ended June 30, 2011, respectively. Amortization expense recorded for the identified intangible assets was approximately $0.8 million and $1.6 million for the three and six months ended June 30, 2010, respectively. Amortization expense is included as part of operating expense in the accompanying consolidated statement of operations.

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Accounts Payble and Accrued Expenses

6 Months Ended

Jun. 30, 2011

Accounts Payable and Accrued Expenses [Abstract]

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

5. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consisted of the following:

	June 30,		December 31,
(In thousands)	2011		2010
Accrued liabilities	$	12,952	$	9,353
Salaries and related costs		20,757		23,321
Accounts payable		10,036		15,332
Broker commissions		13,229		10,519
Bonuses		4,721		8,701
Property management fees and commissions due to third parties		2,256		2,244
Total	$	63,951	$	69,470

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Earnings (Loss) Per Share

6 Months Ended

Jun. 30, 2011

Earnings (Loss) Per Share [Abstract]

EARNINGS (LOSS) PER SHARE

13. EARNINGS (LOSS) PER SHARE

We compute earnings (loss) per share in accordance with the requirements of the Earnings Per Share Topic. Under the Earnings Per Share Topic, basic earnings (loss) per share is computed using the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed using the weighted-average number of common and common equivalent shares of stock outstanding during the periods utilizing the treasury stock method for stock options and unvested restricted stock.

The following is a reconciliation between weighted-average shares used in the basic and diluted earnings (loss) per share calculations:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(In thousands, except per share amounts)	2011			2010			2011			2010
Numerator for loss per share — basic:
Loss from continuing operations	$	(6,771	)	$	(10,976	)	$	(26,305	)	$	(32,220	)
Less: Preferred dividends		(2,897	)		(2,897	)		(5,794	)		(5,794	)
Loss from continuing operations attributable to Grubb & Ellis Company common shareowners		(9,668	)		(13,873	)		(32,099	)		(38,014	)
Loss from discontinued operations attributable to Grubb & Ellis Company common shareowners		(7,946	)		(8,219	)		(7,096	)		(11,027	)
Net loss attributable to noncontrolling interests		384			1,736			779			2,007
Net loss attributable to Grubb & Ellis Company common shareowners	$	(17,230	)	$	(20,356	)	$	(38,416	)	$	(47,034	)
Denominator for loss per share — basic:
Weighted-average number of common shares outstanding		65,928			64,644			65,798			64,503
Loss per share — basic:
Loss from continuing operations attributable to Grubb & Ellis Company common shareowners	$	(0.14	)	$	(0.18	)	$	(0.47	)	$	(0.56	)
Loss from discontinued operations attributable to Grubb & Ellis Company common shareowners		(0.12	)		(0.13	)		(0.11	)		(0.17	)
Net loss per share attributable to Grubb & Ellis Company common shareowners	$	(0.26	)	$	(0.31	)	$	(0.58	)	$	(0.73	)
Loss per share — diluted(1):
Loss from continuing operations attributable to Grubb & Ellis Company common shareowners	$	(0.14	)	$	(0.18	)	$	(0.47	)	$	(0.56	)
Loss from discontinued operations attributable to Grubb & Ellis Company common shareowners		(0.12	)		(0.13	)		(0.11	)		(0.17	)
Net loss per share attributable to Grubb & Ellis Company common shareowners	$	(0.26	)	$	(0.31	)	$	(0.58	)	$	(0.73	)
Total participating shareowners: (as of the end of the period used to allocate earnings)
Preferred shares (as if converted to common shares)		58,527			58,527			58,527			58,527
Unvested restricted stock		4,113			5,184			4,113			5,184
Unvested phantom stock		3,668			4,839			3,668			4,839
Total participating shares		66,308			68,550			66,308			68,550
Total vested common shares outstanding		65,982			64,741			65,982			64,741

(1) Excluded from the calculation of diluted weighted-average common shares as of June 30, 2011 and 2010 were the following securities, the effect of which would be anti-dilutive, because an operating loss was reported or the option exercise price was greater than the average market price of the common shares for the respective periods:

	June 30,		June 30,
(In thousands)	2011		2010
Outstanding unvested restricted stock		4,113		5,184
Outstanding options to purchase shares of common stock		291		442
Outstanding unvested shares of phantom stock		3,668		4,839
Convertible preferred shares (as if converted to common shares)		58,527		58,527
Convertible notes (as if converted to common shares)		14,036		14,036
Outstanding warrants		6,839		—
Total		87,474		83,028

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Credit Facility

6 Months Ended

Jun. 30, 2011

Credit Facility [Abstract]

CREDIT FACILITY

6. CREDIT FACILITY

On April 15, 2011, we entered into a credit agreement (the “Credit Agreement”), by and among us, Grubb & Ellis Management Services, Inc. (“GEMS”) and Colony, for an $18.0 million secured credit facility (the “Credit Facility”). The terms of the Credit Facility included a payment to Colony of (i) a closing fee equal to 1.00% of the Credit Facility amount and (ii) warrants (the “Warrants”) exercisable to purchase 6,712,000 shares of our common stock, valued at $0.7 million. The Credit Facility was fully drawn upon as of May 16, 2011.

The Credit Facility matures on March 1, 2012 and has an initial interest rate of 11.00% per annum, increasing by an additional 0.50% at the end of each three-month period subsequent to the closing date of the Credit Facility for so long as any loans are outstanding. In lieu of making a cash interest payment, we have the option to accrue any due and payable interest under the Credit Facility and issue additional warrants (the “Additional Warrants”) based on a formula calculation. The loan is not subject to any required principal amortization payments during the term. As of June 30, 2011, we have issued 62,120 Additional Warrants.

The Credit Agreement contains customary representations and warranties, as well as customary events of default, in certain cases subject to negotiated periods to cure and exceptions, including but not limited to: failure to make certain payments when due, breach of covenants, breach of representations and warranties, certain insolvency proceedings, judgments and attachments and any change of control.

The Credit Agreement also contains various customary covenants that, in certain instances, restrict the ability of us and our subsidiaries to: (i) incur indebtedness; (ii) create liens on assets; (iii) engage in mergers or consolidations; (iv) engage in dispositions of assets; (v) make investments, loans, guarantees or advances; (vi) pay dividends and distributions with respect to, or repurchase, its outstanding capital stock; (vii) enter into sale and leaseback transactions; (viii) engage in transactions with affiliates; and (ix) change the nature of our business. In addition, the Credit Agreement requires (i) GEMS and its subsidiaries to maintain, as on the last day of each fiscal quarter, a minimum net worth as defined in the agreement of $20.0 million and (ii) the outstanding loan to remain in compliance with the defined borrowing base at the end of each fiscal month (subject to periods to cure). As of June 30, 2011, we were in compliance with all covenants, as amended.

As a condition to the entering into of the Credit Agreement, we, GEMS and certain of our other subsidiaries simultaneously entered into a Guarantee and Collateral Agreement, dated as of April 15, 2011 with Colony, in its capacity as administrative agent (the “Guarantee and Collateral Agreement”), pursuant to which each of our subsidiaries party thereto (other than GEMS) guaranteed the obligations of us and GEMS under the Credit Agreement and each of us and our subsidiaries party thereto granted a first priority security interest in substantially all of our assets.

The Warrants have an exercise price equal to $0.01 per share and a maturity date of three years from the date of issuance (the “Expiration Date”), but are exercisable prior to the Expiration Date upon the satisfaction of certain events as set forth in the Warrants, including, but not limited to, if the volume weighted average price of our common stock equals or exceeds $1.10 for any consecutive 30 calendar day period prior to the date of exercise or upon the occurrence of a fundamental change in which the consideration received for each share of our common stock equals or exceeds $1.10. The Warrants are exercisable, at the option of the holder of such Warrant, (a) by paying the exercise price in cash, (b) pursuant to a “cashless exercise” of the Warrant or (iii) by reduction of the principal amount of loans under the Credit Facility payable to the holder of such Warrant, or by a combination of the foregoing methods. The number of shares of our common stock issuable upon exercise of the Warrants or Additional Warrants is subject to adjustment in certain cases. All Additional Warrants issued pursuant to the Credit Agreement shall contain the same terms as the Warrants. We accounted for the Warrants in accordance with the requirements of ASC 815, Derivatives and Hedging, (“Derivatives and Hedging Topic”) and ASC Topic 480, Distinguishing Liabilities from Equity, (“Distinguishing Liabilities from Equity Topic”). Pursuant to those topics, we determined that the Warrants should be accounted for as a derivative liability as the Warrant Agreement allows for the number of warrants issuable upon exercise of the warrant to be adjusted under certain scenarios including an adjustment if we issue shares of common stock without consideration or for consideration per share less than either: (i) the per share market value or (ii) the trigger price. The Warrants were recorded as a discount to the Credit Facility at fair market value as of April 15, 2011 with a corresponding derivative liability. The derivative liability is adjusted to fair market value at each period end date and the debt discount is amortized over the term of the Credit Facility.

On July 22, 2011, each of us and our wholly-owned subsidiary, GEMS, entered into an amendment and consent agreement (the “Credit Facility Amendment”) with respect to our Credit Facility, an amendment to the commitment letter for the Credit Facility, between Colony and the Company (the “Credit Facility Commitment Letter Amendment”) and amendments to the outstanding common stock purchase warrants issued to Colony pursuant to the terms of the Credit Agreement (the “Warrant Agreement Amendments”, and together with the Credit Facility Amendment and the Commitment Letter Amendment, collectively, the “Amendment Documents”).

Pursuant to the Amendment Documents, among other things, Colony expressly acknowledged and consented to our currently anticipated sale of Daymark, our wholly-owned subsidiary, and each of its wholly-owned (direct and indirect) subsidiaries and the restructuring of the outstanding intercompany debt obligations owing by us to Daymark. The Amendment Documents also clarified the definition of net worth to include any loans included in such net worth calculation. The Amendment Documents also permanently eliminated Colony’s right of first offer to provide us with debt financing prior to it consummating or endeavoring to consummate any similar financing with a third-party. Additionally, the Amendment Documents amended the price at which any common stock purchase warrants issuable to Colony in lieu of cash interest from time to time payable under the Credit Agreement and the common stock purchase warrants previously issued to Colony pursuant to the Credit Agreement, become exercisable from $1.10 per share to $0.71 per share. In addition, if in connection with any financing arrangement, we issue any options, or other equity linked securities to purchase our common stock, with an exercise condition that is based on a share price that is lower than $0.71 per share (“Trigger Price”), then the Trigger Price shall be adjusted downward (but not upward) to such lower price without any further action on the part of any party.

We also entered into a Registration Rights Agreement (“Registration Rights Agreement”) with the holder of the Warrants, pursuant to which holders of the Warrants have the right to require us, subject to certain limitations, to effect the registration under the Securities Act of 1933, as amended (the “Securities Act”), of all or any portion of the shares of our common stock issued as a result of the exercise of all or a portion of the Warrants or the Additional Warrants. The Registration Rights Agreement contains piggy-back registration rights and demand registration rights with respect to the shares underlying the Warrants and the Additional Warrants.

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Other Related Party Transactions

6 Months Ended

Jun. 30, 2011

Related Parties And Other Related Party Transactions [Abstract]

OTHER RELATED PARTY TRANSACTIONS

16. OTHER RELATED PARTY TRANSACTIONS

Offering Costs and Other Expenses Related to Public Non-Traded REITs — We, through our consolidated subsidiaries Grubb & Ellis Apartment REIT Advisor, LLC and Grubb & Ellis Healthcare REIT II Advisor, LLC, bear certain general and administrative expenses in our capacity as advisor of Grubb & Ellis Apartment REIT, Inc. (now known as Apartment Trust of America, Inc.) (“Apartment REIT”) and Grubb & Ellis Healthcare REIT II, Inc. (“Healthcare REIT II”), respectively, and are reimbursed for these expenses. However, Apartment REIT and Healthcare REIT II will not reimburse us for any operating expenses that, in any four consecutive fiscal quarters, exceed the greater of 2.0% of average invested assets (as defined in their respective advisory agreements) or 25.0% of the respective REIT’s net income for such year, unless the board of directors of the respective REITs approve such excess as justified based on unusual or nonrecurring factors. All unreimbursable amounts, if any, are expensed by us. There were no unreimbursed amounts expensed by us during the three and six months ended June 30, 2011 and 2010.

We also pay for the organizational, offering and related expenses on behalf of Healthcare REIT II’s initial offering and paid for such expenses related to Apartment REIT’s follow-on offering (through December 31, 2010 when we terminated our advisory and dealer-manager relationship with Apartment REIT). These organizational and offering expenses include all expenses (other than selling commissions and a dealer manager fee which represent 7.0% and 3.0% of the gross offering proceeds, respectively) to be paid by Healthcare REIT II and Apartment REIT in connection with these offerings. These expenses only become a liability of Healthcare REIT II and Apartment REIT to the extent other organizational and offering expenses do not exceed 1.0% of the gross proceeds of the offerings. As of June 30, 2011 and December 31, 2010, we have incurred expenses of $2.9 million and $2.7 million, respectively, in excess of 1.0% of the gross proceeds of Healthcare REIT II’s initial offering. We anticipate that such amounts will be reimbursed in the future from the offering proceeds of Healthcare REIT II. As of June 30, 2011 and December 31, 2010, we have incurred expenses of $2.5 million, in excess of 1.0% of the gross proceeds of Apartment REIT’s follow-on offering. As of June 30, 2011 and December 31, 2010, we have recorded an allowance for bad debt of approximately $2.5 million, related to Apartment REIT’s follow-on offering costs as we believe that such amounts may not be reimbursed.

Management Fees — We provide both transaction and management services to parties, which are related to one of our principal shareowners and directors (collectively, “Kojaian Companies”). In addition, we also pay asset management fees to Kojaian Companies related to properties we manage on their behalf. Revenue, including reimbursable expenses related to salaries, wages and benefits, earned by us for services rendered to Kojaian Companies, including joint ventures, officers and directors and their affiliates, net of asset management fees paid to Kojaian Companies, was $1.2 million and $1.3 million for the three months ended June 30, 2011 and 2010, respectively, and $2.4 million and $2.5 million for the six months ended June 30, 2011 and 2010, respectively.

In the second quarter of 2011, we began providing management services to the brother of one of our principal shareowners and directors. Revenue earned by us for services rendered was approximately $2,000 for the three months ended June 30, 2011.

Office Leases — In December 2010, we entered into two office leases with landlords related to Kojaian Companies, providing for an annual average base rent of $414,000 and $404,000 over the ten-year terms of the leases which begin in April 2011 and November 2012, respectively.

Other Related Party — Our directors and officers, as well as officers, managers and employees have purchased, and may continue to purchase, interests in offerings made by our programs at a discount. The purchase price for these interests reflects the fact that selling commissions and marketing allowances will not be paid in connection with these sales. Our net proceeds from these sales made, net of commissions, will be substantially the same as the net proceeds received from other sales.

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (33,401)	$ (43,247)
Adjustments to reconcile net loss to net cash used in operating activities:
Equity in losses of unconsolidated entities	(327)	606
Depreciation and amortization (including amortization of signing bonuses)	9,753	9,557
(Recovery) impairment of real estate	(9,858)	1,823
Impairment of intangible assets	480	1,639
Share-based compensation	2,378	5,797
Allowance for uncollectible accounts	6,052	3,301
Other	1,211	1,255
Changes in operating assets and liabilities:
Accounts receivable from related parties	(5,542)	867
Prepaid expenses and other assets	(6,993)	5,873
Accounts payable and accrued expenses	(85)	(5,021)
Other liabilities	1,012	(2,491)
Restricted cash	384	0
Net cash used in operating activities	(34,936)	(20,041)
CASH FLOWS FROM INVESTING ACTIVITIES
Cash effect from deconsolidation of VIE	0	(184)
Purchases of property and equipment	(3,036)	(1,297)
Tenant improvements and capital expenditures	(513)	(517)
Purchases of marketable equity securities, net	44	(936)
Notes and advances to related parties	(291)	(365)
Proceeds from repayment of notes and advances to related parties	739	4,610
Proceeds from sale of note receivable	6,126	0
Investments in unconsolidated entities, net	(27)	(243)
Sale of tenant-in-common interest in unconsolidated entities	0	391
Payments of real estate deposits and pre-acquisition costs, net	0	(422)
Acquisition of business	(100)	(200)
Restricted cash	1,308	2,002
Net cash provided by investing activities	4,250	2,839
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowing on credit facility	18,000	0
Repayments of mortgage notes and capital lease obligations, net	(581)	(514)
Other financing costs	(946)	(489)
Proceeds from the issuance of convertible notes, net	0	29,925
Dividends paid to preferred stockholders	0	(5,794)
Contributions from noncontrolling interests	14	321
Distributions to noncontrolling interests	(998)	(3,244)
Restricted cash	(1,000)	0
Net cash provided by financing activities	14,489	20,205
NET (DECREASE) IN CASH AND CASH EQUIVALENTS	(16,197)	3,003
Cash and cash equivalents - Beginning of period	30,919	39,101
Cash and cash equivalents - End of period	14,722	42,104
SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES
Accrued preferred stock dividends	5,794	0
Issuance of warrants	741	0
Consolidation of assets held by VIEs	0	15,389
Consolidation of liabilities held by VIEs	0	651
Consolidation of noncontrolling interests held by VIEs	0	14,740
Deconsolidation of assets held by VIEs	0	338
Deconsolidation of liabilities held by VIEs	0	411
Deconsolidation of noncontrolling interests held by VIEs	0	73
Consolidation of assets related to sponsored mutual fund	0	823
Consolidation of noncontrolling interests related to sponsored mutual fund	0	823
Acquisition of business	$ 0	$ 1,009

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Income Taxes

6 Months Ended

Jun. 30, 2011

Income Taxes [Abstract]

INCOME TAXES

17. INCOME TAXES

The components of income tax (provision) benefit from continuing operations for the three and six months ended June 30, 2011 and 2010 consisted of the following:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
(In thousands)	2011		2010			2011			2010
Current:
Federal	$	—	$	—		$	—		$	—
State		16		(68	)		50			(130	)
Foreign		7		(12	)		(27	)		(88	)
	$	23	$	(80	)	$	23		$	(218	)
Deferred:
Federal		—		—			—			—
State		—		—			—			—
	$	—	$	—		$	—		$	—

We recorded net prepaid taxes totaling approximately $0.2 million and $0.2 million as of June 30, 2011 and December 31, 2010, respectively, comprised primarily of state tax refunds receivable and state prepaid taxes.

As of December 31, 2010, federal net operating loss carryforwards in the amount of approximately $154.1 million are available to us, translating to a deferred tax asset before valuation allowance of $53.9 million. These NOLs will expire between 2027 and 2030. A significant portion of these NOLs will be transferred to Daymark upon the sale of Daymark.

We also have state net operating loss carryforwards from December 31, 2010 and previous periods totaling $244.1 million, translating to a deferred tax asset of $16.3 million before valuation allowances, which begin to expire in 2017.

We regularly review our deferred tax assets for realizability and have established a valuation allowance based upon historical taxable income, projected future taxable income and the expected timing of the reversals of existing temporary differences to reduce our deferred tax assets to the amount that we believe is more likely than not to be realized. Due to the cumulative pre-tax book loss in the past three years and the inherent volatility of our business in recent years, we believe that this negative evidence supports the position that a valuation allowance is required pursuant to ASC 740, Income Taxes, (“Income Taxes Topic”). Management determined that as of June 30, 2011, $122.7 million of deferred tax assets do not satisfy the recognition criteria set forth in the Income Taxes Topic. Accordingly, a valuation allowance has been recorded for this amount. If released, the entire amount would result in a benefit to continuing operations.

The differences between the total income tax (provision) benefit from continuing operations for financial statement purposes and the income taxes computed using the applicable federal income tax rate of 35.0% for the three and six months ended June 30, 2011 and 2010 were as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(In thousands)	2011			2010			2011			2010
Federal income taxes at the statutory rate	$	2,378		$	3,813		$	9,215		$	11,234
State income taxes, net of federal benefit		206			345			835			752
Foreign income taxes		7			(12	)		(28	)		(88	)
Other		82			(4	)		208			(4	)
Non-deductible expenses		(550	)		(268	)		(2,081	)		(581	)
Change in valuation allowance		(2,100	)		(3,954	)		(8,126	)		(11,531	)
Provision for income taxes	$	23		$	(80	)	$	23		$	(218	)

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Marketable Securities

6 Months Ended

Jun. 30, 2011

Marketable Securities [Abstract]

MARKETABLE SECURITIES

2. MARKETABLE SECURITIES

We apply the provisions of the Fair Value Measurements and Disclosures Topic to our financial assets recorded at fair value, which consists of available-for-sale marketable securities. Level 1 inputs, the highest priority, are quoted prices in active markets for identical assets are used by us to estimate the fair value of our available-for-sale marketable securities.

The historical cost and estimated fair value of the available-for-sale marketable securities held by us are as follows:

	As of June 30, 2011								As of December 31, 2010
							Fair								Fair
	Historical		Gross Unrealized				Market		Historical		Gross Unrealized				Market
(In thousands)	Cost		Gains		Losses		Value		Cost		Gains		Losses		Value
	(Unaudited)
Equity securities	$	1,793	$	241	$	—	$	2,034	$	1,800	$	148	$	—	$	1,948

There were no sales of marketable equity securities, or other than temporary impairments recorded, during the three and six month periods ended June 30, 2011 or 2010.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2011

Commitments and Contingencies [Abstract]

COMMITMENTS AND CONTINGENCIES

11. COMMITMENTS AND CONTINGENCIES

Operating Leases — We have non-cancelable operating lease obligations for office space and certain equipment ranging from one to ten years, and sublease agreements under which we act as a sublessor. The office space leases often times provide for annual rent increases, and typically require payment of property taxes, insurance and maintenance costs.

Rent expense under these operating leases was approximately $5.8 million and $5.4 million for the three months ended June 30, 2011 and 2010, respectively, and approximately $11.9 million and $11.6 million for the six months ended June 30, 2011 and 2010, respectively. Rent expense is included in general and administrative expense in the accompanying consolidated statements of operations.

TIC Program Exchange Provision — Prior to the merger, Triple Net Properties, LLC (now known as GERI), a subsidiary of Daymark, entered into agreements providing certain investors the right to exchange their investments in certain TIC programs for investments in a different TIC program or in substitute replacement properties. The agreements containing such rights of exchange and repurchase rights pertain to initial investments in TIC programs totaling $31.6 million. In the fourth quarter of 2010, GERI was released from certain obligations relating to $6.2 million in initial investments. In addition, we were released from certain obligations totaling $2.0 million as a result of the sale of a TIC program’s property during the year ended December 31, 2010. In July 2009, we received notice on behalf of certain investors stating their intent to exercise rights under one of those agreements with respect to an initial investment totaling $4.5 million. Subsequently, in February 2011, an action was filed in the Superior Court of Orange County, California on behalf of those same investors against GERI alleging breach of contract and breach of the implied covenant of good faith and fair dealing, and seeking damages of $26.5 million with respect to initial cash investments totaling $22.3 million, which is inclusive of the $4.5 million for which we received the notice in July 2009. While the outcome of that action is uncertain, GERI will vigorously defend those claims. See TIC Program Exchange Litigation disclosure under Claims and Lawsuits below for further information.

We deferred revenues relating to these agreements of $0 and $0.1 million for the three months ended June 30, 2011 and 2010, respectively. We deferred revenues relating to these agreements of $0 and $0.1 million for the six months ended June 30, 2011 and 2010, respectively. During the six months ended June 30, 2011, pursuant to the Real Estate — General Topic, we reduced an obligation by $9.0 million related to the re-measurement of our maximum exposure to loss related to certain obligations at the time the February 2011 action was filed. No additional potential losses related to these agreements were incurred during the three months ended June 30, 2011 and 2010, and additional potential losses of $0 and $0.2 million related to these agreements were incurred during the six months ended June 30, 2011 and 2010, respectively, to record a liability underlying the agreements with investors. As of June 30, 2011, we had recorded liabilities totaling $10.9 million related to such agreements, which is included in other current liabilities, consisting of $3.6 million of cumulative deferred revenues and $7.3 million of additional potential losses related to these agreements as a result of estimated declines in the value of the properties. In addition, we are joint and severally liable on the non-recourse mortgage debt related to these TIC programs with exchange provisions totaling $276.1 million as of June 30, 2011 and December 31, 2010. This mortgage debt is not consolidated as the LLCs account for the interests in our TIC investments under the equity method and the non-recourse mortgage debt does not meet the criteria under the Transfers and Servicing Topic for recognizing the share of the debt assumed by the other TIC interest holders for consolidation. We consider the third-party TIC holders’ ability and intent to repay their share of the joint and several liability in evaluating the recoverability of our investment in the TIC program.

Capital Lease Obligations — We lease computers, copiers and postage equipment that are accounted for as capital leases.

Claims and Lawsuits — We and our Daymark affiliate have been named as defendants in multiple lawsuits relating to certain of its investment management offerings, in particular, its TIC programs. These lawsuits allege a variety of claims in connection with these offerings, including mismanagement, breach of contract, negligence, fraud, breach of fiduciary duty and violations of state and federal securities laws, among other claims. Plaintiffs in these suits seek a variety of remedies, including rescission, actual and punitive damages, injunctive relief, and attorneys’ fees and costs. In many instances, the damages being sought are unspecified and to be determined at trial. It is difficult to predict the ultimate disposition of these lawsuits and our ultimate liability with respect to such claims and lawsuits. It is also difficult to predict the cost of defending these matters and to what extent claims will be covered by our existing insurance policies. In the event of an unfavorable outcome, the amounts we may be required to pay in the discharge of liabilities or settlements could have a material adverse effect on our cash flows, financial position and results of operations.

Met Center 10 — One such matter relates to a TIC property known as Met Center 10, located in Austin, Texas. The Company and its subsidiaries have been involved in multiple legal proceedings relating to Met Center 10, including three actions pending in state court in Austin, Texas and an arbitration proceeding being conducted in California. The arbitration proceeding involves Grubb & Ellis Realty Investors, LLC (“GERI”), a subsidiary of Daymark, and is pending before the American Arbitration Association in Orange County, California captioned NNN Met Center 10 1, LLC, et al. v. Grubb & Ellis Realty Investors, LLC, No. 73 115 Y 00140 HLT (the “Met 10 Arbitration”). A state court action involving GERI is pending in the District Court of Travis County, Texas captioned NNN Met Center 10, LLC v. Met Center Partners-6, Ltd., et al., No. D-1-GN-08-002104 (the “Met 10 Main Action”). Two additional state court actions involving the Company, GERI, and Grubb & Ellis Management Services, Inc. are pending in the District Court for Travis County, Texas captioned NNN Met Center 10-1, LLC v. Lexington Insurance Company, et al., No. D-1-GN-10-004495 and NNN Met Center 10, LLC v. Lexington Insurance Company, et al., No. D-1-GN-11-000848 (together, the “Met 10 Lexington Actions”).

In the Met 10 Arbitration, TIC investors asserted, among other things, that GERI should bear responsibility for alleged diminution in the value of the property and their investments as a result of ground movement. The Met 10 Arbitration was bifurcated into two phases. In the first phase, the arbitrator ruled in favor of the TIC investors, finding, among other things, that the TIC investors had properly terminated the property management agreement for cause. In Phase 2 of the arbitration, the TICs asserted claims for damages against GERI arising from alleged breaches of the management agreement and other alleged wrongful acts in connection with the management of the Met Center 10 property and other alleged breaches of duty.

Before the beginning of the Phase 2 hearing, the TICs, GERI, and Lexington Insurance Company reached a settlement, which has been documented and executed by the parties, and which is awaiting court approval. The settlement is for $0.1 million, net of insurance recoveries. Among other things, under the terms of the settlement, GERI must pay $0.1 million to the TICs shortly after the settlement is approved by the court, and may be obligated to subsequently pay up to approximately $0.6 million in addition to the initial $0.1 million payment, depending upon the resolution of claims relating to Met Center 10 against parties other than GERI and its affiliates. The TICs are releasing all claims relating to Met Center 10 against, among others, GERI and its affiliates.

In the Met 10 Texas Action, GERI and NNN Met Center 10, LLC were pursuing claims against the developers and sellers of the property (the “Sellers”), the due diligence firm retained by GERI in connection with the purchase of the Met Center 10 property, and the engineering, construction, and design professionals who performed work relating to the Met Center 10 property (together with the due diligence firm, the “Professionals”) to recover damages arising from, among other things, ground movement. The Sellers and the Professionals were asserting counterclaims against GERI and NNN Met Center 10, LLC. GERI and NNN Met Center 10, LLC, on the one hand, and the Sellers, on the other, have reached a settlement resolving all claims between them, which has been documented and executed by the parties. Under that settlement, GERI, its affiliates, and NNN Met Center 10, LLC are being released from all claims by the Sellers relating to Met Center 10. Neither GERI nor its affiliates (or NNN Met Center 10, LLC) are required to make any payments pursuant to the settlement with the Sellers. In addition, GERI and NNN Met Center 10, LLC, on the one hand, and the Professionals, on the other hand, have reached a tentative settlement resolving all claims between them, which is in the process of being documented and approved. Under that settlement, GERI, its affiliates, and NNN Met Center 10, LLC are being released from all claims by the Professionals relating to Met Center 10. Neither GERI nor its affiliates (or NNN Met Center 10, LLC) are required to make any payments pursuant to the tentative settlement with the Professionals.

In the Met 10 Lexington Actions, the TIC investors were asserting claims against former officers and employees of the Company and other defendants in connection with the negotiation and documentation of an insurance settlement relating to the Met Center 10 property, and an alleged misallocation and/or misappropriation of the proceeds of that settlement. In addition, Lexington Insurance Company asserted claims against NNN Met Center 10, LLC, the Company, GERI, and GEMS arising of the insurance settlement. Pursuant to the settlement of the Met 10 Arbitration described above, the TICs are releasing and dismissing certain claims against the former officers and employees of the Company, including claims that were being asserted in the Met 10 Lexington Actions, and Lexington is releasing and dismissing its claims against the Company, GERI, GEMS, and NNN Met Center 10, LLC, including the claims Lexington was asserting in the Met 10 Lexington Actions.

TIC Program Exchange Litigation — GERI and Grubb & Ellis Company are defendants in an action filed on or about February 14, 2011 in the Superior Court of Orange County, California captioned S. Sidney Mandel, et al. v. Grubb & Ellis Realty Investors, LLC, et al, Case No. 00449598. The plaintiffs allege that, in order to induce the plaintiffs to purchase $22.3 million in TIC investments that GERI (formerly known as Triple Net Properties, LLC) was syndicating, GERI offered to subsequently “repurchase” those investments and provide certain “put” rights under certain terms and conditions pursuant to a letter agreement executed between GERI and the plaintiffs. The plaintiffs allege that GERI has failed to honor its purported obligations under the letter agreement and have initiated suit for breach of contract, breach of the implied covenant of good faith and fair dealing and declaratory relief as to the rights and obligations of the parties under the letter agreement. By way of a first amended complaint, the plaintiffs are alleging that GERI is merely an inadequately capitalized instrumentality of Grubb & Ellis Company and that Grubb & Ellis Company should be held liable for acts and omissions of GERI. The plaintiffs are seeking damages totaling $26.5 million, attorneys’ fees and costs. We intend to vigorously defend these claims and to assert all applicable defenses. At this time we are unable to predict the likelihood of an unfavorable or adverse award or outcome. At this time it is not possible to estimate a range of possible loss for this matter.

Britannia II Office Park — Various Daymark subsidiaries are defendants in an action filed on or about July 22, 2010 in Superior Court of Alameda County, California captioned NNN Britannia Business Center II — 17, LLC, et al. v. Grubb & Ellis Company, et al., Case No. RG10-527282. Plaintiffs invested more than $14 million for TIC interests in a commercial real estate project in Pleasanton, California, known as Britannia Business Center II, which ultimately was foreclosed upon. Plaintiffs claim that they were induced to invest with misrepresentations concerning the financial projections and risks for the project, and allege various mismanagement claims. Plaintiffs’ current claim is for breach of the implied covenant of good faith and fair dealing. Plaintiffs seek compensatory and exemplary damages in an unspecified amount, along with costs and attorneys’ fees. We intend to vigorously defend these claims and to assert all applicable defenses. At this time we are unable to predict the likelihood of an unfavorable or adverse award or outcome. At this time it is not possible to estimate a range of possible loss for this matter.

Durham Office Park — We and various Daymark subsidiaries are defendants in an action filed on or about July 21, 2010 in North Carolina Business Court, Durham County Superior Court Division, captioned NNN Durham Office Portfolio I, LLC, et al. v. Grubb & Ellis Company, et al., Case No. 10 CVS 4392. Plaintiffs invested more than $11 million for TIC interests in a commercial real estate project in Durham, North Carolina. Plaintiffs claim, among other things, that information regarding the intentions of the property’s anchor tenant to remain in occupancy was withheld and misrepresented. Plaintiffs have asserted claims for breach of contract, negligence, negligent misrepresentation, breach of fiduciary duty, fraud, unfair and deceptive trade practices and conspiracy. We intend to vigorously defend these claims and to assert all applicable defenses. At this time we are unable to predict the likelihood of an unfavorable or adverse award or outcome. At this time it is not possible to estimate a range of possible loss for this matter.

We are involved in various claims and lawsuits arising out of the ordinary conduct of our business, many of which may not be covered by our insurance policies. In the opinion of management, in the event of an unfavorable outcome, the amounts we may be required to pay in the discharge of liabilities or settlements could have a material adverse effect on our cash flows, financial position and results of operations. At this time it is not possible to estimate a range of possible loss for these matters.

Guarantees — Historically our Daymark subsidiary provided non-recourse carve-out guarantees or indemnities with respect to loans for properties now owned or under the management of Daymark. As of June 30, 2011, there were 126 properties under management with non-recourse carve-out loan guarantees or indemnities of approximately $3.0 billion in total principal outstanding with terms ranging from one to 10 years, secured by properties with a total aggregate purchase price of approximately $4.1 billion. As of December 31, 2010, there were 133 properties under management with non-recourse carve-out loan guarantees or indemnities of approximately $3.1 billion in total principal outstanding with terms ranging from one to 10 years, secured by properties with a total aggregate purchase price of approximately $4.3 billion. In addition, the consolidated VIEs and unconsolidated VIEs are jointly and severally liable on the non-recourse mortgage debt related to the interests in our TIC investments as further described in Note 4.

Our guarantees consisted of the following as of June 30, 2011 and December 31, 2010:

	June 30,		December 31,
(In thousands)	2011		2010
Daymark non-recourse/carve-out guarantees of debt of properties under management(1)	$	2,782,390	$	2,944,311
Grubb & Ellis Company non-recourse/carve-out guarantees of debt of properties under management(1)	$	78,217	$	78,363
Daymark and Grubb & Ellis Company non-recourse/carve-out guarantees of debt of properties under management(2)	$	31,125	$	31,271
Daymark non-recourse/carve-out guarantees of debt of Company owned property(1)	$	60,000	$	60,000
Daymark recourse guarantees of debt of properties under management	$	11,650	$	12,900
Grubb & Ellis Company recourse guarantees of debt of properties under management(3)	$	11,998	$	11,998
Daymark recourse guarantees of debt of Company owned property(4)	$	10,000	$	10,000

(1) A “non-recourse/carve-out” guarantee or indemnity generally imposes liability on the guarantor or indemnitor in the event the borrower engages in certain acts prohibited by the loan documents. Each non-recourse carve-out guarantee or indemnity is an individual document entered into with the mortgage lender in connection with the purchase or refinance of an individual property. While there is not a standard document evidencing these guarantees or indemnities, liability under the non-recourse carve-out guarantees or indemnities generally may be triggered by, among other things, any or all of the following:

• a voluntary bankruptcy or similar insolvency proceeding of any borrower;

• a “transfer” of the property or any interest therein in violation of the loan documents;

• a violation by any borrower of the special purpose entity requirements set forth in the loan documents;

• any fraud or material misrepresentation by any borrower or any guarantor in connection with the loan;

• the gross negligence or willful misconduct by any borrower in connection with the property, the loan or any obligation under the loan documents;

• the misapplication, misappropriation or conversion of (i) any rents, security deposits, proceeds or other funds, (ii) any insurance proceeds paid by reason of any loss, damage or destruction to the property, and (iii) any awards or other amounts received in connection with the condemnation of all or a portion of the property;

• any waste of the property caused by acts or omissions of borrower of the removal or disposal of any portion of the property after an event of default under the loan documents; and

• the breach of any obligations set forth in an environmental or hazardous substances indemnity agreement from borrower.

Certain acts (typically the first three listed above) may render the entire debt balance recourse to the guarantor or indemnitor, while the liability for other acts is typically limited to the damages incurred by the lender. Notice and cure provisions vary between guarantees and indemnities. Generally the guarantor or indemnitor irrevocably and unconditionally guarantees or indemnifies the lender the payment and performance of the guaranteed or indemnified obligations as and when the same shall be due and payable, whether by lapse of time, by acceleration or maturity or otherwise, and the guarantor or indemnitor covenants and agrees that it is liable for the guaranteed or indemnified obligations as a primary obligor. As of June 30, 2011, to the best of our knowledge, there was no debt owed by us as a result of the borrowers engaging in prohibited acts, despite the prohibited acts that occurred as more fully described below.

(2) We and Daymark are each joint and severally liable on such non-recourse/carve-out guarantees.

(3) We have $1.0 million held as collateral by a lender related to one of our recourse guarantees that, upon the occurrence of any triggering event or condition under the guarantee, will be used to cover all or a portion of the amounts due under the guarantee.

(4) In addition to the $10.0 million principal guarantee, Daymark has guaranteed any shortfall in the payment of interest on the unpaid principal amount of the mortgage debt on one owned property.

If property values and performance decline, the risk of exposure under these guarantees increases. We initially evaluate these guarantees to determine if the guarantee meets the criteria required to record a liability in accordance with the requirements of ASC Topic 460, Guarantees, (“Guarantees Topic”). Any such liabilities were insignificant upon execution of the guarantees. In addition, on an ongoing basis, we evaluate the need to record an additional liability in accordance with the requirements of ASC Topic 450, Contingencies, (“Contingencies Topic”). As of June 30, 2011 and December 31, 2010, we had recourse guarantees of $23.6 million and $24.9 million, respectively relating to debt of properties under management (of which $12.0 million is recourse back to Grubb & Ellis Company, the remainder of which is recourse to our Daymark subsidiary). As of June 30, 2011 and December 31, 2010, approximately $9.5 million, of these recourse guarantees relate to debt that has matured, is in default, or is not currently in compliance with certain loan covenants (of which $2.0 million is recourse back to Grubb & Ellis Company, the remainder of which is recourse to our Daymark subsidiary). In addition, as of June 30, 2011, and December 31, 2010, we had $8.0 million of recourse guarantees related to debt that will mature in the next twelve months (of which $8.0 million is recourse back to Grubb & Ellis Company). In connection with the sale of Daymark, the purchaser indemnified us up to $7.5 million for liabilities, obligations and claims related to or arising from the business or operations of Daymark or its subsidiaries. Our evaluation of the potential liability under these guarantees may prove to be inaccurate and liabilities may exceed estimates. In the event that actual losses materially exceed estimates, individual investment management subsidiaries may not be able to pay such obligations as they become due. Failure of any of our subsidiaries to pay its debts as they become due would likely have a materially negative impact on our ongoing business, and the investment management operations in particular. In evaluating the potential liability relating to such guarantees, we consider factors such as the value of the properties secured by the debt, the likelihood that the lender will call the guarantee in light of the current debt service and other factors. As of June 30, 2011 and December 31, 2010, we recorded a liability of $0 and $0.8 million which is included in other current liabilities, related to our estimate of probable loss related to recourse guarantees of debt of properties under management and previously under management.

Two unaffiliated, individual investor entities (the “TIC debtors”), who are minority owners in two TIC programs located in Texas, Met Center 10 and 2400 West Marshall, which were originally sponsored by GERI, filed chapter 11 bankruptcy petitions in January 2011. The principal balance of the mortgage debt for these two properties was approximately $29.4 million and $6.6 million, respectively, at the time of the bankruptcy filings. On February 1, 2011, the special servicer for each of these loans foreclosed on all of the undivided TIC ownership interests in these properties, except those owned by the unaffiliated investor entities which effected the bankruptcy filings. The automatic stay imposed following the bankruptcy filings by each of these investor entities prevented the special servicer from foreclosing on 100% of the TIC ownership interests. The special servicers for each of the TIC debtors’ loans filed motions for relief from the automatic stay to foreclose upon the remaining TIC ownership interests. In the Met Center 10 case, by order dated May 2, 2011, the bankruptcy court continued the automatic stay, subject to certain conditions, to November 1, 2011. The May 2, 2011 order also established a procedure by which the special servicer would be required to reconvey the foreclosed upon interests to the Met Center 10 debtor and the other investor entities following payment of an “amount due” as that term is defined in the May 2, 2011 Order. In the 2400 West Marshall case, by order dated June 15, 2011, the bankruptcy court continued the automatic stay, subject to certain conditions, to December 1, 2011. The June 15, 2011 order also established a procedure by which the special servicer would be required to reconvey the foreclosed upon interests to the 2400 West Marshall debtor and the other investor entities following payment of an “amount due” as that term is defined in the June 15, 2011 Order.

GERI executed a non-recourse carve-out guarantee in connection with the mortgage loan for the Met 10 property, and a non-recourse indemnity for the 2400 West Marshall property. As discussed in the “Guarantees” disclosure above, such “non-recourse carve-out” guarantees and indemnities only impose liability on GERI if certain acts prohibited by the loan documents take place. Liability under these non- recourse carve-out guarantees and indemnities may be triggered by the voluntary bankruptcy filings made by the two unaffiliated, individual investor entities. As a consequence of these bankruptcy filings, the TIC debtors’ mortgage lenders may assert that GERI is liable under the guarantee and indemnity. While GERI’s ultimate liability under these agreements is uncertain as a result of numerous factors, including, without limitation, whether the bankruptcy filings of the TIC debtors triggered GERI’s obligations under the guaranty and the indemnification, the amount of the lender’s credit bids at the time of foreclosure, events in the individual bankruptcy proceedings and the ultimate disposition of those bankruptcy proceedings, and the defenses GERI may raise under the guarantee and indemnity, such liability may be in an amount in excess of the net worth of NNNRA and its subsidiaries, including GERI. NNNRA and GERI intend to vigorously dispute any imposition of any liability under any such guarantee or indemnity obligation. As of June 30, 2011, we did not have any liabilities accrued related to such guarantees or indemnity obligations.

Investment Program Commitments — In 2009, we revised the offering terms related to certain investment programs which we sponsor, including the commitment to fund additional property reserves and the waiver or reduction of future management fees and disposition fees. Such future funding commitments have been made in the form of guaranteeing the collectability of advances that one of our consolidated VIEs has made to these investment programs. As of June 30, 2011 and December 31, 2010, the future funding commitments under the guarantee totaled approximately $1.5 million and $2.0 million, respectively.

Environmental Obligations — In our role as property manager, we could incur liabilities for the investigation or remediation of hazardous or toxic substances or wastes at properties we currently or formerly managed or at off-site locations where wastes were disposed of. Similarly, under debt financing arrangements on properties owned by sponsored programs, we have agreed to indemnify the lenders for environmental liabilities and to remediate any environmental problems that may arise. We are not aware of any environmental liability or unasserted claim or assessment relating to an environmental liability that we believe would require disclosure or the recording of a loss contingency.

Alesco Seed Capital — On November 16, 2007, we completed the acquisition of a 51.0% membership interest in Alesco from Jay P. Leupp. Pursuant to the Intercompany Agreement between us and Alesco, dated as of November 16, 2007, we committed to invest up to $20.0 million in seed capital into certain real estate funds that Alesco planned to launch. Additionally, upon achievement of certain earn-out targets, we were required to purchase up to an additional 27% interest in Alesco for $15.0 million. To date those earn-out targets have not been achieved. We are allowed to use $15.0 million of seed capital to fund the earn-out payments. As of June 30, 2011, we have invested $1.5 million into the three funds that Alesco has launched to date (the “Existing Alesco Funds”) and our unfunded seed capital commitments with respect to the Existing Alesco Funds totaled $2.5 million. As of February 14, 2011, our obligation to make further seed capital investments under the Intercompany Agreement terminated, except for the remaining commitments under the Existing Alesco Funds. On June 1, 2011, we entered into a definitive agreement for the sale of substantially all of the assets of Alesco to Lazard Asset Management LLC. Closing of the transaction is subject to customary approvals and is expected to occur in the third quarter of 2011.

Deferred Compensation Plan — During 2008, we implemented a deferred compensation plan that permits employees and independent contractors to defer portions of their compensation, subject to annual deferral limits, and have it credited to one or more investment options in the plan. As of June 30, 2011 and December 31, 2010, $3.1 million and $3.4 million, respectively, reflecting the non-stock liability under this plan were included in accounts payable and accrued expenses. We have purchased whole-life insurance contracts on certain employee participants to recover distributions made or to be made under this plan and as of June 30, 2011 and December 31, 2010 have recorded the cash surrender value of the policies of $0.4 million and $1.1 million, respectively, in prepaid expenses and other assets.

In addition, we award “phantom” shares of our stock to participants under the deferred compensation plan. These awards vest over three to five years. Vested phantom stock awards are also unfunded and paid according to distribution elections made by the participants at the time of vesting and will be settled by issuing shares of our common stock from our treasury share account or issuing unregistered shares of our common stock to the participant. As of June 30, 2011 and December 31, 2010, an aggregate of 3.9 million and 4.1 million phantom share grants were outstanding, respectively. Generally, upon vesting, recipients of the grants are entitled to receive the number of phantom shares granted, regardless of the value of the shares upon the date of vesting; provided, however, as of June 30, 2011 grants with respect to 816,000 phantom shares had a guaranteed minimum share price ($2.8 million in the aggregate) that will result in us paying additional compensation to the participants should the value of the shares upon vesting be less than the grant date value of the shares. We account for additional compensation relating to the “guarantee” portion of the awards by measuring at each reporting date the additional payment that would be due to the participant based on the difference between the then current value of the shares awarded and the guaranteed value. This award is then amortized on a straight-line basis as compensation expense over the requisite service (vesting) period, with an offset to deferred compensation liability.

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Changes in Deficit

6 Months Ended

Jun. 30, 2011

Changes in Deficit [Abstract]

CHANGES IN DEFICIT

15. CHANGES IN DEFICIT

The following is a reconciliation of total deficit, deficit attributable to Grubb & Ellis Company and equity attributable to noncontrolling interests from December 31, 2010 to June 30, 2011 (in thousands):

															Total
										Accumulated					Grubb & Ellis
							Additional			Other					Company
	Common Stock						Paid-In			Comprehensive		Accumulated			Shareowners’			Noncontrolling			Total
	Shares			Amount			Capital			Income		Deficit			Deficit			Interests			Deficit
Balance as of December 31, 2010		70,076		$	701		$	409,943		$	148	$	(478,881	)	$	(68,089	)	$	9,130		$	(58,959	)
Vesting of share-based compensation		—			—			2,378			—		—			2,378			—			2,378
Preferred dividends accrued		—			—			(5,794	)		—		—			(5,794	)		—			(5,794	)
Forfeiture of non-vested restricted shares		(223	)		(3	)		(180	)		—		—			(183	)		—			(183	)
Contributions from noncontrolling interests		—			—			—			—		—			—			14			14
Distributions to noncontrolling interests		—			—			—			—		—			—			(998	)		(998	)
Change in unrealized gain on marketable securities		—			—			—			92		—			92			—			92
Net loss		—			—			—			—		(32,622	)		(32,622	)		(779	)		(33,401	)
Comprehensive loss		—			—			—			—		—			(32,530	)		(779	)		(33,309	)
Balance as of June 30, 2011		69,853		$	698		$	406,347		$	240	$	(511,503	)	$	(104,218	)	$	7,367		$	(96,851	)

During the six months ended June 30, 2011 and 2010, we granted 0 and 2,225,000 restricted shares of common stock, respectively.

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Consolidated Balance Sheets (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Current assets:
Cash and cash equivalents (including $244 and $307 from VIEs, respectively)	$ 14,722	$ 30,919
Restricted cash	4,267	3,836
Investment in marketable equity securities	2,034	1,948
Accounts receivable from related parties - net	5,976	3,460
Service fees receivable - net (including $555 and $915 from VIEs, respectively)	32,302	31,048
Professional service contracts - net	3,040	3,468
Prepaid expenses and other assets	12,851	11,842
Assets held for sale (including $15,923 and $14,943 from VIEs, respectively, and $24,055 and $24,992 from related parties, respectively)	90,930	100,314
Total current assets	166,122	186,835
Professional service contracts - net	3,892	5,750
Property, equipment and leasehold improvements - net	10,796	10,110
Identified intangible assets - net	78,680	80,698
Other assets - net (including $21 and $7 from VIEs, respectively)	2,494	2,030
Goodwill	1,521	1,521
Total assets	263,505	286,944
Current liabilities:
Accounts payable and accrued expenses (including $727 and $916 from VIEs, respectively)	63,951	69,470
Credit facility (includes accrued interest)	17,747	0
Notes payable and capital lease obligations	584	1,041
Liabilities held for sale (including $837 and $822 from VIEs, respectively, and $1,617 and $2,178 from related parties, respectively)	116,884	122,478
Total current liabilities	199,166	192,989
Long-term liabilities:
Convertible notes	30,291	30,133
Notes payable and capital lease obligations	452	566
Other long-term liabilities	9,339	7,065
Deferred tax liabilities	25,234	25,070
Total liabilities	264,482	255,823
Commitment and contingencies (Note 11)
Preferred stock: 12% cumulative participating perpetual convertible; $0.01 par value; 1,000,000 shares authorized as of June 30, 2011 and December 31, 2010; 965,700 shares issued and outstanding as of June 30, 2011 and December 31, 2010	95,874	90,080
Shareowners' deficit:
Preferred stock: $0.01 par value; 19,000,000 shares authorized as of June 30, 2011 and December 31, 2010; no shares issued and outstanding as of June 30, 2011 and December 31, 2010
Common stock: $0.01 par value; 200,000,000 shares authorized as of June 30, 2011 and December 31, 2010; 69,853,467 and 70,076,451 shares issued and outstanding as of June 30, 2011 and December 31, 2010, respectively	698	701
Additional paid-in capital	406,347	409,943
Accumulated deficit	(511,503)	(478,881)
Other comprehensive income	240	148
Total Grubb & Ellis Company shareowners' deficit	(104,218)	(68,089)
Noncontrolling interests (including $7,367 and $9,130 from VIEs, respectively)	7,367	9,130
Total deficit	(96,851)	(58,959)
Total liabilities and shareowners' deficit	$ 263,505	$ 286,944