Grubb & Ellis seeks $10 million facility increase to fund broker loans

By Caroline Salls

Pittsburgh, March 2 - Grubb & Ellis Co. has asked the U.S. Bankruptcy Court for the Southern District of New York to increase the borrowing limits under its interim debtor-in-possession financing to $15.5 million from $5.5 million, according to a March 1 court filing.

The company said the increase will allow it to implement a proposed broker loan program with non-insider brokerage sales professionals and to pay commissions to the brokers in the ordinary course of business.

Grubb & Ellis will pay the DIP lender a 1.5% commitment fee.

According to the broker program motion, the company has formulated a loan program to ensure that the brokers are "appropriately incentivized" to stay with Grubb & Ellis through the conclusion of its sale process and to capitalize on brokerage opportunities that will lead to the prompt closing of transactions in progress and new transactions.

Under the loan program, Grubb & Ellis will issue a note in lieu of commissions, with the loans ranging from less than $1,000 to $750,000.

The loans will be forgiven or accelerated upon the occurrence of specified events.

Grubb & Ellis, a Santa Ana, Calif.-based real estate services and investment firm, filed for bankruptcy on Feb. 20. The Chapter 11 case number is 12-10685.

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