Court documents are starting to shed light on how local operations of Santa Ana-based Grubb & Ellis Co. are being affected by the company’s sale to New York-based BGC Partners Inc.
BGC, a brokerage company valued at about $930 million, is buying most of Grubb’s assets out of bankruptcy. The roughly $45 million deal was approved by a New York court late last month.
Details are still fuzzy on how the operations of Grubb—Orange County’s second-largest commercial brokerage in 2011—will be affected after the sale.
Last week BGC unveiled a name, Newmark Grubb Knight Frank, for the combined operations of Grubb and Newmark Knight Frank, another brokerage BGC bought last year.
Whether any significant operations of Grubb’s legacy business will remain in Santa Ana remains unclear.
One thing appears certain, based on court filings: Grubb’s local operations are shrinking for the time being.
BGC filed documents earlier this month to get out of several dozen leases it has for operations across the U.S.
Grubb’s Orange/Anaheim brokerage office on North State College Boulevard is among locations it plans to close.
CoStar Group Inc. records show the brokerage was leasing a little more than 10,000 square feet of space at the 500 Orange Tower building. The company has not announced whether it plans to open another office in the area.
Court records also show Grubb getting out of a small lease in Newport Beach it kept for an appraisal business.
Grubb’s largest brokerage office in OC—at Irvine Company’s MacArthur Court complex—wasn’t among leases slated for cancellation, based on bankruptcy records. But CoStar records show the office’s nearly 20,000-square-foot lease is scheduled to end this summer, with a move expected.
Grubb’s OC offices counted a total 60 brokers a few months ago. There have been a number of broker departures throughout the past year as the company’s well-documented financial issues played out.
Another 200 or so brokers and other employees across the U.S. were let go earlier this month, according to court filings. The layoffs included a number of local brokers, marketing coordinators and other OC employees.
Some brokers that remain at the company have had issues getting commissions paid on deals that closed just before Grubb’s bankruptcy. Others have chafed at a BGC “forgivable loan/grant program,” which would pay off some of those commissions only if the brokers agreed to stay at the company.
That agreement, along with a lack of clarity from BGC on its forthcoming plans, creates “pronounced uncertainty and handcuff(s) the brokers to an unbearable situation,” said a court document filed on behalf of a committee of brokers recently.
“Brokers who stayed loyal to the debtors and stayed in the hope off being employed by BGC have been penalized more than any other class of creditor or party in the bankruptcy,” the filing said.
Island Move
Buena Park-based food manufacturer Island Snacks Inc. is making a big expansion in its local space, after buying a new industrial facility in its hometown.
The company—which packages nuts, candies, dried fruits and snacks for retail food businesses and wholesale food distributors—recently bought a 50,600-square-foot building at 7650 Stage Road, just off Beach Boulevard a few blocks from the Santa Ana (I-5) Freeway.
Island Snacks will relocate its headquarters to the building, which sold for about $3.3 million, or about $65 per square foot, according to brokers with the Orange office of CBRE Group Inc. who worked on the deal.
The company currently occupies 13,000 square feet of an 18,000-square-foot building it owns at 6400 Roland St. in Buena Park.
Island Snacks plans to vacate that building and lease it out once the relocation is complete, according to CBRE’s Steve Young, who represented buyer Nisim & Alin Barak Family Trust, which operates Island Snacks.
The seller, Stage Road Partners, was represented by Steve Calhoun and Matt Erickson of Colliers International.
“Due to low interest rates and reduced prices, this was an opportune time for the buyer to purchase a new building and expand,” Young said.
