Dees Stribling, Contributing Editor
Santa Ana, Calif.–Grubb & Ellis Apartment REIT and Grubb & Ellis Equity Advisors L.L.C., the real estate investment and asset management arm of Grubb & Ellis Co., have severed their advisory and dealer-manager ties. The REIT has said that it will soon change its name to Apartment Trust of America Inc., and establish an advisory agreement with American Realty Capital L.L.C. and ROC REIT Advisors L.L.C.
According to a statement by Grubb & Ellis Equity Advisors, the reason is “fundamental differences of opinion as it relates to strategic direction of the REIT,” the real estate version of “creative differences,” perhaps. In any case, the REIT, beginning with its pending acquisition of Mission Residential Management, is on its way to becoming a self-managed entity.
“Our previously announced pending acquisition… is our first step toward internalization,” said Jay Olander, CEO of Grubb & Ellis Apartment REIT, in a statement. “This purchase will reduce the costs of managing the company’s properties when compared to the fees currently being paid to third-party vendors.”
For Grubb & Ellis Equity’s part, the company says it will focus its efforts in the non-traded REIT realm on Grubb & Ellis Healthcare REIT II, which began acquiring assets earlier this year and seeks to raise $3 billion in equity. But it is not getting out of the multifamily property business.
“Grubb & Ellis Equity Advisors will continue to participate in the multifamily business,” Damon Elder, a spokesman for the company, tells MHN. “Our multifamily portfolio is currently comprised of 49 properties and nearly 14,000 units valued at more than $1.1 billion. The apartment REIT accounts for 15 of these properties and 3,969 units. Grubb & Ellis Healthcare REIT II does not currently have any assisted living facilities in its portfolio, but is actively pursuing that sector.”