SANTA ANA, Calif., Nov. 8 /PRNewswire-FirstCall/ -- NNN Realty
Advisors, Inc., a full-service nationwide commercial real estate
asset management and services firm, today announced financial
results for the third quarter ended September 30, 2007. NNN Realty
Advisors (the Company) reported revenue of $53.1 million, earnings
per share (EPS) of $0.10 and earnings before interest, taxes,
depreciation and amortization (EBITDA) of $16.5 million. Excluding
$4.7 million of non-cash and non-recurring items, net of taxes,
normalized revenue was $47.0 million, normalized EPS was $0.21 and
normalized EBITDA was $14.8 million. Business Highlights * On
November 2, 2007, the Securities and Exchange Commission (SEC)
declared the Registration Statement related to the proposed merger
between NNN Realty Advisors and Grubb & Ellis Company
(NYSE:GBE) effective, allowing for a shareholder vote on December
6, 2007 * Cash and cash equivalents totaled $51.9 million, which
reflects a reduction of $25.0 million to fund a deposit held in
escrow related to the Company's proposed merger with Grubb &
Ellis Company * Raised $547.4 million on a year-to-date basis
($341.3 million in tenant- in-common (TIC) programs and $206.1
million in SEC-Registered non-traded real estate investment trust
(REIT) programs), which represents a 50% increase over the $364.3
million raised through the first nine months of 2006 * Expanded the
portfolio of properties under management to 39.1 million square
feet, valued at approximately $5.4 billion, with the completion of
59 acquisitions year-to-date valued in excess of $1.6 billion *
Increased the number of TIC investors to more than 3,900, which
represents a 26% increase from the 3,100 investors as of the
beginning of the year * Increased the number of investors in NNN
Healthcare/Office REIT, Inc. and NNN Apartment REIT, Inc., to more
than 5,300 and 2,400, respectively * Paid a dividend for the third
quarter of 2007 of $0.09 per common share on October 15, 2007 to
stockholders of record as of September 28, 2007 * Distributions of
$247.7 million year-to-date to TIC investors * Distributions of
$152.4 million year-to-date to SEC-registered non- traded REIT
investors, of which $2.9 million and $1.8 million were paid to
investors in the Healthcare/Office REIT and Apartment REIT,
respectively. These payments represent a yield of 7.25% and 6.90%
in the Healthcare/Office REIT and Apartment REIT, respectively. The
remaining distributions were primarily made to investors in G REIT
as a result of the continuing liquidation of that non-traded REIT.
"The ability of NNN Realty Advisors to successfully execute our
business plan through the fluctuations in the capital markets
during the third quarter demonstrates the fundamental strength of
our company," commented Scott D. Peters, CEO and president of NNN
Realty Advisors. "Upon completion of the merger with Grubb &
Ellis Company, we expect to leverage their well- established brand
to further strengthen and expand the market reach of the various
investment programs sponsored by NNN Realty Advisors." NNN Realty
Advisors was formed in September 2006 to acquire Triple Net
Properties, LLC (Triple Net Properties); Triple Net Properties
Realty, Inc. (Realty); and NNN Capital Corp., (Capital Corp.) and
to bring the businesses conducted by those companies under one
corporate umbrella. In November of 2006, NNN Realty Advisors
completed a $160.0 million private placement of common stock to
institutional investors and certain accredited investors with 16
million shares of its common stock sold in the offering at $10.00
per share. Net proceeds from the offering totaled approximately
$146.0 million. Triple Net Properties was the predecessor to NNN
Realty Advisors prior to November 16, 2006 and therefore the
results of operations for the three and nine months ended September
30, 2006 do not include the earnings of the acquired subsidiaries,
but instead include the results of Triple Net Properties for the
full period. NNN Realty Advisors presents financial results based
on accounting principles generally accepted in the United States of
America, or GAAP, as well as selected non-GAAP financial measures
intended to reflect its normalized results of operations. The
Company believes these normalized financial results provide
investors with additional insight into its underlying results of
operations. Normalized financial results exclude non- cash and
other non-recurring items as fully described in the reconciliation
of GAAP financial measures to non-GAAP normalized financial
measures in the accompanying financial data. Third Quarter
Financial Results GAAP net income totaled $4.1 million for the
three months ended September 30, 2007, an increase of $4.6 million
from GAAP net loss of $0.5 million for the comparable period in
2006. The $4.6 million increase in GAAP net income was driven by an
$18.3 million increase in total services revenue, partially offset
by a $5.6 million increase in total services expense. Other
operating revenue and expenses, net, decreased approximately $5.9
million, of which $4.6 million resulted from additional
depreciation and amortization related to two properties held for
sale to the Strategic Office Fund (Fund) for which the Company will
be the sponsor. Since the Company will continue to maintain a 6%
ownership interest in the Fund, under GAAP the equity method of
accounting is used, with the results of these two properties
reflected in continuing operations. The remaining $1.3 million
resulted from an increase in general and administrative costs,
primarily related to compensation related costs (including $0.2
million of non-cash stock compensation). Also offsetting the
year-over-year revenue increase was a loss from equity method
investments of $0.5 million and an increase in income tax expense
of $2.0 million. Effective with the close of NNN Realty Advisors'
$160.0 million private placement offering in November 2006, Triple
Net Properties became a wholly-owned subsidiary, which caused a
change in Triple Net Properties' tax status from a non-taxable
partnership to a taxable C corporation. Normalized results exclude
the $4.6 million ($2.7 million net of tax) of depreciation and
amortization, which was reflected in continuing operations under
GAAP, as it is expected that these two properties will be sold to
the Fund at their original cost during the first quarter of 2008.
Excluding $4.7 million of non-cash and non-recurring items,
normalized net income for the third quarter of 2007 was $8.8
million or $0.21 per diluted share. EBITDA was $16.5 million for
the third quarter of 2007 and includes $5.0 million related to the
two properties held for sale to the Fund mentioned above. Excluding
the $5.0 million related to the two properties held for sale to the
Fund, but adding back $3.3 million of other non-cash and
non-recurring items, normalized EBITDA was $14.8 million for the
three months ended September 30, 2007. Cash flows from operating
activities were $9.4 million for the three months ended September
30, 2007. Nine Month Financial Results (1) GAAP net income was
$17.9 million for the nine months ended September 30, 2007 an
increase of $1.9 million, or 11.7%, from GAAP net income of $16.0
million for the comparable period in 2006. The $1.9 million
increase was due to a $39.5 million increase in total services
revenue and a $2.1 million increase in interest income from cash
invested from the $160.0 million private placement offering in
November 2006. These increases were partially offset by a $20.6
million increase in total services expense and a $7.8 million
decrease in other operating revenue and expenses, net. Of note,
$4.6 million of the $7.8 million decrease resulted from additional
depreciation and amortization related to the aforementioned two
properties held for sale to the Fund. The remainder of the $7.8
million decrease was related to an increase in general and
administrative costs, of which $1.7 million was related to
compensation related costs (including $0.2 million of non-cash
stock based compensation) and $1.4 million was related to legal
expenses, primarily related to the Mission Residential and Core
litigation matters. Also offsetting the year-over-year increase was
an $11.4 million increase in income tax expense. Excluding $9.6
million of non-cash and non-recurring items, the Company's
normalized net income for the nine months ended September 30, 2007
was $27.5 million or $0.65 per diluted share. EBITDA totaled $39.5
million for the nine months ended September 30, 2007 and includes
$5.0 million related to the two held for sale properties mentioned
above. Excluding the $5.0 related to these two properties, but
adding back $8.4 million of non-cash and non-recurring items, our
normalized EBITDA was $42.9 million for the nine months ended
September 30, 2007, an increase of 59% over normalized EBITDA of
$27.0 million for the nine months ended September 30, 2006. Cash
flows from operating activities were $22.4 million for the nine
months ended September 30, 2007. (1) Refer to the supplemental
financial schedule for additional financial information related to
the nine months ending September 30, 2007 and 2006. Real Estate
Portfolio As of September 30, 2007, the Company provided management
services for a diverse portfolio of 187 properties, encompassing
over 39.1 million square feet of office, healthcare office,
multi-family and retail properties in 29 states that were acquired
by NNN Realty Advisors for approximately $5.4 billion in the
aggregate. Merger Agreement with Grubb & Ellis Company As
previously announced on May 22, 2007, the Company entered into a
merger agreement with Grubb & Ellis Company. The proposed
merger, which has been approved by the boards of directors of both
NNN Realty Advisors and Grubb & Ellis, will combine one of the
world's leading full-service commercial real estate organizations
with a leading sponsor of commercial real estate programs to create
a diversified services business providing a complete range of
transaction, management, consulting and investment services. The
combined company will possess a strong platform for continued
growth. On November 2, 2007, the SEC declared effective the
Registration Statement on Form S-4 related to the merger. A
shareholder meeting to vote on the matter has been scheduled for
December 6, 2007. Pursuant to the agreement, the merger will be
effected through the issuance of 0.88 shares of Grubb & Ellis
common stock for each share of NNN Realty Advisors common stock
outstanding. The transaction is expected to close in the fourth
quarter of 2007, subject to approval by stockholders of both
companies and other customary closing conditions for transactions
of this type. Following the merger, NNN Realty Advisors
stockholders will own approximately 59 percent of the combined
company. NNN Realty Advisors, Inc. NNN Realty Advisors
(http://www.nnnrealtyadvisors.com/) is a nationwide commercial real
estate asset management and services firm that sponsors real estate
investment programs to provide investors with the opportunity to
engage in tax-deferred exchanges of real property and to invest in
other real estate investment vehicles, including public non-traded
real estate investment trusts and real estate investment funds. NNN
Realty Advisors is the parent company of Triple Net Properties,
LLC, Triple Net Properties Realty, Inc. and NNN Capital Corp., a
FINRA-registered broker-dealer. NNN Realty Advisors is the sponsor
of commercial real estate investment programs; including
tax-deferred 1031 tenant-in-common (TIC) exchanges and two recently
launched public non-traded real estate investment trusts, NNN
Apartment REIT and NNN Healthcare/Office REIT. NNN Realty Advisors
currently manages a portfolio of commercial real estate valued at
approximately $5.4 billion. THIS PRESS RELEASE IS FOR INFORMATIONAL
PURPOSES ONLY AND IS NOT AN OFFER TO BUY OR THE SOLICITATION OF AN
OFFER TO SELL ANY SHARES. In connection with the proposed merger,
NNN Realty Advisors and Grubb & Ellis have filed a joint proxy
statement/prospectus with the Securities and Exchange Commission as
part of a registration statement regarding the proposed merger.
Investors and security holders are urged to read the joint proxy
statement/prospectus of NNN Realty Advisors and Grubb & Ellis
because it contains important information about NNN Realty Advisors
and Grubb & Ellis and the proposed merger. Investors and
security holders may obtain copies of the joint proxy
statement/prospectus and the definitive proxy statement/prospectus,
and other documents filed by NNN Realty Advisors and Grubb &
Ellis with the SEC at the SEC's website at http://www.sec.gov/. The
definitive joint proxy statement/prospectus and other relevant
documents may also be obtained free of charge from NNN Realty
Advisors and Grubb & Ellis by directing such request to: NNN
Realty Advisors, Inc., 1551 N. Tustin Avenue, Suite 300, Santa Ana,
CA 92705, 714-667-8252 x861, Attention: Michael Rispoli or to Grubb
& Ellis Company, 500 West Monroe, Suite 2800, Chicago, IL
60661, 312-698-6707, Attention: Janice McDill. Investors and
security holders are urged to read the joint proxy
statement/prospectus and other relevant material when they become
available before making any voting or investment decisions with
respect to the merger. NNN Realty Advisors, Grubb & Ellis and
their respective directors and executive officers may be deemed to
be participants in the solicitation of proxies from the
stockholders of NNN Realty Advisors and Grubb & Ellis,
respectively, in connection with the merger. Information about NNN
Realty Advisors' and Grubb & Ellis' directors and executive
officers is set forth in the joint proxy statement/prospectus,
which can be found on the SEC's website at http://www.sec.gov/.
FORWARD-LOOKING LANGUAGE This press release contains
"forward-looking statements" within the meaning of Private
Securities Litigation Reform Act of 1995. Any statement in this
press release about expectations, beliefs, plans, objectives,
assumptions or future events or performance are not historical
facts and are forward looking statements. Such statements include,
but are not limited to, statements about the benefits of the
proposed merger involving NNN Realty Advisors and Grubb &
Ellis, including the combined company's plans, objectives,
expectations and intentions with respect to future operations,
products and services. Any forward-looking statements are based
upon the current beliefs and expectations of NNN Realty Advisors'
and Grubb & Ellis' management and involve known and unknown
risks, uncertainties and other factors that may cause the actual
results, performance, achievements of transactions of Grubb &
Ellis, NNN Realty Advisors and their affiliates or industry results
or the benefits of the proposed merger to be materially different
from any future results, performance, achievements or transactions
expressed or implied by such forward-looking statements. The
following factors, among others, could cause actual results to
differ materially from the anticipated results or other
expectations expressed in the forward-looking statements: changes
in NNN Realty Advisors' results of operations; uncertainties
relating to the implementation of the NNN Realty Advisors' real
estate investment and asset management strategies; changes in
general economic and real estate conditions; the failure to realize
synergies and cost-savings from the transaction or delay in the
realization thereof; the inability to combine the businesses of NNN
Realty Advisors and Grubb & Ellis successfully, or that such
combination may take longer, be more difficult, time-consuming or
costly to accomplish than expected; increased operating costs and
business disruption following the merger, including adverse effects
on employee retention and on business relationships with third
parties; the failure of NNN Realty Advisors and Grubb & Ellis
stockholders to approve the transaction; the ability to obtain
governmental approvals of the transaction on a timely basis; the
effects of general and local economic and real estate conditions;
reliance on the largest stockholders as well as other key executive
officers, the loss of any such key executive officers or the
failure to hire and retain qualified employees; and the ability to
expand the Grubb & Ellis footprint internationally. Additional
information or factors which could impact the companies and the
forward-looking statements contained herein are included in each
company's filings with the Securities and Exchange Commission,
including the companies' joint proxy statement/prospectus. Any
forward looking statements speak only as of the date on which they
are made and the companies assume no obligation to update or
supplement forward-looking statements that become untrue because of
subsequent events. NNN REALTY ADVISORS, INC. CONSOLIDATED
STATEMENTS OF OPERATIONS Three Months Ended Nine Months Ended
September 30, September 30, 2007 2006 (1) 2007 2006 (1) (In
thousands, except per share data) (Unaudited) (Unaudited) SERVICES
REVENUE Transaction $22,414 $10,544 $62,617 $39,948 Management
11,550 10,215 32,407 28,482 Dealer-Manager 5,069 - 12,913 - Total
services revenue 39,033 20,759 107,937 68,430 OTHER REVENUE Rental
13,006 2,303 17,625 6,849 Interest 986 833 2,405 2,304 Other 118
108 261 108 Total other revenue 14,110 3,244 20,291 9,261 TOTAL
REVENUE 53,143 24,003 128,228 77,691 OPERATING EXPENSE Compensation
costs 17,098 13,609 45,042 31,559 General and administrative 10,233
6,377 29,953 18,984 Depreciation and amortization 5,034 507 6,017
1,548 Rental related expense 8,869 2,519 13,743 7,062 Interest
expense 5,641 1,478 6,685 2,739 Loss on disposal of property and
equipment - 1 17 135 Total operating expense 46,875 24,491 101,457
62,027 OPERATING INCOME (LOSS) 6,268 (488) 26,771 15,664 OTHER
INCOME (EXPENSE) Equity in earnings (loss) of unconsolidated
entities (519) (19) (40) 418 Interest income 919 57 2,183 57
Realized gain (loss) on marketable securities (700) - 411 - Total
other income (expense) (300) 38 2,554 475 Income (loss) from
continuing operations before minority interest and income tax
provision 5,968 (450) 29,325 16,139 Minority interest (155) (48)
(111) (48) Income (loss) from continuing operations before income
tax provision 6,123 (402) 29,436 16,187 Income tax provision 2,039
- 11,423 - Income (loss) from continuing operations 4,084 (402)
18,013 16,187 Total loss from discontinued operations (30) (138)
(88) (138) NET INCOME (LOSS) $4,054 $(540) $17,925 $16,049 Basic
earnings (loss) per share Income (loss) from continuing operations
$0.10 $(0.02) $0.43 $0.83 (Loss) from discontinued operations -
(0.01) - (0.01) Net earnings (loss) per share $0.10 $(0.03) $0.43
$0.82 Diluted earnings (loss) per share Income (loss) from
continuing operations $0.10 $(0.02) $0.43 $0.83 (Loss) from
discontinued operations - (0.01) - (0.01) Net earnings (loss) per
share $0.10 $(0.03) $0.43 $0.82 Shares used in computing basic net
earnings (loss) per share 41,943 19,598 41,943 19,554 Shares used
in computing diluted net earnings (loss) per share 42,127 19,598
42,057 19,554 (1) Based on Generally Accepted Accounting Principles
(GAAP). Triple Net Properties was the predecessor to NNN Realty
Advisors prior to November 16, 2006. The operating results for the
three and nine months ended September 30, 2006 includes the results
of Triple Net Properties only. Triple Net Properties' tax status
was a non-taxable partnership and, accordingly, did not reflect a
tax provision. NNN REALTY ADVISORS, INC. RECONCILIATION OF GAAP
FINANCIAL MEASURES TO NON-GAAP NORMALIZED FINANCIAL MEASURES Three
Months Ended Nine Months Ended September 30, September 30, 2007
2006 2007 2006 (In thousands, except per share data) (Unaudited)
(Unaudited) GAAP revenue $53,143 $24,003 $128,228 $77,691 Non-cash
amortization of identified intangible contract rights (a) 799 -
2,620 - Strategic Office Fund properties (b)(6,949) (6,949)
Normalized revenue $46,993 $24,003 $123,899 $77,691 GAAP net income
(loss) $4,054 $(540) $17,925 $16,049 Non-cash amortization of
identified intangible contract rights (a) 799 - 2,620 - Non-cash
amortization of other intangible assets (c) 57 - 57 - Non-cash
stock based compensation (d) 2,416 2,134 5,014 2,134 Strategic
Office Fund properties (b) 4,679 - 4,679 - Non-recurring legal
expense (e) 80 - 477 - Non-recurring credits (f) - 2,539 - 2,539
Prepayment penalty (g) - 550 - 550 Documentary/transfer taxes and
other closing costs (h) - 1,171 - 1,171 SEC investigation (i) - 320
- 320 Other non-recurring expense (j) - - 341 - Tax adjustment
(k)(3,335) - (3,630) - Normalized net income $8,750 $6,174 $27,483
$22,763 Normalized diluted earnings per share $0.21 $0.32 $0.65
$1.16 GAAP net income (loss) $4,054 $(540) $17,925 $16,049 Interest
expense 484 1,478 1,528 2,739 Interest income (915) (57) (2,178)
(57) Realized (gain) loss on sale of securities 700 - (411) -
Depreciation and amortization (including $57 thousand of intangible
asset amortization) 484 507 1,467 1,548 Strategic Office Fund
interest expense 5,157 - 5,157 - Strategic Office Fund interest
income (4) - (4) - Strategic Office Fund depreciation and
amortization 4,550 - 4,550 - Taxes - GAAP 2,039 - 11,423 - EBITDA
$16,549 $1,388 $39,457 $20,279 Normalized net income $8,750 $6,174
$27,483 $22,763 Interest expense 484 1,478 1,528 2,739 Interest
income (915) (57) (2,178) (57) Realized (gain) loss on sale of
securities 700 - (411) - Depreciation and amortization (excluding
$57 thousand of intangible asset amortization) 427 507 1,410 1,548
Taxes - normalized 5,374 - 15,053 - Normalized EBITDA $14,820
$8,102 $42,885 $26,993 GAAP to Non-GAAP Normalized Adjustments: (a)
Represents the non-cash amortization of identified intangible
contract rights associated with the acquisition of Realty. (b) At
September 30, 2007, the Company was holding two properties on its
balance sheet for sale to the Strategic Office Fund, an
institutional investment fund for which the Company will be the
sponsor and will maintain a continuing 6% ownership interest.
Pursuant to the provisions of SEC Staff Accounting Bulletin 103,
Topic Z, "Accounting and Disclosure Regarding Discontinued
Operations", the Company must account for these properties as part
of continuing operations since it plans to account for the
Strategic Office Fund on the equity method of accounting. The
property operations increased the Company's EBITDA by $5.0 million
but decreased the GAAP net income by $2.4 million, primarily as a
result of $4.6 million of depreciation and amortization that would
not have been recorded had the properties been included in
discontinued operations. Normalized results exclude the $4.6
million of depreciation and amortization which has been recorded as
a result of accounting for these properties as part of continuing
operations. (c) Represents amortization of other intangible assets.
(d) Non-cash stock based compensation expense based on the fair
value of all stock options and restricted stock in accordance with
Statement of Financial Accounting Standards (SFAS) No. 123 (R),
"Accounting for Stock Based Compensation". (e) Non-recurring legal
expense, primarily associated with the Mission Residential
litigation matter. (f) Non-recurring credits granted to investors
in three programs. (g) Prepayment penalty for early redemption of
redeemable preferred liability. (h) Documentary/transfer taxes and
other closing costs that the company paid for programs it
sponsored. (i) Costs associated with the SEC investigation. (j)
Other non-recurring expense primarily related to a one-time
corporate transaction. (k) Impact of normalized adjustments to the
GAAP provision for income taxes. The following measures are
considered "non-GAAP financial measures" under SEC guidelines: (i)
Normalized revenue (ii) Normalized net income (iii) Normalized
diluted earnings per share (iv) EBITDA, and (v) Normalized EBITDA
(1) EBITDA represents earnings before net interest expense, income
taxes, depreciation and amortization. Management believes EBITDA is
useful in evaluating the Company's performance compared to that of
other companies in the same industry because the calculation of
EBITDA generally eliminates the effects of financing and income
taxes and the accounting effects of capital spending and
acquisition, which items may vary for different companies for
reasons unrelated to overall operating performance. As a result,
management uses EBITDA as a measure to evaluate the performance of
the Company's various business lines and for other discretionary
purposes, including as a significant component when measuring the
Company's performance under the employee incentive programs.
However, EBITDA is not a recognized measurement under U.S.
Generally Accepted Accounting Principles, or GAAP, and when
analyzing the Company's operating performance, readers should use
EBITDA in addition to, and not as an alternative for, net income as
determined in accordance with GAAP. Because not all companies use
identical calculations, the Company's presentation of EBITDA may
not be comparable to similarly titled measures of other companies.
Furthermore, EBITDA is not intended to be a measure of free cash
flow for management's discretionary use, as it does not consider
certain cash requirements such as tax and debt service payments.
The amounts shown for EBITDA also differ from the amounts
calculated under similarly titled definitions in the Company's debt
instruments, which are further adjusted to reflect certain other
cash and non-cash charges and are used to determine compliance with
financial covenants and the Company's ability to engage in certain
activities, such as incurring additional debt and making certain
restricted payments. The Company has presented normalized revenue,
normalized net income, normalized EBITDA and EBITDA to assist
investors in understanding its normalized results of operations on
an on-going basis. The Company is providing these non-GAAP
financial measures to investors to enable them to perform
additional financial analysis and because it is consistent with the
financial models and estimates published by analysts who follow the
Company. Management believes that these are important measures in
the evaluation of the Company's results of operations. Investors
should consider non-GAAP financial measures in addition to, and not
as a substitute for, or superior to, measures of financial
performance prepared in accordance with GAAP. The non-GAAP
financial measures presented by the Company may be different than
non-GAAP financial measures presented by other companies. NNN
REALTY ADVISORS, INC. CONSOLIDATED BALANCE SHEET September 30,
December 31, 2007 2006 (In thousands, except per share data)
(Unaudited) ASSETS Current Assets: Cash and cash equivalents
$51,875 $102,226 Restricted cash/reserves 22,502 4,009 Investment
in marketable securities 4,177 2,334 Accounts receivable from
related parties - net 38,175 28,843 Advances to related parties -
net 16,499 9,668 Notes receivable from related party - net 2,200
10,008 Real estate deposits and preacquisition costs 5,363 17,169
Prepaid expenses and other assets 38,191 3,420 Properties held for
sale - net of accumulated depreciation 145,153 40,260 Assets held
for sale - net 14,700 9,333 Total current assets 338,835 227,270
Investments in unconsolidated entities 18,863 11,413 Total
properties held for investment 134,735 3,835 Property and equipment
- net 4,882 4,123 Goodwill 60,183 60,183 Identified intangible
assets - net 33,275 20,306 Other assets - net 2,873 913 Total
Assets $593,646 $328,043 LIABILITIES, MINORITY INTEREST AND
STOCKHOLDERS' EQUITY Current Liabilities: Lines of credit $- $-
Accounts payable and accrued expenses 36,820 33,601 Due to related
parties 3,083 4,095 Current portion of capital lease obligations
292 184 Current portion of notes payable related to properties held
for investment 33,125 4,491 Mortgage loans payable secured by
properties held for sale 135,974 46,906 Liabilities of properties
held for sale - net 489 595 Other liabilities 12,262 726 Total
current liabilities 222,045 90,598 Long-term liabilities:
Participating notes 16,277 10,263 Mortgage loans payable secured by
properties held for investment 107,318 442 Capital lease
obligations 587 401 Deferred tax liability - 3,184 Total
Liabilities 346,227 104,888 MINORITY INTEREST 12,793 1,211
STOCKHOLDERS' EQUITY Common Stock 437 423 Additional paid in
capital 217,501 212,635 Retained earnings 17,108 8,912 Accumulated
other comprehensive (loss) (420) (26) Total Equity $234,626
$221,944 TOTAL LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS'
EQUITY $593,646 $328,043 NNN Realty Advisors, Inc. Supplemental
Financial Schedule Nine Months Ended September 30, 2007 2006 (In
thousands) (Unaudited) Segment Data: Acquisition fees $33,613
$16,799 Disposition fees (excluding amortization of intangible
contract rights of $2.6 million for the nine months ended September
30, 2007) 18,743 11,512 Loan fees 5,140 3,266 OMEA fees 6,441 6,782
Amortization of intangible contract rights (2,620) - Other
transaction revenue 1,300 1,589 Transaction services revenue
$62,617 $39,948 Compensation expense $21,095 $13,458 Operating and
administrative expense 11,890 13,030 Transaction services expense
$32,985 $26,488 Transaction services margin $29,632 $13,460
Transaction services margin % 47.3% 33.7% Management services
revenue $32,407 $28,482 Compensation expense 20,787 17,754
Operating and administrative expense 7,149 5,519 Management
services expense $27,936 $23,273 Management services margin $4,471
$5,209 Management services margin % 13.8% 18.3% Dealer-manager
revenue $12,913 $ - Compensation expense 974 - Operating and
administrative expense 8,512 - Dealer-manager expense $9,486 $ -
Dealer-manager margin $3,427 $ - Dealer-manager margin % 26.5% -
Other operating revenue $20,291 $9,261 Other operating expense
31,049 12,266 Other operating margin $(10,758) $(3,005) Transaction
Services Data: Total properties acquired 59 27 Total aggregate
purchase price of properties acquired $1,620,578 $1,040,672 Total
acquisition fee revenue $33,613 $16,799 Acquisition fee as a
percentage of purchase price [A] 2.1% 1.6% Total properties
disposed 24 16 Total aggregate sales value at disposition $753,366
$610,538 Total disposition fee revenue (excluding amortization of
intangible contract rights of $2.6 million for the nine months
ended September 30, 2007) $18,743 $11,512 Disposition fee as a
percentage of aggregate sales value [B] 2.5% 1.9% OMEA as a
percentage of TIC equity raised 1.9% 1.9% Aggregate value of loans
brokered $732,079 $755,300 Property Management Data: Average square
feet of property under management (excluding multi family) 28,103
25,904 Property and asset management fee revenue $27,619 $24,835
Property and asset management fee per average square foot $1.31
$1.28 Total multi family outsourced square feet of property under
management 8,606 4,425 Total non-multi family outsourced square
feet of property under management 6,277 7,718 Total square feet of
property under management 39,147 30,911 [A] Excluding the purchase
price of $140.5 million related to the two properties held for sale
to the Strategic Office Fund and $154.8 million of purchase price
related to five other properties that were consolidated at
September 30, 2007, the acquisition fee as a percentage of purchase
price for the nine months ended September 30, 2007 was 2.5%. [B]
Disposition fee as a percentage of aggregate sales value for the
nine months ended September 2006, was impacted by the sale of
$267.3 million of G REIT assets at a 1.5% fee. DATASOURCE: Triple
Net Properties, LLC CONTACT: Scott D. Peters, Chief Executive
Officer and President, Francene LaPoint, Chief Financial Officer,
1-877-IRS-1031, +1-714-667-8252, or media, Jill Swartz,
+1-714-667-8252, ext. 251, , all of NNN Realty Advisors, Inc. Web
site: http://www.nnnrealtyadvisors.com/
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