Grubb & Ellis Co., the national real estate firm that came into Salt Lake City in 1982 at the height of the real estate boom led by Saudi Arabian financier Adnan Khashoggi and his Triad companies, will close its Commercial Brokerage Services office here on March 31, laying off its staff of 30.

The action means Grubb & Ellis will no longer lease or sell properties in the Salt Lake area, but the firm's local Property Management Division will not be affected, said David Pugh, district manager of the division whose portfolio of locally managed properties includes the Triad Center on west South Temple and the Salt Lake International Center business park west of the airport - both former Khashoggi projects.Robert Hildebran, president of G&E's Northwest Region, said the San Francisco-based real estate services firm has for some time been "looking at units that have been having difficulty producing profits."

He praised the Salt Lake staff but said their efforts have not been enough to justify keeping the office open.

"Frankly, the real estate environment there (in Salt Lake) is not what I would call benevolent," Hildebran said in a phone interview from his San Francisco office. "We simply didn't have the short-term solutions, so we will cease operations there."

Hildebran said the decision wasn't made overnight. "We've been concerned with the results we've been getting for quite awhile."

But Salt Lake isn't an isolated case, he conceded. "Being a national company, we operate in areas encountering difficulty. We've been consolidating and cutting back on offices in areas unable to produce profits and where we felt it was not of critical importance to other (G&E) operations."

But veteran Salt Lake real estate professionals, who agreed to speak with the Deseret News only on the condition they not be named, say Grubb & Ellis' departure has as much to do with the company's own performance as it does the local real estate market.

One source said G&E's big mistake upon coming into Salt Lake was to locate their offices at the Salt Lake International Center, then accessible only via North Temple. That location was fine for leasing commercial or industrial buildings in that park, the source said, but it did nothing to enhance G&E's presence when it came to leasing space downtown or in suburban offices or retail malls.

By the time G&E realized its error and moved downtown into the Triad Center (where it is now located) it was too late, the sources said. Coldwell Banker, the nation's largest real estate services firm, had already established itself downtown and proved to be formidable competition.

Also, Commerce Properties, a local real estate firm, was and remains a strong presence that from the beginning gave G&E fervent competition. "The result was that Grubb & Ellis was butting heads from a secondary location," said one source.

Another industry watcher agreed with that analysis but noted that the local market is just not strong enough to support two national firms.

"It's pretty tough for Grubb & Ellis and Coldwell Banker or whomever to compete on a head-to-head basis and get equal market shares. They (Grubb & Ellis) didn't take advantage of their early start (G&E came in several years ahead of Coldwell Banker) and they lost out."

One local broker said Grubb & Ellis has also had internal problems that combined with competitive forces to drive the firm out of Salt Lake.

"They were plagued by high (employee) turnover from the beginning. They were always restaffing and losing their top people. Their top producers left two years ago to form Consolidated Realty Group (CRG) and with that kind of turnover, it's hard to maintain a quality work force."