SANTA ANA, Calif. (


) --

Grubb & Ellis

( GBE) shares traded sharply lower amid heavy trading on Wednesday after the commercial real estate firm offered a dismal preview of its quarterly earnings.

Grubb & Ellis said late Tuesday it expects to lose $3 million in the third quarter, before taxes and amortization, a disappointing blow to analysts who expected the firm to post EBITDA of $5.3 million.

Revenue should come in at $144 million, Grubb & Ellis said, also lower than analysts' consensus call for a top-line figure of $152.5 million.

Based on the preliminary results, the company said it no longer expects to achieve its previously announced fiscal 2010 adjusted EBITDA target of $10 million to $15 million. The line item is now expected to be negative for the year, though Grubb & Ellis did not say by how much. Adjusted EBITDA for the fourth quarter is still expected to be positive which, if realized, will show sequential improvement in each quarter of the year.

Grubb & Ellis cited weakness in the investment management segment of its operations, including equity raised and delayed fees.

Grubb & Ellis shares nosedived in early trading Wednesday. At midday the stock was down 8.4%, off earlier lows, on nearly 2.5 times their average daily trading volume.

Elsewhere in the real estate sector, shares of

AMB Property

( AMB) jumped 5.2% amid heavy trading after the industrial

real estate investment trust maintained its guidance for fiscal 2011 funds from operations, or FFO. FFO is a performance figure generally used by REITs to define cash flow from operations.

AMB forecast fiscal 2010 core FFO to be in a range between $1.20 and $1.26 per share, and fiscal 2011 adjusted core FFO in a range between $1.30 to $1.40 per share, excluding the recognition of gains from development activities, early debt extinguishment costs and restructuring charges.

Analysts' consensus call is for FFO of $1.23 for fiscal 2010 and FFO of $1.38 for fiscal 2011.

Grubb & Ellis was a minority in terms of REIT laggards in Wednesday's session. Most of the sector was comfortably in positive territory as the

major indexes pushed higher , rebounding from the

previous session's steep selloff, thanks to an influx of better-than-expected earnings reports.

Sector gainers included shopping mall owner

Simon Property Group

(SPG) - Get Report

, up 2.7%,

Equity Residential

(EQR) - Get Report

, up 3.4%,

Host Hotels & Resorts

(HST) - Get Report

, up 3%,

Annaly Capital Management

(NLY) - Get Report

, up 0.8% and

CBL & Associates

(CBL) - Get Report

, up 6.6%.

-- Written by Miriam Marcus Reimer in New York.

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Miriam Reimer


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