ProLogis, the largest owner of industrial property in the world, and manger of numerous closed-ended funds, has parted company with its chief executive and chairman.
Denver-based ProLogis said Jeffrey Schwartz had resigned in a statement today. In his place, the company has elevated president and chief operating officer Walter Rakowich. Stephen Feinberg, the board’s lead trustee, will assume the role of chairman.
Feinberg credited Schwartz with being the key driver behind the company’s international expansion over 14 years with the company, but he added that with the economy facing “significant headwinds” ProLogis was prepared to take tough choices to weather the storm.
Schwartz said that the current environment called for a focus on deleveraging, cost management and improved operational efficiencies. Also in the statement, Rakowich revealed the company had developed a plan to reposition itself.
The company is slashing the dividend. Retained capital will be used to repay debt and strengthen the balance sheet. In the worst news for ProLogis staff, headcount will be reduced and business spending will be cut. It does not plan to undertake any more new developments and will not enter into any new markets until conditions and liquidity improved, it added.
Shares in the firm have nosedived 78 percent in the last month alone on concerns about its ability to refinance debt, according to Bloomberg. The shares fell a further 21 percent at one point today.
In recent months, the firm has acquired a warehouse in South Korea, three properties in Tokyo, entered into a joint venture in India, a joint venture in the Middle East, and continued expansion into China.
It manages 18 property funds, all except one being private. The public vehicle is ProLogis European Properties.
This year it formed one fund: The ProLogis China Properties Fund. Last year it formed a total of five separate vehicles targeting North America, Korea, Europe, and Mexico.