The Rexford takeover rumors seem to have traction.
The industrial real estate investment trust indicated as much a couple days ago, after market close, when it announced a chief executive shakeup and a changed capital allocation strategy.
The dual announcements came months after a report that Paul Singer’s Elliott Investment Management built an active stake in the company. Rexford more recently took the opportunity of an earnings call, to disclose that it had met with the relentless activist investor.
Rexford chief operating officer Laura Clark is now in line to succeed co-CEOs and co-founders Michael Frankel and Howard Schwimmer, the company announced. Chairman Tyler Rose, who recently replaced Richard Ziman, said the “transition is the culmination of the board’s multi-year succession planning process.”
There’s more to it, according to Newport Beach-based industry tracker and data analyst Green Street.
“It appeared Ms. Clark was on the path to eventually succeed Co-CEOs Frankel and Schwimmer upon their retirement, but there is no question that Elliott’s involvement sped up the timeline,” a Green Street analysis read.
Frankel and Schwimmer aren’t only dropping their C-suite gigs, but their seats on the board of directors, too, which was characterized as a surprise in a recent BMO analysis.
Nonetheless, Frankel and Schwimmer have entered into a transition and separation agreement, each being granted a restricted stock award valued at $22.6 million. That’s more than their $13 million total compensation for 2024.
In a separate announcement, Clark said the company would maximize returns by selling assets and reinvesting capital into high-yielding assets and share repurchases. During the latest earnings, the company said it had no planned purchases, only dispositions, a change from its buy-happy days.
The company said it would add a new independent director by the end of the year, too. Any guesses? Either way, shares of the $10 billion, typically vanilla-REIT, rose on the news.
Reversal behind Hudson Pac reverse split?
In other publicly traded, real estate investment trust news: Studio and office owner Hudson Pacific Properties announced a board-approved 1-for-7 reverse stock split that’ll take effect Dec. 1.
Reverse stock splits consolidate the number of existing shares into fewer, higher-priced shares and are sometimes done to avoid being delisted — but the company’s shares are trading under $2 per share, with the $1 mark a red flag for delisting. Still, the announcement comes after the Victor Coleman-helmed company’s losses ballooned to hundreds of millions of dollars.
Selling debt
Distressed debt, anyone?
Eastdil is marketing an offering to purchase the mortgage loan connected to a Brookfield-owned office tower on Bunker Hill. The Downtown Los Angeles property, at 333 South Grand Avenue, includes a 54-story office building, called the Wells Fargo Center — North Tower, along with a three-story retail asset called the Halo.
(A sister South Tower is not included in the deal).
The roughly $506 million debt on the Wells Fargo Center — North Tower is in default, but how much the note would fetch, if it trades, is unclear. Eastdil shared no hints in the offering memorandum, nor did it say whether it was representing Brookfield or its lenders.
But the loan connected to EY Plaza, another Brookfield-owned Downtown Los Angeles office tower, now in a receiver’s hands after debt default, may offer a clue. Colliers is marketing the $275 million note connected to the property, on behalf of lenders, and expects the note to trade at a massive discount.
Real estate whodunit solved
Cue the Law & Order theme song … The J.J. Abrams’ Bad Robot building mystery buyer is Teddy Schwarzman’s Black Bear.
The independent studio founded by Schwarzman — son of Stephen Schwarzman, billionaire chairman and chief executive of Blackstone — purchased the three-story, brick building located in Santa Monica for about $31 million.
But will Schwarzman keep Abrams’ esoteric typewriter sign, an inside joke about the Hollywood pro’s personal style and direction choices?
Another mystery.
End of an era
Related California chairman and chief executive Bill Witte is stepping down after more than three decades at the helm. Witte will become chairman emeritus, and two company executives Gino Canori and Ann Silverberg will split the CEO title effective Jan. 1. Canori will head market-rate, mixed-use and commercial with Silverberg in charge of affordable residential developments.
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