In the last months, two REITs have seen senior executives leave. In a sign of the times, the companies will spread their duties among multiple existing executives.
Last week, Houston-based Camden announced that Senior Vice President of Operations Steve Eddington will retire on Dec. 31 and that he would not be replaced. Instead, his duties will be handled by the REIT's three division vice presidents—Tom Sloan, East; Dawn Mathwig, Central; and Elaine Withrow, West.
Cost savings was a partial motivator for the decision, says Kim Callahan, Camden's vice president of investor relations. “The vice presidents were reporting to Steve, who then reported to the COO [H. Malcolm Stewart],” she says. “Now the vice presidents will report directly to the COO. Hopefully, this will be more efficient.”
In November, Atlanta-based Post Properties announced that Thomas L. Wilkes, president of Post Apartment Management and executive vice president of Post Properties, will also leave on Dec. 31 "as part of an overall restructuring intended to streamline its business and reduce costs.” S. Jamie Teabo, senior vice president of property management, and Charles A. Konas, executive vice president of construction and development, will replace Wilkes.
“Senior-level people are probably getting a couple hundred thousand dollars a year,” says Paula Poskon, a senior research analyst with Milwaukee-based wealth management and private equity firm Robert W. Baird. “Is it [eliminating their position] enough to move the needle [for the REITs]? I don’t know. Companies are looking to drive efficiencies.”
The common thread in these moves: The streamlining allows Post and Camden to save money as the industry heads into another challenging year. “In general, there have been a lot of changes as companies restructure and adapt to the new environment,” says Alexander Goldfarb, senior REIT equity analyst for New York-based investment banking firm Sandler O'Neill + Partners. “People also may decide to move on for a variety of reasons.”
These positions aren't necessarily gone for good. “You might as well save it [the salary] this year while NOI is continuing to fall,” Poskon says. “If things pick up, maybe you will hire someone a year from now.”