Inland Gets ‘New’ Chairman, CEO
- Apr 22, 2008
Management changes at Inland Real Estate Corp. have given the REIT a new chairman and a new CEO, though both men are company veterans and no one is leaving, at least not immediately. Thomas D’Arcy has been appointed the non-executive chairman of the board of directors, replacing Daniel Goodwin, who had been chairman since 2001 and will continue as a director. D’Arcy has served as an independent director and member of the audit committee since 2005. D’Arcy is a principal in Bayside Realty Partners, a private company operating primarily in New England, and has more than 20 years in commercial and residential real estate. He previously served as chairman, president & CEO of Bradley Real Estate Inc., a retail REIT focusing on the Midwest, until Bradley was acquired by Heritage Property Investment Trust in 2000. In addition, Mark Zalatoris (pictured), previously executive vice president, COO & treasurer, has been promoted to president & CEO. He succeeds Robert Parks, who has chosen not to stand for re-election to the board, but will remain on the board through the date of the 2008 annual shareholders meeting. Parks will also reportedly remain “a significant shareholder.” A CPA, Zalatoris has been with Inland since 2000, originally as senior vice president & CFO before becoming executive vice president & COO in 2004. Before joining the REIT, he was a vice president at Inland Real Estate Investment Corp., where he was responsible for asset management and due diligence. In an exclusive interview with CPN, Zalatoris downplayed the significance of the shuffle, describing the changes as primarily allowing him and the others involved to focus their responsibilities more, and as giving Inland Real Estate Corp. “a full-time CEO.” He said that no change is envisioned in the company’s focus on “open-air, necessity-based shopping centers,” typically anchored by grocery or drug stores and primarily in the Chicago and Minneapolis metro areas. Inland likes these two cities, Zalatoris said, because of their diversified economies and resistance to economic downturns. “We’re going to continue with that plan,” he said. “It is by its nature not exciting,” though such stability helps enable Inland to continue its practice of paying dividends monthly, not quarterly. And in the current climate especially, lenders too like stability. Zalatoris told CPN that yesterday Inland renewed a three-year, $150 million line of credit, now grown to $155 million, through a group of five banks: KeyBank, Bank of America, Wachovia, Wells Fargo and Bank of Montreal. Further, Inland had not previously had such a relationship with the latter two lenders. Moving forward, Zalatoris said, “I think maybe we’ve hit the bottom” in the current downturn, with commodities prices as perhaps the only remaining bubble yet to burst. Beyond that, he expects to see a slight but noticeable upturn starting within 12 months. More specifically on the retail front, he sees opportunities for retail expansion, especially since many markets have not seen the overbuilding in retail that other product types have experienced. “Retailers are very anxious to fulfill a retail demand that’s not being met right now” in urban infill sites, especially in blue-collar communities, Zalatoris said. “That’s an opportunity for us.” Two weeks ago, CPN reported that Inland Real Estate Acquisitions Inc. had closed on the final portion of a $361 million sale-leaseback with SunTrust Bank. The purchase involved 215 triple-net lease properties totaling about 1.1 million square feet, which SunTrust will lease back for 10 years, with renewal options. Established in 1994, Inland Real Estate Corp. owns interests in 152 neighborhood, community, power and lifestyle centers and single-tenant retail properties, primarily in the Midwest. The Inland Real Estate Group was its sponsor and continues to hold a minority share. In 2007, CPN ranked Inland Real Estate as the no. 6 buyer of commercial real estate in the United States, and in 2006, Shopping Centers Today magazine ranked it as the fifth-largest shopping center owner in North America. The company has more than 100 milllon square feet under management.