Real estate firms increasingly vulnerable to executive overthrow

These were big exits, but they weren’t CEOs.

In Mack-Cali, front runner Michael DeMarco was overthrown in a coup by Bow Street Partners, an activist investor who took control of its board of directors in the summer, a situation that could affect other vulnerable property companies in the coming months.

Corporations are vulnerable now – stock prices have fallen across the property investment trust committee, and saving cash is a priority – and the sharks are swimming.

Bow Street cited gritty corporate governance that had driven the company into the ground and it wasn’t going to let a pandemic knock it down further.

“[Mack-Cali’s] A bad governance culture must be completely uprooted for the company to finally thrive, “Bow Street said in an investor presentation with the aim of” ridding the company of the self-sufficient, weak governance and opacity that has long characterized its leadership and boardroom have plagued. ”

MaryAnne Gilmartin’s tenure as interim CEO of the company ends March 8th. She was selected to run the company for several months while the new board looked for a permanent boss. Next week Mahbod Nia, chosen by the board of directors, will take the throne. Gilmartin will return to the helm of MAG Partners, a real estate development firm that she founded in 2019.

While the new hiring is good news, sales are cause for concern, Evercore ISI analyst Steve Sakwa said in a report. “This process has been going on for several months so it’s nice to see it nearing its end, even though it means the company will have its third CEO in less than 12 months,” he wrote.

Bow Street didn’t stop in Mack-Cali. The investment firm made an unsolicited offer for Paramount Group in November, which the firm quickly rejected.

Sakwa labeled the cash supply of $ 9.50 to $ 10 per share too low, but noted that this is not the last news on the matter.

“Corporate event odds for [Paramount] and others march higher, ”said Daniel Ismail, an analyst at research firm Green Street.