Colony Capital, Inc. (NYSE: CLNY) shook up its leadership amid a net loss of $70 million for the third quarter, naming executive chairman Thomas Barrack as CEO.
Barrack replaces Richard Saltzman, who served as CEO for four years since the company went public. Saltzman is expected to remain with the company in a non-executive capacity as chairman of both Colony Credit Real Estate Inc. (NYSE: CLNC) and NorthStar Realty Europe (NYSE: NRE).
Colony Capital, which was formerly known as Colony NorthStar, has investment interests in health care real estate, industrial real estate and hospitality real estate, CLNC, investment management, and other equity and debt. In 1991, Barrack founded one of the predecessors to Colony Capital; that company merged with NorthStar Realty Finance (NYSE: NRF) and its current external manager, NorthStar Asset Management (NSAM), in 2016.
Colony Capital, a real estate investment trust (REIT) based in Los Angeles, Calif., reported a net loss of $70 million, or 15 cents a share, for the third quarter, compared with net income of $1.65 million in the year-ago period.
The company had 413 properties in its consolidated health care portfolio as of Sept. 30, 99 of which are skilled nursing facilities. Those facilities have 11,829 beds, 81.9% of which are occupied.
“Our health care and hospitality verticals are in rotation and we will maximize cash flows by restructuring debt, enhancing operations and transitioning lower quality assets to higher quality assets,” Barrack said on the third-quarter earnings call. “We’ll monetize assets in both these verticals at every opportunity in which the private market ascribes a higher value than the public market.”
Colony is also embarking on a corporate restructuring and cost-reduction plan, which executive vice president and CFO Darren Tangen said is expected to provide $50 million to $55 million in annual cost savings on a run-rate basis by the end of next year, with most of the savings coming in 2019 and 2020.
Colony is also targeting more than $1 billion in additional net equity proceeds from asset sales by the end of next year, Barrack said.
Written by Maggie Flynn