GLOBAL - ProLogis, the world's largest logistics developer, has announced the resignation of chief executive officer Jeffrey Schwartz at a time when the company is halting further developments.
Walter Rakowich, the former president and chief operating officer for the company, has been chosen by ProLogis' board of trustees to replace Schwartz as CEO, while Stephen Feinberg, the board's lead trustee will become board chairman.
Feinberg praised the work of the outgoing Schwartz, saying he was "the key driver behind our international expansion and accomplished a great deal during his 14 years with the company."
He also assured the new senior management team is prepared to face the "significant headwinds due to dislocation in the credit markets and the negative effect on business conditions around the world", and "to make the tough choices necessary to ensure the company is positioned to weather this storm."
The change in positions has coincided with ProLogis' plans to halt all new developments for the foreseeable future and limit its annualised dividend target for 2009 by 52%.
The action is designed to allow the firm to retain additional capital to repay debt and strengthen its balance sheet until market conditions improve.
In response to the tough economic climate, ProLogis revealed plans to reduce the general and administrative expenses by 20-25% by cutting its workforce and reducing business spending.
William Sullivan, chief financial officer for ProLogis, said: "Obviously, the credit markets and overall market conditions make it clear that we need to significantly reduce expenses. Difficult times require difficult choices, and we are currently implementing our expense reduction plan."
The developer said it still intended to complete the development projects currently underway.
As of September 30 2008, ProLogis has $40.8bn (€32.5bn) of assets owned, managed or under development.