Schwartz resigns as CEO and chairman of Prologis

Prologis announced on Wednesday that Jeffrey Schwartz has resigned as the company's chairman and CEO. Walter Rakowich, a former president and chief operating officer, replaces Schwartz as CEO of the Denver-based global owner, manager and developer of distribution facilities. Stephen Feinberg, the board's lead trustee, assumes the role of board chairman.

The statement released by the company did not spell out the reasons for Schwartz's departure, but it did reveal that the development side of the business is being seriously curtailed.

Prologis said it intends to complete the development projects currently underway, but it does not expect any new development activity in the foreseeable future and will not pursue entry into any new markets 'until liquidity returns'.

'Jeff was the key driver behind our international expansion and accomplished a great deal during his 14 years with the company,' said Feinberg. 'With the economy facing significant headwinds due to dislocation in the credit markets and the negative effect on business conditions around the world, Walt brings a deep background in real estate, encompassing both operational and financial expertise.'

'Together, our senior management team has developed a solid plan to reposition the company,' Rakowich added. 'We believe that the current share price substantially understates the company's worth but realize we need to prove that with actions rather than words.'

Prologis also said it is cutting its 2009 dividend to enhance liquidity in view of the 'tough economic climate.' The company has reduced its annualised dividend for next year by 52% from $2.07 in 2008 to $1. The company had initially announced a dividend of $2.28 for next year.

Prologis' shares fell by almost 35% in trading after the announcement to close on $4.47. Prologis shares have lost about 86% of their value in the last two months.