OAK BROOK, IL—Inland American Real Estate Trust, Inc. and its business manager Inland American Business Manager & Advisor, Inc. have just agreed to terminate their management agreement. The REIT will perform those functions and has also hired all of the manager’s employees and acquired the assets needed to perform the day-to-day operations.
Inland officials did not respond to an interview request by press time.
“Additionally, we hired certain employees of our property managers; assumed responsibility for performing certain of their significant functions, including property-level accounting, lease administration, leasing, marketing and construction functions; and amended our property management agreements to reduce our property management fees as a result of our assumption of such responsibilities,” the REIT said in a statement. “Furthermore, we have agreed with our property managers that, subject to the satisfaction of specified closing conditions, effective on December 31, 2014 we will take over the remaining property management functions performed by our property managers, terminate our property management agreements, hire the remaining property manager employees and acquire the assets necessary to conduct the remaining functions performed by the property managers for no fee.”
The management team remains unchanged. Members of the executive team, previously employed by the business manager on behalf of the REIT, have now become employees of the REIT, including Thomas McGuinness, president, Jack Potts, treasurer and principal financial officer, Anna Fitzgerald, principal accounting officer, and Scott Wilton, secretary.
“This announcement marks an important milestone for Inland American,” said McGuinness in his own statement. “This transition is the next step in Inland American’s life cycle and becoming self-managed shows the board’s confidence in Inland American’s personnel, expertise and growth as a company. Effective February 1, 2014, the REIT will no longer pay a quarterly advisory fee to its business manager.”
“The decision to become self-managed is the result of a thorough process conducted by our board’s special committee of independent directors,” added McGuinness. “Inland American’s board and management team are committed to driving value for stockholders and look forward to completing Inland American’s transition to full self-management.”