Callahan Steps Down From Equity Office Helm

In the interim, Zell takes on a more active role in managing the largest US office REIT. Besides assuming Callahan's roles as president and chief executive officer, Zell is part of a transition committee that includes Group Investments, LLC vice chairman Sheli Z. Rosenberg and former Spieker Properties co-CEO John A. Foster. Chaired by Rosenberg, the committee's top priority is to find a Callahan's successor.

Callahan joined Equity Group Investments, Inc. in 1992 executive vice president and chief financial officer, overseeing that entity's portfolio investments as well as dealing with capital markets. He joined Equity Office Properties in 1996 as president, chief executive officer and trustee, another position he relinquishes with his resignation. Before joining Zell's companies, Callahan was vice president–finance with Youngstown, OH-based Edward J. DeBartolo Corp. and had overseen lending activities in the Midwest and Mid-Atlantic regions as senior vice president of Chemical Bank in New York City.

"Tim has made substantial contributions throughout his tenure, having led Equity Office through three major mergers and the creation of the first true national office portfolio," Zell says in a statement. "These accomplishments created the platform from which EOP will move to the next level. Fortunately, our management depth is such that we expect this transition to be smooth."

The mergers included last year's $7.2-billion acquisition of Spieker Properties, which widened Equity Office's West Coast presence in addition to picking up another 28.3 million sf of office properties as well as a 10.1-million-sf industrial portfolio. In 2000, Cornerstone Partnership was acquired for $4.5 billion. The REIT now owns and operates 128.3 million sf of office space.

The first REIT to be included in the S&P 500, Equity Office Properties most recently was added to two highly-regarded magazine lists – the Fortune 500 and Forbes Super 500. Along with the rest of the industry, Equity Office has seen an uptick in vacancy. The REIT has 42% of its portfolio now concentrated in San Francisco, Boston, San Jose, Seattle and Chicago, where occupancy has fallen 5.2 percentage points to 92.5%.