Stonehaven’s push into the Internet applications forthe commercial real estate industry has prompted twoof its top officers to leave the company and could putthe status of the REIT in question. Soon after the St. Paul-based real estate and technology company put most of its real estate up forsale, Arnold Leas left his post as chairman and BobRice, president, resigned as well. As of June 30,Stonehaven had six properties encompassing 326,000 sf.

“They indicated that given they are exiting the realestate management business, so the managementstructure became redundant,” says Dennis Nielson, asecurities analyst with R.J. Steichen & Co. inMinneapolis. “The company was going to offer all their real estateof sale, and they would prefer to sell it in one bigchunk.”

When it was formed two years ago, plans were tocreate Stonehaven into a major REIT. Investors werecounting on Duane Lund, who remains Stonehaven’s chiefexecutive officer, to repeat with the company what hehad done with Chicago-based First Industrial RealtyTrust, which grew into a major holder of industrialproperties. But the REIT market had changed, and Lunddecided to take the company in a different direction.In its recent quarterly report, Stonehaven said thatgiven its acquisition of RESoft, “no assurance can begiven that the company will continue to qualify” as aREIT. What’s more, given its opportunities in thechanging economy, it may choose to change itsstructure itself differently, according to thedisclosure. Any change in its status could subjectdistributions to both corporate and personal incometaxes, according to the company.

Stonehaven entered the Internet business in February,when it purchased St. Paul-based NetLinkInternational. The idea was to create a softwarepackage that would allow property managers tocommunicate with vendors, employees and tenants. TheStonehaven acquisition has been renamed RESoft Inc.and has launched at least three Internet softwareproducts since it was acquired.

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