"Recently, [Baird and I] have come to the conclusion that we have different views on the best business and organizational strategies to drive AMB's future success," said Hamid R. Moghadam, the REIT's co-founder, chairman and CEO, in a prepared statement. An AMB executive was not immediately available Tuesday morning for further explanation.
Banc of America Securities analyst Ross Nussbaum, after speaking with Moghadam and Coke, stated in an email to clients this morning that the departures appear unrelated and that no accounting problems had been discovered.
"Baird's role, according to Moghadam, had become somewhat redundant," Nussbaum wrote. "His time was no longer needed on the operations front with the role of President North America and President International established. Thus, Baird's role had become more strategic, which was already Moghadam's primary focus. Over time, differences emerged in strategy as Moghadam's entrepreneurial style clashed with Baird's more thoughtful, analytical approach."
When Nussbaum inquired whether Baird's resignation was due to a strategic transaction or strategy shift that the two did not agree on, "the answer was a resounding 'No'," he wrote, adding, "We see both departures as a loss for AMB. Both Baird and Coke were talented and added depth and expertise to AMB's growing global model."
AMB is planning to retire Baird's position and push the associated duties to Moghadam and other executives. Shares of AMB stock stood at $60.96 in early afternoon trading Tuesday, off $0.35 on the day.
Earlier this month, AMB paid $181 million for a 2.1-million-sf portfolio of airfreight buildings and 131 acres of developable land. The buildings are spread among international airports serving Seattle, Dallas and Houston. The excess land is in Houston and Atlanta.
In its third quarter report last month, AMB said occupancy in its 120-million-sf industrial portfolio was at its highest level since the third quarter of 2001 and rents on renewals entered positive territory for the first time since the first quarter of 2002. The company reported portfolio occupancy of 95.9%, a 50 basis point improvement from the end of the second quarter and a 130 basis point improvement from the third quarter of 2005. More significantly, it reported that rents on lease renewal and rollover in its operating portfolio increased 9.9% during the quarter. Rents declined in the second quarter by 0.9% and by 7.5% during the third quarter of 2005.
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