Inland Real Estate Investment Corp., once the dominant player among nontraded REITs, has turned to a rival for its next chief executive.
Inland, which has seen sales slide, said last Monday that it has tapped Mitchell Sabshon, most recently chief operating officer of Cole Real Estate Investments, to replace Robert Parks, who remains chairman, as chief executive.
Mr. Sabshon will join the company in the middle of the month.
The choice of Mr. Sabshon was unusual but welcome for Inland, which has deep ties to independent broker-dealers and representatives, one industry executive said.
Inland used to be the “gorilla” of the nontraded-
REIT industry but is no longer, said Daniel Wildermuth, chief executive of Kalos Capital Inc., a broker-dealer that specializes in alternative asset classes.
“Inland has struggled a little bit with the devaluations, but the rumor of its demise is greatly exaggerated,” he said. “Inland went outside of its own walls for a fresh perspective.”
Over the past decade, Inland far outpaced its nontraded-
REIT-sponsor rivals and launched two of the largest such real estate investment trusts in the industry, Inland American Real Estate Trust and Inland Western Real Estate Trust. Both REITs experienced difficulties during the credit crisis and have suffered drops in value well below the $10 a share at which they were initially sold to investors.
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Inland American, which is the largest nontraded REIT, with $10.8 billion in total assets, at the end of last year had an estimated per-share value of $6.93.
The REIT said last year that it was also the target of a fact-finding investigation by the Securities and Exchange Commission.
Inland Western, which has $5.2 billion in total assets, was renamed Retail Properties of America Inc., listed on the
New York Stock Exchange and began trading at about $8 a share in April 2012. But that was after a reverse stock split, with the adjusted value closer to $3 a share.
Retail Properties of America has since risen in value and last Monday was trading at $13.92 a share, a gain of almost 60% since its debut.
In the wake of those REITs, Inland has struggled to come close to the levels of sales it enjoyed before the downturn.
According to investment bank Robert A. Stanger & Co. Inc., Inland Securities Corp., the REIT sponsor's broker-dealer distributor, had year-to-date sales of just $10.7 million during the first half, ranking it 21st in a highly competitive industry.
Inland Securities Corp. also posted about $110 million in sales of private placements during the first half, according to company spokesman Richard Jurek.
Inland spokeswoman Alyssa Templeton said that Mr. Sabshon was unavailable for comment.
