Pacific Office Properties Trust Inc. has a new leader and base of operations as the major Honolulu office building owner fights to survive in a slowly recovering economy and shaken real estate market.
The San Diego-based firm established in 2008 by Hawaii commercial real estate investor Jay Shidler will be headquartered in Honolulu effective Sunday after three top officers resigned to manage some Pacific Office properties through a separate company.
Departures of James Ingebritsen as president and chief executive officer, Michael Burer as chief financial officer and Matthew Root as chief investment officer took effect Thursday, two weeks after the moves were announced.
Assuming the executive roles of all the departed is Larry Taff, a longtime Shidler partner who had been Pacific Office’s executive vice president and also served as interim chief financial officer for eight months ended in April 2010.
Effective Sunday, Pacific Office will be based downtown at the Davies Pacific Center, a company-owned property.
The moves were made primarily to cut expenses at the publicly traded company, according to its annual report released Wednesday.
Pacific Office has endured financial constraints since its launch, which happened to correspond with the onset of economic and real estate market downturns.
Pacific Office said in its annual report that it generated $1.1 million in net income during the fourth quarter, which was a turnaround from a $6 million net loss in the same period the year before. But for all of last year, the company was in the red with a $21.8 million net loss, though that was an improvement from a $77.9 million net loss the year before.
The company also noted in its annual report that a lender repossessed Sorrento Technology Center, a San Diego property, in January after Pacific Office ceased making mortgage payments in June.
To meet capital obligations over the last year, Pacific Office has resorted to selling whole or partial ownership stakes in some buildings.
In Honolulu the company wholly owns Waterfront Plaza, Davies Pacific Center, First Insurance Center, the Pan Am Building and Clifford Center. It jointly owns two buildings in Waikiki. Last month Pacific Office announced an agreement to sell First Insurance Center to Massachusetts-based Senior Housing Properties Trust for $70.5 million, including the assumption of $52 million of debt. The sale is expected to close by June 30.
Last year Pacific Office sold a partial stake in a building at the corner of Kalakaua Avenue and Ala Wai Boulevard in Waikiki.
Pacific Office, which owns six properties by itself and 16 with partners, continues with its divestment strategy, and noted in its annual report that another Hawaii property, Bank of Hawaii Waikiki Center, is on the market.
Pacific Office previously sought to raise capital by selling stock, but that failed. Financial losses also caused the American Stock Exchange to warn Pacific Office that its stock might be delisted.
With no hope of improving operations to meet AMEX listing standards, Pacific Office recently decided to withdraw its stock listing to make an orderly transition to the less significant over-the-counter trading marketplace. That move is expected to be effective April 5.
Shares of Pacific Office stock closed Thursday at 39 cents, which was up from 34 cents on Wednesday and a 52-week low of 22 cents on Tuesday.
