Michael Fascitelli is resigning as president and CEO of Vornado Realty Trust (NYSE: VNO) and will be replaced by longtime chairman Steven Roth, the company announced Feb. 27.
After a 16-year run with Vornado that included Fascitelli’s appointment as CEO in 2009, Roth said during a conference call that he recognized the decision may seem “very abrupt” to those outside the company. However, both executives said the decision has been in the works for a while.
“We debated this long and hard,” Roth said. “Internally, and certainly on the board level, this has been discussed extensively. The board decided it was the right time for me to do another tour of duty.”
The changes will take effect on April 15, and Fascitelli will remain part of the company’s board of trustees. Roth said he will take on some of Fascitelli’s day-to-day responsibilities, but also spread some out across the company.
Roth has been with Vornado for more than 30 years and served as CEO from 1989 to 2009. He has been with the company since 1980 and chairman since 1989.
Roth said the decision to resign belonged entirely to Fascitelli. He also downplayed the suggestion that “disagreements” between the two men might have prompted the CEO to step down. The 56-year-old Fascitelli added that he felt the timing of the move was right with the end of the 2012 fiscal year being wrapped up.
“The company is a part of the fabric of my being. It’s like having a child,” Fascitelli said. “We really have done our best. I think this company is in great shape, and it’s got great assets and people. I want to experience something very different. I’m not getting any younger, and now’s the time to do it.”
Andrew Goldfarb, analyst with Sandler O’Neil & Partners, called the announcement “a surprise.” He noted that the timing of the resignation coincided with the announcement of losses stemming from two Vornado investments, Toys “R” Us and J.C. Penney Co. However, Goldfarb said he didn’t think the struggles of the two retailers factored into the decision.
“But I do think it’s a reflection on how difficult the job is and the turnaround is,” Goldfarb said.
Vornado owns and manages commercial properties in the retail and office sectors, primarily in New York, Washington and Arlington, Va. Goldfarb suggested that Vornado might benefit from splitting its portfolio based on its assets. Fascitelli, however, said the firm has no current plans to do so.