The job of chief executive of the REIT remains the same as it has for the past few years – sell off properties to pay down debt – but the person in the role has changed.
Late last year the Winnipeg-based trust announced Gino Romagnoli would take over the role from Arni Thorsteinson, 68, who had been CEO since its creation.
Romagnoli, 55, is hardly an outsider, though. An accountant by trade, he has been working with the REIT since its creation and works with Thorsteinson at Shelter Canadian Properties Ltd., which is actually providing his expertise under a services agreement.
The new CEO has “divestiture” and “debt restructuring” at the top of his job list.
“It really hasn’t changed much. We are still looking, for want of better words, to right the ship,” said Romagnoli. “We have a lot of properties in Alberta, particularly Fort McMurray and they have been severely affected by the decline in the oil prices and of course the fires didn’t help this past spring.”
Romagnoli worked with Lanesborough in an investor relations capacity since the inception in 2002. He was involved in Lanesborough’s initial public offering, and all subsequent equity and debt offerings, and has also been responsible for LREIT’s regulatory reporting requirements.
A dozen properties in Fort McMurray
Lanesborough was fortunate its properties suffered only smoke damage in the wild fires in and around Fort McMurray.
Of its 16 properties, a dozen are in Fort Mac and its portfolio is also entirely multi-residential. It has two holdings in rural Alberta, a 10-storey apartment tower in Manitoba and a seniors’ complex in Saskatchewan that appears close to sale.
“There is a buyer in place for that one. We hope to close in the not too distant future,” Romagnoli said. “It is a function of him completing his financing.”
Selling down the REIT’s holdings in Fort Mac will likely mean selling the best and keeping the rest. “We have chosen what we believe to be the most saleable of the properties and of course the most saleable are the nicest.”
One property, a combination of walk-up apartments and townhomes, has been sold down as condos over the years with about 47 remaining. “We are starting to see a little bit of a pickup in interest in that property as well but again that will be one at a time” sales.
Fort Mac still recovering
The northern Alberta oil sands city has still not recovered from the fire that resulted in its evacuation last year.
“Best guess based on what the city has looked at in terms of their water bills, hydro bills and school enrollments, they project that about 18 per cent of the people have not come back,” Romagnoli said.
As a hopeful seller, Romagnoli is not counting Fort McMurray out.
“As oil prices continue to stabilize and potentially increase with the Keystone XL pipeline announcement, there has been some announcement by a couple of the oil companies that they are starting up their projects again and of course construction brings in people.”
Beyond Shelter and Lanesborough, the Thorsteinson and Romagnoli combination also included Temple Hotels Inc. (TPH-T). Thorsteinson headed up the hotel company while Romagnoli served as executive vice-president of Temple Hotels Inc. until April 1, 2016, ending an 11-year run with that organization.
Last April, Morguard Corp. (MRC-T) announced the effective takeover of Temple with the resignation of top executives including Thorsteinson and Romagnoli and their replacement by top Morguard executives.