With his contract about to expire, outspoken industry leader Laurence Geller has negotiated a mutually agreed upon exit from Strategic Hotels & Resorts, and on Friday the hotel REIT with 18 luxury and upscale assets announced effectively immediately its founder after some 15 years was stepping down from his role of president and CEO. As a result of a succession plan instituted a few years ago, company Chairman Raymond “Rip” Gellein Jr. steps into the chief executive role.
Geller, 64, will remain in an advisory capacity through the end of the year for the Chicago-based hotel company that has not turned a profit since 2007. Terms of his separation agreement with Strategic, which company executives stated came without acrimony, will be released in an 8-K on Thusday.
While the company reaffirmed its full-year guidance on Friday, questions were immediately raised about the potential sale of the company that has suffered during the recession of the past five years. There is even a bit of speculation that Geller himself could position himself as a bidder. By early afternoon Monday, the company’s stock increased 74 cents, roughly 13%, to US$6.31.
During a Friday conference call with analysts to discuss the change of leadership, Gellein responded to queries about a potential sale of Strategic by stating that he would not comment directly and that he does not expect his tenure as CEO to be short term. The former Starwood president of global development through 2008 added that his focus will be on reducing debt, making careful acquisitions and extracting ongoing value from Strategic’s portfolio. “Our hotel operations are profitable and have significant embedded growth potential. In addition, we dramatically restructured our balance sheet, which is terrific shape today,” Gellein said.
Gellein said later during the call, “Within the last 60 days, we just added an iconic hotel in New York to our portfolio. We’ve announced that we will be selling one hotel to de-lever our balance sheet and as you know Laurence involved in various deals. We will be active, but cautious. We will do the right deal. We’ll do the smart deals. That’s what our strategy has been over the last couple of years, so we’ll build value.”
Geller said in a company statement, “We have emerged from the recession a strong company with great assets well positioned for sustained growth in a virtually no-supply environment. And with the recent addition of the iconic JW Marriott Essex House New York, the company has re-established its East Coast presence.”
Geller is about to release his second industry-related novel, “The Last Resort,” remains a significant Strategic shareholder and is expected to continue his involvement in the industry.
Crain’s Chicago Business reported that Geller has been looking into selling his Chicago home and considering moving back to his native England, where he was recently recognized by Queen Elizabeth for his charitable work and extensive efforts to keep alive the memory of Sir Winston Churchill.