Following a series of recent transactions including the spinoff of HCR ManorCare assets, “Big Three” REIT HCP Inc. (NYSE: HCP) has named a new CEO and a new president. The company announced Monday that its board will elect Tom Herzog, the company’s current chief financial officer, as a board member and CEO; and will elect Chief Investment Officer Justin Hutchens to be the company’s president.
The elections follow the departure of HCP’s former CEO Lauralee Martin, who stepped down from her role in July. Executive Chairman Mike McKee has served as interim president and CEO since July.
Herzog has served as CFO since June 2016 and also held the same role from 2009 to 2011. Hutchens, who is former CEO of real estate investment trust NHI (NYSE: NHI), has held the chief investment officer title for HCP since August 2015.
The company has indicated in recent earnings calls with analysts that it would appoint new leadership by year end; both elections are anticipated to be effective by January 1, 2017.
“The board is very excited to announce HCP’s new generation of leadership, which was one of the key strategic goals we outlined earlier this year,” McKee said in a press release. “Tom and Justin are both outstanding executives, and their skills and experience have been invaluable during the past year as we have made significant progress on our long-term strategic plan.”
After announcing its HCR ManorCare spinoff earlier this year, HCP has conducted other recent changes to shore up its portfolio, including the disposition of $1.125 billion in assets earlier this month. This “surgery,” has been conducted in an effort to redirect HCP and overcome challenges, some of which stem from its struggling skilled nursing assets. Analysts have indicated recently that HCP is on a path toward recovery in light of the changes, a improvement the company has coined “HCP 3.0.”
“Elevating two highly qualified senior members of our current executive team will ensure stability as well as continuity of leadership and strategy as we continue our transition to HCP 3.0, and our vision for a stronger and more profitable company,” McKee said. “We are all committed and excited to continue to work together to drive improved performance and build shareholder value.”
The company is already underway in achieving many of its near-term goals in order to execute on its long-term plans, the newly-named executives said.
“Since I returned to HCP in June, we have achieved a number of our near-term strategic goals, and this gives me great confidence in our ability to continue to execute the long-term plan,” Herzog stated. “From top to bottom, HCP is an extremely talented and hard-working organization, and I look forward to collaborating with our entire team to ensure this next chapter in our corporate history is as successful as possible.”
Hutchens echoed the sentiment.
“We have all worked incredibly hard this year to ensure the successful transformation of the business, and we have a clear strategy in place to continue this performance.”
Written by Elizabeth Ecker