– USA, OH – Associated Estates Realty Corporation (NYSE, NASDAQ: AEC) today announced that Jon A. Fosheim has been appointed to the Company’s Board of Directors, effective immediately.
Mr. Fosheim is a real estate industry veteran with a proven record of leadership, and brings significant real estate investment, financial and strategic planning experience to the Associated Estates Board. A seasoned and well-known executive in the REIT industry, Mr. Fosheim was a Principal and Co-founder of Green Street Advisors and also previously served as Chief Executive Officer of Oak Hill REIT Management, a Newport Beach, California-based investment firm that specializes in REIT investments.
Mr. Fosheim was also appointed as a member of the Finance and Planning Committee of the Associated Estates Board and will be involved in the thorough review of the Company’s assets, operations and business strategy being undertaken in conjunction with Citigroup Global Markets Inc. Following Mr. Fosheim’s appointment, Jeffrey I. Friedman, the Company’s Chairman and Chief Executive Officer, will step down as a member of the Board’s Finance and Planning Committee, which will now be comprised entirely of independent directors.
Mr. Fosheim’s appointment follows the addition of Douglas Crocker II as a new independent director in December 2014. The Board remains committed to identifying an additional independent director to join the Associated Estates Board in 2015. Shareholders will be asked to approve the expansion of the Board of Directors to eight members at the upcoming Annual Meeting, such that the additional independent director can be added concurrent with or after the Annual Meeting.
Mr. Friedman, Chairman and Chief Executive Officer, said, “We are extremely pleased to welcome Jon to the Associated Estates Board of Directors. Jon’s extensive experience in the REIT industry and demonstrated leadership capabilities bring additional breadth to our Board, and his skillset complements the initiatives we have underway to further optimize our portfolio and continue to drive additional shareholder value. The Board looks forward to working with Jon, and believes that his addition is in the best interests of the Company and all its shareholders and will create an even stronger and more experienced Board and Company.”
James A. Schoff, Chairman of the Nominating and Corporate Governance Committee of the Associated Estates Board, commented, “As an accomplished REIT industry veteran, Jon is an ideal addition to our Board of Directors. I know I speak for the rest of the Board when I say that I am truly excited to welcome Jon and look forward to adding his fresh perspectives to our Board.”
Mr. Fosheim said, “Associated Estates has an impressive portfolio of diversified properties and a strong development team with an exciting opportunity to deliver value to its investors. I look forward to working together with the entire Board and management team and talking directly to the Company’s shareholders about how we can further strengthen the Company and deliver superior value to shareholders.”
Associated Estates also announced that Albert T. Adams has retired from the Board, effective immediately, facilitating the immediate appointment of Mr. Fosheim.
Mr. Friedman added, “On behalf of the Board of Directors and all our shareholders, I want to express our sincere thanks to Al for his many contributions and 19 years of dedicated service to Associated Estates shareholders. We all wish him the best.”
Ongoing Commitment to Outstanding Corporate Governance
In reiterating its commitment to best practices in corporate governance, Associated Estates notes the following:
The Board and management team will continue to act in the best interests of its shareholders, and has already taken proactive steps to expand and bring additional expertise to the Board. In addition to today’s appointment of Mr. Fosheim as a new independent director, the Board previously announced the appointment of Mr. Crocker, a proven leader with significant REIT industry experience spanning a 40 year career, including positions as Vice Chairman and CEO of Equity Residential. The Board remains committed to identifying an additional independent director to join the Associated Estates Board in 2015.
Associated Estates has continuously demonstrated a responsiveness and willingness to act on value-enhancing feedback from shareholders. The Board regularly reviews and analyzes its corporate governance framework, as evidenced by the Company’s current policies and recent enhancements already implemented, including eliminating the Executive Committee of the Board, eliminating the shareholder rights plan, and seeking shareholder approval at the 2015 Annual Meeting to eliminate the Company’s current 4% share ownership limit. These changes are all designed to increase transparency, accountability and provide the best governance structure. The Company noted that independent members of its Board of Directors, including its newest members Messrs. Crocker and Fosheim, look forward to meeting with shareholders in the weeks and months ahead.
Associated Estates continues to welcome any input from shareholders that may further enhance the value of the Company. As part of this commitment, the Company has commenced its recently announced business review. The Finance and Planning Committee of the Board, comprised entirely of independent directors and further strengthened with the additions of Messrs. Crocker and Fosheim, is working with its financial advisor to review the Company’s assets, operations and business. Associated Estates intends to report back to shareholders following the outcome of the business review, which is expected to be completed by no later than the 2015 Annual Meeting. The Company will continue to develop and refine its business plan with a singular focus on maximizing value for all Associated Estates shareholders.
Citigroup Global Markets Inc. is serving as financial advisor to Associated Estates, and Wachtell, Lipton, Rosen & Katz and Jones Day are serving as legal advisors.
About Jon A. Fosheim
Jon A. Fosheim previously served as Chief Executive Officer of Oak Hill REIT Management, LLC from 2005 to 2011. Oak Hill REIT Management was an investment firm that specializes in REIT investments for private equity firms, hedge funds, high-yield and distressed bond funds, public equity funds and real estate funds. From 1985 until 2005, Mr. Fosheim also served as Principal and Co-founder of Green Street Advisors, an industry leader in real estate and REIT research for investors looking to execute public and private real estate capital allocation decisions. Prior to that, Mr. Fosheim worked in institutional sales at Bear Stearns & Co. and worked in the tax department at Touche Ross and Co., currently known as Deloitte LLP. Mr. Fosheim earned his Bachelor of Arts Degree, Masters in Business Administration, and Juris Doctorate in Law, all from the University of South Dakota. Mr. Fosheim is also a member of the Board of Directors of Apple Hospitality REIT as of January 2015, one of the largest hospitality REITs in the U.S. with 191 hotels that contain 23,000 guestrooms. He currently serves on the Audit and Governance Committees of the Apple Hospitality REIT Board.
About Associated Estates
Associated Estates is a real estate investment trust and a member of the S&P 600, Russell 2000, and MSCI US REIT Indices. The Company is headquartered in Richmond Heights, Ohio. Associated Estates’ portfolio consists of 57 apartment communities containing 15,206 units located in 10 states, which include three committed acquisitions with 1,026 units that are being managed during lease-up and five apartment communities with 1,446 units in various stages of active development.
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