trending Market Intelligence /marketintelligence/en/news-insights/trending/z42bw7bjnyuxibcxhtjblg2 content esgSubNav
In This List

Colony NorthStar's Barrack '100% focused' after dividend cut

Blog

Using ESG Analysis to Support a Sustainable Future

Video

S&P Capital IQ Pro | Powered by Expert Insights

Blog

Q&A: Streamlining Analytics for TCFD Reporting

Blog

Evergrande and the wider impact: a sentiment analytics based perspective


Colony NorthStar's Barrack '100% focused' after dividend cut

Colony NorthStar Inc. has retained Morgan Stanley as a financial adviser to help it simplify its business after a "very disappointing year" in 2017, President and CEO Richard Saltzman said.

The real estate investment trust owns portfolios of industrial, healthcare and hospitality real estate, plus real estate debt, among other investments. It also manages nontraded REITs through an asset management business. In a 2017 earnings report released March 1, the company said it will cut its quarterly dividend to 11 cents per share from 27 cents.

The company has "many moving pieces," Saltzman said on a conference call, acknowledging that a tri-party merger that formed the company in its present state did not go as planned. The company will be a net seller of assets in 2018, he added.

"Combined with our disappointing financial results, the management team together with our board have determined that we should hire a financial adviser to help us expedite our continuing objectives of streamlining, monetizing and de-emphasizing noncore business lines and assets, all with the objective of simplification and reinvesting in new strategic growth platforms that are both compelling and capable of turbocharging our investment management business," Saltzman said.

Morgan Stanley will help Colony NorthStar analyze its plan and its ability to transform, Saltzman said, adding: "To the extent that there are weak links in that plan," the adviser will provide "perhaps some input as to how we adjust, how we may think about other options."

Thomas Barrack Jr., the company's chairman, led off the call by emphasizing that company leaders "understand the definition of not confusing efforts with results."

Barrack argued that planned changes to the company's approach, including the dividend cut, will turn Colony NorthStar around, adding that he intends to "personally usher" the business's operations.

"I'm 100% focused," Barrack said. "I'm still one of the largest personal shareholders of this company. It's the majority of my personal net worth. It's the dominant factor in my and my family's pride, reputation and future, and I don't intend to leave it tainted or unattended."