Mack-Cali Realty Corporation named Michael DeMarco CEO and made current chief executive Mitch Rudin the vice chair, the New Jersey-based office real estate investment trust announced Wednesday.
Both executives joined Mack-Cali in June 2015, with Rudin as CEO and DeMarco as president and COO.
DeMarco, a Vornado Realty Trust and Lehman Brothers alum, told The Real Deal that he started as “co-equals” with Rudin in 2015. “The only difference was he was five years older than I was and he wanted to be CEO at this part of his career,” he said. DeMarco claimed he has been running day-to-day operations for a while and naming him CEO was merely a recognition of his role.
He said Rudin will focus on “major leasing activities and the transformation of the portfolio” in his new position.
Rudin did not immediately respond to a request for comment. The company’s performance steadily improved under his tenure. Since Rudin became CEO, its share price recovered from a low of $16.90 on May 29, 2015, to $27.12 as of 11 a.m. Wednesday.
The leadership switch was “not unexpected whatsoever,” said John Guinee, an analyst at Stifel. “The company made the decision as to who is number one and number two very quickly and they are now essentially reversing the roles.”
Guinee argued that making Rudin CEO was “inappropriate” from the start because his strengths are in leasing and operations, not so much in the portfolio strategy and capital markets work required of a company head. But Guinee also argued that the demotion shouldn’t reflect poorly on Rudin, calling him a “very talented guy” who is respected in the industry.
Prior to joining Mack-Cali, Rudin served as head of Brookfield’s U.S. commercial operations and was at one point the Canadian company’s highest-paid executive. He abruptly left the firm in June 2014 amid a broader leadership reshuffle that ultimately saw his position eliminated. Between 2004 and 2011 Rudin served as CBRE’s tristate CEO.
When Rudin joined Mack-Cali in 2015 to succeed Mitchell Hersh as CEO, the company was struggling amid a downturn in the market for suburban office properties that make up the bulk of its portfolio.