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To: NOW who wrote (161473)	4/22/2002 11:59:06 PM
From: johnsto1	Respond to of 436258

Chief Executive of Equity Office Steps Down for Personal Reasons By DEAN STARKMAN Staff Reporter of THE WALL STREET JOURNAL Equity Office Properties Trust's president and chief executive, Timothy H. Callahan, resigned for personal reasons, and the company's chairman and founder, Sam Zell, temporarily took over the posts at the nation's largest publicly traded real-estate company. The 51-year-old Mr. Callahan also quit the board of trustees. Mr. Callahan's exit, announced Friday, surprised Wall Street analysts and comes at an awkward time for the huge Chicago-based office landlord, which has struggled lately with weak demand for U.S. office space, particularly in northern California, where Equity Office has become a dominant presence. In an interview, Mr. Zell declined to elaborate on the reasons for Mr. Callahan's departure but said it had nothing to do with financial or operational issues. His resignation followed a special meeting of the Equity Office board of trustees on Thursday. Richard Kincaid, chief operating officer, said Mr. Callahan had been discussing his future with the Equity Office board for about two months but declined to say why Mr. Callahan left so abruptly. A company spokeswoman said Mr. Callahan wasn't available for comment. The departure comes amid other turnover in Equity Office's executive suite. On Friday, company officials acknowledged the departure of both its top acquisitions executives, Sybil J. Ellis and David H. Naus, who shared the title of executive vice president for real-estate investments. Company officials said the departures of both Ms. Ellis and Mr. Naus were also for personal reasons, but declined to say whether any of the resignations were related. Ms. Ellis left in February. Company officials wouldn't comment on when Mr. Naus decided to leave, but said his resignation will be effective around June 1. Efforts to reach Mr. Naus and Ms. Ellis were unsuccessful. Mr. Kincaid declined to discuss any severance arrangements for the three executives, except to say that any severance for Mr. Callahan would be disclosed. Mr. Zell will sit on a three-person committee that will search for a successor. He said the task will be completed "yesterday." The company has been operating without a full-time chief financial officer since last fall, when the company's chief operating officer was reassigned and eventually succeeded by Mr. Kincaid, who was then chief financial officer, a post he retains on an interim basis. "It's certainly serious business," said Lawrence Raiman, a Credit Suisse First Boston analyst. "The fact that the biggest REIT is in need of a CEO and a CFO is not good news." Equity Office shares fell 82 cents to $29.30 in New York Stock Exchange 4 p.m. composite trading Friday. Mr. Zell said the transition would be smooth. "I started the company," he said. "I ran the company. I've been intimately involved in the company for 10 years. So this is not a giant leap of faith or giant change of direction." Mr. Zell formed Equity Office from properties purchased in the late 1980s and early 1990s by his highly successful private real-estate investment funds and brought the company public in 1997. Under Messrs. Zell and Callahan, the company embarked on a strategy to expand through acquisitions, most recently last July when it bought the dominant REIT in California, Spieker Properties Inc. in Menlo Park, for $4.48 billion, in the largest-ever REIT deal. Equity Office now owns 127 million square feet of office space nationally, more than the twice as much as the next-biggest office landlord. Last fall, the company became the first REIT to be included in the Standard & Poor's 500-stock index, which many analysts took as a sign that the industry, long scorned as scandal-plagued and prone to booms and busts, had finally arrived. Lately, though, analysts have begun to worry that the company's size may actually hurt its prospects against more nimble competitors. "Is EOP too big?" Lehman Brothers Inc. wrote in a report last month. Write to Dean Starkman at dean.starkman@wsj.com Updated April 22, 2002