First Capital REIT names new board chair in face of dissident calls for change

First Capital Real Estate Investment Trust FCXXF replaced the chair of its board of trustees on Tuesday months after activist investors launched campaigns for new leadership at one of the country’s largest shopping mall owners.

First Capital named Toronto-Dominion Bank executive Paul Douglas, a trustee since 2019, as the REIT’s new chair. In addition, former real estate analyst and portfolio manager Ira Gluskin, co-founder of Gluskin Sheff + Associates Inc., is joining the board.

The REIT said chair Bernard McDonell, who has been a trustee since 2007, has retired from the board, effective immediately.

First Capital units have underperformed peers over the past five years, and activist investors and the company’s founder have objected to management’s plans to improve performance with an “optimization plan” that will see the REIT sell up to $1-billion of properties – or 10 per cent of its portfolio – to fund development, pay down debt and increase cash distributions.

In the press release Tuesday, Mr. Douglas said: “I fully believe in the management team, the optimization plan and the direction the company is taking.”

In recent months, fund managers Sandpiper Group and Ewing Morris & Co. Investment Partners Ltd. separately put forward slates of candidates to replace Mr. McDonell and other First Capital trustees. This week, First Capital scheduled a unitholder vote on Sandpiper’s candidates for March 28.

First Capital owns approximately $10-billion of real estate in British Columbia, Alberta, Ontario and Quebec. On Tuesday, the REIT announced it lost $160-million in 2022, compared with a profit of $460.1-million the previous year.

Mr. Douglas plans to retire from TD Bank in April after 45 years at the bank. He is currently group head of Canadian business banking, responsible for a business with $100-billion in assets, including real estate and mortgages. Mr. Gluskin was a top-ranked real estate analyst at an investment dealer before launching an asset manager in 1984. Onex Corp. acquired Gluskin Sheff in 2019 for $445-million.