CLEVELAND, July 19, 2004 (PRIMEZONE) -- Paragon Real Estate Equity and Investment Trust (AMEX:PRG) announced that Jack R. Kuhn has joined its executive management team as Sr. Vice President - Chief Property Management & Development Officer responsible for overseeing, managing and directing all property management and development activities.
For the past 19 years, Mr. Kuhn held a number of positions with Forest City Enterprises (NYSE), Cleveland, Ohio. Since 1999, he served as Executive Vice President responsible for operations, and asset and property management. For 10 years prior, he served as President of Forest City Commercial Management, responsible for the management of the office and mixed-use properties in the group. His experience includes significant adaptive reuse projects that entailed conversion of real estate properties for alternate single- or mixed-use purposes. Prior to joining Forest City, Mr. Kuhn focused on development of commercial and multi-family properties in the Pittsburgh area. He has a bachelor degree from University of Pittsburgh and is a licensed broker in Pennsylvania.
Paragon's management team and board consider Mr. Kuhn's appointment complementary to implementation of the company's value-added business plan designed to acquire well-located, under-performing, multi-family residential properties. He will be directly responsible for repositioning property acquisitions through renovation, leasing, management and branding strategies.
"Jack Kuhn's real estate industry experience complements and adds depth to our executive management team and strengthens our ability to execute our aggressive strategic plan," said James C. Mastandrea, Chief Executive Officer and President of Paragon. "We have been actively investigating acquisitions including several portfolios of apartment properties in the Southeast, Southwest, and Midwest, and are continuing dialogues with several sellers."
Mr. Mastandrea noted that prior to Paragon's restructuring in 2003, prevailing low interest rates made it a seller's market for under-performing apartment properties. With interest rates rising, Mr. Mastandrea is seeing more reasonable pricing for these properties. "When we reach terms on acquisitions that will add value for our shareholders, we expect Paragon's momentum to shift with announcements of acquisitions. Jack's addition to our team is in anticipation and preparation for these acquisitions."
Each member of Paragon's senior executive team, including Mr. Kuhn, has agreed to receive comparably low base salaries, along with the potential for significant rewards through share ownership, linked directly to increasing the value of the company for shareholders.
As a material inducement for Mr. Kuhn joining Paragon, the independent Management, Organization and Compensation Committee approved a restricted stock grant of 1,000,000 shares. The initial grant of 500,000 restricted shares will vest half of the shares in four years and the second half in five years. Additional grants of 125,000 restricted common shares will be distributed annually for the next four years beginning on the anniversary date of his employment with vesting effective four years after each grant date.
Mr. Mastandrea said, "Jack's role in repositioning the apartment properties we purchase by renovating and intensively managing them to raise their prominence in local markets is key to Paragon's success. We are delighted to have him on board."
Forward-Looking Statements
Certain matters discussed within this press release may be deemed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although Paragon Real Estate Equity and Investment Trust believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that the planned implementation of a national real estate acquisition, development and re-development strategy will be completed in whole or in part. Factors that could cause actual results to differ materially from Paragon's expectations include changes in local or national economic or real estate conditions, the ability to meet competition, loss of existing key personnel, ability to hire and retain future personnel and other risks detailed from time to time in Paragon's SEC reports and filings, including its annual report on Form 10-K, quarterly reports on Form 10-Q and periodic reports on Form 8-K. Paragon assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.