Bren Steps Aside as President of Apartment Firm
Irvine Co. Chairman Donald Bren stepped aside Wednesday as president and chief executive of Irvine Apartment Communities Inc., a publicly traded real estate investment trust.
Bren, who took the helm of IAC only four months ago, will be replaced by William McFarland, an Irvine Co. executive who resigned from that company to assume the IAC posts.
Bren will continue as chairman of the Newport Beach apartment company.
Though Bren will remain “deeply involved” with IAC, his preoccupation with the rest of his real estate empire made it necessary to hand day-to-day responsibility to someone else, said James Mead, IAC’s chief financial officer.
“Don Bren has a big business to run and was spending a disproportionate amount of time on IAC,” Mead said. “We’re fortunate to get someone of Bill’s caliber who can dedicate himself to being president and CEO on a full-time basis.”
Bren succeeded departing IAC chief executive Steven Albert in February in what some expected would be a transitional reshuffling until a permanent replacement could be brought on board.
Bren’s appointment to IAC had concerned some real estate watchers because the apartment company purchases land from the Irvine Co., which holds a 57% nonvoting interest in IAC.
McFarland is giving up his position as president and chief executive of Irvine Community Development Co., relinquishing his seat of the Irvine Co. board of directors and cutting his ties to Bren’s California Pacific Homes building company.
But his long relationship with Bren and the Irvine Co. still raises concerns about possible conflicts of interest, according to analyst Craig Leupold of Green Street Advisors in Newport Beach.
“It hasn’t gotten any worse, but it hasn’t gotten any better,” Leupold said. “IAC’s relationship with the Irvine Co. cuts both ways. On the one hand it’s their most valuable asset because they have ready access to development parcels that other companies don’t. At the same time it’s a relationship fraught with potential conflicts of interest.”
Before joining the Irvine Co. in 1984, McFarland served as president and chief executive of Bren’s separately owned Bren Co., a residential building firm.
The ties, however, haven’t stopped IAC from going off the Irvine Ranch property to buy other apartment complexes. It recently purchased a company that holds Silicon Valley land for three upscale complexes and it acquired an existing complex in La Jolla.
