FrontView Executive Fired Months After Initial Stock Offering

FrontView REIT shook up its leadership less than a year after launching, and Wall Street didn’t take it well.

The Dallas-based firm ousted its chief financial officer less than two months after his appointment, prompting investor uncertainty and a stock downgrade from JPMorgan, Bisnow reported.

Randall Starr was terminated following an audit committee investigation that found he violated the terms of his employment agreement, FrontView said.

The company did not disclose specific details but said the dismissal was unrelated to business operations or previously reported financials. JPMorgan analysts said executives described the issue as a matter “outside the scope of the company’s business.”

The abrupt exit led the analysts to slash their rating on the stock from overweight to neutral and trim its target price by 15 percent, from $14 to $12 per share. “With limited ability to grow externally at this point and what appears to be a bruised C-suite, we find it hard to recommend the stock,” they wrote.

FrontView, which trades under the ticker FVR, went public in October and now owns more than 300 net-leased retail and business services properties across the U.S., with 150 tenants. The REIT, led by co-CEO and board chairman Stephen Preston, lost $1.3 million on $16 million in revenue in the first quarter and has $312 million in outstanding debt. As of March, 12 of its 323 properties were vacant.

Despite reaffirming its adjusted funds from operations for the year, the firm has already scaled back its acquisition strategy and plans to reduce administrative expenses. Its stock price was down 40 percent Wednesday from its IPO.

Sean Fukumura, the REIT’s chief accounting officer, has stepped in as interim CFO while the company searches for a permanent replacement.

JPMorgan’s report added fuel to speculation that FrontView — which debuted with a stock price over $19 and was trading below $12 this week — could become an acquisition target.

“Its simple structure and portfolio is one that we believe could be quickly integrated into another platform,” the analysts wrote.

The analyst team also warned that leadership instability and “sudden changes” could hamper FrontView’s ability to win back investor confidence — they wrote that the stock is still “discounted to the underlying real estate.”

— Judah Duke