Nov. 12 (Bloomberg) -- Prologis, the world's largest warehouse developer, fell the most in more than 14 years after Chief Executive Officer Jeffrey Schwartz resigned. The company will cut its dividend and halt new developments as the global credit crisis deepens.

Chief Operating Officer Walter Rakowich, 51, will replace Schwartz, Denver-based Prologis said today in a statement. The company will reduce the 2009 annual dividend by more than half to $1 a share and stop plans for new developments.

Prologis shares have fallen 86 percent in the last month as loans become more difficult to get and refinancing options shrink. The company is struggling to bolster its balance sheet, saying today that it would slash expenses as much as 25 percent through job cuts and spending reductions.

``Difficult times require difficult choices,'' Chief Financial Officer William E. Sullivan said in the statement. ``Obviously, the credit markets and overall market conditions make it clear that we need to significantly reduce expenses.''

Prologis fell $2.40, or 35 percent, to $4.47 at 4 p.m. in New York Stock Exchange composite trading, the biggest drop and the lowest level since March 31, 1994.

Calls to spokeswoman Krista Shepard seeking comment were not immediately returned.

Dividend Cut

Schwartz, 49, had been chief executive since January 2005 and added the title of chairman in May 2007. Stephen L. Feinberg, CEO of Dorsar Investment Co. in Berino, New Mexico, will be Prologis's new chairman.

Prologis had planned a 2009 dividend of $2.28 a share and is expected to pay $2.07 this year. The dividend cut ``will permit the company to retain additional capital, which will be used to repay debt and strengthen the balance sheet,'' the company said.

The company said it will not begin new developments for the foreseeable future and ``will not pursue entry into any new markets until conditions improve and liquidity returns.'' It will complete projects already begun.

Prologis owned, managed or had under development $40.8 billion of assets comprising 548 million square feet (51 million square meters) in 2,898 facilities as of Sept. 30, according to the company.

(Prologis will host an investor meeting tomorrow at 8:30 a.m. New York time. To listen, call 800-768-6569 in the U.S. or 785- 830-7992 outside the U.S. and use passcode 9027242 or log on to http://ir.prologis.com.)

To contact the reporter on this story: Bob Ivry in New York at bivry@bloomberg.net.

Last Updated: November 12, 2008 16:21 EST