Investors who were hoping for an acquisition announcement from Income Investor selection American Financial Realty Trust (NYSE:AFR) are going to have to wait a bit longer. After listening to the conference call Thursday, it's clear to me that the company tried to work out an acquisition, but ultimately didn't find a buyer offering close to what it had determined was fair value.

Instead, there are many changes coming at American Financial Realty. All of them are potentially positive, and some of them, such as moving to industry-standard reporting, are long overdue. But the first and biggest change is that Nicholas Schorsch resigned as CEO and Harold Pote was appointed to replace him.

Investors in American Financial Realty may be unfamiliar with Pote because he joined the company's board just this year. However, he has been a part of the company's strategic review over the past few months and has experience in both the real estate and banking sectors. In the past, he also worked out deals to sell at least two companies that he ran, and American Financial Realty made it clear that a sale is still possible.

But first, American Financial Realty needs to prove itself to investors, and Pote laid out a number of ways it plans to accomplish that in the near term. These include selling off non-core properties and assets that aren't critical to the relationships American Financial Realty has with customers; cutting the dividend to $0.19 per quarter from $0.27; and reducing MG&A, or management, general, and administrative expenses, 15% to 25%. Pote also said the company will begin reporting its performance using standard operating metrics for real estate investment trusts such as funds from operations (FFO) and funds available for distribution (FAD).

Observant readers and investors will notice that selling non-core properties has always been a part of the company's business. It also means selling off some trophy properties that don't really add value to the business, such as the company's New York City office, which will be for sale, and the London office it recently sold. But, in fairness, selling non-critical but in certain cases high-profile properties is a bit of a new twist for the company. The asset sales are important, because they allow American Financial Realty to retire debt, aid in the restructuring of debt, and provide capital to acquire additional core properties. As related goals, the company also said it wants to get its debt down to 60% to 65% of total assets and have the dividend covered by operating cash flows (funds available for distribution) by the second or third quarter of fiscal 2007.

As with any restructuring, there are costs the company will have to bear to accomplish its goals, and these costs will hit the income statement in the next quarter or two, likely depressing results.

Unlike Equity Office Properties Trust (NYSE:EOP) and United Dominion Realty Trust (NYSE:UDR), which had operational and business-strategy changes to overcome, American Financial Realty also has to overcome issues of trust with its investors, and those wounds are more difficult to heal. Overall, however, the management change and near-term goals are big steps in the right direction. For investors who have held onto their shares and plan to continue holding, it now means focusing two to four quarters down the road to make sure Pote comes through on some of his goals.

At the time of publication, Nathan Parmelee owned shares in American Financial, but had no interest in any of the other companies mentioned. The Motley Fool has an ironclad disclosure policy.