April 21, 2017 Comments (0) Current Investigations

Everest Completes KBS REIT III Tender Offer for $7 per share

KBS REIT III
(Last Updated On: April 21, 2017)

Recovery of Investment Losses in KBS REIT III

Have you suffered losses investing in KBS REIT III? If so, the attorneys at The White Law Group may be able to help you recover your losses by filing a FINRA Arbitration Claim against the brokerage firm that sold you the investment.

KBS Real Estate Investment Trust III, a non-traded real estate investment trust, went effective in October 2010 and closed in July 2015 after raising approximately $1.7 billion in investor equity. As of December 31, 2016, the company’s $3 billion portfolio was comprised of 28 office properties, one mixed-use office/retail property, and a multifamily joint venture project which is currently under construction.

Everest REIT Investors I and II completed their tender offer to purchase up to 1.8 million shares of KBS Real Estate Investment Trust III common stock for $7.00 per share. The offer expired on April 14th and resulted in Everest purchasing 134,603 shares of the non-traded REIT for approximately $942,000.

In December 2016, the KBS REIT III board approved an estimated net asset value of $10.63 per share, as of September 30, 2016.

Letter to Shareholders

The REIT, which previously urged stockholders to reject the Everest offer, has a share redemption program that allows stockholders to sell their shares to the REIT in limited amounts in various percentages of NAV depending on the duration the shares are held. As of January 1st, there was $61.9 million available for eligible share redemptions in 2017.

Shares held by stockholders for at least one year can be redeemed for 92.5 percent of the most recent NAV, while those held for two, three and four years will be priced at 95 percent, 97.5 percent and 100 percent of NAV, respectively.

Everest currently owns 135,003 shares of KBS REIT III, or approximately 0.1 percent of the outstanding shares.

The Trouble with Non-Traded REITs

Many brokers pitched non-traded REIT’s, like KBS REIT III, as low risk and relatively safe products. They failed to adequately disclose the risks and liquidity problems often associated with non-traded REITs.

Brokerage firms have a fiduciary duty to their clients to perform adequate due diligence on an investment prior to recommending it for sale. They must ensure that any investment recommended is appropriate in light of the investor’s age, investment experience, net worth, and investment objectives. Given what is now known about KBS REIT III, it appears that some brokerage firms that sold this investment failed in its fiduciary duty to their clients.

Free Consultation

To determine whether you may be able to recover investment losses incurred as a result of your purchase of KBS REIT III, please contact The White Law Group at 888-637-5510.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Vero Beach, Florida.

For more information on The White Law Group, visit www.WhiteSecuritiesLaw.com.