November 22, 2017 Comments (0) Blog, Current Investigations

Mackenzie offers $11.01/share for KBS Strategic Opportunity REIT

KBS Strategic Opportunity REIT
(Last Updated On: November 22, 2017)

KBS Strategic Opportunity REIT Inc. Recommends Rejecting Tender Offer

The White Law Group is investigating potential claims involving broker-dealers who recommended high risk non-traded REITs such as KBS Strategic Opportunity REIT to investors.

According to SEC filings, KBS Strategic Opportunity REIT Inc., sent a letter to shareholders recommending that they reject an unsolicited tender offer by MacKenzie Capital Management LP.

KBS Strategic Opportunity REIT, a publically registered non-traded REIT, went effective in November 2009 and closed its primary offering three years later after raising $574 million in investor equity. According to the filings, company is considering converting to a “NAV REIT” which to increase its capacity to repurchase shares.

MacKenzie Capital Management is offering to purchase up to 1 million shares of the REIT’s common stock for $11.01 per share, which is approximately 1.9 percent of the outstanding shares. KBS Strategic Opportunity REIT believes the offer price is “substantially below” the current value of the shares.

KBS Strategic Opportunity REIT informed shareholders that it is in the process of receiving final appraisals of its real estate properties from independent third-party valuation firms to update its estimated value per share in mid-December 2017. The company’s most recent NAV per share is $14.81, as of December 2016.

Last month, KBS Strategic Opportunity REIT completed a self-tender offer at a price of $14.07 per share, and purchased 4.7 million shares, or approximately 83 percent of those properly tendered, according to SEC filings.

Share Redemption Requests Rejected due to Insufficient Funding

The REIT admitted that in the fourth quarter of 2016, first quarter of 2017, and second quarter of 2017, it rejected a number of share redemption requests due to insufficient funding.

KBS Strategic Opportunity REIT reportedly generated additional capital that may be used for future share redemptions or tender offers by selling $804 million in properties to Singapore-based Keppel-KBS US REIT.

Brokerage firms are required to perform due diligence on the investment before recommending it. They must ensure that the investment is suitable for a particular investor in light of that investor’s age, investment objectives, income, net worth, and investment experience.  Given the current risk of devaluation of these REITs, such investments are likely only suitable for wealthy and/or sophisticated investors.

Free Consultation – Recovery of Investment Losses

If you have concerns about your investment in KBS Strategic Opportunity REIT, please call the securities attorneys of The White Law Group at 888-637-5510 for a free consultation.

You may gather more information on other investments on our website at www.whitesecuritueslaw.com

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