How to Recover KBS Strategic Opportunity REIT Losses

The White Law Group continues to investigate claims involving broker dealers who may have improperly recommended high risk REITs like KBS Strategic Opportunity REIT to investors.

According to its website, KBS Strategic Opportunity REIT is a non-traded Real Estate Investment Trust (REIT) that closed its initial public offering on November 20, 2012.

Mackenzie Capital Management, LP has just extended a tender offer to purchase shares of KBS Strategic Opportunity REIT for just $7.80/share. The original offering price was $10/share.

According to SEC filings, the REIT estimates its value is currently $11.50/share, down from the last Net Asset Value of $14.81/share.

According to Mackenzie, in April the REIT extended a self- tender for approximately 9.9 million shares at $10.93 per share but only about 9.5 million were purchased.

“After the offer, the share redemption program (“SRP”) was reopened but there is only $8.5 million reserved for redemption requests over the remainder of 2018. In addition, investors should note that redemptions made through the SRP are capped at $3 million per quarter,” according to Mackenzie’s letter.

Update on May 7, 2019 – New Tender Offer

According to reports, MacKenzie Capital Management has recently launched an unsolicited tender offer to purchase up to 120,000 shares of KBS Strategic Opportunity REIT for  just $5.15 per share.

The REIT’s most recent net asset value is $9.91 per share, as of September 30, 2018.

Liquidity Problems

Investments such as KBS Strategic Opportunity REIT are illiquid and it can be difficult to find a buyer when the investor is ready to sell.

Additionally, non-traded REITs often have high commissions, which could be a motivating factor for unscrupulous financial advisors to sell REITs such as KBS Strategic Opportunity REIT.

The total commissions and expenses make it difficult for the REIT to perform in line with the market. Prior to making recommendations to an individual investor, brokerage firms are required by the Financial Industry Regulatory Authority (FINRA) to disclose all the risks of an investment. Recommendations should only be made if the investment is suitable for an individual investor given their age, investment objections, investment experience and risk tolerance.

Brokerage firms that do not perform adequate due diligence on an investment and/or make unsuitable recommendations can be held accountable for investment losses through FINRA arbitration.

Recovery of KBS Strategic Opportunity REIT Losses

If you suffered losses investing in KBS Strategic Opportunity REIT and would like to discuss your recovery options, please call the securities attorneys of The White Law Group at 888-637-5510 for a free consultation.

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 Franklin, Tennessee.

For more information on The White Law Group, visit https://www.whitesecuritieslaw.com.

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