Posts tagged ‘KBS Real Estate Investment Trust’
KBS was quick to file an Amended Free Writing Prospectus (FWP) with the SEC after Keith D. Hall, KBS Capital Advisor co-founder and managing partner, appeared on Fox Business. The document filed on February 20th, 2013 is intended to correct and clarify approximately 15 statements Hall made in the 5 min TV segment titled “Non-Traded REITS Investing 101.”
KBS headquarters are located in Newport Beach, Calif. According to their website KBS began as a real estate investment company to provided real estate investments on behalf of large institutional clients. In 2005 KBS Capital Advisors was created to manage the assets of KBS non-traded REITs.
For prospective Real Estate investors, Hall’s interview was very persuasive in promoting non-traded REITs like those offered by KBS. However, the FWP document not only clarifies, it sheds light on some of the risks involved in non-traded REITs.
For example, Hall commented “…there is no volatility in the stock.” However, the FWP points out that even though non-traded REIT shares are not subject to broader market volatility, that the value of the REIT may be volatile. Investors in KBS Real Estate Investment Trust, Inc., know this to be true. Shares purchased between 2006 and 2008 initially for $10.00 per share are currently valued at $5.18 as of December 18, 2012.
To learn more about the Amended Free Writing Prospectus, and to read a transcript of the interview visit http://www.sec.gov/Archives/edgar/data/1482430/000119312513073587/d490785dfwp.htm
There is an inherent risk with non-trade REITs, as with any investment, and it is the responsibility of the brokerage firm selling the non-traded REIT to adequately disclose all risks. Non-trade REITs are not suitable for investors who need liquidity in their investment. Other suitability factors that should be considered by a brokerage firm prior to recommending a non-traded REIT are age, financial needs, and risk tolerance to name a few.
However, many brokerage firms overlook suitability regulations set forth by the SEC to earn the high commission that non-trade REITs, like KBS, offer. KBS Real Estate Investment Trust REITs offer a 6.5% sales commission, in addition to a 3.0% dealer manager fee.
Brokerage firms that do not perform adequate due diligences on an investment or demonstrate a breach of fiduciary duty can be held accountable for losses incurred through FINRA arbitration.
The White Law Group continues to investigate FINRA arbitration claims involving KBS Real Estate Investment Trust, Inc., KBS Real Estate Investment Trust II, KBS Real Estate Investment Trust III, KBS Strategic Opportunity REIT, and KBS Legacy Partners Apartment REIT.
If you invested in a KBS non-traded REIT and would like to discuss you litigation options, please call the securities attorneys of The White Law Group at 312-238-9650 for a free consultation.
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Boca Raton, Florida.
For more information on The White Law Group, visit http://whitesecuritieslaw.com
Last month, a group of investors filed a prospective class action complaint against KBS Real Estate Investment Trust Inc. (or KBS REIT I) in the U.S. District Court for the Middle District of Florida in Fort Myers. The class action alleges that KBS made misrepresentations about the REIT, including its investment objectives, the dividend payment policy, and the value of the REIT’s investments.
It is being reported that this suit has caused at least one brokerage firm, Summit Brokerage Services, to suspend its selling agreements with sponsor KBS Holdings LLC. This news also raises questions regarding the ability of KBS REIT to succeed moving forward. In March, KBS REIT I announced a new valuation of $5.16 a share, down from $7.32 a share, and from the $10/share that original investors paid for the shares. KBS REIT has also cut its distribution to zero.
The White Law Group continues to file FINRA arbitration claims against the brokerage firms that recommended KBS REIT. These claims generally allege that the broker-dealers that sold KBS failed to perform the adequate due diligence on KBS REIT before offering it for sale to their clients.
Brokerage firms have a fiduciary duty to perform adequate due diligence on any investment before offering it for sale to its clients. Based on what is now known about KBS, it does not appear that the firms that sold KBS REIT performed the necessary due diligence on the offering.
Certainly, the extremely high commission offered by KBS REIT to brokerage firms for selling the product may explain the brokerage firms’ motivation in approving an investment with so many issues.
If you are a KBS REIT investor and you would like to discuss your litigation options with a REIT fraud attorney, please call The White Law Group at 312/238-9650 for a free consultation.
The White Law Group is a national securities fraud, securities arbitration and investor protection law firm with offices in Chicago, Illinois and Boca Raton, Florida.
For more information on The White Law Group, visit http://www.whitesecuritieslaw.com.