KBS Strategic Opportunity REIT II Declares Net Asset Value
Are you concerned about your losses in KBS Strategic Opportunity REIT II? If so, The White Law Group may be able to help you recover your losses by filing a FINRA Dispute Resolution claim against the brokerage firm that sold you the investment.
KBS is “one of the nation’s preeminent buyers of commercial real estate and structured debt investments”, according to their website.
KBS often raises money for investments through Reg D private placement offerings like the company did for KBS Strategic Opportunity REIT II. These Reg D private placements are then typically sold by brokerage firms in exchange for a large up front commission, usually between 7-10%, as well as additional “due diligence fees” that can range from 1-3%.
The board of KBS Strategic Opportunity REIT II Inc., approved an estimated net asset value of the company’s common stock of $9.05 per share, according to a filing with the Securities and Exchange Commission. The NAV per share is the first disclosed by the company.
The valuation, which was performed within IPA guidelines, is based on the estimated value of the REIT’s assets less the estimated value of its liabilities, divided by the number of shares outstanding, as of March 31, 2017. Duff & Phelps, a third-party valuation advisory firm, assisted with the valuation.
As of March 31, 2017, the REIT had sold 22 million shares of common stock in its private offering and separate private transactions, as well as its initial public offering, at an average price of approximately $9.58 per share.
The Trouble with Reg D Private Placements
The trouble with Reg D Private Placements, like KBS Strategic Opportunity REIT II, is that they involve a high degree of risk and are typically sold as unregistered securities which lack the same regulatory oversight as more traditional investment products like stocks or bonds.
The White Law Group is investigating the liability that brokerage firms may have for improperly selling private placements like KBS Strategic Opportunity REIT II and other KBS offerings.
Broker dealers that sell alternative investments are required to perform adequate due diligence on all investment recommendations to ensure that each investment recommendation that is made is suitable for the investor in light of the investor’s age, risk tolerance, net worth, financial needs, and investment experience.
However, another problem with Reg D private placements is that the high sales commissions and due diligence fees the brokers earn for selling such products sometimes can provide brokers with an enormous incentive to push the product to unsuspecting investors who do not fully understand the risks of these types of investments or to outright misrepresent the basic features of the products – usually focusing on the income potential and tax benefits while downplaying the risks.
Fortunately, FINRA does provide for an arbitration forum for investors to resolve such disputes and if a broker or brokerage firm makes an unsuitable investment recommendation or fails to adequately disclose the risks associated with an investment they may be found liable for investment losses in a FINRA arbitration claim.
Recovery of Investment Losses
To determine whether you may be able to recover investment losses incurred as a result of your purchase of KBS Strategic Opportunity REIT II or another KBS private placement investment, please contact The White Law Group at 1-888-637-5510 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. The firm represents investors throughout the country in claims against their brokerage firm.
For more information on the firm and its representation of investors, visit www.WhiteSecuritiesLaw.com.