KBS Strategic Opportunity REIT Announces Dispositions
November 9, 2017 | Luke Schmidt | Blue Vault
On November 8, 2017, KBS Strategic Opportunity REIT, Inc. (“KBS”), through 11 wholly owned subsidiaries, sold 11 of its properties to various subsidiaries of Keppel-KBS US REIT, a newly formed Singapore real estate investment trust that was listed on the Singapore Stock Exchange. The sale price of these properties was $804 million, before third-party closing costs of approximately $7.7 million and excluding any disposition fees payable to KBS Capital Advisors LLC, the Company’s external advisor. The sale price was primarily determined based on real estate valuations performed by independent third-party valuation firms.
The sold properties consist of the following: 1800 West Loop, Westech 360, Great Hills Plaza, Westmoor Center, Iron Point Business Park, the Plaza Buildings, Bellevue Technology Center, Northridge Center I and II, West Loop I and II, Powers Ferry Landing East, and Maitland Promenade II. In connection with this sale, KBS repaid $401.7 million of outstanding debt secured by these properties. KBS also used approximately $52.5 million of the proceeds to acquire shares in the newly formed Singapore REIT, representing a 9.5% ownership interest.
Currently, the Singapore REIT does not own any properties other than these being purchased. The REIT was established with the investment strategy of principally investing, directly or indirectly, in a diversified portfolio of income-producing commercial assets and real estate-related assets in key growth markets of the United States.
The Singapore REIT will be externally managed by a joint venture between (1) an entity in which Keith D. Hall, KBS’s CEO and a director, and Peter McMillan III, KBS’s President and Chairman of the board of directors, will have an indirect ownership interest and (2) Keppel Capital Holding Pte. Ltd., which is not affiliated with KBS Strategic Opportunity REIT. The Singapore REIT is expected to pay certain purchase and sales commissions and asset management fees to the manager in exchange for the provision of certain management services.
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