KBS Strategic Opportunity REIT to Purchase Alpharetta, GA Office Property

May 5, 2019

KBS Strategic Opportunity REIT to Purchase Alpharetta, GA Office Property

May 3, 2019 | James Sprow | Blue Vault

On May 1, 2019, KBS Strategic Opportunity REIT, Inc. entered into a purchase and sale agreement to purchase an office property, known as Georgia 400 Center, consisting of three buildings containing an aggregate of 416,463 rentable square feet located on an aggregate of 24.4 acres of land in Alpharetta, Georgia. On April 12, 2019, KBS Capital Advisors LLC, the Company’s external advisor, entered into a purchase and sale agreement to purchase Georgia 400 Center and on May 1, 2019, the Advisor subsequently assigned the purchase and sale agreement, as amended, to the REIT for $1.0 million, which is the amount of the initial deposit paid by the Advisor. The seller is not affiliated with the REIT or the Advisor.

Pursuant to the purchase and sale agreement, the REIT would be obligated to purchase the property only after satisfactory completion of agreed upon closing conditions.

Related: KBS REIT II Advises Against Accepting $3.21 Per Share CMG Partners Offer

The contractual purchase price of Georgia 400 Center is $91.0 million plus closing costs. The REIT intends to fund the purchase of Georgia 400 Center with proceeds from a mortgage loan and cash on hand.

Georgia 400 Center was built between 1998 and 2001 and is currently 85% leased to 31 tenants.

As of December 31, 2018, the REIT owned six office properties, one office portfolio, one retail property, two apartment properties, three parcels of land, three unconsolidated JVs, three financial assets, and one debt investment. The office and retail properties were 74% leased, and the apartments were 94% leased.

The REIT paid no regular distributions in Q4 2018, but on November 12, 2018, the board of directors authorized a special dividend of $2.95 per share of common stock. On November 12, 2018, the board of directors approved an estimated value per share of our common stock of $9.91 based on the estimated value of assets less the estimated value of liabilities, or net asset value, divided by the number of shares outstanding as of September 30, 2018, with the exception of an adjustment to the net asset value to give effect to the November 12, 2018 authorization of a special dividend of $2.95 per share.

The special dividend was paid in December 2018 to stockholders of record as of the close of business on the record date. The 2018 special dividend was made primarily in connection with a deemed sale of land to a taxable REIT subsidiary, which triggered a significant amount of capital gain in 2018.

Sources:  SEC, Blue Vault


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Loreen M. Gilbert, CIMA, AIF, CRC, CLTC – President, WealthWise Financial Services
Blue Vault
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