KBS Strategic Opportunity REIT to Sell 11 Properties to Singapore REIT
October 16, 2017 | James Sprow | Blue Vault
On October 13, 2017 KBS Strategic Opportunity REIT, Inc. announced its intentions to sell 11 of its properties to various subsidiaries of a newly formed Singapore real estate investment trust (the “SREIT”) that is expected to be listed on the Singapore Stock Exchange. The transaction is subject to a number of conditions, including the SREIT obtaining the capital necessary to fund the acquisition of the properties. Such capital may not be raised from investors in the United States. After the transaction, the Company expects to maintain an ownership interest in the SREIT of up to 9.5%.
The SREIT will be externally managed by a joint venture between (i) an entity in which Keith D. Hall, the Company’s Chief Executive Officer and director, and Peter McMillan III, the Company’s President and Chairman of the board of directors, will have an indirect ownership interest and (ii) Keppel Capital Holding Pte Ltd., which is not affiliated with the Company. The SREIT is expected to pay certain purchase and sale commissions and asset management fees to the manager in exchange for the provision of certain management services.
KBS Strategic Opportunity REIT, Inc. owned 52 properties as of June 30, 2017, with total leasable area of over 11.8 million square feet. The properties included two multifamily properties with 383 units, eight industrial properties with 4.8 million square feet of leasable area, 20 office properties with 5.9 million square feet and 21 mixed use properties.
The SEC declared the Company’s registration statement effective on November 20, 2009. The Company ceased offering shares of common stock in its primary offering on November 14, 2012 and continues to offer shares under its dividend reinvestment plan.
The Company sold 56,584,976 shares of common stock in its primary offering for gross offering proceeds of $561.7 million. As of June 30, 2017, the Company had sold 6,427,949 shares of common stock under its dividend reinvestment plan for gross offering proceeds of $71.2 million. Also, as of June 30, 2017, the Company had redeemed 6,669,622 shares for $84.5 million. Additionally, on December 29, 2011 and October 23, 2012, the Company issued 220,994 shares and 55,249 shares of common stock, respectively, for $2.0 million and $0.5 million, respectively, in private transactions exempt from the registration requirements.
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