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Written by 4:47 pm Current Investigations

KBS REIT III Tender Offer $7 per Share


Concerned about investment losses in KBS REIT III?

Have you suffered losses investing in KBS REIT III? If so, The White Law Group may be able to help you recover your losses through a FINRA Arbitration Claim.

KBS Real Estate Investment Trust III, a non-traded real estate investment trust, went effective in October 2010 and closed in July 2015 after raising approximately $1.7 billion in investor equity. As of September 30, 2016, the company’s $3 billion portfolio was comprised of 28 office properties, one mixed-use office/retail property, and a multifamily joint venture project which is currently under construction.

Recently, Everest REIT Investors I and II have extended a tender offer to purchase up to 1.8 million shares of KBS Real Estate Investment Trust III common stock for $7.00 per share. The offer, which constitutes 1 percent of the outstanding shares, expires on April 14, 2017.

Everest and its affiliates currently own 400 shares of KBS REIT III, and will pay approximately $12.7 million if all shares in the current offer are tendered.

In December 2016, The DI Wire reported that the KBS REIT III board approved an estimated net asset value of $10.63 per share, as of September 30, 2016.

Letter to Shareholders

In a letter to shareholders, KBS REIT III recommended its shareholders reject the offer as it is “substantially below” the value of the shares.

The REIT also said that its share redemption program allows stockholders to sell their shares to the REIT in limited amounts in various percentages of NAV depending on the duration the shares are held. As of January 1st, there was $61.9 million available for eligible share redemptions in 2017.

Shares held by stockholders for at least one year can be redeemed for 92.5 percent of the most recent NAV, while those held for two, three and four years will be priced at 95 percent, 97.5 percent and 100 percent of NAV, respectively.

Many brokers pitched non-traded REIT’s, like KBS REIT III, as low risk and relatively safe products. They failed to adequately disclose the risks and liquidity problems often associated with non-traded REITs.

Brokerage firms have a fiduciary duty to their clients to perform adequate due diligence on an investment prior to recommending it for sale, as well as to ensure that any investment recommended is appropriate in light of the investor’s age, investment experience, net worth, and investment objectives. Given what is now known about KBS REIT III, it appears that some brokerage firms that sold this investment failed in its fiduciary duty to their clients.

Free Consultation

To determine whether you may be able to recover investment losses incurred as a result of your purchase of KBS REIT III, please contact The White Law Group at 888-637-5510.

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 Vero Beach, Florida.

For more information on The White Law Group, visit www.WhiteSecuritiesLaw.com.


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