Securities Investigation – KKR Real Estate Select Trust 

According to various reports last week, KKR Real Estate Select Trust, a non-traded REIT sponsored by investment firm KKR, limited redemptions after shareholder redemption requests exceeded the company’s quarterly redemption limit of 5 percent. 

This follows after two of the largest non-traded REITs, Starwood REIT and Blackstone Real Estate Income Trust, limited redemptions in December after an influx of investor redemption requests surpassed quarterly redemption limits. 

KKR Real Estate Select Trust reported that it received repurchase requests of $128 million, or 8.1%, of the fund’s aggregate net asset value as of Dec. 1, 2022, according to filings with the SEC. 

In the past, the company has conducted quarterly tender offers to repurchase up to 5% of NAV of the fund’s outstanding common stock. 

The REIT repurchased common stock equal to 5% of its NAV, or $79.3 million. Accordingly, redemption requests were fulfilled at an amount equal to 62% of each shareholder’s first quarter 2023 tender request. 

The trust reported liquid holdings of 36% of net asset value as of the fourth quarter 2022. It produced a net total return of more than 8% for the year and received roughly $947 million in subscriptions. 

Potential Lawsuits to Recover Financial Losses    

The trouble with non-traded REITs is that they are complex and inherently risky products. Lack of liquidity is often problematic for many investors.  Investors looking to sell often have difficulty finding a buyer, and when they do, can suffer significant losses on the sale. To learn more, see: Non-traded REITs “Liquidity Issue” 

 Prior to making recommendations to an individual investor, brokerage firms are required by the Financial Industry Regulatory Authority (FINRA) to disclose all the risks of an investment. Recommendations should only be made if the investment is suitable for an individual investor given their age, investment objections, investment experience and risk tolerance. 

Brokerage firms that do not perform adequate due diligence on an investment and/or make unsuitable recommendations can be held accountable for investment losses through FINRA arbitration. 

If you are concerned about your investment in KKR Real Estate Select Trust, the securities attorneys at The White Law Group may be able to help. Please call the offices at 888-637-5510 for a free consultation with a securities attorney. 

The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Seattle, Washington 

For more information on The White Law Group and its representation of investors in FINRA arbitration claims, visit whitesecuritieslaw.com. 

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