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Thursday, 27 February 2020

2 Former KBS Non-Traded REITs to Bulk Up in Merger

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Commercial Real Estate Direct Staff Report

Two former KBS Strategic Opportunity REITs have agreed to merge, resulting in a company that would own 12 office properties with 5 million square feet, two hotels, two apartment properties, 993 single-family rental properties and land, all valued at a combined $2.6 billion.

The two companies are now known as Pacific Oak Strategic Opportunity REIT Inc. and Pacific Oak Strategic Opportunity REIT II Inc., as Pacific Oak Cos., formed and led by Keith Hall and Peter McMillan in 2018, has taken over their management.

The merger is expected to be completed within four months. The two non-traded REITs said the resulting company's bulk would give it greater access to capital with which to make opportunistic and value-add investments. Shareholders also would benefit from greater diversity and lower general and administrative costs. The two REITs are waiving acquisition and disposition fees they would otherwise be entitled to as a result of a merger.

The transaction would be completed as an exchange of common shares. Every Strategic Opportunity II share would receive 0.9643 shares in Strategic Opportunity, so investors in the latter would own 69 percent of the resulting company.

The merger agreement allows the special committee of Strategic Opportunity II to shop itself to other potential investors for 45 days.

Houlihan Lokey is financial adviser, while Morrison & Foerster LLP is legal counsel to Strategic Opportunity's special committee, while SunTrust Robinson Humphrey Inc. is financial adviser...





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Additional Info

  • Syndicate to Realpoint: No
  • Subject: Mergers & Acquisitions (M&A), REITS -general (REITS)
  • Company: KBS Realty Advisors
  • Private: Yes
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Data Digest

 

CMBS DELINQUENCY VOLUME

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CMBS SPECIAL SERVICING VOLUME

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Top Bookrunners Domestic, Private-Label CMBS - 2017
Investment Bank #Deals Vol$mln MktShr%
Goldman Sachs 17.59 11,819.34 13.68
JPMorgan Securities 14.52 10,968.11 12.70
Citigroup 12.04 10,012.71 11.59
Wells Fargo Securities 14.02 9,936.06 11.50
Deutsche Bank 12.55 9,879.74 11.44

 

RCA CPPI

 

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CMBS 2.0 Spreads

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Top CMBS Loan Contributors - 2017
Lender #Loans Vol$mln MktShr%
Goldman Sachs 146.89 11,719.34 13.63
JPMorgan Chase Bank 117.68 10,114.14 11.76
Deutsche Bank 198.48 9,689.97 11.27
Morgan Stanley 166.18 8,539.78 9.93
Citigroup 199.05 8,088.24 9.41

 

 

 

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