Commercial Real Estate Direct Staff Report
KBS Realty Advisors, has registered to raise up to $1.8 billion through the sale of shares in its latest REIT.
The Newport Beach, Calif., investment manager aims to invest in a variety of real estate-related debt instruments, properties, CMBS and collateralized debt obligations through the non-traded REIT, KBS Strategic Opportunity REIT II Inc.
Its shares will sell for $10 each through KBS' primary offering.
The new vehicle is a successor to KBS's first Strategic Opportunity REIT Inc., which was registered in 2009 and had raised $561.7 million of gross proceeds from an offering that was completed last year. As of the end of September, it owned 4.1 million square feet of office and retail space, one apartment property with 317 units, 1,375 acres of undeveloped land and one CMBS investment with a $1.5 million face value. It also held $21.78 million of loans.
The first Strategic Opportunity REIT picked up its apartment property, the Eleven80, at 1180 Raymond Blvd. in Newark, N.J., by buying and then foreclosing on a $35 million mortgage against it.
The REIT's filing says that it will likely be selling shares in itself at the same time that it is trying to raise another $105 million through a private placement that KBS, its sponsor, launched in August as a prelude to the recent offering.
KBS' broker-dealer affiliate is slated to earn fees of up to 9.5 percent of the amount raised. In addition, KBS will earn fees for investing the REIT's capital and it will earn an annual management fee.
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