Home Alts News CIM and KBS REITs Recommend Shareholders Reject Unsolicited Tender Offer

CIM and KBS REITs Recommend Shareholders Reject Unsolicited Tender Offer

The board of CIM Real Estate Finance Trust, a publicly registered non-traded real estate investment trust, and KBS Real Estate Investment Trust III Inc., a publicly registered non-traded real estate investment trust, has sent a letter to shareholders recommending that they reject an unsolicited mini-tender offer from Comrit Investments 1 LP, a Tel Aviv-based investment fund. The tender offer expires on Dec. 29, 2022.

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The boards of CIM Real Estate Finance Trust and KBS Real Estate Investment Trust III Inc., publicly registered non-traded real estate investment trusts, have each sent letters to their shareholders recommending that they reject unsolicited mini-tender offers from Comrit Investments 1 LP, a Tel Aviv-based investment fund. The tender offers expires on Dec. 29, 2022.

Comrit is offering to purchase up to 22.4 million shares of CIM Real Estate Finance Trust for $4.61 per share. Comrit’s offer is 36% less than the most recent estimated net asset value per share of $7.20, as of March 31, 2021. Shares of the REIT most recently traded for $5.86 on Realto, an online secondary trading platform for illiquid securities.

“The board believes the offer price is significantly below the current and potential long-term value of the shares and is an opportunistic attempt by Comrit to purchase your shares at a deeply discounted price,” the letter from CIM stated.

Comrit is offering to purchase up to 1.2 million shares of KBS Real Estate Investment Trust III common stock for $5.68 each. Comrit’s offer is 37% less than the most recent net asset value per share of $9.00, as of Sept. 28, 2021. Shares most recently traded on Realto for $7.97 each.

“The fact that Comrit is offering to purchase 1,232,394 shares, while already owning 1,264,492 shares that were purchased in KBS REIT III’s initial public offering, through tender offers and in the secondary market, indicates that it sees value in KBS REIT III, and believes the shares are worth far more than its offer price of $5.68 per share,” the letter from KBS stated.

In its letter to shareholders, KBS REIT III stated that it expects to reopen its share redemption program on Jan. 3, 2023, at which time it will resume accepting ordinary redemption requests from stockholders for the Jan. 31, 2023, redemption date.

CIM Real Estate Finance Trust primarily owns and operates a portfolio of core commercial real estate assets consisting of net leased properties and a portfolio of commercial mortgage loans. The REIT launched its offering in January 2012 and raised more than $3 billion prior to closing in April 2014.

KBS REIT III’s initial offering commenced in October 2010 and closed in July 2015 after raising approximately $1.7 billion. As of May 2022, the REIT’s portfolio was comprised of 17 properties with an estimated value of $3 billion, based on September 2021 appraisals.

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