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KBS Growth & Income REIT Encourages Stockholders to Approve Liquidation

KBS Growth & Income REIT has proposed that its stockholder vote to approve a plan of liquidation at the company’s annual meeting scheduled to take place on May 9, 2023.

A special committee of the company’s board of directors, composed solely of its independent directors, as well as the full board, each unanimously determined that liquidation is in the company and stockholder’s best interest and sent out proxy statements encouraging stockholders to vote to approve the plan.

As the DI Wire previously reported, the KBS REIT advised that its board of directors began a review of strategic alternatives which would likely lead to the adoption of a plan of liquidation.

In a quarterly report with the Securities and Exchange Commission from November 2022, the KBS REIT indicated that its portfolio was under significant pressure and stated it was unlikely to be able to “continue as a going concern.” The company is facing near term loan maturities which it may not be able to refinance under current terms. Specifically, the company’s $45.7 million mortgage loan tied to the Commonwealth Building, an office building located in Portland, Oregon that is just 51.8% occupied, is maturing in February 2023. The company also has a modified term loan with an outstanding of $52.3 million due to mature in November 2023.

KBS previously estimated that the net proceeds from liquidation and the amount of cash that stockholders would receive for each share of their common stock would range between approximately $0.59 and $1.16 per share.

At the annual meeting, the company will seek stockholder’s approval of:

  • a plan of complete liquidation and dissolution of the company;
  • the election of four directors;
  • the ratification of the appointment of Ernst & Young LLP as the independent registered public accounting firm for the fiscal year ending Dec. 31, 2022; and
  • a proposal that would permit the board to proceed with the voting on and approval of only the proposals that have received sufficient votes to be approved at the annual meeting and, subsequently, to adjourn the annual meeting to solicit additional proxies to vote in favor of any proposal that has not received sufficient votes to be approved at the annual meeting.

The board of directors has unanimously approved each of the proposals and recommends that stockholders vote “FOR” each of the proposals described in the accompanying proxy statement.

The company says it cannot complete the sale of all of their properties and dissolution pursuant to the terms of the plan of liquidation without the affirmative vote of a majority of all of the shares of common stock entitled to vote on the matter.

In August 2020, KBS terminated their distribution reinvestment plan to pursue a liquidation strategy.

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