The board of KBS Growth & Income REIT Inc., a publicly registered non-traded real estate investment trust, has terminated the company’s distribution reinvestment plan offering effective as of August 15th in order to pursue a liquidation strategy. The board also terminated the REIT’s currently suspended private placement offering.
In November 2018, the board formed a special committee to evaluate various strategic alternatives for the company. The board has decided that it is in the best interests of the company and its stockholders to pursue a liquidation strategy through asset sales.
The REIT expects to present a liquidation plan for a vote of the stockholders within the next three to six months, with the goal of completing the liquidation no later than the end of 2022.
The company noted that it does not currently have agreements in place to sell any of its assets and economic and market conditions that arise in the future, including potentially negative effect of the COVID-19 pandemic, could impact the process and influence the REIT to either accelerate or delay the liquidation plan.
The board also established a new dollar amount limitation under the share redemption program, which currently only allows special redemptions due to a stockholder’s death, qualifying disability, or determination of incompetence.
The new dollar amount for the remainder of 2020 is $200,000, and this includes the month of August 2020.
Last week, the REIT adjusted its distribution policy, citing uncertainty caused by the ongoing public health crisis and its uncertain impact on the company’s operations and those of its tenants.
The board indicated that it expects to consider and declare distributions based on a single quarterly record date beginning with the third quarter of 2020. Previously, distributions were based on a monthly record date for each month.
The company said at the time that distributions will be based on the company’s financial condition and such other factors as the board deems relevant.
KBS Growth & Income REIT’s initial private offering launched in June 2015 and raised $76.8 million before closing in April 2016. Its initial public offering raised $3.9 million from April 2016 until June 2017, and its second private offering launched in October 2017 and raised $5.4 million via KBSDirect.com, as of September 30, 2019. In December 2019, in connection with its consideration of strategic alternatives, the board decided to suspend the second private offering.
As of March 31, 2020, the company had invested in three office properties and had made an investment in an unconsolidated joint venture. Total assets for the first quarter of 2020 totaled $153.2 million.