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KBS REIT II Announces Estimated Liquidation Proceeds

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KBS Real Estate Investment Trust II Inc., a publicly registered non-traded real estate investment trust, announced that the company anticipates distributing substantially all of the remaining proceeds from its portfolio liquidation in the second quarter of 2023. Last week the company sold its sole remaining asset, Union Bank Plaza, an iconic Los Angeles office tower.

On April 4, 2023, the company’s board of directors approved an estimated liquidation value per share of its common stock of $0.73. The value was based on their net assets in liquidation, divided by the number of shares outstanding, all as of Dec. 31, 2022. KBS REIT II cautioned that the estimated liquidation value per share could change as the company winds down operations. Final details regarding shareholder distribution value and timing of payment has not yet been disclosed.

The company’s liquidation plan was announced in March 2020 at its annual meeting of shareholders in which approximately 116.1 million shares voted in favor, 3.8 million voted against, 5.3 million abstained, and no votes from 20.9 million brokers.

At the time of adopting the plan of liquidation, KBS says it anticipated completing the orderly liquidation of their company and paying all of their liquidating distributions from the net proceeds from liquidation within 24 months after stockholder approval of the plan of liquidation.

“Given the continued disruptions in the financial markets and continued economic uncertainty, our completion of the plan of liquidation has been delayed,” KBS REIT II reports in a filing with the SEC. “Although we were not able to complete our liquidation within the 24-month period described above, we do not anticipate any material unfavorable tax consequences to our stockholders or to our status as a REIT.”

As The DI Wire reported earlier this week, KBS REIT II sold Union Bank Plaza after an extended process during which multiple potential buyers walked away from purchase agreements. Ultimately, the company sold the property for just $104 million plus $6 million in capital obligations to current tenants. KBS REIT II originally acquired the office tower from Hines for $208 million in 2010.

KBS REIT II closed its primary offering in December 2010 after raising approximately $1.8 billion in investor equity.

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