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KBS REIT II Closes on Sale of Tower for $850 Million

Non-traded REIT, KBS Real Estate Trust II (KBS REIT II), announced this week that it has officially closed the sale of the property located at 300 North LaSalle in Chicago, Illinois. The 1.3 million square-foot tower was sold for $850 million, the largest single-building office transaction in Chicago history. As reported in May, KBS REIT II has expressed intentions of making a special distribution to stockholders with a large portion of the proceeds from this sale.

“In 2010, KBS REIT II saw a unique opportunity in 300 N. LaSalle during uncertain economic times,” commented KBS REIT II CEO, Charles J. Schreiber. “We developed and implemented a strategy over a 4-year period and ultimately exceeded our business plan on behalf of KBS REIT II investors. We are very pleased with this transaction for our investors,” he added.

As of March 31, 2014, the LaSalle building represented approximately 19.1% of the REIT’s assets and 19.5% of the REIT’s total revenues for the three months ended March 31, 2014.

Formed in 2007, KBS REIT II closed its IPO in December, 2010 after raising almost $1.9 billion. As of March 31, 2014, the company owned 27 real estate properties.

The sale of the LaSalle building is part of a series of dispositions by KBS REIT II.

In the space of a month, from late April to May, the company entered into purchase and sale agreements to sell five of its properties. The recent agreements include;

  • 601 Tower at Carlson Center in Minnetonka, Minnesota for $75.0 million
  • Dallas Cowboys Distribution Center in Irving, Texas for $22.3 million
  • Plano Business Park in Plano, Texas for $23.4 million
  • One Meadowlands Plaza in East Rutherford, New Jersey for $108.7 million
  • 300 North LaSalle in Chicago, Illinois for $850 million

The aggregate sale price for the properties equals approximately $1.079 billion.

KBS REIT II was unable to comment at this time as to when a special distribution may be expected or if further dispositions will take place.

It is unknown if the REIT is shopping for more properties or if the recent sales are part of a larger liquidation process.