Days after closing on the largest single building sale in Chicago history, KBS Real Estate Investment Trust II, Inc. (KBS REIT II), has declared a distribution of $3.75 per share of common stock. Investors originally paid $10 per share.
As The DI Wire reported earlier this week, KBS REIT II has been busy selling properties as of late. In a filing yesterday, the REIT announced the sale of its sixth property since May.
This distribution will be paid from the proceeds of these dispositions as well as cash on hand as a result of the repayment or sale of four real estate loans.
Stockholders of record as of the close of business on September 15, 2014 will receive the distribution on or about September 23, 2014.
The REIT estimates that the distribution will be characterized as a mix of long term capital gains, depreciation recapture, and a return of capital. The distribution will also reduce the estimated value per share of the REIT, which will be announced in September.
If KBS REIT II closes on additional asset sales prior to the record date, its board of directors may declare additional distributions that would be paid in addition to the $3.75 per share. At the end of March, 2014, the REIT listed nine properties as held for sale.
The REIT has already agreed to sell six properties since May, which 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
- Torrey Reserve West in San Diego, CA for $39.2 million
The aggregate sale price for the properties equals approximately $1.119 billion.
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.
It’s unclear if the REIT is in liquidation mode and is simply selling off its assets or is repositioning itself for a merger, acquisition or listing on an exchange. A KBS spokesperson was unable to comment at this time.
Since July 16, 2008, the REIT has paid an annualized distribution rate of 6.5%. In addition, there was a special distribution of $0.05416667 per share paid in February 2013.
Through March 2014, 93% of distributions paid were funded from operating cash flows.