KBS Real Estate Investment Trust II, a publicly registered non-traded REIT, has scheduled its annual meeting of the stockholders where investors will vote on the company’s liquidation and dissolution plan. The meeting will be held on March 5, 2020 at 8:30 a.m. PST. In addition, the REIT provided investors with a property update ahead of the liquidation vote.
The company expects the net proceeds to range between approximately $3.40 and $3.83 per share.
Last month, the board approved an updated net asset value of $3.79 per share, based on the estimated value of the REIT’s assets less the estimated value of its liabilities, divided by the number of shares outstanding, as of September 30, 2019.
The December 2018 NAV per share was adjusted for a $0.45 per share special distribution paid in June 2019, resulting in an estimated value per share of $4.50 effective as of June 17, 2019. The REIT noted that the decrease in share value was largely attributable to the decrease in property values at the Campus Drive and Union Bank properties.
Campus Drive Properties, a Class A office park comprised of six four-story buildings located in Florham Park, New Jersey, is under contract to be sold to an affiliate of Opal Holdings for $320 million, which was below the 2018 appraised value.
The company said that a $56.3 million decline from the December 2018 appraised value was due to institutional investors that would have previously been in the market for the property either had too much exposure in suburban office or moved away from suburban properties. The sale is expected to close no later than January 31, 2020.
Regarding the Union Bank property in Los Angeles, California, its estimated value declined $15 million from the December 2018 appraised value, despite the REIT spending approximately $15 million in capital expenditures to improve the property.
The company said that the primary reason for the decline is that Union Bank downsized more than previously anticipated, and the cost of building and tenant improvements were higher than previously anticipated. The REIT launched a renovation plan with the hopes of bringing new leasing and stabilization of the property in 2020.
For its District | 237 asset located in San Jose, KBS REIT II plans to execute a series of renovations at the five-building property. During 2019, the REIT executed two full-building leases and is currently negotiating a lease with a large company for two of the other buildings.
Lastly, Anadarko Petroleum extended their lease at Granite Tower in Denver until April 30, 2033, and in conjunction, the REIT committed to a series of renovations that are expected to be completed in June 2020.
The REIT expects to complete the plan of liquidation within 24 months after stockholder approval.
KBS REIT II closed its primary offering in December 2010 after raising approximately $1.8 billion in investor equity. Its portfolio consists of six office properties and an office campus consisting of five office buildings.