KBS Real Estate Investment Trust II, a publicly registered non-traded real estate investment trust, is urging its stockholders not to sell their shares in the latest unsolicited tender offer launched by CMG Partners LLC. CMG is offering to pay $3.21 per share of KBS REIT II.
In December 2018, the board of KBS REIT II approved a $4.95 per share net asset value for the REIT’s common stock, as of September 30, 2018. The NAV per share is based on the estimated value of the REIT’s assets less the estimated value of its liabilities, divided by the number of shares outstanding.
“We believe [CMG’s] offer is meant to take advantage of the illiquidity of the REIT’s shares by buying shares at a price significantly below their fair value in order to make a significant profit,” the company said in a letter to shareholders.
According to Summit Investment Research, KBS REIT II has paid shareholders $4.50 per share in special distributions from proceeds from its property sales. Shares originally sold for $10.00 each.
KBS REIT II noted that “its focus in 2019 is to continue to strategically sell assets and consider special distributions to its stockholders; negotiate lease renewals or new leases that facilitate the sales process and enhance property stability for prospective buyers; and complete capital projects, such as renovations or amenity enhancements, to attract quality buyers and improve the potential sale price.”
KBS REIT II closed its primary offering in December 2010 after raising approximately $1.8 billion in investor equity. The REIT’s $1 billion portfolio consists of eight office properties and an office campus consisting of five office buildings, as of the third quarter of 2018