KBS Real Estate Investment Trust III Inc., a publicly registered non-traded REIT, plans to explore strategic alternatives in an effort to provide liquidity to its stockholders.
The company noted that one of the strategic alternatives could be a potential conversion of the company into a NAV REIT, where shares are valued as often as daily, but at least quarterly, on a net asset value basis. This can provide increased capacity to repurchase shares through the company’s share redemption program.
In addition to providing increased liquidity to stockholders, the company believes that a conversion would result in further growth of the company.
KBS REIT III recently agreed to sell 11 properties to various subsidiaries of Prime US REIT, a newly formed Singapore real estate investment trust that is expected to be listed on the Singapore Stock Exchange. The sale price of the portfolio is $1.2 billion, and the transaction is expected to close this month.
KBS REIT III expects to generate $475 million of proceeds from the transaction, after taking into account the $201 million investment, and will use the proceeds to pay down debt and issue a special distribution to shareholders. The company noted that the special distribution would likely consist of both cash and shares of common stock.
The 11 properties included in the potential sale are:
Tower I at Emeryville located in Emeryville, California
222 Main located in Salt Lake City, Utah
Village Center Station located in Greenwood Village, Colorado
Village Center Station II located in Greenwood Village, Colorado
101 South Hanley located in St. Louis, Missouri
Tower on Lake Carolyn located in Irving, Texas
Promenade I & II at Eilan located in San Antonio, Texas
CrossPoint at Valley Forge located in Wayne, Pennsylvania
One Washingtonian Center located in Gaithersburg, Maryland
Reston Square located in Reston, Virginia
171 17th Street located in Atlanta, Georgia
KBS REIT III’s initial offering commenced in October 2010 and closed in July 2015 after raising approximately $1.8 billion. As of the first quarter of 2019, the company’s portfolio was comprised of 30 properties purchased for approximately $3.3 billion.