KBS Strategic Opportunity REIT II JV to Buy Phoenix Office Portfolio for $33 Million

KBS Strategic Opportunity REIT II Inc., a publicly registered non-traded real estate investment trust, has agreed to purchase Grace Court, a portfolio of three office buildings and one school house in Phoenix, Arizona, for approximately $33.3 million plus closing costs.

According to a filing with the Securities and Exchange Commission, the REIT plans to purchase the portfolio in a joint venture with Verus Grace Court LLC and Verus Partners LLC, which KBS owns a 90 percent equity interest.

Grace Court is located in downtown Phoenix and includes the historic Grace Court School, which was built in 1911, and three office buildings built between 2003 and 2008. The 311,000-square-foot portfolio is currently 41 percent leased.

The joint venture intends to fund the purchase with capital contributions from its members and with proceeds from a mortgage loan from an unaffiliated lender. The JV partners are currently negotiating the terms of the mortgage loan. KBS intend to fund its contribution with offering proceeds.

KBS Strategic Opportunity REIT II went effective in August 2014, and through a private placement offering and a subsequent initial public offering, has raised a total of $233 million in investor equity. The company’s $337 million portfolio was comprised of six investments as of the second quarter of 2017, according to Summit Investment Research.

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