KBS Strategic Opportunity REIT II Inc., through a joint venture with EH Q&C LLC, entered into a purchase and sale agreement with AGRE NV Q&C Property Owner LLC to acquire the 196-room Q&C Hotel in New Orleans for $51.2 million.
KBS Strategic Opportunity REIT II Inc. owns a 90 percent equity interest in the joint venture, which intends to fund the acquisition of the Q&C Hotel with capital contributions from its members and with proceeds from a mortgage loan. The joint venture is currently negotiating the terms of the mortgage loan.
KBS Strategic Opportunity REIT II intends to fund its contribution to the joint venture with proceeds from its now terminated private offering and its ongoing initial public offering.
Pursuant to the purchase and sale agreement, the joint venture would be obligated to purchase the property only after satisfaction of agreed-upon closing conditions. Additionally, the acquisition of the property is subject to the approval of the company’s board of directors prior to the expiration of the 30-day due diligence period.
If the joint venture completes the acquisition, the hotel will be leased to an indirect wholly owned subsidiary of KBS Strategic Opportunity REIT II, as the lessee, under a separate hotel lease agreement between the lessee and the joint venture.
The Q&C Hotel was built in 1913 and completely renovated in 2014.
As of June 30, 2015, KBS Strategic Opportunity REIT II had raised $50.8 million of investor proceeds from a series of private and public offerings, including its ongoing public offering of 100 million shares of common stock, which was declared effective by the SEC on Aug. 12, 2014.
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