KBS Strategic Opportunity REIT Increases NAV and Declares Special Dividend

The board of KBS Strategic Opportunity REIT Inc., has revised it's NAV...

The board of KBS Strategic Opportunity REIT Inc., a publicly registered non-traded real estate investment trust, approved an $11.50 per share estimated net asset value, as of September 30, 2017. The board also declared a special dividend of $3.61 per share, payable to stockholders of record as of the close of business on December 7th. The dividend will be paid in January 2018.

The special dividend stems from last month’s $804 million sale of 11 properties to various subsidiaries of Keppel-KBS US REIT, a newly formed Singapore real estate investment trust that was listed on the Singapore Stock Exchange.

Excluding the special dividend, the company’s NAV per share would have been $15.11, a 2 percent increase compared to the company’s previous NAV per share of $14.81 as of September 30, 2016. REIT shares were originally priced at $10.00 each.

The NAV increase was primarily due to increases in fair values of the REIT’s real estate properties and additional acquisitions, as well acquisitions of real estate equity and debt securities following the previous valuation.

The NAV per share is based on the estimated value of the company’s assets less the estimated value of its liabilities, divided by the number of shares outstanding. Independent third-party firms Duff & Phelps LLC and Newmark Knight Frank Valuation & Advisory LLC assisted with the valuation process which was performed in accordance with Investment Program Association guidelines, the company said.

The special dividend is payable in either cash or shares of common stock, as long as the total amount of cash distributed will not exceed 20 percent of the total special dividend, with the remainder to be paid in shares of common stock. The election deadline is midnight, Central Time on December 29, 2017.

In other KBS Strategic Opportunity REIT news, the company recently disclosed plans to convert to a non-traded perpetual-life NAV REIT.

Under the proposed structure, the company would sell new shares of common stock continuously through a number of distribution channels in ongoing public offerings, calculate the net asset value on a more frequent basis, and expand its current share redemption program and periodic self-tender offers.

KBS Strategic Opportunity REIT went effective in November 2009 and closed its primary offering three years later after raising $574 million in investor equity. As of the third quarter 2017, the company owned 20 properties with an investment cost of $1.2 billion, according to Summit Investment Research.

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