KBS Strategic Opportunity REIT, a non-traded real estate investment trust, plans to launch a self-tender offer following an unsolicited tender offer made by private real estate investment firm Everest REIT Investors I LLC, according to a filing with the Securities and Exchange Commission.
Everest, which currently owns approximately 74,000 shares of KBS Strategic Opportunity REIT, is offering to purchase up to 300,000 shares for $7.75 each and will pay approximately $2.3 million if all shares are tendered. The Everest offer expires on May 28, 2018.
KBS Strategic Opportunity REIT recommends that shareholders not sell their shares to Everest as the offer price is “substantially below” the current $11.50 net asset value per share.
The REIT also disclosed plans to launch a self-tender offer on April 23, 2018 to purchase up to 8.2 million shares of common stock at $10.93 per share, or approximately $90 million of shares. The KBS offer will expire on May 18, 2018.
The KBS offer price of $10.93 per share is 95 percent of the company’s NAV per share, while the Everest offer price of $7.75 is approximately 67 percent of NAV.
“We are conducting the offer in order to make liquidity available to stockholders in excess of that permitted under our share redemption program, which recently has been limited to $3 million per quarter for ordinary redemptions,” said the company in a letter to shareholders.
In light of the self-tender offer, the company suspended its share redemption program until the June 2018 redemption period and has cancelled all outstanding redemption requests.
KBS Strategic Opportunity REIT launched its initial public offering in November 2009 and raised approximately $574 million in investor equity before closing the offering three years later. As of the fourth quarter 2017, the company owned nine properties with an investment cost of $737.2 million, according to Summit Investment Research.