KBS Capital Markets Group, the distribution affiliate of non-traded REIT sponsor KBS, last week essentially shut its doors and laid off its entire sales force and other employees, aside from some investor services representatives.
The move comes a year after KBS launched KBS Direct, an online portal designed to attract investments in its offerings directly from retail investors. According to sources, the launch of the portal led to the cancellation of numerous selling agreements by the company’s network of broker-dealer partners and sounded the death knell for KBS’ distribution through the IBD channel. As of Sept. 30, 2018, KBS Direct has raised $2.8 million on behalf of its sole offering, KBS Growth & Income REIT, Inc., since the launch of the portal in late 2017.
In response to KBS’ departure from the space, the co-founders of KBS Capital Advisors, Keith Hall and Peter McMillan III, have formed Pacific Oak Companies, comprised of Pacific Oak Capital Advisors, LLC, Pacific Oak Capital Markets Group LLC, and Pacific Oak Holdings, LLC.
Pacific Oak Companies plans to facilitate the acquisition, disposition and management of commercial real estate and related investment products via the independent broker-dealer channel.
In a statement released by the company, Hall said, “Pacific Oak will leverage our well-established relationships and industry expertise to continue to deliver [alternative investment] opportunities to financial advisors and their clients throughout the United States. Pacific Oak is dedicated to the broker-dealer channel, and when an advisor is in need of value-add products, we want to provide the solution.”
According to the company, Pacific Oak may offer a perpetual life real estate investment trust as well as private placements, including tax-advantaged Delaware statutory trusts, a single-family rental housing REIT, qualified opportunity zone funds, private equity, and other value-add alternative investment products.
Hall and McMillan are joined at Pacific Oak by the core executive team that previously led KBS Capital Markets Group, including: Michael “Mick” Manning, president and chief executive officer; Hans Henselman, chief operating officer; Jeff Kremin, national sales manager, as well as Lee Bastidas and Emily Gallagher, who oversee key accounts throughout the independent broker-dealer and registered investment advisor channels.
The company is currently in the process of staffing Pacific Oak Capital Markets Group to focus on serving investment advisors through the U.S.