The recently approved KBS REIT NAV price represents a loss for many investors. KBS REIT II is a non-traded REIT investment (real estate investment trust), which just approved net asset value (NAV) price of $3.79/share, representing a significant deduction from the NAV price of $4.95/share that was declared a little over one year ago on 12/3/18. This significant reduction of $1.16/share (approximately -23%) is substantial for some investors.
KBS REIT NAV
The decrease in NAV was attributed to a reduction in real estate properties, selling costs, capital expenditures and operating cash flow issues. The appraised value of the real estate properties along with estimated value of other assets and liabilities was relied upon by KBS. Some investors may recall that KBS REIT II was first offered in December 2010 and by March 2011 it had raised approximately $1.8 billion from investors. In September 2018 a tender offer to KBS REIT II investors was received for $3.53/share from MacKenzie Realty Capital, Inc. Some investors took advantage of that tender offer as the illiquidity of the non-traded REIT investment left them with little or no choice. Unfortunately, the tender offer NAV valuation as well as the recently approved NAV valuation represent significant declines for many investors, especially any that recall the original purchase price was based on a NAV of $10.00/share.
Compared to traditional investments, such as stocks, bonds and mutual funds, non-traded REIT investments like KBS REIT II, are illiquid and considerably more complex and involve a high degree of risk. Unfortunately many investors were not made adequately aware of the risks and liquidity problems associated with non-traded REITs. Broker-dealer firms selling non-traded REITs are required to perform adequate due diligence on any investment they recommend and must also properly supervise their financial advisors to ensure that all recommendations are suitable for the public investor. Investment recommendations should be in line with the investor’s age, risk tolerance, net worth, and investment experience. In addition to suitability issues, every investor is entitled to accurate and fair disclosures, regardless of their age, net worth, or investment experience.
Investment fraud is a deceptive practice that induces investors to make purchase decisions based on false or misleading information. Broker-dealer firms and their financial advisors are required to adequately disclose material risks and to make suitable and appropriate investment recommendations, or they can be held liable for investment losses resulting from their failure to do so.
What Should KBS REIT Investors Do?
Haselkorn and Thibaut P.A. (InvestmentFraudLawyers.com) is investigating financial advisors and broker-dealer firms that sold KBS REIT II investments to their clients. According to Matthew Thibaut, Esq. “… our law firm continues to handle similar claims nationwide”. In addition, the firm is continuing to investigate numerous financial advisors and broker-dealer firms involved in selling non-traded REIT investments and other similar, illiquid, non-publicly traded investments as well. For investors that were sold KBS REIT II, or similar types of investments, and who are interested in learning more, or who may have information related to these issues, they are encouraged to call 1-800-856-3352.
The sole purpose of this release is to investigate the manner in which non-traded REIT and other illiquid investments were approved for sale by broker-dealers to investor clients, including new product reviews, due diligence, as well as the sales practice and supervision related to the recommendations in KBS REIT II. If you have any knowledge or experience with these matters, please contact Haselkorn & Thibaut, P.A. at 1-800-856-3352.
Haselkorn & Thibaut, P.A. is a law firm with offices in Palm Beach, Florida, on Park Avenue in New York City, as well as in Phoenix, Arizona and in Cary, North Carolina. The law firm specializes in representing investor clients in investment fraud matters and FINRA arbitration cases nationwide. They represent both individual and institutional investors seeking to aggressively pursue their claims and maximize their recovery of investment losses for victims of negligence or investment fraud. As former securities industry defense attorneys, they are an experienced group of lawyers that have moved from their side, to YOUR side and they are available to assist you today. If you are an investor with any questions related to the handling of your investments, please telephone Haselkorn & Thibaut, P.A. at 1-800-856-3352, for more information and ask about a no-cost consultation and portfolio review. No Recovery, No Fee.