On November 12, 2018, the KBS Strategic Opportunity REIT Board of Directors approved an updated estimated value per share of $9.91 after adjusting for the declaration of a November 12, 2018 special dividend of $2.95 per share. Excluding the special dividend, the REIT's estimated value per share would be $12.861, which is an increase of $1.36 over the 2017 estimated value per share.
The Company’s board of directors approved the special dividend as a result of the tax gains generated from the Company’s sale or transfer of real estate properties during 2018. As a result of these tax gains, KBS Strategic Opportunity REIT must make a special dividend to stockholders to continue to maintain its REIT status.
The special dividend is payable to stockholders of record as of November 12, 2018 and will be paid in December 2018. Stockholders can elect to receive the special dividend as 100% stock or 100% cash, with cash being the default election.
Please note that because the aggregate amount of cash to be distributed by the REIT cannot exceed 20% of the total special dividend, the likely result of a part cash and part stock election or the default election is the receipt of approximately 20% cash and 80% shares of common stock.
Stockholders will be mailed a letter with an election form at the beginning of next week. If the investors wish to elect for a 100% stock distribution, the form must be received by DST, the transfer agent, by midnight CST on December 7, 2018. Please keep in mind the following:
The special dividend is ineligible for reinvestment through the Dividend Reinvestment Plan.
Elections for 100% stock for custodial held accounts require the custodian's approval.
The special dividend payment, including both cash & stock, will generally be taxed as a capital gain distribution. Stockholders are advised to consult their tax advisors regarding the tax consequences of the special dividend.
1 For a full description of the limitations, methodologies and assumptions used to value the REIT's assets and liabilities and used in the calculation of the estimated value per share, see the REIT's Current Report on Form 8-K, filed with the SEC on November 14, 2018.
For informational purposes only. This is neither an offer to sell nor a solicitation of an offer to buy shares of KBS Strategic Opportunity REIT; the primary offering for KBS Strategic Opportunity REIT closed effective November 20, 2012. Offering is only made by prospectus. This information must be preceded or accompanied by a prospectus in order to understand fully all of the implications and risks of the offering. Neither the Attorney General of the State of New York nor any other state regulators have passed on or endorsed the merits of this offering. Any representation to the contrary is unlawful.
Investing in KBS Strategic Opportunity REIT includes significant risks. These risks include, but are not limited to: the possibility of losing your entire investment; no guarantees regarding future performance; upon sale or distribution of assets you may receive less than your initial investment; fluctuation of the value of the assets owned by KBS Strategic Opportunity REIT; lack of a public market for shares of KBS Strategic Opportunity REIT; limited liquidity; limited transferability; reliance on KBS Capital Advisors LLC, the REIT's advisor, to select and manage assets; payment of significant fees; and various economic factors that may include changes in interest rates, laws, operating expenses, insurance costs and tenant turnover. Shares of KBS Strategic Opportunity REIT are not suitable for all investors.
KBS Capital Markets Group,
Member FINRA & SIPC
800 Newport Center Drive, Suite 700, Newport Beach, CA 92660
kbs-cmg.com | Toll Free 866-527-4264