KBS Real Estate Investment Trust III Inc., a publicly registered non-traded REIT, has agreed to sell 11 properties to various subsidiaries of Prime US REIT, a newly formed Singapore real estate investment trust that is expected to be listed on the Singapore Stock Exchange. The sale price of the portfolio is $1.2 billion, and the transaction is expected to close this month.
KBS Strategic Opportunity REIT Inc., an affiliated non-traded REIT, conducted a similar transaction with Keppel Capital Holdings Pte. Ltd., an affiliate of Singapore-based conglomerate, Keppel Corp. in 2017.
In addition to the sale, KBS REIT Properties III LLC, the REIT’s indirect wholly owned, entered into a subscription agreement with the Prime US REIT’s manager to purchase $201 million units of the Singapore-based REIT.
KBS REIT III and its related entities agreed to hold 100 percent of the subscription units for six months following the listing and will hold 50 percent of the subscription units for 12 months following the listing.
KBS REIT III expects to generate $475 million of proceeds from the transaction, after taking into account the $201 million investment, and will use the proceeds to pay down debt and issue a special distribution to shareholders. The company noted that the special distribution would likely consist of both cash and shares of common stock.
The properties included in the sale:
- Tower I at Emeryville located in Emeryville, California
- 222 Main located in Salt Lake City, Utah
- Village Center Station located in Greenwood Village, Colorado
- Village Center Station II located in Greenwood Village, Colorado
- 101 South Hanley located in St. Louis, Missouri
- Tower on Lake Carolyn located in Irving, Texas
- Promenade I & II at Eilan located in San Antonio, Texas
- CrossPoint at Valley Forge located in Wayne, Pennsylvania
- One Washingtonian Center located in Gaithersburg, Maryland
- Reston Square located in Reston, Virginia
- 171 17th Street located in Atlanta, Georgia
Prime US REIT will be managed by a joint venture between KBS Asia Partners, and unaffiliated companies Keppel Capital Two Pte. Ltd and Experion Holdings Pte. Ltd. KBS Asia Partners is an entity owned by KBS CEO Charles Schreiber Jr. and the Linda Bren 2017 Trust, which will have an indirect majority ownership interest in the joint venture. Linda Bren is the widow of KBS co-founder and president Peter Bren, who passed away earlier this year.
KBS REIT III’s initial offering commenced in October 2010 and closed in July 2015 after raising approximately $1.8 billion. As of the first quarter of 2019, the company’s portfolio was comprised of 30 properties purchased for approximately $3.3 billion.