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KBS Strategic Opportunity REIT plans perpetual-life NAV REIT conversion

KBS Strategic Opportunity REIT Inc. plans to convert to a non-listed perpetual-life net-asset-value real estate investment trust and is proposing to remove Section 5.11 from its charter.

The company said the proposed NAV REIT conversion is the best option for it to maximize shareholder return and boost liquidity. Under the proposed strategy, the company will offer and sell new common shares continuously in ongoing public offerings, and expand its current share redemption program and periodic self-tender offers.

Meanwhile, Section 5.11 requires KBS to seek shareholder approval of a liquidation plan if it does not list its common shares on a national securities exchange by July 31, 2019; provided that a decision on such a plan will be postponed if it is deemed to be not in the best interest of stockholders. Section 5.11 is inconsistent with the company's NAV REIT conversion plan and removing it should avoid confusion among investors regarding its long-term strategy, according to a filing.

The proposed Section 5.11 deletion is contingent on the approval of a proposal to accelerate the payment of incentive fee to the company's external adviser, KBS Capital Advisors LLC, in the form of restricted stock units.

The proposals will be up for consideration at the company's 2017 annual shareholder meeting.