KBS REIT Closes With $2.1B in Assets

Nearly two years after its first shares were offered for sale, KBS Real Estate Investment Trust Inc. has closed. The non-traded REIT raised $1.67 billion and bought $1.65 billion in income-producing commercial real estate and other assets, bringing the total acquisitions to more than $2.1 billion. With KBS Capital Markets Group as its dealer manager, KBS REIT used the proceeds to buy 61 properties with more than 20 million square feet of office, industrial and retail space primarily in large U.S. cities and metropolitan areas. KBS REIT also bought $543 million of strategic debt real estate-related assets. Charles Schreiber, CEO of Newport Beach, Calif.-based KBS Capital Advisors, said 42,000 shareholders participated in the first KBS-sponsored non-traded REIT. “We’re delighted at the response to KBS REIT from the investment community,” he said in a news release. One of the REIT’s most recent acquisitions was the purchase of Tysons Dulles Plaza, a Class A three-building office complex with 482,000 square feet in the Washington, D.C., submarket of Tysons Corner, Va., from Vornado Realty Trust for $152 million. KBS REIT also recently bought the 14-story, 354,000-square-foot Millennium Tower in the Dallas area from RREEF North America for an undisclosed amount. CPN has reported other acquisitions by the REIT including: Rivertech Park in Billerica, Mass., a 286,000-square-foot office property for $45 million purchased earlier this year; and a six-building Nashville portfolio comprised of 551,000 square feet of flex industrial and office space purchased last fall for $53 million. KBS REIT has also been active in the Chicago area, picking up Woodfield Preserve Office Center in Schaumburg, Ill., a two-building property with about 647,200 square feet, from JP Morgan for an undisclosed amount in the fall. On Feb. 2, 2007, CPN reported that KBS REIT had acquired 625 Second Street in San Francisco for $51 million and Crescent Green in the Cary submarket of Raleigh, N.C., for $48.14 million. One of the REIT’s early investments was a 16-story office building with 325,000 square feet of space in Clayton, Mo., a St. Louis suburb, that it purchased for $92 million from THF Realty Inc., according to a Sept. 29, 2006, CPN article. Among the industrial acquisitions was a $516 million joint venture with Hackman Capital Partners and Calare Properties. KBS said the REIT owns 80 percent of the JV and the other partners have the remaining 20 percent. Fresh off the success of the first nontraded REIT, the firm has launched KBS REIT II. It will offer up to 200 million shares in a primary offering at a maximum price of $10 per share. The proceeds will be also be used to acquire and operate commercial real estate and real estate-related assets with KBS Capital Markets Group as the dealer manager, CPN reported June 3.