National investment fraud lawyers KlaymanToskes continues its investigation of brokerage firms and financial advisers that made investment recommendations in KBS Strategic Opportunity REIT, Inc./Pacific Oak Strategic Opportunity REIT Inc., a Non-traded Real Estate Investment Trust (“REIT”). The investigation continues on behalf of investors who may have suffered losses as a result of unsuitable investment recommendations.
Investors who suffered losses as a result of being recommended KBS/Pacific Oak Opportunity REIT by their broker/financial adviser are encouraged to contact attorney Lawrence L. Klayman at (888) 997-9956 or lklayman@klaymantoskes.com for a free and confidential consultation to discuss recovery options. Our firm offers legal services on a contingency fee basis, meaning we do not collect attorney’s fees unless we are able to obtain a financial recovery for you.
Pacific Oak Strategic Opportunity REIT (formerly KBS Strategic Opportunity REIT II), is a Non-traded Real Estate Investment Trust (“REIT”) that closed its initial public offering in 2012. According to its website, the REIT is headquartered in Los Angeles, CA and was designed to capitalize on the “dislocation, lack of liquidity, and government intervention” that exists in commercial real estate markets.
On February 24th, 2023, Pacific Oak REIT (OTCMKTS:PCOK) and its president Peter McMillan III sent a letter to its stockholders in response to its tender offer to shareholders, which reported that a third party known as “Comrit Investments 1” was offering to purchase shares of Pacific Oak for $6.62 per share. The original price was $10 per share. The letter, attached to Pacific Oak’s SEC 8-K filing, states that Pacific Oak believes “the Offer Price is substantially below the value of the Shares” and recommended against shareholders selling to Comrit Investments at that price.
However, the letter goes on to state that as of December 31, 2022, Pacific Oak has had unfulfilled requests to redeem 14,738,800 shares due to “funding limitations” of its share redemption program (“SRP”). The REIT previously suspended its SRP in January, 2022 to “allow stockholders an opportunity to review the updated estimated value per share.”
During the year ended December 31, 2022, no funding was made available for Pacific Oak’s SRP, excluding funding reserved for redemptions in connection with a stockholder’s death, qualifying disability or “determination of incompetence,” which totaled $10.2 million in 2021 and 2022.
Unfortunately, many investors are not aware of the risks and liquidity problems associated with Non-traded REITs. REITs are considerably more complex than traditional stocks and mutual funds, and involve a high degree of risk due to being illiquid.
The brokers and financial advisors who sold KBS Strategic Opportunity REIT/Pacific Oak Strategic Opportunity REIT may be liable for any losses incurred by investors. Brokers/financial advisors cannot disregard a customer’s risk-tolerance when making unsuitable alternative investment recommendations. They also need to look at the investment’s risk and not misrepresent material facts and/or over-concentrate the customer’s portfolio in too many alternative investments.
Investors who have suffered significant losses in KBS/Pacific Oak Real Estate Investment Trust (“REIT”) should contact attorney Lawrence L. Klayman to discuss recovery options at (866) 460-4957 or lklayman@klaymantoskes.com. Consultations are free and every case is taken on a contingency basis, meaning we do not collect attorney’s fees unless we are able to obtain a financial recovery for you.
Pacific Oak is one of many REITs that have recently suspended or limited redemptions in the past several months. See our related blog on a similar REIT: Blackstone REIT Blocks Investor Withdrawals: KlaymanToskes Has Recovery Options.
KlaymanToskes is a leading national securities law firm which practices exclusively in the field of securities arbitration on behalf of retail and institutional investors throughout the world in large and complex securities matters. The firm has recovered over $250 million in FINRA arbitrations and over $350 million in other securities litigation matters. KlaymanToskes has office locations in California, Florida, New York, and Puerto Rico.
Contact
Lawrence L. Klayman, Esq.
888-997-9956