National investment fraud lawyers KlaymanToskes issues a notice to investors who may have suffered losses in KBS Strategic Opportunity REIT, Inc./Pacific Oak Strategic Opportunity REIT Inc., at the hands of brokerage firms and financial advisers that made unsuitable investment recommendations.
Investors who suffered losses in KBS/Pacific Oak Opportunity REIT due to recommendations by their broker/financial adviser are encouraged to contact attorney Lawrence L. Klayman at (888) 997-9956 or lklayman@klaymantoskes.com for a free consultation to discuss recovery options. 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, and was designed to capitalize on the “dislocation, lack of liquidity, and government intervention” that exists in commercial real estate markets, according to its website.
Pacific Oak REIT (OTCMKTS:PCOK) and its president Peter McMillan III wrote a letter to stockholders on February 24th, 2023. The letter was in response to a tender offer made to shareholders by a third party called “Comrit Investments 1”.
The letter, attached to Pacific Oak’s SEC 8-K filing, stated that Comrit was offering to buy shares of Pacific Oak for $6.62 per share, however, the REIT’s original price was $10 per share. Pacific Oak stated that the offer price of $6.62 per share is much less than what the shares are worth and advised against its stockholders selling their shares to Comrit Investments for that price.
The letter to stockholders also mentioned that as of December 31, 2022, Pacific Oak has been unable to fulfill requests to redeem 14,738,800 shares. The reason for this was that their share redemption program (SRP) had “funding limitations”. Pacific Oak had suspended the SRP in January 2022, so that stockholders could review an updated estimate of the value per share.
During the year ended December 31, 2022, Pacific Oak did not make any funding available for its SRP, with the exception of funding reserved for redemptions in specific circumstances such as a stockholder’s death, qualifying disability or a “determination of incompetence”. The total amount of funding reserved for such cases was $10.2 million in both 2021 and 2022.
Regrettably, a significant number of investors remain unaware of the risks and liquidity issues associated with Non-traded REITs. Compared to conventional stocks and mutual funds, REITs are considerably more complicated and come with a greater degree of risk, largely because of their illiquid nature. The brokers and financial advisors responsible for selling KBS Strategic Opportunity REIT/Pacific Oak Strategic Opportunity REIT may be held responsible for any financial losses sustained by investors.
Financial professionals are obligated to consider a customer’s risk-tolerance when making unsuitable recommendations regarding alternative investments. Additionally, they are required to carefully examine the investment’s risks, avoid misrepresenting material facts, and refrain from excessively concentrating customers’ portfolios in too many alternative investments.
Investors who have suffered significant losses in KBS/Pacific Oak Real Estate Investment Trust (“REIT”) at the hands of a full-service brokerage firm and/or broker/financial advisor, should contact attorney Lawrence L. Klayman for a free consultation to discuss recovery options at (866) 460-4957 or lklayman@klaymantoskes.com. 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.
KlaymanToskes, P.A.
Lawrence L. Klayman, Esq.
888-997-9956
lklayman@klaymantoskes.com
www.klaymantoskes.com