At our recommendation some of our clients own non-traded real estate investment trusts (REITs) offered and managed by KBS Capital Markets Group and KBS Capital Advisors respectively. These assets have had a positive effect on the risk adjusted returns experienced by our clients who hold them and we expect that positive effect to continue. They are also illiquid assets with holding periods of many years, and have only been recommended to clients whose situations could benefit from holding an illiquid asset. From time to time, including very recently, investment organizations have made tender offers to purchase our clients’ shares of these assets. In these cases the tender offers are not priced at a premium, but at a discount. For example, the most recent offer made to purchase shares of the KBS Legacy Partners Apartment REIT is priced at $7.50 per share, even though on December 9, 2016 the Board of Directors published an estimated value per share of $9.35. So, should our clients sell? No. The only reason that an owner should sell is if she is willing to take a “haircut” in order to get cash. And, that is unlikely to be the case with our clients because we would have discovered the potential need for cash during the financial planning reviews, and would not have recommended this type of investment.
If you have comments or questions about the most recent KBS REIT tender offer please contact our office, or leave your question or comment in the comment window below.
If ice causes a branch from your tree to fall causing damage to your neighbor’s home would your homeowners policy pay for repairs? During these winter months weather conditions in the greater St Louis area may cause some of our readers to need answers to questions of this type. In response I include here a link to the Missouri Department of Insurance Winter Storm FAQs page. Of course, the assistance of a good, competent insurance agent will likely prove valuable. The FAQs page is here.