Did you lose money investing in KBS Real Estate Investment Trust II?
Galvin Legal, PLLC is launching an investigation on behalf of investors who may have suffered losses investing in KBS Real Estate Investment Trust II at the recommendation of their financial advisor. If you suffered losses investing in the investment, then Galvin Legal, PLLC may be able to help you recover your losses in a Financial Industry Regulatory Authority (“FINRA“) arbitration claim against the broker-dealer and/or registered representative that recommended the investment.
UPDATE 5/1/2020: On April 13, 2020, MacKenzie Capital Management reportedly extended a tender offer to purchase shares of KBS Real Estate Investment Trust II for $0.75 per share. The original offering price was $10.00 per share.
UPDATE 12/12/2019: KBS REIT II has scheduled its annual meeting where its investors will vote on its liquidation and dissolution plan. The meeting is currently scheduled for March 5, 2020 at 8:30 AM PST. The expected net proceeds range between approximately $3.40 and $3.83 per share.
UPDATE 11/19/2019: The board of KBS REIT II has approved an estimated net asset value of $3.79 per share of the company’s common stock, as of November 13, 2019, which represents a reduction of $1.16 per share from last years valuation of $4.95 declared on December 3, 2018.
UPDATE 12/27/2016: MacKenzie Capital has extended a tender off of $3.46 per share of KBS REIT II. This is significantly less than the $10.00 investors originally paid for shares in the REIT.
UPDATE 7/21/16: CMG Partners (CMG) has completed its unsolicited tender offer according to an SEC filing. CMG purchased 263,882 shares of common stock at $3.30 per share for a total of approximately $871,000. CMG now owns approximately 998,632 shares or approximately 0.53 percent of the total outstanding common stock.
What are Real Estate Investment Trusts (REIT)?
A Real Estate Investment Trust (“REIT”) is a complex investment that is generally only suitable for sophisticated high-net worth investors, and then only in certain circumstances. A REIT is an entity that owns, and may also manage, income producing real estate. REITs pool capital from multiple investors and use it to purchase properties, similar to mutual funds and other pooled investment vehicles.
A Real Estate Investment Trust can be offered in several different forms. A Public Exchange Listed REIT is registered with the U.S. Securities and Exchange Commission (“SEC”) and is publicly traded on a national securities exchange. A Public Non-Listed REIT is registered with the SEC, but does not trade on a major securities exchange. Finally, a Private REIT, also known as a private-placement REIT, is not registered with the SEC and does not trade on a national securities exchange.
KBS Real Estate Investment Trust II Due Diligence Requirement
FINRA requires brokerage firms to conduct due diligence on investments, such as KBS Real Estate Investment Trust II, and to conduct a suitability analysis when recommending securities to a customer that takes into account the customer’s knowledge and experience. FINRA Rule 2111(a) states that “a member or an associated person must have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer, based on the information obtained through the reasonable diligence of the member or associated person to ascertain the customer’s investment profile. A customer’s investment profile includes, but is not limited to, the customer’s age, other investments, financial situation and needs, tax status, investment objectives, investment experience, investment time horizon, liquidity needs, risk tolerance, and any other information the customer may disclose to the member or associated person in connection with such recommendation.”
Rule 2111 is composed of three main obligations: reasonable-basis suitability, customer-specific suitability, and quantitative suitability. Brokerage firms that fail to conduct adequate due diligence on investments they recommend, such as KBS Real Estate Investment Trust II, or that make unsuitable recommendations can be held responsible for the customer’s losses in a FINRA arbitration claim.
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