Price Graph
Price
Yield
These terms and conditions govern your use of the website alphaminr.com and its related services.
These Terms and Conditions (“Terms”) are a binding contract between you and Alphaminr, (“Alphaminr”, “we”, “us” and “service”). You must agree to and accept the Terms. These Terms include the provisions in this document as well as those in the Privacy Policy. These terms may be modified at any time.
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You represent that you are of legal age to form a binding contract. You are responsible for any
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time.
The Services are intended for your own individual use. You shall only use the Services in a
manner that complies with all laws. You may not use any automated software, spider or system to
scrape data from Alphaminr.
Alphaminr is not a financial advisor and does not provide financial advice of any kind. The service is provided “As is”. The materials and information accessible through the Service are solely for informational purposes. While we strive to provide good information and data, we make no guarantee or warranty as to its accuracy.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, UNDER NO CIRCUMSTANCES SHALL ALPHAMINR BE LIABLE TO YOU FOR DAMAGES OF ANY KIND, INCLUDING DAMAGES FOR INVESTMENT LOSSES, LOSS OF DATA, OR ACCURACY OF DATA, OR FOR ANY AMOUNT, IN THE AGGREGATE, IN EXCESS OF THE GREATER OF (1) FIFTY DOLLARS OR (2) THE AMOUNTS PAID BY YOU TO ALPHAMINR IN THE SIX MONTH PERIOD PRECEDING THIS APPLICABLE CLAIM. SOME STATES DO NOT ALLOW THE EXCLUSION OR LIMITATION OF INCIDENTAL OR CONSEQUENTIAL OR CERTAIN OTHER DAMAGES, SO THE ABOVE LIMITATION AND EXCLUSIONS MAY NOT APPLY TO YOU.
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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Maryland
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26-3842535
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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620 Newport Center Drive, Suite 1300
Newport Beach, California
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92660
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(Address of Principal Executive Offices)
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(Zip Code)
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Title of Each Class
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Name of Each Exchange on Which Registered
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None
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None
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Large Accelerated Filer
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¨
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Accelerated Filer
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¨
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Non-Accelerated Filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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x
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ITEM 1.
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ITEM 1A.
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ITEM 1B.
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ITEM 2.
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ITEM 3.
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ITEM 4.
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ITEM 5.
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ITEM 6.
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ITEM 7.
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ITEM 7A.
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ITEM 8.
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ITEM 9.
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ITEM 9A.
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ITEM 9B.
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ITEM 10.
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ITEM 11.
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ITEM 12.
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ITEM 13.
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ITEM14.
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ITEM 15.
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•
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Both we and our advisor have limited operating histories. This inexperience makes our future performance difficult to predict. We are dependent on our advisor to identify suitable investments and to manage our investments.
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•
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All of our executive officers and some of our directors and other key real estate and debt finance professionals are also officers, directors, managers, key professionals and/or holders of a direct or indirect controlling interest in our advisor, our dealer manager and other KBS‑affiliated entities. As a result, they face conflicts of interest, including significant conflicts created by our advisor’s compensation arrangements with us and other KBS‑advised programs and investors and conflicts in allocating time among us and these other programs and investors. These conflicts could result in unanticipated actions. Fees paid to our advisor in connection with transactions involving the origination, acquisition and management of our investments are based on the cost of the investment, not on the quality of the investment or services rendered to us. This arrangement could influence our advisor to recommend riskier transactions to us.
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There is no assurance that we will raise the maximum offering amount in our initial public offering. If we raise substantially less than the maximum offering amount, we may not be able to invest in as diverse a portfolio of real estate-related assets as we otherwise would and the value of an investment in us may vary more widely with the performance of specific assets. There is a greater risk that stockholders will lose money in their investment in us if we have less diversity in our portfolio.
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•
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We pay substantial fees to and expenses of our advisor, affiliates and participating broker-dealers, which payments increase the risk that our stockholders will not earn a profit on their investment in us. These fees increase our stockholders’ risk of loss.
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If we are unable to find suitable investments, we may not be able to achieve our investment objectives or pay distributions.
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Continued disruptions in the financial markets and uncertain economic conditions could adversely affect our ability to implement our business strategy and generate returns to stockholders.
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•
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We have invested, and may continue to invest, in residential and commercial mortgage-backed securities, collateralized debt obligations and other structured debt securities as well as real estate-related loans. Many of these types of investments have become illiquid and considerably less valuable over the past two years. This reduced liquidity and decrease in value caused financial hardship for many investors in these assets. Many investors did not fully appreciate the risks of such investments. Our investments in these assets may not be successful.
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•
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We have focused, and expect to continue to focus, our investments in real estate-related loans and real estate-related debt securities in distressed debt, which involves more risk than in performing debt.
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Our opportunistic property-acquisition strategy involves a higher risk of loss than would a strategy of investing in some other properties.
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•
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We depend on tenants for our revenue and, accordingly, our revenue is dependent upon the success and economic viability of our tenants. Revenues from our property investments could decrease due to a reduction in tenants (caused by factors including, but not limited to, tenant defaults, tenant insolvency, early termination of tenant leases and non‑renewal of existing tenant leases) and/or lower rental rates, limiting our ability to pay distributions to our stockholders.
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ITEM 1.
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BUSINESS
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•
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to provide our stockholders with attractive and stable returns; and
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to preserve and return our stockholders’ capital contributions.
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Weighted Average as of December 31, 2011
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Security Type
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Number of
Holdings
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Amount
Invested
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Face Amount
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Fair Value
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Credit
Ratings
(1)
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Maturity
(Years)
(1)
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Coupon Rate
(2)
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CMBS
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6
(3)
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$
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58,696
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$
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57,604
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$
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58,602
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AAA
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30.3
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5.11%
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•
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One non-performing first mortgage loan totaling $19.8 million plus closing costs. We subsequently foreclosed on this first mortgage loan and took title to the property securing the loan.
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One office property containing 34,711 rentable square feet located in Los Angeles, California for $7.3 million plus closing costs.
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A portfolio consisting of five office buildings containing 728,857 rentable square feet and 43 acres of undeveloped land in Richardson, Texas for $44.5 million plus closing costs.
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1,375 acres of undeveloped land in North Las Vegas, Nevada for $21.5 million.
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Six separate AAA-rated CMBS investments totaling $58.7 million.
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ITEM 1A.
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RISK FACTORS
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•
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the values of our investments in commercial properties could decrease below the amounts paid for such investments;
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•
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revenues from our properties could decrease due to fewer tenants and/or lower rental rates, making it more difficult for us to pay distributions or meet our debt service obligations on debt financing; and/or
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•
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revenues from the properties and other assets underlying our CMBS investments could decrease, making it more difficult for the borrowers to meet their payment obligations to us, which could in turn make it more difficult for us to pay distributions or meet our debt service obligations on debt financing.
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•
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the continuation, renewal or enforcement of our agreements with KBS Capital Advisors and its affiliates, including the advisory agreement and the dealer‑manager agreement;
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public offerings of equity by us, which entitle KBS Capital Markets Group to dealer‑manager fees and will likely entitle KBS Capital Advisors to increased acquisition and origination fees and asset management fees;
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sales of investments, which entitle KBS Capital Advisors to disposition fees and possible subordinated incentive fees;
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•
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acquisitions of investments and originations of loans, which entitle KBS Capital Advisors to acquisition and origination fees and asset management fees and, in the case of acquisitions of investments from other KBS‑sponsored programs, might entitle affiliates of KBS Capital Advisors to disposition fees and possible subordinated incentive fees in connection with its services for the seller;
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•
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borrowings to acquire investments and to originate loans, which borrowings increase the acquisition and origination fees and asset management fees payable to KBS Capital Advisors;
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whether and when we seek to list our common stock on a national securities exchange, which listing could entitle KBS Capital Advisors to a subordinated incentive listing fee;
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whether we seek stockholder approval to internalize our management, which may entail acquiring assets (such as office space, furnishings and technology costs) and negotiating compensation for key real estate and debt finance professionals at our advisor and its affiliates that may result in the real estate and debt finance professionals at our advisor receiving more compensation from us than they currently receive from our advisor; and
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•
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whether and when we seek to sell the company or its assets, which sale could entitle KBS Capital Advisors to a subordinated incentive fee.
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limitations on capital structure;
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restrictions on specified investments;
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prohibitions on transactions with affiliates; and
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compliance with reporting, record keeping, voting, proxy disclosure and other rules and regulations that would significantly increase our operating expenses.
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is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities (the “primarily engaged test”); or
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•
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is engaged or proposes to engage in the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire “investment securities” having a value exceeding 40% of the value of such issuer’s total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis (the “40% test”). “Investment securities” excludes U.S. government securities and securities of majority-owned subsidiaries that are not themselves investment companies and are not relying on the exception from the definition of investment company under Section 3(c)(1) or Section 3(c)(7) (relating to private investment companies).
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•
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The lower of $9.25 or 92.5% of the price paid to acquire the shares from us for stockholders who have held their shares for at least one year;
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The lower of $9.50 or 95.0% of the price paid to acquire the shares from us for stockholders who have held their shares for at least two years;
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The lower of $9.75 or 97.5% of the price paid to acquire the shares from us for stockholders who have held their shares for at least three years; and
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•
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The lower of $10.00 or 100% of the price paid to acquire the shares from us for stockholders who have held their shares for at least four years.
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•
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natural disasters such as hurricanes, earthquakes and floods;
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•
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acts of war or terrorism, including the consequences of terrorist attacks, such as those that occurred on September 11, 2001;
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•
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adverse changes in national and local economic and real estate conditions;
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•
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an oversupply of (or a reduction in demand for) space in the areas where particular properties are located and the attractiveness of particular properties to prospective tenants;
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•
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changes in governmental laws and regulations, fiscal policies and zoning ordinances and the related costs of compliance therewith and the potential for liability under applicable laws;
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•
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costs of remediation and liabilities associated with environmental conditions affecting properties; and
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•
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the potential for uninsured or underinsured property losses.
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•
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interest rate hedging can be expensive, particularly during periods of rising and volatile interest rates;
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•
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available interest rate hedging may not correspond directly with the interest rate risk for which protection is sought;
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the duration of the hedge may not match the duration of the related liability or asset;
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the amount of income that a REIT may earn from hedging transactions to offset interest rate losses is limited by federal tax provisions governing REITs;
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the credit quality of the party owing money on the hedge may be downgraded to such an extent that it impairs our ability to sell or assign our side of the hedging transaction;
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•
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the party owing money in the hedging transaction may default on its obligation to pay; and
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we may purchase a hedge that turns out not to be necessary, i.e., a hedge that is out of the money.
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•
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that our co‑venturer or partner in an investment could become insolvent or bankrupt;
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•
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that such co‑venturer or partner may at any time have economic or business interests or goals that are or that become inconsistent with our business interests or goals; or
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•
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that such co‑venturer or partner may be in a position to take action contrary to our instructions or requests or contrary to our policies or objectives.
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•
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In order to qualify as a REIT, we must distribute annually at least 90% of our REIT taxable income to our stockholders (which is determined without regard to the dividends‑paid deduction or net capital gain). To the extent that we satisfy the distribution requirement but distribute less than 100% of our REIT taxable income, we will be subject to federal corporate income tax on the undistributed income.
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•
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We will be subject to a 4% nondeductible excise tax on the amount, if any, by which distributions we pay in any calendar year are less than the sum of 85% of our ordinary income, 95% of our capital gain net income and 100% of our undistributed income from prior years.
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•
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If we elect to treat property that we acquire in connection with a foreclosure of a mortgage loan or certain leasehold terminations as "foreclosure property," we may avoid the 100% tax on the gain from a resale of that property, but the income from the sale or operation of that property may be subject to corporate income tax at the highest applicable rate.
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•
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If we sell an asset, other than foreclosure property, that we hold primarily for sale to customers in the ordinary course of business, our gain would be subject to the 100% “prohibited transaction” tax unless such sale were made by one of our taxable REIT subsidiaries.
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•
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not be allowed to be offset by a stockholder’s net operating losses;
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•
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be subject to a tax as unrelated business income if a stockholder were a tax‑exempt stockholder;
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•
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be subject to the application of federal income tax withholding at the maximum rate (without reduction for any otherwise applicable income tax treaty) with respect to amounts allocable to foreign stockholders; and
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•
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be taxable (at the highest corporate tax rate) to us, rather than to our stockholders, to the extent the excess inclusion income relates to stock held by disqualified organizations (generally, tax‑exempt companies not subject to tax on unrelated business income, including governmental organizations).
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•
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the investment is consistent with their fiduciary and other obligations under ERISA and the Internal Revenue Code;
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•
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the investment is made in accordance with the documents and instruments governing the plan or IRA, including the plan’s or account’s investment policy;
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•
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the investment satisfies the prudence and diversification requirements of Sections 404(a)(1)(B) and 404(a)(1)(C) of ERISA and other applicable provisions of ERISA and the Internal Revenue Code;
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•
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the investment in our shares, for which no public market currently exists, is consistent with the liquidity needs of the plan or IRA;
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•
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the investment will not produce an unacceptable amount of “unrelated business taxable income” for the plan or IRA;
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•
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our stockholders will be able to comply with the requirements under ERISA and the Internal Revenue Code to value the assets of the plan or IRA annually; and
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•
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the investment will not constitute a prohibited transaction under Section 406 of ERISA or Section 4975 of the Internal Revenue Code.
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS
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ITEM 2.
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PROPERTIES
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Property Location of Property
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Date
Acquired or Foreclosed on
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Property Type
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Rentable Square Feet
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Total Real Estate at Cost
(in thousands)
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Annualized Base Rent
(1)
(in thousands)
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Average Annualized Base Rent per Sq. Ft.
(2)
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Average Remaining Lease Term in Years
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Occupancy
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Village Overlook Buildings Stockbridge, GA
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08/02/2010
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Office
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34,830
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$
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1,776
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$
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238
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$
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17.86
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2.9
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38
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%
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Academy Point Atrium I
(3)
Colorado Springs, CO
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11/03/2010
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Office
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92,099
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4,534
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—
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—
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—
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—
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%
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Northridge Center I & II
(4)
Atlanta, GA
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03/25/2011
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Office
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188,509
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6,854
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1,749
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19.33
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2.7
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48
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%
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Iron Point Business Park
(5)
Folsom, CA
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06/21/2011
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Office
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211,056
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19,538
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2,113
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24.74
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2.0
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39
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%
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Roseville Commerce Center
(6)
Roseville, CA
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06/27/2011
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Industrial/Flex
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113,341
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5,348
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644
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14.71
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3.3
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39
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%
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1635 N. Cahuenga Building
(7)
Los Angeles, CA
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08/03/2011
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Office
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34,711
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7,482
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600
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29.96
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3.3
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58
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%
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Richardson Portfolio
(8)
Richardson, TX
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11/23/2011
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Office/
Undeveloped Land
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728,857
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43,258
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6,848
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17.91
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4.8
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52
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%
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Park Highlands
(9)
North Las Vegas, NV
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12/30/2011
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Undeveloped Land
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—
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21,545
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—
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—
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—
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N/A
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1,403,403
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$
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110,335
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$
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12,192
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$
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19.19
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2.9
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45
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%
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Industry
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Number of
Tenants
|
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Annualized
Base Rent
(1)
(in thousands)
|
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Percentage of
Annualized
Base Rent
|
|||
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Management Consulting
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18
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$
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3,346
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27.4
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%
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Finance and Insurance
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14
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2,596
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21.3
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%
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Other Professional Services
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13
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1,773
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14.5
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%
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$
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7,715
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63.2
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%
|
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Year of Expiration
|
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Number of Leases Expiring
|
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Annualized Base Rent
(in thousands)
(1)
|
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% of Portfolio Annualized Base Rent Expiring
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Leased Rentable Square Feet
Expiring
|
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% of Portfolio Rentable Square Feet Expiring
|
||||||
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Month-to-Month
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7
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$
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90
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0.7
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%
|
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6,417
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|
|
1.0
|
%
|
|
2012
|
|
26
|
|
|
4,404
|
|
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36.1
|
%
|
|
221,957
|
|
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34.9
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%
|
|
|
2013
|
|
14
|
|
|
1,240
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|
10.2
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%
|
|
55,777
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|
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8.8
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%
|
|
|
2014
|
|
15
|
|
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1,658
|
|
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13.6
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%
|
|
83,929
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|
|
13.2
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%
|
|
|
2015
|
|
12
|
|
|
971
|
|
|
8.0
|
%
|
|
46,092
|
|
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7.3
|
%
|
|
|
2016
|
|
10
|
|
|
1,695
|
|
|
13.9
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%
|
|
97,715
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|
|
15.4
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%
|
|
|
2017
|
|
6
|
|
|
1,064
|
|
|
8.7
|
%
|
|
60,557
|
|
|
9.5
|
%
|
|
|
2018
|
|
4
|
|
|
635
|
|
|
5.2
|
%
|
|
36,656
|
|
|
5.8
|
%
|
|
|
2019
|
|
1
|
|
|
220
|
|
|
1.8
|
%
|
|
13,438
|
|
|
2.1
|
%
|
|
|
2020
|
|
1
|
|
|
215
|
|
|
1.8
|
%
|
|
12,741
|
|
|
2.0
|
%
|
|
|
2021
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
|
Thereafter
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
|
Total
|
|
96
|
|
|
$
|
12,192
|
|
|
100
|
%
|
|
635,279
|
|
|
100
|
%
|
|
ITEM 3.
|
LEGAL PROCEEDINGS
|
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
Ordinary Income
|
|
—
|
%
|
|
Return of Capital
|
|
100
|
%
|
|
Total
|
|
100
|
%
|
|
Type of Expense Amount
|
|
Amount
|
|
Estimated/Actual
|
||
|
|
|
(in thousands)
|
|
|
||
|
Selling commissions and dealer manager fees
|
|
$
|
18,440
|
|
|
Actual
|
|
Finders’ fees
|
|
—
|
|
|
Actual
|
|
|
Other underwriting compensation
|
|
1,158
|
|
|
Actual
|
|
|
Other organization and offering costs (excluding underwriting compensation)
|
|
5,798
|
|
|
Actual
|
|
|
Total expenses
|
|
$
|
25,396
|
|
|
|
|
Percentage of offering proceeds used to pay or reimburse affiliates for organization and offering costs and expenses
|
|
11.7
|
%
|
|
Actual
|
|
|
•
|
Unless the shares are being redeemed in connection with a stockholder’s death, “qualifying disability” or “determination of incompetence” (each as defined under the share redemption program), we may not redeem shares until the stockholder has held his or her shares for one year.
|
|
•
|
During any calendar year, the share redemption program limits the number of shares we may redeem to those that we could purchase with the amount of the net proceeds from the issuance of shares under the dividend reinvestment plan during the prior calendar year.
|
|
•
|
During any calendar year, we may redeem no more than 5% of the weighted‑average number of shares outstanding during the prior calendar year.
|
|
•
|
We have no obligation to redeem shares if the redemption would violate the restrictions on distributions under Maryland law, which prohibits distributions that would cause a corporation to fail to meet statutory tests of solvency.
|
|
•
|
We could use the aggregate amount of net proceeds, if any, from the sale of our shares under our dividend reinvestment plan during the remainder of calendar year 2011 to redeem a qualifying stockholder’s shares during calendar year 2011 and calendar year 2012. Any redemptions during calendar year 2011 that were made from the aggregate amount of net proceeds from the sale of shares under our dividend reinvestment plan during calendar year 2011 reduced in direct proportion funds available for redemptions during calendar year 2012.
|
|
•
|
We also may use up to $1.244 million (approximately one percent (1%) of the gross proceeds from our initial public offering as of July 31, 2011) to redeem a qualifying stockholder’s shares if the shares are being redeemed in connection with a stockholder’s death, “qualifying disability” or “determination of incompetence.” For purposes of determining the amount of funds available for redemption under our second amended and restated share redemption program, redemptions for a stockholder’s death, qualifying disability or determination of incompetence, will be made first from the $1.244 million of gross offering proceeds from our initial public offering.
|
|
Month
|
|
Total Number
of Shares
Redeemed
(1)
|
|
Average
Price Paid
Per Share
(2)
|
|
Approximate Dollar Value of Shares Available That May Yet Be Redeemed Under the Program
|
|||
|
January 2011 through August 2011
|
|
—
|
|
|
$
|
—
|
|
|
(3)
|
|
September 2011
|
|
4,000
|
|
|
$
|
10.00
|
|
|
(3)
|
|
October 2011 through December 2011
|
|
—
|
|
|
$
|
—
|
|
|
(3)
|
|
Total
|
|
4,000
|
|
|
|
|
|
||
|
•
|
The lower of $9.25 or 92.5% of the price paid to acquire the shares from us for stockholders who have held their shares for at least one year;
|
|
•
|
The lower of $9.50 or 95.0% of the price paid to acquire the shares from us for stockholders who have held their shares for at least two years;
|
|
•
|
The lower of $9.75 or 97.5% of the price paid to acquire the shares from us for stockholders who have held their shares for at least three years; and
|
|
•
|
The lower of $10.00 or 100% of the price paid to acquire the shares from us for stockholders who have held their shares for at least four years.
|
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
|
|
|
As of December 31,
|
||||||||||
|
|
|
2011
|
|
2010
|
|
2009
|
||||||
|
Balance sheet data
|
|
|
|
|
|
|
||||||
|
Total real estate and real estate-related investments, net
|
|
$
|
166,354
|
|
|
$
|
17,774
|
|
|
$
|
—
|
|
|
Total assets
|
|
258,463
|
|
|
42,404
|
|
|
193
|
|
|||
|
Notes payable and repurchase agreements
|
|
63,203
|
|
|
—
|
|
|
—
|
|
|||
|
Total liabilities
|
|
66,628
|
|
|
1,346
|
|
|
—
|
|
|||
|
Redeemable common stock
|
|
5,291
|
|
|
—
|
|
|
—
|
|
|||
|
Total equity
|
|
186,544
|
|
|
41,058
|
|
|
193
|
|
|||
|
|
|
For the Years Ended December 31,
|
||||||||||
|
Operating data
|
|
|
|
|
|
|
||||||
|
Total revenues
|
|
$
|
4,278
|
|
|
$
|
308
|
|
|
$
|
—
|
|
|
Net loss attributable to common stockholders
|
|
(7,581
|
)
|
|
(1,975
|
)
|
|
(7
|
)
|
|||
|
Net loss per common share - basic and diluted
|
|
(0.66
|
)
|
|
(1.18
|
)
|
|
(0.37
|
)
|
|||
|
Other data
|
|
|
|
|
|
|
||||||
|
Cash flows used in operating activities
|
|
$
|
(3,507
|
)
|
|
$
|
(1,572
|
)
|
|
$
|
(7
|
)
|
|
Cash flows used in investing activities
|
|
(154,405
|
)
|
|
(17,885
|
)
|
|
—
|
|
|||
|
Cash flows provided by financing activities
|
|
220,649
|
|
|
42,906
|
|
|
—
|
|
|||
|
Distributions declared
|
|
6,405
|
|
|
—
|
|
|
—
|
|
|||
|
Distributions declared per common share
(1)
|
|
0.30
|
|
|
—
|
|
|
—
|
|
|||
|
Weighted-average number of common shares
outstanding, basic and diluted
|
|
11,432,823
|
|
|
1,678,335
|
|
|
20,000
|
|
|||
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
•
|
Proceeds from our ongoing initial public offering;
|
|
•
|
Debt financing; and
|
|
•
|
Cash flow generated by our real estate and real estate-related investments.
|
|
•
|
Acquisitions of an individual office property, one office portfolio consisting of five office buildings and 43 acres of undeveloped land and 1,375 acres of undeveloped land for an aggregate purchase price of $73.6 million;
|
|
•
|
Purchases of six CMBS investments for an aggregate purchase price of $58.7 million;
|
|
•
|
Acquisition of a non-performing first mortgage loan for $20.1 million; and
|
|
•
|
Improvements to real estate of $2.4 million.
|
|
•
|
$147.2 million of cash provided by offering proceeds related to our initial public offering, net of payments of selling commissions, dealer manager fees and other organization and offering expenses of $17.9 million;
|
|
•
|
$62.0 million of net cash provided by debt as a result of proceeds from notes payable and repurchase agreements of $63.2 million, partially offset by payments of deferred financing costs of $1.2 million;
|
|
•
|
$13.7 million of noncontrolling interest contributions; and
|
|
•
|
$2.3 million of net cash distributions, after giving effect to distributions reinvested by stockholders of $4.1 million.
|
|
|
|
|
|
Payments Due During the Years Ending December 31,
|
||||||||||||||||
|
Contractual Obligations
|
|
Total
|
|
2012
|
|
2013-2014
|
|
2015-2016
|
|
Thereafter
|
||||||||||
|
Outstanding debt obligations
(1)
|
|
$
|
63,203
|
|
|
$
|
30,201
|
|
|
$
|
—
|
|
|
$
|
33,002
|
|
|
$
|
—
|
|
|
Interest payments on outstanding debt obligations
(2)
|
|
8,060
|
|
|
2,043
|
|
|
4,038
|
|
|
1,979
|
|
|
—
|
|
|||||
|
Buildings
|
25-40 years
|
|
Building Improvements
|
10-25 years
|
|
Tenant Improvements
|
Shorter of lease term or expected useful life
|
|
Tenant origination and absorption costs
|
Remaining term of related leases, including below-market renewal periods
|
|
•
|
Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities;
|
|
•
|
Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model‑derived valuations in which significant inputs and significant value drivers are observable in active markets; and
|
|
•
|
Level 3: prices or valuation techniques where little or no market data is available that requires inputs that are both significant to the fair value measurement and unobservable.
|
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
|
|
|
Maturity Date
|
|
Total Book Value
|
|
|
||||||||||||||||||||||||||
|
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
Thereafter
|
|
|
Fair Value
|
|||||||||||||||||
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Real estate-related debt securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Fixed rate
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
58,602
|
|
|
$
|
58,602
|
|
|
$
|
58,602
|
|
|
Average interest rate
(1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.1
|
%
|
|
5.1
|
%
|
|
|
|||||||||
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Notes Payable and Repurchase Agreements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Fixed rate
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
29,525
|
|
|
$
|
3,477
|
|
|
$
|
—
|
|
|
$
|
33,002
|
|
|
$
|
33,018
|
|
|
Average interest rate
(1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.3
|
%
|
|
5.0
|
%
|
|
—
|
|
|
6.1
|
%
|
|
|
|||||||||
|
Variable rate
|
|
$
|
30,201
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
30,201
|
|
|
$
|
30,201
|
|
|
Average interest rate
(1)
|
|
1.5
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.5
|
%
|
|
|
|||||||||
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
|
ITEM 9B.
|
OTHER INFORMATION
|
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
|
Name*
|
|
Position(s)
|
|
Age**
|
|
Keith D. Hall
|
|
Chief Executive Officer and Director
|
|
53
|
|
Peter McMillan III
|
|
Chairman of the Board, President and Director
|
|
54
|
|
David E. Snyder
|
|
Chief Financial Officer, Treasurer and Secretary
|
|
40
|
|
Stacie K. Yamane
|
|
Chief Accounting Officer
|
|
47
|
|
Michael L. Meyer
|
|
Independent Director
|
|
73
|
|
William M. Petak
|
|
Independent Director
|
|
50
|
|
Eric J. Smith
|
|
Independent Director
|
|
54
|
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
|
Name
|
|
Fees Earned or Paid in Cash in 2011
(1)
|
|
All Other Compensation
|
|
Total
|
||||||
|
Michael L. Meyer
|
|
$
|
94,335
|
|
|
$
|
—
|
|
|
$
|
94,335
|
|
|
William M. Petak
|
|
91,335
|
|
|
—
|
|
|
91,335
|
|
|||
|
Eric J. Smith
|
|
100,335
|
|
|
—
|
|
|
100,335
|
|
|||
|
Keith D. Hall
(2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
|
Peter McMillan III
(2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
|
•
|
$2,500 for each board meeting attended;
|
|
•
|
$2,500 for each committee meeting attended (committee chairpersons receive an additional $500 per committee meeting for serving in that capacity);
|
|
•
|
$2,000 for each teleconference meeting of the board; and
|
|
•
|
$2,000 for each teleconference meeting of any committee (committee chairpersons receive an additional $1,000 per teleconference committee meeting for serving in that capacity).
|
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
|
Name of Beneficial Owner
(1)
|
|
Number of Shares Beneficially Owned
(2)
|
|
Percent of
All Shares
|
|
KBS Capital Advisors LLC
(1)
|
|
20,000
(2)
|
|
*
|
|
Keith D. Hall, Chief Executive Officer and Director
(1)
|
|
241,532
(2) (3)
|
|
*
|
|
Peter McMillan III, Chairman of the Board, President and Director
(1)
|
|
241,532
(2) (3)
|
|
*
|
|
David E. Snyder, Chief Financial Officer, Treasurer and Secretary
|
|
—
|
|
—
|
|
Stacie K. Yamane, Chief Accounting Officer
|
|
—
|
|
—
|
|
Michael L. Meyer, Independent Director
|
|
—
|
|
—
|
|
William M. Petak, Independent Director
|
|
—
|
|
—
|
|
Eric J. Smith, Independent Director
|
|
—
|
|
—
|
|
All directors and executive officers as a group
|
|
241,532
(2) (3)
|
|
*
|
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
|
|
•
|
finding, presenting and recommending investment opportunities to us consistent with our investment policies and objectives;
|
|
•
|
making investment decisions for us, subject to the limitations in our charter and the direction and oversight of our board of directors;
|
|
•
|
acquiring investments on our behalf;
|
|
•
|
sourcing and structuring our loan originations;
|
|
•
|
arranging for financing and refinancing of our investments;
|
|
•
|
formulating and overseeing the implementation of strategies for the administration, promotion, management, operation, financing and refinancing, marketing, servicing and disposition of our investments;
|
|
•
|
engaging and supervising our agents;
|
|
•
|
performing administrative services and maintaining our accounting; and
|
|
•
|
assisting us with our regulatory compliance.
|
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
|
|
|
2011
|
|
2010
|
||||
|
Audit fees
|
|
$
|
310,000
|
|
|
$
|
174,000
|
|
|
Audit-related fees
|
|
33,000
|
|
|
5,000
|
|
||
|
Tax fees
|
|
21,000
|
|
|
7,132
|
|
||
|
All other fees
|
|
—
|
|
|
—
|
|
||
|
Total
|
|
$
|
364,000
|
|
|
$
|
186,132
|
|
|
•
|
Audit fees - These are fees for professional services performed for the audit of our annual financial statements and the required review of quarterly financial statements and other procedures performed by Ernst & Young in order for them to be able to form an opinion on our consolidated financial statements. These fees also cover services that are normally provided by independent auditors in connection with statutory and regulatory filings or engagements.
|
|
•
|
Audit-related fees - These are fees for assurance and related services that traditionally are performed by independent auditors that are reasonably related to the performance of the audit or review of the financial statements, such as due diligence related to acquisitions and dispositions, attestation services that are not required by statute or regulation, internal control reviews and consultation concerning financial accounting and reporting standards.
|
|
•
|
Tax fees - These are fees for all professional services performed by professional staff in our independent auditor’s tax division, except those services related to the audit of our financial statements. These include fees for tax compliance, tax planning and tax advice, including federal, state and local issues. Services may also include assistance with tax audits and appeals before the IRS and similar state and local agencies, as well as federal, state and local tax issues related to due diligence.
|
|
•
|
All other fees - These are fees for any services not included in the above-described categories.
|
|
ITEM 15.
|
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
|
|
Ex.
|
|
Description
|
|
|
|
|
|
3.1
|
|
Second Articles of Amendment and Restatement, incorporated by reference to the Company’s Current Report on Form 8-K filed February 4, 2010
|
|
|
|
|
|
3.2
|
|
Amended and Restated Bylaws, incorporated by reference to Pre-Effective Amendment No. 2 to the Company’s Registration Statement on Form S-11 (No. 333-156633) filed August 21, 2009
|
|
|
|
|
|
4.1
|
|
Form of Subscription Agreement, incorporated by reference to Appendix B to the prospectus dated April 27, 2011, incorporated by reference to Post-Effective Amendment No. 7 to the Company’s Registration Statement on Form S-11 (No. 333-156633) filed January 12, 2012
|
|
|
|
|
|
4.2
|
|
Statement regarding restrictions on transferability of shares of common stock (to appear on stock certificate or to be sent upon request and without charge to stockholders issued shares without certificates), incorporated by reference to Pre-Effective Amendment No. 1 to the Company’s Registration Statement on Form S-11 (No. 333-156633) filed February 25, 2009
|
|
|
|
|
|
4.3
|
|
Amended and Restated Dividend Reinvestment Plan, incorporated by reference to Appendix B to the prospectus dated April 27, 2011, incorporated by reference to Post-Effective Amendment No. 7 to the Company’s Registration Statement on Form S-11 (No. 333-156633) filed January 12, 2012
|
|
|
|
|
|
4.4
|
|
Second Amended and Restated Share Redemption Program, incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed August 11, 2011
|
|
|
|
|
|
4.5
|
|
Second Amended and Restated Escrow Agreement, incorporated by reference to Pre-Effective Amendment No. 3 to the Company’s Registration Statement on Form S-11 (No. 333-156633) filed October 5, 2009
|
|
|
|
|
|
10.1
|
|
Second Amended and Restated Dealer Manger Agreement, between the Company and KBS Capital Markets Group LLC, dated August 9, 2011, incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed August 11, 2011
|
|
|
|
|
|
10.2
|
|
Advisory Agreement, between the Company and KBS Capital Advisors LLC, dated October 8, 2011, incorporated by reference to Post-Effective Amendment No. 7 to the Company’s Registration Statement on Form S-11 (No. 333-156633) filed January 12, 2012
|
|
|
|
|
|
10.3
|
|
Loan Purchase Agreement (related to the acquisition of the Iron Point Business Park First Mortgage), by and between KBS SOR Debt Holdings II, LLC and Road Bay Investments, LLC, dated March 14, 2011, incorporated by reference to Exhibit 10.12 to Post-Effective Amendment No. 6 to the Company’s Registration Statement on Form S-11 (No. 333-156633) filed April 6, 2011
|
|
|
|
|
|
10.4
|
|
Deed of Trust, Assignment of Leases, Rents and Contracts, Security Agreement and Fixture Filing (related to the acquisition of the Iron Point Business Park First Mortgage), by Redwood Industrials and Lampert at Iron Point, LLC, in favor of Allstate Life Insurance Company, dated February 20, 2004, incorporated by reference to Exhibit 10.13 to Post-Effective Amendment No. 6 to the Company’s Registration Statement on Form S-11 (No. 333-156633) filed April 6, 2011
|
|
|
|
|
|
10.5
|
|
Assignment of Mortgage Loan Documents (related to the acquisition of the Iron Point Business Park First Mortgage) by Road Bay Investments, LLC, to KBS SOR Debt Holdings II, LLC, dated March 14, 2011, incorporated by reference to Exhibit 10.14 to Post-Effective Amendment No. 6 to the Company’s Registration Statement on Form S-11 (No. 333-156633) filed April 6, 2011
|
|
Ex.
|
|
Description
|
|
|
|
|
|
10.6
|
|
Purchase and Sale Agreement (relating to the acquisition of the Richardson Portfolio), by and among Equastone Palisades I, LLC, Equastone Palisades II, LLC, Equastone Palisades III, LLC, Equastone Greenway I, LLC, Equastone Greenway IA, LLC, Equastone Greenway II, LLC and JP Realty Partners, Ltd., dated August 4, 2011, incorporated by reference to Exhibit 10.14 to Post-Effective Amendment No. 7 to the Company’s Registration Statement on Form S-11 (No. 333-156633) filed January 12, 2012
|
|
|
|
|
|
10.7
|
|
First Amendment to Purchase and Sale Agreement (relating to the acquisition of the Richardson Portfolio), by and among Equastone Palisades I, LLC, Equastone Palisades II, LLC, Equastone Palisades III, LLC, Equastone Greenway I, LLC, Equastone Greenway IA, LLC, Equastone Greenway II, LLC and JP Realty Partners, Ltd., dated September 19, 2011, incorporated by reference to Exhibit 10.15 to Post-Effective Amendment No. 7 to the Company’s Registration Statement on Form S-11 (No. 333-156633) filed January 12, 2012
|
|
|
|
|
|
10.8
|
|
Second Amendment to Purchase and Sale Agreement (relating to the acquisition of the Richardson Portfolio), by and among Equastone Palisades I, LLC, Equastone Palisades II, LLC, Equastone Palisades III, LLC, Equastone Greenway I, LLC, Equastone Greenway IA, LLC, Equastone Greenway II, LLC and JP Realty Partners, Ltd., dated September 21, 2011, incorporated by reference to Exhibit 10.16 to Post-Effective Amendment No. 7 to the Company’s Registration Statement on Form S-11 (No. 333-156633) filed January 12, 2012
|
|
|
|
|
|
10.9
|
|
Third Amendment to Purchase and Sale Agreement (relating to the acquisition of the Richardson Portfolio), by and among Equastone Palisades I, LLC, Equastone Palisades II, LLC, Equastone Palisades III, LLC, Equastone Greenway I, LLC, Equastone Greenway IA, LLC, Equastone Greenway II, LLC and JP Realty Partners, Ltd., dated September 23, 2011, incorporated by reference to Exhibit 10.17 to Post-Effective Amendment No. 7 to the Company’s Registration Statement on Form S-11 (No. 333-156633) filed January 12, 2012
|
|
|
|
|
|
10.10
|
|
Fourth Amendment to Purchase and Sale Agreement (relating to the acquisition of the Richardson Portfolio), by and among Equastone Palisades I, LLC, Equastone Palisades II, LLC, Equastone Palisades III, LLC, Equastone Greenway I, LLC, Equastone Greenway IA, LLC, Equastone Greenway II, LLC and JP Realty Partners, Ltd., dated September 30, 2011, incorporated by reference to Exhibit 10.18 to Post-Effective Amendment No. 7 to the Company’s Registration Statement on Form S-11 (No. 333-156633) filed January 12, 2012
|
|
|
|
|
|
10.11
|
|
Fifth Amendment to Purchase and Sale Agreement (relating to the acquisition of the Richardson Portfolio), by and among Equastone Palisades I, LLC, Equastone Palisades II, LLC, Equastone Palisades III, LLC, Equastone Greenway I, LLC, Equastone Greenway IA, LLC, Equastone Greenway II, LLC and JP Realty Partners, Ltd., dated October 12, 2011, incorporated by reference to Exhibit 10.19 to Post-Effective Amendment No. 7 to the Company’s Registration Statement on Form S-11 (No. 333-156633) filed January 12, 2012
|
|
|
|
|
|
10.12
|
|
Assignment of Rights Under Purchase and Sale Agreement (relating to the acquisition of the Richardson Portfolio), by and between JP Realty Partners, Ltd. and JP-KBS Richardson Holdings, LLC, dated October 31, 2011, incorporated by reference to Exhibit 10.20 to Post-Effective Amendment No. 7 to the Company’s Registration Statement on Form S-11 (No. 333-156633) filed January 12, 2012
|
|
|
|
|
|
10.13
|
|
Deed of Trust, Security Agreement and Fixture Filing (relating to the acquisition of the Richardson Portfolio), by JP-KBS Richardson Holdings, LLC in favor of General Electric Capital Corporation, dated November 18, 2011, incorporated by reference to Exhibit 10.21 to Post-Effective Amendment No. 7 to the Company’s Registration Statement on Form S-11 (No. 333-156633) filed January 12, 2012
|
|
|
|
|
|
10.14
|
|
Promissory Note (relating to the acquisition of the Richardson Portfolio), by JP-KBS Richardson Holdings, LLC in favor of General Electric Capital Corporation, dated November 18, 2011, incorporated by reference to Exhibit 10.22 to Post-Effective Amendment No. 7 to the Company’s Registration Statement on Form S-11 (No. 333-156633) filed January 12, 2012
|
|
|
|
|
|
10.15
|
|
Loan Agreement (relating to the acquisition of the Richardson Portfolio), by and between JP-KBS Richardson Holdings, LLC and General Electric Capital Corporation, dated November 18, 2011, incorporated by reference to Exhibit 10.23 to Post-Effective Amendment No. 7 to the Company’s Registration Statement on Form S-11 (No. 333-156633) filed January 12, 2012
|
|
|
|
|
|
10.16
|
|
Limited Liability Company Agreement of JP-KBS Richardson Holdings, LLC (relating to the acquisition of the Richardson Portfolio), by and between JP-Richardson, LLC and KBS SOR Richardson Portfolio JV, LLC, dated November 22, 2011, incorporated by reference to Exhibit 10.24 to Post-Effective Amendment No. 7 to the Company’s Registration Statement on Form S-11 (No. 333-156633) filed January 12, 2012
|
|
|
|
|
|
10.17
|
|
Master Repurchase Agreement, by and between KBS SOR CMBS Owner, LLC and Wells Fargo Securities, LLC, dated December 12, 2011, incorporated by reference to Exhibit 10.25 to Post-Effective Amendment No. 7 to the Company’s Registration Statement on Form S-11 (No. 333-156633) filed January 12, 2012
|
|
Ex.
|
|
Description
|
|
|
|
|
|
10.18
|
|
Annex I (Supplemental Terms and Conditions) to the Master Repurchase Agreement, by and between KBS SOR CMBS Owner, LLC and Wells Fargo Securities, LLC, dated December 12, 2011, incorporated by reference to Exhibit 10.26 to Post-Effective Amendment No. 7 to the Company’s Registration Statement on Form S-11 (No. 333-156633) filed January 12, 2012
|
|
|
|
|
|
10.19
|
|
First Amendment to Master Purchase Agreement by and between KBS SOR CMBS Owner, LLC and Wells Fargo Securities, LLC, dated December 21, 2011, incorporated by reference to Exhibit 10.27 to Post-Effective Amendment No. 7 to the Company’s Registration Statement on Form S-11 (No. 333-156633) filed January 12, 2012
|
|
|
|
|
|
10.20
|
|
Guarantee, by KBS Strategic Opportunity REIT, Inc., in favor of Wells Fargo Securities, LLC, dated December 12, 2011, incorporated by reference to Exhibit 10.28 to Post-Effective Amendment No. 7 to the Company’s Registration Statement on Form S-11 (No. 333-156633) filed January 12, 2012
|
|
|
|
|
|
10.21
|
|
Master Repurchase Agreement, by and between KBS SOR CMBS Owner, LLC and Wells Fargo Bank, N.A., dated December 12, 2011, incorporated by reference to Exhibit 10.29 to Post-Effective Amendment No. 7 to the Company’s Registration Statement on Form S-11 (No. 333-156633) filed January 12, 2012
|
|
|
|
|
|
10.22
|
|
Annex I (Supplemental Terms and Conditions) to the Master Repurchase Agreement, by and between KBS SOR CMBS Owner, LLC and Wells Fargo Bank, N.A., dated December 12, 2011, incorporated by reference to Exhibit 10.30 to Post-Effective Amendment No. 7 to the Company’s Registration Statement on Form S-11 (No. 333-156633) filed January 12, 2012
|
|
|
|
|
|
10.23
|
|
First Amendment to Master Purchase Agreement by and between KBS SOR CMBS Owner, LLC and Wells Fargo Bank, N.A., dated December 21, 2011, incorporated by reference to Exhibit 10.31 to Post-Effective Amendment No. 7 to the Company’s Registration Statement on Form S-11 (No. 333-156633) filed January 12, 2012
|
|
|
|
|
|
10.24
|
|
Guarantee, by KBS Strategic Opportunity REIT, Inc., in favor of Wells Fargo Bank, N.A., dated December 12, 2011, incorporated by reference to Exhibit 10.32 to Post-Effective Amendment No. 7 to the Company’s Registration Statement on Form S-11 (No. 333-156633) filed January 12, 2012
|
|
|
|
|
|
10.25
|
|
Repurchase Agreement Confirmation, by and between KBS SOR CMBS Owner, LLC and Wells Fargo Securities, LLC, dated December 20, 2011, incorporated by reference to Exhibit 10.33 to Post-Effective Amendment No. 7 to the Company’s Registration Statement on Form S-11 (No. 333-156633) filed January 12, 2012
|
|
|
|
|
|
10.26
|
|
Repurchase Agreement Confirmation, by and between KBS SOR CMBS Owner, LLC and Wells Fargo Securities, LLC, dated December 21, 2011, incorporated by reference to Exhibit 10.34 to Post-Effective Amendment No. 7 to the Company’s Registration Statement on Form S-11 (No. 333-156633) filed January 12, 2012
|
|
|
|
|
|
10.27
|
|
Repurchase Agreement Confirmation, by and between KBS SOR CMBS Owner, LLC and Wells Fargo Securities, LLC, dated December 22, 2011, incorporated by reference to Exhibit 10.35 to Post-Effective Amendment No. 7 to the Company’s Registration Statement on Form S-11 (No. 333-156633) filed January 12, 2012
|
|
|
|
|
|
10.28
|
|
Repurchase Agreement Confirmation, by and between KBS SOR CMBS Owner, LLC and Wells Fargo Securities, LLC, dated December 22, 2011, incorporated by reference to Exhibit 10.36 to Post-Effective Amendment No. 7 to the Company’s Registration Statement on Form S-11 (No. 333-156633) filed January 12, 2012
|
|
|
|
|
|
10.29
|
|
Repurchase Agreement Confirmation, by and between KBS SOR CMBS Owner, LLC and Wells Fargo Securities, LLC, dated January 19, 2012
|
|
|
|
|
|
10.30
|
|
Repurchase Agreement Confirmation, by and between KBS SOR CMBS Owner, LLC and Wells Fargo Securities, LLC, dated January 19, 2012
|
|
|
|
|
|
10.31
|
|
Repurchase Agreement Confirmation, by and between KBS SOR CMBS Owner, LLC and Wells Fargo Securities, LLC, dated January 19, 2012
|
|
|
|
|
|
10.32
|
|
Repurchase Agreement Confirmation, by and between KBS SOR CMBS Owner, LLC and Wells Fargo Securities, LLC, dated January 19, 2012
|
|
|
|
|
|
10.33
|
|
Repurchase Agreement Confirmation, by and between KBS SOR CMBS Owner, LLC and Wells Fargo Securities, LLC, dated February 17, 2012
|
|
|
|
|
|
10.34
|
|
Repurchase Agreement Confirmation, by and between KBS SOR CMBS Owner, LLC and Wells Fargo Securities, LLC, dated February 17, 2012
|
|
|
|
|
|
10.35
|
|
Repurchase Agreement Confirmation, by and between KBS SOR CMBS Owner, LLC and Wells Fargo Securities, LLC, dated February 17, 2012
|
|
Ex.
|
|
Description
|
|
|
|
|
|
10.36
|
|
Repurchase Agreement Confirmation, by and between KBS SOR CMBS Owner, LLC and Wells Fargo Securities, LLC, dated February 17, 2012
|
|
|
|
|
|
21.1
|
|
Subsidiaries of the Company
|
|
|
|
|
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
32.1
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
32.2
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
101.1
|
|
The following information from the Company’s annual report on Form 10-K for the year ended December 31, 2011, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations; (iii) Consolidated Statements of Stockholders’ Equity; and (iv) Consolidated Statements of Cash Flows
|
|
Consolidated Financial Statements
|
|
|
|
|
|
Financial Statement Schedule
|
|
|
|
|
December 31,
|
||||||
|
|
|
2011
|
|
2010
|
||||
|
Assets
|
|
|
|
|
||||
|
Real estate, net
|
|
$
|
107,752
|
|
|
$
|
4,547
|
|
|
Real estate loans receivable, net
|
|
—
|
|
|
13,227
|
|
||
|
Real estate securities ($46.4 million pledged under repurchase agreements)
|
|
58,602
|
|
|
—
|
|
||
|
Total real estate and real estate-related investments, net
|
|
166,354
|
|
|
17,774
|
|
||
|
Cash and cash equivalents
|
|
86,379
|
|
|
23,642
|
|
||
|
Rents and other receivables, net
|
|
510
|
|
|
47
|
|
||
|
Above-market leases, net
|
|
2,846
|
|
|
27
|
|
||
|
Prepaid expenses and other assets
|
|
2,374
|
|
|
914
|
|
||
|
Total assets
|
|
$
|
258,463
|
|
|
$
|
42,404
|
|
|
Liabilities and stockholders’ equity
|
|
|
|
|
||||
|
Notes payable and repurchase agreements:
|
|
|
|
|
||||
|
Notes payable
|
|
$
|
33,002
|
|
|
$
|
—
|
|
|
Repurchase agreements on real estate securities
|
|
30,201
|
|
|
—
|
|
||
|
Total notes payable and repurchase agreements
|
|
63,203
|
|
|
—
|
|
||
|
Accounts payable and accrued liabilities
|
|
2,235
|
|
|
917
|
|
||
|
Due to affiliates
|
|
31
|
|
|
378
|
|
||
|
Below-market leases, net
|
|
437
|
|
|
—
|
|
||
|
Security deposits and other liabilities
|
|
722
|
|
|
51
|
|
||
|
Total liabilities
|
|
66,628
|
|
|
1,346
|
|
||
|
Commitments and contingencies (Note 13)
|
|
|
|
|
|
|
||
|
Redeemable common stock
|
|
5,291
|
|
|
—
|
|
||
|
Equity
|
|
|
|
|
||||
|
KBS Strategic Opportunity REIT, Inc. stockholders’ equity
|
|
|
|
|
||||
|
Preferred stock, $.01 par value; 10,000,000 shares authorized, no shares issued and outstanding
|
|
—
|
|
|
—
|
|
||
|
Common stock, $.01 par value; 1,000,000,000 shares authorized, 22,214,815 and 5,132,988 shares issued and outstanding as of December 31, 2011 and December 31, 2010, respectively
|
|
222
|
|
|
52
|
|
||
|
Additional paid-in capital
|
|
188,817
|
|
|
42,988
|
|
||
|
Cumulative distributions and net losses
|
|
(15,968
|
)
|
|
(1,982
|
)
|
||
|
Accumulated other comprehensive loss
|
|
(46
|
)
|
|
—
|
|
||
|
Total KBS Strategic Opportunity REIT, Inc. stockholders’ equity
|
|
173,025
|
|
|
41,058
|
|
||
|
Noncontrolling interests
|
|
13,519
|
|
|
—
|
|
||
|
Total equity
|
|
186,544
|
|
|
41,058
|
|
||
|
Total liabilities and stockholders’ equity
|
|
$
|
258,463
|
|
|
$
|
42,404
|
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
|
2011
|
|
2010
|
|
2009
|
||||||
|
Revenues:
|
|
|
|
|
|
|
||||||
|
Rental income
|
|
$
|
3,595
|
|
|
$
|
154
|
|
|
$
|
—
|
|
|
Tenant reimbursements
|
|
276
|
|
|
23
|
|
|
—
|
|
|||
|
Interest income from real estate loans receivable
|
|
311
|
|
|
131
|
|
|
—
|
|
|||
|
Interest income from real estate securities
|
|
53
|
|
|
—
|
|
|
—
|
|
|||
|
Other operating income
|
|
43
|
|
|
—
|
|
|
—
|
|
|||
|
Total revenues
|
|
4,278
|
|
|
308
|
|
|
—
|
|
|||
|
Expenses:
|
|
|
|
|
|
|
||||||
|
Operating, maintenance, and management
|
|
2,957
|
|
|
217
|
|
|
—
|
|
|||
|
Real estate taxes and insurance
|
|
888
|
|
|
46
|
|
|
—
|
|
|||
|
Asset management fees to affiliate
|
|
328
|
|
|
30
|
|
|
—
|
|
|||
|
Real estate acquisition fees and expenses
|
|
1,139
|
|
|
51
|
|
|
—
|
|
|||
|
Real estate acquisition fees and expenses to affiliate
|
|
460
|
|
|
18
|
|
|
—
|
|
|||
|
Costs related to foreclosure of loans receivable
|
|
901
|
|
|
92
|
|
|
—
|
|
|||
|
General and administrative expenses
|
|
2,005
|
|
|
1,635
|
|
|
7
|
|
|||
|
Depreciation and amortization
|
|
3,203
|
|
|
212
|
|
|
—
|
|
|||
|
Interest expense
|
|
313
|
|
|
—
|
|
|
—
|
|
|||
|
Total expenses
|
|
12,194
|
|
|
2,301
|
|
|
7
|
|
|||
|
Other income:
|
|
|
|
|
|
|
||||||
|
Other interest income
|
|
117
|
|
|
18
|
|
|
—
|
|
|||
|
Net loss
|
|
(7,799
|
)
|
|
(1,975
|
)
|
|
(7
|
)
|
|||
|
Net loss attributable to noncontrolling interests
|
|
218
|
|
|
—
|
|
|
—
|
|
|||
|
Net loss attributable to common stockholders
|
|
$
|
(7,581
|
)
|
|
$
|
(1,975
|
)
|
|
$
|
(7
|
)
|
|
Net loss per common share, basic and diluted
|
|
$
|
(0.66
|
)
|
|
$
|
(1.18
|
)
|
|
$
|
(0.37
|
)
|
|
Weighted-average number of common shares outstanding, basic and diluted
|
|
11,432,823
|
|
|
1,678,335
|
|
|
20,000
|
|
|||
|
Distributions declared per common share
|
|
$
|
0.30
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
Additional Paid-in Capital
|
|
Cumulative Distributions and
Net Losses
|
|
Accumulated Other Comprehensive Loss
|
|
Total Stockholders’ Equity
|
|
Noncontrolling Interest
|
|
Total Equity
|
|||||||||||||||
|
|
Common Stock
|
|
|
|
||||||||||||||||||||||||||
|
|
Shares
|
|
Amounts
|
|
|
|
||||||||||||||||||||||||
|
Balance, December 31, 2008
|
20,000
|
|
|
$
|
1
|
|
|
$
|
199
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
200
|
|
|
$
|
—
|
|
|
$
|
200
|
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
(7
|
)
|
|||||||
|
Balance, December 31, 2009
|
20,000
|
|
|
$
|
1
|
|
|
$
|
199
|
|
|
$
|
(7
|
)
|
|
$
|
—
|
|
|
$
|
193
|
|
|
$
|
—
|
|
|
$
|
193
|
|
|
Issuance of common stock
|
5,112,988
|
|
|
51
|
|
|
50,349
|
|
|
—
|
|
|
—
|
|
|
50,400
|
|
|
—
|
|
|
50,400
|
|
|||||||
|
Commissions on stock sales and related dealer manager fees to affiliate
|
—
|
|
|
—
|
|
|
(4,116
|
)
|
|
—
|
|
|
—
|
|
|
(4,116
|
)
|
|
—
|
|
|
(4,116
|
)
|
|||||||
|
Other offering costs
|
—
|
|
|
—
|
|
|
(3,444
|
)
|
|
—
|
|
|
—
|
|
|
(3,444
|
)
|
|
—
|
|
|
(3,444
|
)
|
|||||||
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,975
|
)
|
|
—
|
|
|
(1,975
|
)
|
|
—
|
|
|
(1,975
|
)
|
|||||||
|
Balance, December 31, 2010
|
5,132,988
|
|
|
$
|
52
|
|
|
$
|
42,988
|
|
|
$
|
(1,982
|
)
|
|
$
|
—
|
|
|
$
|
41,058
|
|
|
$
|
—
|
|
|
$
|
41,058
|
|
|
Comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,581
|
)
|
|
—
|
|
|
(7,581
|
)
|
|
(218
|
)
|
|
(7,799
|
)
|
|||||||
|
Unrealized loss on real estate securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(46
|
)
|
|
(46
|
)
|
|
—
|
|
|
(46
|
)
|
|||||||
|
Total comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
(7,627
|
)
|
|
(218
|
)
|
|
(7,845
|
)
|
||||||||||||
|
Issuance of common stock
|
17,085,827
|
|
|
171
|
|
|
168,995
|
|
|
—
|
|
|
—
|
|
|
169,166
|
|
|
—
|
|
|
169,166
|
|
|||||||
|
Transfers to redeemable common stock
|
—
|
|
|
—
|
|
|
(5,291
|
)
|
|
—
|
|
|
—
|
|
|
(5,291
|
)
|
|
—
|
|
|
(5,291
|
)
|
|||||||
|
Redemptions of common stock
|
(4,000
|
)
|
|
(1
|
)
|
|
(39
|
)
|
|
—
|
|
|
—
|
|
|
(40
|
)
|
|
—
|
|
|
(40
|
)
|
|||||||
|
Distributions declared
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,405
|
)
|
|
—
|
|
|
(6,405
|
)
|
|
—
|
|
|
(6,405
|
)
|
|||||||
|
Commissions on stock sales and related dealer manager fees to affiliate
|
—
|
|
|
—
|
|
|
(14,324
|
)
|
|
—
|
|
|
—
|
|
|
(14,324
|
)
|
|
—
|
|
|
(14,324
|
)
|
|||||||
|
Other offering costs
|
—
|
|
|
—
|
|
|
(3,512
|
)
|
|
—
|
|
|
—
|
|
|
(3,512
|
)
|
|
—
|
|
|
(3,512
|
)
|
|||||||
|
Noncontrolling interests contributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,737
|
|
|
13,737
|
|
|||||||
|
Balance, December 31, 2011
|
22,214,815
|
|
|
$
|
222
|
|
|
$
|
188,817
|
|
|
$
|
(15,968
|
)
|
|
$
|
(46
|
)
|
|
$
|
173,025
|
|
|
$
|
13,519
|
|
|
$
|
186,544
|
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
|
2011
|
|
2010
|
|
2009
|
||||||
|
Cash Flows from Operating Activities:
|
|
|
|
|
|
|
||||||
|
Net loss
|
|
$
|
(7,799
|
)
|
|
$
|
(1,975
|
)
|
|
$
|
(7
|
)
|
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
||||||
|
Depreciation and amortization
|
|
3,203
|
|
|
212
|
|
|
—
|
|
|||
|
Noncash interest income on real estate securities
|
|
48
|
|
|
—
|
|
|
—
|
|
|||
|
Deferred rent
|
|
(207
|
)
|
|
—
|
|
|
—
|
|
|||
|
Amortization of above- and below-market leases, net
|
|
613
|
|
|
32
|
|
|
—
|
|
|||
|
Amortization of deferred financing costs
|
|
24
|
|
|
—
|
|
|
—
|
|
|||
|
Write-off of closing costs related to foreclosed assets
|
|
696
|
|
|
—
|
|
|
—
|
|
|||
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
||||||
|
Rents and other receivables
|
|
(256
|
)
|
|
(47
|
)
|
|
—
|
|
|||
|
Prepaid expenses and other assets
|
|
(207
|
)
|
|
(438
|
)
|
|
—
|
|
|||
|
Accounts payable and accrued liabilities
|
|
108
|
|
|
313
|
|
|
—
|
|
|||
|
Due to affiliates
|
|
(295
|
)
|
|
312
|
|
|
—
|
|
|||
|
Security deposits and other liabilities
|
|
565
|
|
|
19
|
|
|
—
|
|
|||
|
Net cash used in operating activities
|
|
(3,507
|
)
|
|
(1,572
|
)
|
|
(7
|
)
|
|||
|
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
||||||
|
Acquisitions of real estate
|
|
(73,597
|
)
|
|
(1,800
|
)
|
|
—
|
|
|||
|
Purchase of real estate securities
|
|
(58,696
|
)
|
|
—
|
|
|
—
|
|
|||
|
Improvements to real estate
|
|
(2,430
|
)
|
|
(83
|
)
|
|
—
|
|
|||
|
Investments in real estate loans receivable
|
|
(20,120
|
)
|
|
(16,002
|
)
|
|
—
|
|
|||
|
Principal repayments on real estate loans receivable
|
|
438
|
|
|
—
|
|
|
—
|
|
|||
|
Net cash used in investing activities
|
|
(154,405
|
)
|
|
(17,885
|
)
|
|
—
|
|
|||
|
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
||||||
|
Proceeds from notes payable
|
|
33,002
|
|
|
—
|
|
|
—
|
|
|||
|
Proceeds from repurchase agreement
|
|
30,201
|
|
|
—
|
|
|
—
|
|
|||
|
Payments of deferred financing costs
|
|
(1,161
|
)
|
|
—
|
|
|
—
|
|
|||
|
Proceeds from issuance of common stock
|
|
165,079
|
|
|
50,400
|
|
|
—
|
|
|||
|
Payments to redeem common stock
|
|
(40
|
)
|
|
—
|
|
|
—
|
|
|||
|
Payments of commissions on stock sales and related dealer manager fees
|
|
(14,324
|
)
|
|
(4,116
|
)
|
|
—
|
|
|||
|
Payments of other offering costs
|
|
(3,527
|
)
|
|
(3,378
|
)
|
|
—
|
|
|||
|
Distributions paid
|
|
(2,318
|
)
|
|
—
|
|
|
—
|
|
|||
|
Noncontrolling interest contribution
|
|
13,737
|
|
|
—
|
|
|
—
|
|
|||
|
Net cash provided by financing activities
|
|
220,649
|
|
|
42,906
|
|
|
—
|
|
|||
|
Net increase (decrease) in cash and cash equivalents
|
|
62,737
|
|
|
23,449
|
|
|
(7
|
)
|
|||
|
Cash and cash equivalents, beginning of period
|
|
23,642
|
|
|
193
|
|
|
200
|
|
|||
|
Cash and cash equivalents, end of period
|
|
$
|
86,379
|
|
|
$
|
23,642
|
|
|
$
|
193
|
|
|
Supplemental Disclosure of Noncash Transactions:
|
|
|
|
|
|
|
||||||
|
Interest paid
|
|
$
|
118
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Supplemental Disclosure of Noncash Transactions:
|
|
|
|
|
|
|
||||||
|
Investments in real estate through foreclosure
|
|
$
|
32,213
|
|
|
$
|
2,775
|
|
|
$
|
—
|
|
|
Escrow deposits in other assets and other liabilities
|
|
$
|
—
|
|
|
$
|
476
|
|
|
$
|
—
|
|
|
Liabilities assumed on foreclosed real estate
|
|
$
|
200
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Increase in capital expenses payable
|
|
$
|
921
|
|
|
$
|
30
|
|
|
$
|
—
|
|
|
Increase in lease commissions payable
|
|
$
|
158
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Liabilities assumed on real estate acquisition
|
|
$
|
—
|
|
|
$
|
32
|
|
|
$
|
—
|
|
|
Increase in due to affiliates for offering costs
|
|
$
|
—
|
|
|
$
|
66
|
|
|
$
|
—
|
|
|
Increase in accounts payable and accrued liabilities for offering costs
|
|
$
|
37
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Distributions paid to common stockholders through common stock issuances pursuant to the dividend reinvestment plan
|
|
$
|
4,087
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
1.
|
ORGANIZATION
|
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
|
•
|
whether the lease stipulates how a tenant improvement allowance may be spent;
|
|
•
|
whether the amount of a tenant improvement allowance is in excess of market rates;
|
|
•
|
whether the tenant or landlord retains legal title to the improvements at the end of the lease term;
|
|
•
|
whether the tenant improvements are unique to the tenant or general‑purpose in nature; and
|
|
•
|
whether the tenant improvements are expected to have any residual value at the end of the lease.
|
|
Buildings
|
25-40 years
|
|
Building Improvements
|
10-25 years
|
|
Tenant Improvements
|
Shorter of lease term or expected useful life
|
|
Tenant origination and absorption costs
|
Remaining term of related leases, including below-market renewal periods
|
|
•
|
Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities;
|
|
•
|
Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model‑derived valuations in which significant inputs and significant value drivers are observable in active markets; and
|
|
•
|
Level 3: prices or valuation techniques where little or no market data is available that requires inputs that are both significant to the fair value measurement and unobservable.
|
|
•
|
Unless the shares are being redeemed in connection with a stockholder’s death, “qualifying disability” or “determination of incompetence” (each as defined under the share redemption program), the Company may not redeem the shares until the stockholder has held the shares for one year.
|
|
•
|
During each calendar year, the share redemption program limits the number of shares the Company may redeem to those that the Company could purchase with the amount of the net proceeds from the issuance of shares under the DRP during the prior calendar year.
|
|
•
|
During any calendar year, the Company may redeem no more than 5% of the weighted‑average number of shares outstanding during the prior calendar year.
|
|
•
|
The Company has no obligation to redeem shares if the redemption would violate the restrictions on distributions under Maryland law, which prohibits distributions that would cause a corporation to fail to meet statutory tests of solvency.
|
|
•
|
The Company could use the aggregate amount of net proceeds, if any, from the sale of shares under the dividend reinvestment plan during the remainder of calendar year 2011 to redeem a qualifying stockholder’s (as defined) shares during calendar year 2011 and calendar year 2012. Any redemptions during calendar year 2011 that are made from the aggregate amount of net proceeds from the sale of shares under our dividend reinvestment plan during calendar year 2011 reduced in direct proportion funds available for redemptions during calendar year 2012.
|
|
•
|
We also may use up to $1.244 million (approximately one percent (1%) of the gross proceeds from our initial public offering as of July 31, 2011) to redeem a qualifying stockholder’s shares if the shares are being redeemed in connection with a stockholder’s death, “qualifying disability” (as defined) or “determination of incompetence” (as defined). For purposes of determining the amount of funds available for redemption under our second amended and restated share redemption program, redemptions for a stockholder’s death, qualifying disability or determination of incompetence, will be made first from the $1.244 million of gross offering proceeds from our initial public offering.
|
|
•
|
The lower of $9.25 or 92.5% of the price paid to acquire the shares from the Company for stockholders who have held their shares for at least one year;
|
|
•
|
The lower of $9.50 or 95.0% of the price paid to acquire the shares from the Company for stockholders who have held their shares for at least two years;
|
|
•
|
The lower of $9.75 or 97.5% of the price paid to acquire the shares from the Company for stockholders who have held their shares for at least three years; and
|
|
•
|
The lower of $10.00 or 100% of the price paid to acquire the shares from the Company for stockholders who have held their shares for at least four years.
|
|
3.
|
REAL ESTATE
|
|
|
|
December 31,
|
||||||
|
|
|
2011
|
|
2010
|
||||
|
Land
|
|
$
|
43,126
|
|
|
$
|
2,090
|
|
|
Buildings and improvements
|
|
58,974
|
|
|
2,425
|
|
||
|
Tenant origination and absorption costs
|
|
8,235
|
|
|
221
|
|
||
|
Total real estate, cost
|
|
110,335
|
|
|
4,736
|
|
||
|
Accumulated depreciation and amortization
|
|
(2,583
|
)
|
|
(189
|
)
|
||
|
Total real estate, net
|
|
$
|
107,752
|
|
|
$
|
4,547
|
|
|
Property
|
|
Date
Acquired or Foreclosed on
|
|
City
|
|
State
|
|
Property Type
|
|
Land
|
|
Building
and Improvements
|
|
Tenant Origination and Absorption
|
|
Total
Real Estate at Cost
|
|
Accumulated Depreciation and Amortization
|
|
Total
Real Estate,
Net
|
|
Ownership %
|
|||||||||||||
|
Village Overlook Buildings
|
|
08/02/2010
|
|
Stockbridge
|
|
GA
|
|
Office
|
|
$
|
440
|
|
|
$
|
1,309
|
|
|
$
|
27
|
|
|
$
|
1,776
|
|
|
$
|
(100
|
)
|
|
$
|
1,676
|
|
|
100.0
|
%
|
|
Academy Point Atrium I
|
|
11/03/2010
|
|
Colorado Springs
|
|
CO
|
|
Office
|
|
1,650
|
|
|
2,884
|
|
|
—
|
|
|
4,534
|
|
|
(52
|
)
|
|
4,482
|
|
|
100.0
|
%
|
||||||
|
Northridge Center I & II
|
|
03/25/2011
|
|
Atlanta
|
|
GA
|
|
Office
|
|
2,234
|
|
|
3,948
|
|
|
672
|
|
|
6,854
|
|
|
(564
|
)
|
|
6,290
|
|
|
100.0
|
%
|
||||||
|
Iron Point Business Park
|
|
06/21/2011
|
|
Folsom
|
|
CA
|
|
Office
|
|
2,671
|
|
|
15,621
|
|
|
1,246
|
|
|
19,538
|
|
|
(1,065
|
)
|
|
18,473
|
|
|
100.0
|
%
|
||||||
|
Roseville Commerce Center
|
|
06/27/2011
|
|
Roseville
|
|
CA
|
|
Industrial/Flex
|
|
2,010
|
|
|
2,795
|
|
|
543
|
|
|
5,348
|
|
|
(204
|
)
|
|
5,144
|
|
|
100.0
|
%
|
||||||
|
1635 N. Cahuenga Building
|
|
08/03/2011
|
|
Los Angeles
|
|
CA
|
|
Office
|
|
3,112
|
|
|
3,885
|
|
|
485
|
|
|
7,482
|
|
|
(138
|
)
|
|
7,344
|
|
|
70.0
|
%
|
||||||
|
Richardson Portfolio:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Palisades Central I
|
|
11/23/2011
|
|
Richardson
|
|
TX
|
|
Office
|
|
1,037
|
|
|
7,116
|
|
|
1,543
|
|
|
9,696
|
|
|
(119
|
)
|
|
9,577
|
|
|
90.0
|
%
|
||||||
|
Palisades Central II
|
|
11/23/2011
|
|
Richardson
|
|
TX
|
|
Office
|
|
810
|
|
|
14,384
|
|
|
2,733
|
|
|
17,927
|
|
|
(265
|
)
|
|
17,662
|
|
|
90.0
|
%
|
||||||
|
Greenway I
|
|
11/23/2011
|
|
Richardson
|
|
TX
|
|
Office
|
|
561
|
|
|
1,170
|
|
|
—
|
|
|
1,731
|
|
|
(4
|
)
|
|
1,727
|
|
|
90.0
|
%
|
||||||
|
Greenway II
|
|
11/23/2011
|
|
Richardson
|
|
TX
|
|
Office
|
|
854
|
|
|
2,392
|
|
|
—
|
|
|
3,246
|
|
|
(8
|
)
|
|
3,238
|
|
|
90.0
|
%
|
||||||
|
Greenway III
|
|
11/23/2011
|
|
Richardson
|
|
TX
|
|
Office
|
|
702
|
|
|
3,470
|
|
|
986
|
|
|
5,158
|
|
|
(64
|
)
|
|
5,094
|
|
|
90.0
|
%
|
||||||
|
Undeveloped Land
|
|
11/23/2011
|
|
Richardson
|
|
TX
|
|
Undeveloped Land
|
|
5,500
|
|
|
—
|
|
|
—
|
|
|
5,500
|
|
|
—
|
|
|
5,500
|
|
|
90.0
|
%
|
||||||
|
Total Richardson Portfolio
|
|
|
|
|
|
|
|
|
|
9,464
|
|
|
28,532
|
|
|
5,262
|
|
|
43,258
|
|
|
(460
|
)
|
|
42,798
|
|
|
|
|||||||
|
Park Highlands
|
|
12/30/2011
|
|
North Las Vegas
|
|
NV
|
|
Undeveloped Land
|
|
21,545
|
|
|
—
|
|
|
—
|
|
|
21,545
|
|
|
—
|
|
|
21,545
|
|
|
50.1
|
%
|
||||||
|
|
|
|
|
|
|
|
|
|
|
$
|
43,126
|
|
|
$
|
58,974
|
|
|
$
|
8,235
|
|
|
$
|
110,335
|
|
|
$
|
(2,583
|
)
|
|
$
|
107,752
|
|
|
|
|
|
2012
|
$
|
9,282
|
|
|
2013
|
7,449
|
|
|
|
2014
|
6,403
|
|
|
|
2015
|
4,923
|
|
|
|
2016
|
3,599
|
|
|
|
Thereafter
|
3,371
|
|
|
|
|
$
|
35,027
|
|
|
Industry
|
|
Number of
Tenants
|
|
Annualized
Base Rent
(1)
(in thousands)
|
|
Percentage of
Annualized
Base Rent
|
|||
|
Management Consulting
|
|
18
|
|
$
|
3,346
|
|
|
27.4
|
%
|
|
Finance and Insurance
|
|
14
|
|
2,596
|
|
|
21.3
|
%
|
|
|
Other Professional Services
|
|
13
|
|
1,773
|
|
|
14.5
|
%
|
|
|
|
|
|
|
$
|
7,715
|
|
|
63.2
|
%
|
|
4.
|
TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW‑MARKET LEASE LIABILITIES
|
|
|
|
Tenant Origination and
Absorption Costs
|
|
Above-Market
Lease Assets
|
|
Below-Market
Lease Liabilities
|
||||||||||||||||||
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
||||||||||||
|
Cost
|
|
$
|
8,235
|
|
|
$
|
221
|
|
|
$
|
3,298
|
|
|
$
|
61
|
|
|
$
|
(471
|
)
|
|
$
|
—
|
|
|
Accumulated Amortization
|
|
(1,344
|
)
|
|
(127
|
)
|
|
(452
|
)
|
|
(34
|
)
|
|
34
|
|
|
—
|
|
||||||
|
Net Amount
|
|
$
|
6,891
|
|
|
$
|
94
|
|
|
$
|
2,846
|
|
|
$
|
27
|
|
|
$
|
(437
|
)
|
|
$
|
—
|
|
|
|
|
Tenant Origination and
Absorption Costs
|
|
Above-Market
Lease Assets
|
|
Below-Market
Lease Liabilities
|
||||||||||||||||||
|
|
|
For the Year Ended
December 31,
|
|
For the Year Ended
December 31,
|
|
For the Year Ended
December 31,
|
||||||||||||||||||
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
||||||||||||
|
Amortization
|
|
$
|
1,773
|
|
|
$
|
140
|
|
|
$
|
653
|
|
|
$
|
34
|
|
|
$
|
(40
|
)
|
|
$
|
(2
|
)
|
|
|
|
Tenant
Origination and
Absorption Costs
|
|
Above-Market
Lease Assets
|
|
Below-Market
Lease Liabilities
|
||||||
|
2012
|
|
$
|
2,684
|
|
|
$
|
1,041
|
|
|
$
|
125
|
|
|
2013
|
|
1,494
|
|
|
642
|
|
|
106
|
|
|||
|
2014
|
|
1,083
|
|
|
461
|
|
|
87
|
|
|||
|
2015
|
|
766
|
|
|
256
|
|
|
81
|
|
|||
|
2016
|
|
505
|
|
|
203
|
|
|
38
|
|
|||
|
Thereafter
|
|
359
|
|
|
243
|
|
|
—
|
|
|||
|
|
|
$
|
6,891
|
|
|
$
|
2,846
|
|
|
$
|
437
|
|
|
Weighted-Average Remaining Amortization Period
|
|
3.8 years
|
|
4.1 years
|
|
4.0 years
|
||||||
|
5.
|
REAL ESTATE LOANS RECEIVABLE
|
|
Loan Name
Location of Related Property or Collateral
|
|
Date Acquired/ Originated
|
|
Property Type
|
|
Loan Type
(1)
|
|
Book Value
as of
December 31, 2010
(2)
|
|
Maturity Date
|
|
Foreclosure Date
|
||
|
Roseville Commerce Center Mortgage Portfolio
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Roseville, California
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Roseville Commerce Center First Mortgage I
|
|
09/10/2010
|
|
Industrial/Flex
|
|
Non-Performing Mortgage
|
|
$
|
4,112
|
|
|
N/A
|
|
06/27/2011
|
|
Roseville Commerce Center First Mortgage II
|
|
09/10/2010
|
|
Industrial/Flex
|
|
Non-Performing Mortgage
|
|
1,700
|
|
|
N/A
|
|
06/27/2011
|
|
|
Roseville Commerce Center First Mortgage III
|
|
09/10/2010
|
|
Land
|
|
Non-Performing Mortgage
|
|
158
|
|
|
N/A
|
|
06/27/2011
|
|
|
Total Roseville Commerce Center Mortgage Portfolio
|
|
|
|
|
|
|
|
5,970
|
|
|
|
|
|
|
|
Northridge Center I & II First Mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Atlanta, Georgia
|
|
12/08/2010
|
|
Office
|
|
Non-Performing Mortgage
|
|
7,257
|
|
|
N/A
|
|
03/25/2011
|
|
|
Iron Point Business Park First Mortgage
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Folsom, California
|
|
03/14/2011
|
|
Office
|
|
Non-Performing Mortgage
|
|
—
|
|
|
N/A
|
|
06/21/2011
|
|
|
|
|
|
|
|
|
|
|
$
|
13,227
|
|
|
|
|
|
|
Real estate loans receivable - December 31, 2010
|
$
|
13,227
|
|
|
Face value of real estate loans receivable acquired
|
25,631
|
|
|
|
Discount on purchase price of real estate loans receivable
|
(5,881
|
)
|
|
|
Principal repayments received on real estate loans receivable
|
(438
|
)
|
|
|
Closing costs on purchase of real estate loans receivable
|
370
|
|
|
|
Foreclosure on properties securing real estate loans receivable
|
(32,909
|
)
|
|
|
Real estate loans receivable - December 31, 2011
|
$
|
—
|
|
|
6.
|
REAL ESTATE SECURITIES
|
|
Description
|
|
Credit Rating
|
|
Scheduled Maturity
|
|
Coupon Rate
|
|
Face Amount
|
|
Amortized Cost Basis
|
|
Unrealized Gains (Losses)
|
|
Fair Value
|
||||||||
|
CMBS
|
|
AAA
|
|
06/10/2044
|
|
5.14%
|
|
$
|
5,170
|
|
|
$
|
5,235
|
|
|
$
|
(5
|
)
|
|
$
|
5,230
|
|
|
CMBS
|
|
AAA
|
|
05/10/2043
|
|
4.54%
|
|
6,914
|
|
|
6,991
|
|
|
(28
|
)
|
|
6,963
|
|
||||
|
CMBS
(1)
|
|
AAA
|
|
08/15/2038
|
|
5.10%
|
|
14,571
|
|
|
14,855
|
|
|
(28
|
)
|
|
14,827
|
|
||||
|
CMBS
(1)
|
|
AAA
|
|
07/15/2042
|
|
5.11%
|
|
9,342
|
|
|
9,459
|
|
|
6
|
|
|
9,465
|
|
||||
|
CMBS
(1)
|
|
AAA
|
|
07/15/2042
|
|
5.11%
|
|
4,198
|
|
|
4,251
|
|
|
2
|
|
|
4,253
|
|
||||
|
CMBS
(1)
|
|
AAA
|
|
12/15/2043
|
|
5.33%
|
|
17,409
|
|
|
17,857
|
|
|
7
|
|
|
17,864
|
|
||||
|
|
|
|
|
|
|
|
|
$
|
57,604
|
|
|
$
|
58,648
|
|
|
$
|
(46
|
)
|
|
$
|
58,602
|
|
|
Face value of securities acquired
|
$
|
57,604
|
|
|
Premium on securities acquired
|
1,092
|
|
|
|
Amortization of premium on securities
|
(48
|
)
|
|
|
Unrealized losses
|
(46
|
)
|
|
|
Real estate securities - December 31, 2011
|
$
|
58,602
|
|
|
|
Holding Period of Unrealized Losses of Investments in Real Estate Securities
|
||||||||||||||||||||||
|
|
Less than 12 Months
|
|
12 Months or More
|
|
Total
|
||||||||||||||||||
|
Investment
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Gains (Losses)
|
|
Fair
Value
|
|
Unrealized
Losses
|
||||||||||||
|
Fixed Rate CMBS
|
$
|
58,602
|
|
|
$
|
(46
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
58,602
|
|
|
$
|
(46
|
)
|
|
7.
|
NOTES PAYABLE AND REPURCHASE AGREEMENTS
|
|
|
|
Principal
|
|
Contractual Interest Rate
(1)
|
|
Effective Interest Rate
(1)
|
|
Payment Type
|
|
Maturity Date
(2)
|
||
|
1635 N. Cahuenga Mortgage Loan
|
|
$
|
3,477
|
|
|
5.00%
|
|
5.0%
|
|
Interest Only
|
|
07/31/2016
|
|
Richardson Portfolio Mortgage Loan
(3)
|
|
29,525
|
|
|
6.25%
|
|
6.25%
|
|
Interest Only
|
|
11/30/2015
|
|
|
Repurchase Agreements on real estate securities
|
|
30,201
|
|
|
LIBOR + 1.25%
|
|
1.54%
|
|
Interest Only
|
|
01/19/2012
(4)
|
|
|
Total Notes Payable and Repurchase Agreements
|
|
$
|
63,203
|
|
|
|
|
|
|
|
|
|
|
|
Current Maturity
|
|
Fully Extended Maturity
(1)
|
||||||||||||||||||||
|
|
Notes Payable
|
|
Repurchase Agreements
|
|
Total
|
|
Notes Payable
|
|
Repurchase Agreements
|
|
Total
|
||||||||||||
|
2012
|
$
|
—
|
|
|
$
|
30,201
|
|
|
$
|
30,201
|
|
|
$
|
—
|
|
|
$
|
30,201
|
|
|
$
|
30,201
|
|
|
2013
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
2014
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
2015
|
29,525
|
|
|
—
|
|
|
29,525
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
2016
|
3,477
|
|
|
—
|
|
|
3,477
|
|
|
33,002
|
|
|
—
|
|
|
33,002
|
|
||||||
|
Thereafter
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
|
$
|
33,002
|
|
|
$
|
30,201
|
|
|
$
|
63,203
|
|
|
$
|
33,002
|
|
|
$
|
30,201
|
|
|
$
|
63,203
|
|
|
Collateral
|
|
Balance Sheet Classification
of Collateral
|
|
Carrying Value of
Repurchase Agreement
|
|
Book Value of
Underlying Collateral
|
|
Maturity Date
of Collateral
|
|
Repurchase Agreement
Counterparties
|
||||
|
CMBS
|
|
Real estate securities
|
|
$
|
9,664
|
|
|
14,827
|
|
|
08/15/2038
|
|
Wells Fargo Securities, LLC
|
|
|
CMBS
|
|
Real estate securities
|
|
6,154
|
|
|
9,465
|
|
|
07/15/2042
|
|
Wells Fargo Securities, LLC
|
||
|
CMBS
|
|
Real estate securities
|
|
2,766
|
|
|
4,253
|
|
|
07/15/2042
|
|
Wells Fargo Securities, LLC
|
||
|
CMBS
|
|
Real estate securities
|
|
11,617
|
|
|
17,864
|
|
|
12/15/2043
|
|
Wells Fargo Securities, LLC
|
||
|
|
|
|
|
$
|
30,201
|
|
|
$
|
46,409
|
|
|
|
|
|
|
8.
|
FAIR VALUE DISCLOSURES
|
|
|
|
December 31, 2011
|
|
December 31, 2010
|
||||||||||||||||||||
|
|
|
Face Value
|
|
Carrying Amount
|
|
Fair Value
|
|
Face Value
|
|
Carrying Amount
|
|
Fair Value
|
||||||||||||
|
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Real estate loans receivable
(1)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
27,483
|
|
|
$
|
13,227
|
|
|
$
|
12,950
|
|
|
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Notes payable and repurchase agreements
|
|
$
|
63,203
|
|
|
$
|
63,203
|
|
|
$
|
63,219
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
Fair Value Measurements Using
|
||||||||||||
|
|
Total
|
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
|
Recurring Basis:
|
|
|
|
|
|
|
|
||||||||
|
CMBS
|
$
|
58,602
|
|
|
$
|
—
|
|
|
$
|
58,602
|
|
|
$
|
—
|
|
|
|
|
|
Fair Value Measurements Using
|
||||||||||||
|
|
Total
|
|
Quoted Prices in Active Markets
for Identical Assets (Level 1)
|
|
Significant Other Observable
Inputs
(Level 2)
|
|
Significant Unobservable
Inputs
(Level 3)
|
||||||||
|
Nonrecurring Basis:
|
|
|
|
|
|
|
|
||||||||
|
Foreclosed real estate
(1)
|
$
|
32,713
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
32,713
|
|
|
Investment in real estate
(2)
|
73,297
|
|
|
—
|
|
|
—
|
|
|
73,297
|
|
||||
|
Total Assets
|
$
|
106,010
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
106,010
|
|
|
9.
|
RELATED PARTY TRANSACTIONS
|
|
|
|
Incurred
|
|
Payable as of
December 31,
|
||||||||||||||||
|
|
|
2011
|
|
2010
|
|
2009
|
|
2011
|
|
2010
|
||||||||||
|
Expensed
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Asset management fees
|
|
$
|
328
|
|
|
$
|
30
|
|
|
$
|
—
|
|
|
$
|
17
|
|
|
$
|
—
|
|
|
Reimbursable operating expenses
(1)
|
|
60
|
|
|
462
|
|
|
346
|
|
|
—
|
|
|
312
|
|
|||||
|
Acquisition fees on real properties
|
|
460
|
|
|
18
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
Additional Paid-in Capital
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Selling commissions
|
|
9,431
|
|
|
2,618
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
Dealer manager fees
|
|
4,893
|
|
|
1,498
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
Reimbursable other offering costs
|
|
2,450
|
|
|
3,438
|
|
|
—
|
|
|
14
|
|
|
66
|
|
|||||
|
Capitalized
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Acquisition and origination fees on real estate loans receivable
|
|
199
|
|
|
131
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
Acquisition fee on undeveloped land
|
|
106
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
|
|
$
|
17,927
|
|
|
$
|
8,195
|
|
|
$
|
346
|
|
|
$
|
31
|
|
|
$
|
378
|
|
|
10.
|
SEGMENT INFORMATION
|
|
|
|
Years Ended December 31,
|
||||||
|
|
|
2011
|
|
2010
|
||||
|
Revenues:
|
|
|
|
|
||||
|
Real estate segment
|
|
$
|
3,914
|
|
|
$
|
177
|
|
|
Real estate-related segment
|
|
311
|
|
|
131
|
|
||
|
Total segment revenues
|
|
4,225
|
|
|
308
|
|
||
|
Corporate-level
|
|
53
|
|
|
—
|
|
||
|
Total Revenues
|
|
$
|
4,278
|
|
|
$
|
308
|
|
|
Interest Expense:
|
|
|
|
|
||||
|
Real estate segment
|
|
$
|
300
|
|
|
$
|
—
|
|
|
Real estate-related segment
|
|
—
|
|
|
—
|
|
||
|
Total segment interest expense
|
|
300
|
|
|
—
|
|
||
|
Corporate-level
|
|
13
|
|
|
—
|
|
||
|
Total Interest Expense
|
|
$
|
313
|
|
|
$
|
—
|
|
|
NOI:
|
|
|
|
|
||||
|
Real estate segment
|
|
$
|
(467
|
)
|
|
$
|
(95
|
)
|
|
Real estate-related segment
|
|
235
|
|
|
110
|
|
||
|
Total NOI
|
|
$
|
(232
|
)
|
|
$
|
15
|
|
|
|
|
As of December 31,
|
||||||
|
|
|
2011
|
|
2010
|
||||
|
Assets:
|
|
|
|
|
||||
|
Real estate segment
|
|
$
|
114,310
|
|
|
$
|
4,637
|
|
|
Real estate-related segment
|
|
—
|
|
|
13,832
|
|
||
|
Total segment assets
|
|
114,310
|
|
|
18,469
|
|
||
|
Corporate-level
(1)
|
|
144,153
|
|
|
23,935
|
|
||
|
Total assets
|
|
$
|
258,463
|
|
|
$
|
42,404
|
|
|
Liabilities:
|
|
|
|
|
||||
|
Real estate segment
|
|
$
|
36,146
|
|
|
$
|
295
|
|
|
Real estate-related segment
|
|
—
|
|
|
563
|
|
||
|
Total segment liabilities
|
|
36,146
|
|
|
858
|
|
||
|
Corporate-level
(2)
|
|
30,482
|
|
|
488
|
|
||
|
Total liabilities
|
|
$
|
66,628
|
|
|
$
|
1,346
|
|
|
|
|
Years Ended December 31,
|
||||||
|
|
|
2011
|
|
2010
|
||||
|
Net loss
|
|
$
|
(7,799
|
)
|
|
$
|
(1,975
|
)
|
|
Interest income from real estate securities and other interest income
|
|
(170
|
)
|
|
(18
|
)
|
||
|
Real estate acquisition fees and expenses
|
|
1,139
|
|
|
51
|
|
||
|
Real estate acquisition fees and expenses to affiliates
|
|
460
|
|
|
18
|
|
||
|
Costs related to the foreclosure of loans receivable
|
|
901
|
|
|
92
|
|
||
|
General and administrative expenses
|
|
2,005
|
|
|
1,635
|
|
||
|
Depreciation and amortization
|
|
3,203
|
|
|
212
|
|
||
|
Corporate-level interest expense
|
|
13
|
|
|
—
|
|
||
|
Corporate-level asset management fees to affiliates
|
|
16
|
|
|
—
|
|
||
|
NOI
|
|
$
|
(232
|
)
|
|
$
|
15
|
|
|
11.
|
PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
|
|
|
|
For the Year Ended December 31,
|
||||||
|
|
|
2011
|
|
2010
|
||||
|
Revenues
|
|
$
|
12,991
|
|
|
$
|
10,966
|
|
|
Depreciation and amortization
|
|
$
|
4,823
|
|
|
$
|
1,885
|
|
|
Net loss attributable to common stockholders
|
|
$
|
(5,718
|
)
|
|
$
|
(1,105
|
)
|
|
Net loss per common share, basic and diluted
|
|
$
|
(0.44
|
)
|
|
$
|
(0.33
|
)
|
|
Weighted-average number of common shares outstanding, basic and diluted
|
|
12,880,234
|
|
|
3,298,902
|
|
||
|
12.
|
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
|
|
|
|
2011
|
||||||||||||||
|
|
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||||
|
Revenues
|
|
$
|
337
|
|
|
$
|
609
|
|
|
$
|
1,189
|
|
|
$
|
2,143
|
|
|
Net loss attributable to commons stockholders
|
|
$
|
(703
|
)
|
|
$
|
(1,677
|
)
|
|
$
|
(1,844
|
)
|
|
$
|
(3,357
|
)
|
|
Net loss per common share, basic and diluted
|
|
$
|
(0.12
|
)
|
|
$
|
(0.19
|
)
|
|
$
|
(0.14
|
)
|
|
$
|
(0.19
|
)
|
|
Distributions declared per common share
(1)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.300
|
|
|
|
|
2010
|
||||||||||||||
|
|
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||||
|
Revenues
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
75
|
|
|
$
|
233
|
|
|
Net loss
|
|
$
|
(3
|
)
|
|
$
|
(603
|
)
|
|
$
|
(460
|
)
|
|
$
|
(909
|
)
|
|
Net loss per common share, basic and diluted
|
|
$
|
(0.13
|
)
|
|
$
|
(0.74
|
)
|
|
$
|
(0.23
|
)
|
|
$
|
(0.24
|
)
|
|
Distributions declared per common share
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
13.
|
COMMITMENTS AND CONTINGENCIES
|
|
14.
|
SUBSEQUENT EVENTS
|
|
|
|
|
|
|
|
|
|
Initial Cost to Company
|
|
|
|
Gross Amount at which Carried at Close of Period
|
|
|
|
|
|
|
||||||||||||||||||||||||||
|
Description
|
|
Location
|
|
Ownership Percent
|
|
Encumbrances
|
|
Land
|
|
Building and Improvements
(1)
|
|
Total
|
|
Cost Capitalized Subsequent to Acquisition
(2)
|
|
Land
|
|
Building and Improvements
(1)
|
|
Total
(3)
|
|
Accumulated Depreciation and Amortization
|
|
Original Date of Construction
|
|
Date
Acquired or Foreclosed on
|
||||||||||||||||||
|
Village Overlook Buildings
|
|
Stockbridge, GA
|
|
100%
|
|
$
|
—
|
|
|
$
|
440
|
|
|
$
|
1,332
|
|
|
$
|
1,772
|
|
|
$
|
4
|
|
|
$
|
440
|
|
|
$
|
1,336
|
|
|
$
|
1,776
|
|
|
$
|
(100
|
)
|
|
1993
|
|
08/02/2010
|
|
Academy Point Atrium I
|
|
Colorado Springs, CO
|
|
100%
|
|
—
|
|
|
1,650
|
|
|
1,223
|
|
|
2,873
|
|
|
1,661
|
|
|
1,650
|
|
|
2,884
|
|
|
4,534
|
|
|
(52
|
)
|
|
1981
|
|
11/03/2010
|
|||||||||
|
Northridge Center I & II
|
|
Atlanta, GA
|
|
100%
|
|
—
|
|
|
2,234
|
|
|
4,457
|
|
|
6,691
|
|
|
163
|
|
|
2,234
|
|
|
4,620
|
|
|
6,854
|
|
|
(564
|
)
|
|
1985/1989
|
|
03/25/2011
|
|||||||||
|
Iron Point Business Park
|
|
Folsom, CA
|
|
100%
|
|
—
|
|
|
2,671
|
|
|
16,576
|
|
|
19,247
|
|
|
291
|
|
|
2,671
|
|
|
16,867
|
|
|
19,538
|
|
|
(1,065
|
)
|
|
1999/2001
|
|
06/21/2011
|
|||||||||
|
Roseville Commerce Center
|
|
Roseville, CA
|
|
100%
|
|
—
|
|
|
2,010
|
|
|
3,311
|
|
|
5,321
|
|
|
27
|
|
|
2,010
|
|
|
3,338
|
|
|
5,348
|
|
|
(204
|
)
|
|
2006
|
|
06/27/2011
|
|||||||||
|
1635 N. Cahuenga Building
|
|
Los Angeles, CA
|
|
70%
|
|
3,477
|
|
|
3,112
|
|
|
4,245
|
|
|
7,357
|
|
|
125
|
|
|
3,112
|
|
|
4,370
|
|
|
7,482
|
|
|
(138
|
)
|
|
1983
|
|
08/03/2011
|
|||||||||
|
Richardson Portfolio
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Palisades Central I
|
|
Richardson, TX
|
|
90%
|
|
(4
|
)
|
|
1,037
|
|
|
8,628
|
|
|
9,665
|
|
|
31
|
|
|
1,037
|
|
|
8,659
|
|
|
9,696
|
|
|
(119
|
)
|
|
1980
|
|
11/23/2011
|
|||||||||
|
Palisades Central II
|
|
Richardson, TX
|
|
90%
|
|
(4
|
)
|
|
810
|
|
|
17,117
|
|
|
17,927
|
|
|
—
|
|
|
810
|
|
|
17,117
|
|
|
17,927
|
|
|
(265
|
)
|
|
1985
|
|
11/23/2011
|
|||||||||
|
Greenway I
|
|
Richardson, TX
|
|
90%
|
|
(4
|
)
|
|
561
|
|
|
1,170
|
|
|
1,731
|
|
|
—
|
|
|
561
|
|
|
1,170
|
|
|
1,731
|
|
|
(4
|
)
|
|
1983
|
|
11/23/2011
|
|||||||||
|
Greenway II
|
|
Richardson, TX
|
|
90%
|
|
(4
|
)
|
|
854
|
|
|
2,392
|
|
|
3,246
|
|
|
—
|
|
|
854
|
|
|
2,392
|
|
|
3,246
|
|
|
(8
|
)
|
|
1985
|
|
11/23/2011
|
|||||||||
|
Greenway III
|
|
Richardson, TX
|
|
90%
|
|
(4
|
)
|
|
702
|
|
|
4,083
|
|
|
4,785
|
|
|
373
|
|
|
702
|
|
|
4,456
|
|
|
5,158
|
|
|
(64
|
)
|
|
1983
|
|
11/23/2011
|
|||||||||
|
Undeveloped Land
|
|
Richardson, TX
|
|
90%
|
|
(4
|
)
|
|
5,500
|
|
|
—
|
|
|
5,500
|
|
|
—
|
|
|
5,500
|
|
|
—
|
|
|
5,500
|
|
|
—
|
|
|
N/A
|
|
11/23/2011
|
|||||||||
|
Total Richardson Portfolio
|
|
|
|
|
|
29,525
|
|
|
9,464
|
|
|
33,390
|
|
|
42,854
|
|
|
404
|
|
|
9,464
|
|
|
33,794
|
|
|
43,258
|
|
|
(460
|
)
|
|
|
|
|
|||||||||
|
Park Highlands
|
|
North Las Vegas, NV
|
|
50%
|
|
—
|
|
|
21,545
|
|
|
—
|
|
|
21,545
|
|
|
—
|
|
|
21,545
|
|
|
—
|
|
|
21,545
|
|
|
—
|
|
|
N/A
|
|
12/30/2011
|
|||||||||
|
|
|
|
|
TOTAL
|
|
$
|
33,002
|
|
|
$
|
43,126
|
|
|
$
|
64,534
|
|
|
$
|
107,660
|
|
|
$
|
2,675
|
|
|
$
|
43,126
|
|
|
$
|
67,209
|
|
|
$
|
110,335
|
|
|
$
|
(2,583
|
)
|
|
|
|
|
|
|
|
2011
|
|
2010
|
||||
|
Real Estate
|
|
|
|
|
||||
|
Balance at the beginning of the year
|
|
$
|
4,737
|
|
|
$
|
—
|
|
|
Acquisitions
(1)
|
|
103,015
|
|
|
4,646
|
|
||
|
Improvements
|
|
3,351
|
|
|
113
|
|
||
|
Write-off of fully depreciated and fully amortized assets
|
|
(768
|
)
|
|
(22
|
)
|
||
|
Balance at the end of the year
|
|
$
|
110,335
|
|
|
$
|
4,737
|
|
|
|
|
|
|
|
||||
|
Accumulated depreciation
|
|
|
|
|
||||
|
Balance at the beginning of the year
|
|
$
|
190
|
|
|
$
|
—
|
|
|
Depreciation expense
|
|
3,161
|
|
|
212
|
|
||
|
Write-off of fully depreciated and fully amortized assets
|
|
(768
|
)
|
|
(22
|
)
|
||
|
Balance at the end of the year
|
|
$
|
2,583
|
|
|
$
|
190
|
|
|
|
KBS STRATEGIC OPPORTUNITY REIT, INC.
|
|
|
|
|
|
|
|
By:
|
/s/ Keith D. Hall
|
|
|
|
Keith D. Hall
|
|
|
|
Chief Executive Officer and Director
|
|
Name
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
/s/ KEITH D. HALL
|
|
Chief Executive Officer and Director
|
|
March 12, 2012
|
|
Keith D. Hall
|
|
|
|
|
|
/s/ PETER MCMILLIAN III
|
|
Chairman of the Board, President and Director
|
|
March 12, 2012
|
|
Peter McMillian III
|
|
|
|
|
|
/s/ DAVID E. SNYDER
|
|
Chief Financial Officer
|
|
March 12, 2012
|
|
David E. Snyder
|
|
|
|
|
|
/s/ STACIE K. YAMANE
|
|
Chief Accounting Officer
|
|
March 12, 2012
|
|
Stacie K. Yamane
|
|
|
|
|
|
/s/ MICHAEL L. MEYER
|
|
Director
|
|
March 12, 2012
|
|
Michael L. Meyer
|
|
|
|
|
|
/s/ WILLIAM M. PETAK
|
|
Director
|
|
March 12, 2012
|
|
William M. Petak
|
|
|
|
|
|
/s/ ERIC J. SMITH
|
|
Director
|
|
March 12, 2012
|
|
Eric J. Smith
|
|
|
|
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
| FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
|---|
| DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
|---|
No information found
No Customers Found
No Suppliers Found
Price
Yield
| Owner | Position | Direct Shares | Indirect Shares |
|---|