KBS Real Estate Investment Trust Inc.( KBS REIT I) just informed investors it is ceasing the payment of distributions to investors. This no doubt is bad news for those who purchased KBS in anticipation of receiving monthly distributions to supplement retirement income.
Adding further insult to this financial injury, the company lowered the value of the REIT again. It has declined to $5.16 per share, from $7.32, a drop of 29%. KBS has lost nearly 50% of its value from the $10 per share offering price.
"The new pricing of KBS REIT I reflects the current status of the portfolio, and the discontinuation of distributions was made with the goal of managing the REIT's debt obligations and cash flows, and attempting to maximize the total return to investors over time," according to a quote in the Investment News by Keith Hall, executive vice president of KBS REIT I.
KBS I raised $1.7 billion, so this recent devaluation indicates investors have losses of over $800 million. The future does not look too bright for a recovery since the company SEC filings report that occupancy rates declined last year to 85%, from 92% in 2010.
Our investigation indicates that many REITs were touted as being safe and secure investments that would maintain value and provide a steady income stream. Other REITS, including those from Behringer Harvard, Cornerstone Core Properties, Hines, Wells and Inland Western have seen values decline and the curtailment of distributions.
If you were sold KBS REIT or any other REIT on the basis that values and distributions were assured, you may be able to recover some or all of your losses. Rex Securities Law, located in Boca Raton, FL, represents aggrieved investors nationwide. Call us at 561 391 1900 or visit our website.
Initial consultation free.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.