The Institutional Real Estate Inc Sponsorship brochure, Connected-Investor Focused, We connect people, data and insights, sponsorship, events, IREI Products
Issue link: http://read.uberflip.com/i/1058204
37 REALASSETS ADVISER | D E C E M B E R 2 0 1 8 CORPORATE CONTACT KBS may be reached at www.kbs.com or at (855) 434-4527 THINGS TO NOTE This article presents the author's present opinion refl ecting current market conditions, which are subject to change without notice. It has been written for informational and educational purposes only and should not be considered as investment advice or as a recommendation of any particular security, strategy or investment product. Investing in real estate includes substantial risks including, but are not limited to, the possibility of losing your entire investment. A decision to invest in real estate should be made only after a careful review of any offering materials, including consideration of the risks related to the investment. SPONSOR INTERVIEW Another model you've recently changed is distribution. You have launched a real estate fund that is available for direct investment. Yes, KBS Growth & Income REIT is a fund with well-located and well-leased multi-tenant offi ce assets diversifi ed in four key U.S. offi ce markets. The fund is registered as a 506c for Registered Investment Advisers and accredited investors. There is no middleman on this fund. It's a direct investment, meaning there are no up-front sales commissions. If the investor invests $100,000, the entire $100,000 goes right into the investment. How does this new product help the RIA? The response from RIAs has been tremendous. They've never before been able to offer an institutional real estate product to their retail clients. This fund makes it much easier to access true real estate and all its benefi ts. In addition, it gives an RIA access to tremendous market data from KBS. An RIA can place this fund on their custodial platform, and they can begin participating in the dividend distributions. The KBS Growth & Income REIT is not a blind pool; there are well-located multi-tenant offi ce buildings already in the fund. In addition, this fund has no up-front commissions. Can you tell us more about the KBS Growth & Income Fund? As mentioned previously, the fund is registered as a 506c private placement for accredited investors with a minimum investment amount of $25,000. Presently, we have four multi-tenant offi ce assets in the fund, and we are looking to add more as fundraising progresses. The current assets include Commonwealth in downtown Portland, Offi ces at Greenhouse in Houston, 213 West Institute Place in downtown Chicago, and Von Karman Tech Center in Irvine, Calif. As of June 30, 2018, the current offering price (NAV) was $8.79 per share and the current distribution rate was 6.00 percent based on NAV. The portfolio totals 683,952 rentable square feet and is presently 98 percent leased. Is there a level of due diligence involved with the RIA? In many cases, yes. RIAs value their clients, and they want to make sure the alternative investment offerings on their custodial platforms are high quality. We believe in 100 percent transparency, so we would typically work with their due diligence fi rm to thoroughly analyze our team and the KBS Growth & Income Fund. We have also met with several RIAs personally, so they can meet our team face to face and get to know our fi rm and how we actively manage our properties. What do RIAs need to know to make recommendations about choosing product sponsors like yourself? You want to make sure the sponsor is credible and stable. You want to know how long they have been in business, their total exposure to the marketplace, their current portfolio, and the tenure of their team. RIAs need to have a sense of real estate. A lot of retail investors access real estate by investing in a single building via a partnership. This can be labor intensive and risky because everything is tied up in the performance of that single asset. In our portfolio, if we have to sell a building, it doesn't have a negative impact on the investor because the other assets will be continuing to perform while we replace the sold building with one that has an opportunity long term. What's the best career advice that somebody has given you, over the course of your career? I think there are three things: be a perfectionist, be tenacious and have a vision. I let everyone in the company know I'm not their proofreader. Everything needs to be perfect when it comes to me. If I'm looking at a report and the date is wrong, how do I know the IRR calculation is right? How do I know the annual yield is right? How do I know the assumptions are right? Everything has got to be perfect because our investors, board members and other stakeholders need to know they can trust the information we provide. Then there's tenacity. Everything is not going to go smoothly. You need to just keep going if you believe in your goal. And that brings me to having a vision. That's not about how much money we are going to make this month or next month, or even this year. It's about what this company is going to look like 10 or 15 years from now. Being able to create that vision is something that's really, really exciting. And I can't wait to see it come to fruition.