Zamansky LLC is investigating possible securities law violations, fraud, breach of fiduciary duty and unsuitable sales of the KBS Real Estate Investment Trust Inc. (“KBS REIT I”). KBS REIT I is a non-publicly traded real estate investment trust focused on the commercial real estate market that has seen a sharp drop in its value, and has stopping paying distributions to investors.
On Monday, April 3, 2012, KBS REIT I told investor that it was cutting the value of the REIT to $5.16 per share, from $7.32, a drop of 29%. The offering price paid by most investors for KBS REIT I was $10 per share. “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,” said Keith Hall, executive vice president of KBS REIT I.
KBS REIT I also announced that it was ceasing its distributions to investors. Most investors purchased the KBS REIT I believing that it was a safe and secure investment which generated income with no risk of loss of principal. Previously, the REIT had been paying investors annual distributions of 5.3% which was attractive to yield-seeking investors. KBS REIT I raised approximately $1.7 billion from investors, who now hold at a loss marked-down securities which pay no income.
Zamansky is investing KB REIT I for misrepresentations made in its offering documents and reports to investors, failures to disclose risks associated with its practices, failure to report on deterioration in its business and violations of its investment objectives to investors.
If you are an investor in KBS REIT I, or have knowledge that would assist in our investigation, please contact Jake Zamansky at 212 742-1414, firstname.lastname@example.org.