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Webcast: The Future of Commercial Real Estate Investing, How the Investment Ecosystem is Being Disrupted


Earlier this week, three members of KBS Direct’s leadership team, Chuck Schreiber, Peter Bren, and Lew Feldman, were all featured in a webcast with InvestmentNews. InvestmentNews Executive Editor, Evan Cooper, hosted, and together they discussed the future of real estate investment and the KBS Growth & Income Real Estate Investment Trust.

Visit https://kbsdirect.work/webcastIN/ to register and listen to the webcast.   

Do you have any questions? Speak with an Investor Relations Representative.

 

Articles or information from third-party sources outside of this domain may discuss KBS Direct or relate to information contained herein, but KBS Directdoes not approve and is not responsible for such content. Hyperlinks to third-party sites, or reproduction of third-party content, do not constitute an approval or endorsement by KBS Direct or NCPS of the linked or reproduced content. KBS Direct makes no representations as to the appropriateness of an investment in the KBS Growth & Income Real Estate Investment Trust REIT for ERISA plan fiduciaries and IRA owners and no investment advice is being provided.  ERISA plan fiduciaries and IRA owners should consult with counsel before making an investment in the REIT’s shares. The Growth & Income Real Estate Investment Trust is offered through North Capital Private Securities, member FINRA/SIPC.

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RIAs – Learning to Love No-Load Investments

Even though the implementation of the Fiduciary Rule has been pushed back to 2019, many of the country’s largest investment firms have already started making the changes necessary to comply.

It is inevitable that a larger portion of the financial industry will abide by a fiduciary standard. This standard can be a positive shift for the investor as well as the Registered Investment Advisor (RIA), especially if the adviser is continually working to acquire and retain clients by providing a high level of transparency in all information and investments.

Below are some ways RIAs can be more competitive1:

  • Really Listen:  Listen and understand each client’s needs so you provide the most relevant investment information for that investor’s needs.
  • Comprehensive Research:  Technology is such that most investors can find all the information they need on their own. That means you must prove that your advice is spot on and your solid experience in the field can help bring potentially steady returns
  • Show No Bias:  Always provide unbiased research.
  • Transparency:  With the arrival of the Fiduciary Rule, transparency is key since currently about two-thirds of investors do not trust the financial industry to act in their best interests. As an RIA, you can combat this by educating clients and helping them understand the decision-making process.
  • Relevance:  Show how your recommendations are relevant to your client’s desired outcome.

What about No-Load investments?

If investors show a preference for no-load investments, and they already are, current compensation structures in the industry can be impacted. No wonder there’s a sense of apprehension among financial professionals. But there’s no use in dragging your heels. RIAs who embrace the changes necessary to meet investors’ desire to avoid investments with upfront fees are likely to gain greater customer satisfaction and customer trust. .

Be Clear

Despite the fact that most advisers are honest with clients, there is still a feeling that they are not. It could be that clients do not always understand the information being provided or the way it’s being presented. So be willing to take a more straightforward approach, and even if you’re not sure it’s necessary, take the extra time to make sure clients understand what you are advising .

Choose the Best Option

There are times when a no-load investment may be the best option for the investor, and sometimes it may not be. But if you present your client with clearly defined information, they feel empowered in the decision to invest their hard-earned money. Transparency is a sign of trust and there is no doubt that consumer trust is a key factor in the success of any business.

Start Now

The early adopters of increased transparency have a head start over those who are waiting until 2019. The financial industry is at a turning point, so be willing to change and learn new ways of doing business in order to survive the regulatory, technological and consumer transformations that are occurring.

Now is the time for RIAs to make the best use of their experience, intelligence, education, research, and interpersonal skills, to ensure each and every client is happy with and understands their investments.

 

Do you have any questions? Speak with an Investor Relations Representative.

Articles or information from third-party sources outside of this domain may discuss KBS Direct or relate to information contained herein, but KBS Direct does not approve and is not responsible for such content. Hyperlinks to third-party sites, or reproduction of third-party content, do not constitute an approval or endorsement by KBS Direct or NCPS of the linked or reproduced content. KBS Direct makes no representations as to the appropriateness of an investment in the KBS Growth & Income Real Estate Investment Trust REIT for ERISA plan fiduciaries and IRA owners and no investment advice is being provided.  ERISA plan fiduciaries and IRA owners should consult with counsel before making an investment in the REIT’s shares. The Growth & Income Real Estate Investment Trust is offered through North Capital Private Securities, member FINRA/SIPC.

 

1 Trainer, David (2017). How the Fiduciary Rule is Good for You. Retrieved from https://www.forbes.com/sites/greatspeculations/2017/12/14/how-the-fiduciary-rule-is-good-for-you/#557f7b6d60c5

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New Video on Portland’s Commonwealth Building

Designed by renowned architect Pietro Belluschi and constructed between 1946 and 1948, Commonwealth is recognized as one of the first glass box, mid-century design towers ever built. Since its creative repositioning beginning in 2008, the building has become one of the dominant locations for Portland’s technology, advertising, media and information tenants.

Please check out our new video that showcases the Commonwealth building.

More than $13.6 million was invested in tenant improvements, shared amenities and capital expenditures in recent years, allowing Commonwealth to offer a best-in-class tenant experience. Amenities include a roof top deck, building conference room, tenant lounge, bicycle storage, a fitness center and locker rooms. The building fronts the Sixth Avenue transit mall providing tenants with convenient access to mass transit.

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Chicago’s 213 West Institute:
From Bike Factory to Dream Factory

Forget brick-and-mortar — how about brick-and-timber?

Chicago’s River North features a lot of millennials, startups and tech/creative firms. It also includes 213 West Institute, the newest property in KBS Direct’s Growth & Income Real Estate Investment Trust.

River North is one of Chicago’s oldest neighborhoods, and features mixed use buildings that have long served the youthful population from three neighboring universities: DePaul, Northwestern and Loyola.

“It’s catering to the millennials and the younger workforce,” says Dan Park, KBS senior VP and the asset manager for the property. “They’re demanding cool bars, restaurants, lounges, music venues — anything more experiential — cool and hip, if you will. This market has the older properties — the brick-and-timber buildings — that give it character. When you add in the walkability, it’s uniquely positioned.”

Because KBS looks for properties where there is strong population and job growth. Central regional president, Ken Robertson, along with his acquisition team, were successful in acquiring this vintage property.  

The building can meet most millennials’ requirements for live/work/play. It is a Class A converted loft office building valued at $43.5 million. A brick-and-timber building that has housed creative and tech tenants, the property once served as a bicycle factory, with rentable space of 155,454 square feet.

“We believe this property fits seamlessly with the character and demand of today’s workforce with its great location, walkability to amenities and access to transportation and housing,” adds KBS SVP Brett Merz.

As a 100-year-old, repurposed and renovated building — and having once been a bike factory — 213 W. Institute is unique building with an interesting history.

“We love Chicago, and like a lot of markets we love, it’s still all about understanding submarkets and micro-markets,” says Ken Robertson. “We never bargain hunt at the expense of location, so making sure we are in a market we believe in and a submarket we love — that’s the bullseye for us.”

When it comes to choosing locations, the KBS strategy is surprisingly simple.

“Focus on places high-growth companies want to be in most,” Ken says. “Company location is usually part of a broader team-building strategy and creating a culture that fuels their specific business. As far as specific location qualities, it’s all about lifestyle, which usually means a mixture of things that are important to today’s workforce. Outdoor activities, many food choices, public transportation, nearby housing, walkability, an authentic vibe, even a sense of history if you can find it — these things are usually very high on the wish list.”  

 

Do you have any questions? Speak with an Investor Relations Representative.

Articles or information from third-party sources outside of this domain may discuss KBS Direct or relate to information contained herein, but KBS Direct does not approve and is not responsible for such content. Hyperlinks to third-party sites, or reproduction of third-party content, do not constitute an approval or endorsement by KBS Direct or NCPS of the linked or reproduced content. Investing in real estate involves substantial risks and an investment decision should be made only after a careful review of offering materials, including consideration of the risks related to the investment. The Growth & Income Real Estate Investment Trust is offered through North Capital Private Securities, member FINRA/SIPC.

Meeting of shareholders

Preparing for Compliance with the Fiduciary Rule

By KBS Direct

As you may already know, the Department of Labor’s Fiduciary Rule rule has been postponed until July 1, 2019. But recently, Securities and Exchange Commission Chairman Jay Clayton publicly stated that the SEC has plans to enact its own fiduciary standard.

In other words, momentum for transparency between advisers and their clients continues to grow.

That’s why it’s not a bad idea to conduct an assessment of your firm sooner rather than later to determine what, if any, new processes you may need to implement.

Five Assessment Recommendations

So how can you approach an assessment of your firm?

The Harvard Law School Forum on Corporate Governance and Financial Regulation published several recommendations from two Mayer Brown attorneys to help companies prepare for the compliance process. These recommendations can benefit most financial professionals regardless of specialty.

  1. Conduct a thorough review of the roles and responsibilities of your employees, communications plans, and general operating procedures.
  2. Ensure your firm has enough fiduciary liability insurance to cover additional employees who will operate as fiduciaries.
  3. Confirm that all service providers know their new roles under the Rule and determine what they must know to comply with ERISA (Employee Retirement Income Security Act of 1974). The process may look a bit different for different vendors. It all depends on how much their roles will change. The largest affected group will be those employees who were not previously required to act as fiduciaries.
  4. Your current service agreements need to be reviewed and corrected if necessary with the new title of any advisor. This includes any changes that might take place in regards to covenants and standards of care, representations and warranties, even indemnity and exculpation.
  5. Develop a clear and easily understandable plan to address compensation structures. Advisors may feel uncomfortable discussing compensation with clients. By developing a communication plan that emphasizes the value of these services, advisors can better communicate with their clients.

A Reminder

This current period, prior to the Rule going live, is what the Department of Labor considers “transitional”. This means that certain provisions have taken effect, but most have not. One of those provisions in effect is that advisors must use the transitional version of the Best-Interest Contract Exemption (BICE), if they have a conflict of interest. The transitional BICE is in effect until July 1, 2019.

It requires advisors to conduct business by “Impartial Conduct Standards.” These include: putting investors’ best interests first, receiving “reasonable” compensation, and refraining from making deceptive statements. Moreover, advisors need to have policies in place—including ones that address compensation—to make sure their firms are aligned with the Impartial Conduct Standards.  

Do you have any questions? Speak with an Investor Relations Representative.

Articles or information from third-party sources outside of this domain may discuss KBS Direct or relate to information contained herein, but KBS Direct does not approve and is not responsible for such content. Hyperlinks to third-party sites, or reproduction of third-party content, do not constitute an approval or endorsement by KBS Direct or NCPS of the linked or reproduced content. KBS Direct makes no representations as to the appropriateness of an investment in the KBS Growth & Income Real Estate Investment Trust REIT for ERISA plan fiduciaries and IRA owners and no investment advice is being provided.  ERISA plan fiduciaries and IRA owners should consult with counsel before making an investment in the REIT’s shares. The Growth & Income Real Estate Investment Trust is offered through North Capital Private Securities, member FINRA/SIPC.

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How Investors May Benefit from the Fiduciary Rule

By: KBS Direct

The Fiduciary Rule has yet to take effect, having been pushed out to mid-2019; however, to invoke its name is to create a stir in the world of financial advisors. The rule has taken on a life of its own, and now it may not even matter if it ever becomes a law—it’s bringing change anyway.

The rule puts more responsibility on financial advisors to act in the best interest of their clients. This means disclosing whether investment opportunities include upfront commission or fees. In some cases, advisors have long relied on current fee-based models that did not require upfront disclosure.

Challenges Driving The Rule

In a Globest.com interview, Chuck Schreiber, CEO and co-founder of KBS Realty Advisors and KBS Capital Advisors, said the impetus for change within the industry first came from the Financial Industry Regulatory Authority (FINRA), a non-governmental agency that regulates the securities industry. FINRA began analyzing fees about 10 years ago, questioning what would be an appropriate commission for an investor to pay. Subsequently, the Department of Labor took up the charge, and issued the Fiduciary Rule in April of 2016.

Only a Matter of Time

Said Schreiber: “Whether this law and the rules are enacted as written today or even modified—and it may be modified—it already changed the discussion about commissioned products.”

Just as someone who hires an attorney will ask about fees, the same type of discussion will likely take place between advisors and their clients—if it isn’t happening already. Said Schreiber: “There are financial advisors who as far back as two years ago modified the structure of their organization, group, firm, or reps affiliated with that firm in their interaction in managing their relationship with their clients.”

Some firms are making changes to be in compliance with the rule, ahead of its enactment. Schreiber, and Peter Bren, Chairman, President and co-founder of KBS Realty Advisors and KBS Capital Advisors, are in that category.

They launched the Growth & Income Real Estate Investment Trust agreeing that as the sponsor, they would pay all upfront fees and expenses associated with an investment. Said Schreiber: “There is no commission or acquisition fee [paid with proceeds raised in the offering], with the intent to have 100% of the dollars an investor is committing into the fund go into the product. I don’t know of any other fund that has this.”

The Momentum for Transparency

The movement towards greater transparency has a lot to do with investors becoming savvier. “I think investors are much more knowledgeable about the opportunities” said Schreiber. “The more people know, the better off we all are.” Investors aren’t just looking at upfront costs, they’re also paying attention to sponsors’ track record of investments and the strategies they use.

With Securities and Exchange Commission Jay Clayton declaring in October that the commission was drafting its own fiduciary rule proposal, the momentum for transparency is expected to  continue to increase.

Do you have any questions? Speak with an Investor Relations Representative.

Articles or information from third-party sources outside of this domain may discuss KBS Direct or relate to information contained herein, but KBS Direct does not approve and is not responsible for such content. Hyperlinks to third-party sites, or reproduction of third-party content, do not constitute an approval or endorsement by KBS Direct or NCPS of the linked or reproduced content. KBS Direct makes no representations as to the appropriateness of an investment in the KBS Growth & Income Real Estate Investment Trust REIT for ERISA plan fiduciaries and IRA owners and no investment advice is being provided.  ERISA plan fiduciaries and IRA owners should consult with counsel before making an investment in the REIT’s shares. The Growth & Income Real Estate Investment Trust is offered through North Capital Private Securities, member FINRA/SIPC.