The KBS Growth and Income REIT completed its most recent portfolio update webinar on Friday, March 15, 2019. You can find the link to the webinar presentation at the bottom of the page along with supporting material for your review.
The biggest take away from the update was that the in-place rents with existing tenants are below current market rents. In some cases, 40% below current market rates. This represents potential upside for rental rate growth as below-market leases expire.
The KBS strategy, to owning these CORE and CORE + buildings, is improving quality of the building and thus improving the experience for the tenant. The KBS philosophy is based on creating a work environment for the tenants so that the employees do not want to leave the building. KBS is focused on growth markets in urban areas where there is a technology company base which is driving the growth in the sub-market. For employers to retain top tech talent, the workspace and work environment for this workforce, must be attractive, with the work/play/live focus of these employees.
The KBS philosophy for investors in its REITs is transparency, all the way down to the tenant. Investors and CRE professionals can drill down and evaluate the actual market metrics and valuations of the buildings to determine how this type of cash flow and potential upside in asset/building value may fit into an investor’s portfolio.
Below you can find the description of the buildings in the KBS Growth and Income REIT and review the detail of the tenant composition of each building.
|Von Karman Tech Center, Irvine CA
(Page 12 of PPT)
|43% BELOW current market rates|
|Commonwealth Building, Portland, OR
(Page 13 of PPT)
|46% BELOW current market rates|
|Offices at Greenhouse, Houston
(Page 14 of PPT)
|15% BELOW current market rates|
|213 West Institute Place, Chicago, IL
(Page 15 of PPT)
|20% BELOW current market rates|
Dec. 31, 2018:
Current distribution: 6% annual rate, paid monthly
Leverage: LTV is 57%
Total Lease Occupancy of portfolio: 93%
Tenant total: 73
NAV change for 2018: +4.66%
Total Return for 2018: ~+10.4%
Given the transparency and detailed portfolio disclosure by KBS, CRE professionals and potential investors can evaluate, analyze and determine if the KBS Growth and Income REIT fits within their investment allocation.
For the Webinar Slides, please click here
For the Webinar Video, please click here