KBS REIT I Wreaks Havoc on Retirees and Other Investors


Much to their dismay, investors in KBS Real Estate Investment Trust I (“KBS REIT I”) recently learned that shares which they purchased for $10 per share now have an “estimated” value of only $5.16. In his March 26, 2012 letter to shareholders, chief executive Charles Schreiber, Jr. also told them that they would no longer receive their monthly distribution payments, which had been reduced to less than $.53 per share.

Since the company halted its repurchase of shares in 2009, except in cases of death or disability, KBS REIT I investors are left holding illiquid, devalued shares that pay no distributions. Mr. Schreiber’s statement to shareholders that the company is focusing its efforts “on attempting to maximize the amount of capital that we return to you over time” is little comfort to investors. His words are especially alarming to retirees, who are suffering from the loss of income they relied upon and have no hope of selling their shares for the price they paid in the foreseeable future. They see little light at the end of the tunnel.

KBS REIT I has proven to be, as one retiree described it to us, “a horrible investment.” It’s a far cry from what he and others expected when brokers at Ameriprise and other firms recommended investing in the non-traded REIT that began selling shares to the public in 2006. As with most REITs, it appears that investors were routinely told that KBS REIT I was a safe investment whose share price was likely to remain stable. They were also told that it paid good dividends and was suitable for a retirement nest egg. They typically were not told that selling their shares could be problematic and that REITs were high commission products.

In order to help investors recover their losses, Page Perry is currently investigating the sales practices surrounding KBS REIT I as well as those involving other REITs. If you are concerned about your REIT investment, please contact us.

Page Perry is an Atlanta-based law firm with over 170 years of collective experience dedicated to maintaining integrity in the investment markets and protecting investor rights.