Non-traded real estate investment trusts (“REITs”), such as KBS REIT I (“KBS I”), unlike exchange traded REITs, are complex and risky investment vehicles that do not trade on a national securities exchange such as the NYSE or NASDAQ. Unfortunately, retail investors are often uninformed by their broker or money manager of the illiquid nature of non-traded REITs, meaning that investors who wish to sell their shares can only do so through a direct redemption with the issuer or through a fragmented and illiquid secondary market.
KBS I launched through its initial public offering (“IPO”) in early 2006 for issuance of up to 200 million shares. Through its IPO at $10 per share, KBS I raised $1.7 billion prior to closing in May 2008. The company’s portfolio includes nearly 200 properties, in addition to participation in various real estate loan receivables.