NOW THAT KBS REAL ESTATE INVESTMENT TRUST INVESTORS LOST OVER 50%: WHAT SHOULD THEY DO?

It is now estimated by KBS Real Estate Trust Inc. (KBS REIT I) that investors' interests are worth $5.16. The new valuation represents a 29% drop from the last change to the valuation in late 2009 and a nearly 50% drop since shares of KBS REIT I were initially offered at $10.00. Many investors in the non-traded KBS I and II REITs have inquired about their ability to recover their losses after learning that their fund is no longer valued as much as they were previously led to believe. Additionally, KBS REIT investors were told that they would no longer be receiving any distributions. Our answer is: file a FINRA arbitration. Many claims are being filed by KBS REIT and other REIT investors for misrepresentation, unsuitable recommendations and/or overconcentrations of their investment funds in KBS REIT and other REIT investments to recover their REIT losses.

At first blush, one may think that the best claim is against the KBS REIT itself and its management but one needs to remember why they first invested. Undoubtedly, the KBS REIT and other REIT investments were recommended by your brokerage firm and financial advisor who have a fiduciary duty to not misrepresent or omit to state important facts, perform due diligence on any REIT and first make sure that the investment is suitable at all for any investor and then specifically ensure that the investment is appropriate in light of the investor's actual age, investment experience, investment objectives, tax and financial condition. If the brokerage firm and its advisor fail in fulfilling any one of these duties under common law and under the FINRA Code of Conduct, investors will have the right to recover their investment losses against them through a FINRA arbitration proceeding and/or court if no arbitration agreement has been executed.

The most common misrepresentation and misleading statement claims that the KBS REIT and other REIT investors have been making relate to the risk associated with the non-traded REITs. Many investors have complained that the KBS REIT and other REITs were not adequately represented before purchase and that they did not know the real truth about the valuations, performance, prospects, liquidity, or distribution and redemption practices of management relating to their investment. Many elderly investors seeking income were overconcentrated in the KBS REITs and other REITs because they needed income. Sadly they learned too late that there were no guarantees that distributions would be made. Some REIT investors have just learned that they would no longer be receiving distributions or that the distributions they actually received were derived from loans and not the true cash flow of the REIT. Brokerage firms and their financial advisors were eager to push REIT investments on their clients for the high commissions compared to other products. Unfortunately, many investors are locked in and unable to sell their REIT investments without suffering without selling into deeply discounted secondary market for some other REIT investments. If you are a KBS REIT investor with the same complaints, we believe we can help you recover your REIT losses!

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.

CAN I RECOVER MY KBS REAL ESTATE INVESTMENT TRUST LOSSES?

Many investors in the non-traded KBS I and II REITs have inquired about their ability to recover their losses after learning that their fund is no longer valued as much as they were previously led to believe. Additionally, KBS REIT investors were told that they would no longer be receiving any distributions. As a result, many claims are being filed by KBS REIT and other REIT investors for misrepresentation, unsuitable recommendations and/or overconcentrations of their investment funds in KBS REIT and other REIT investments to recover their REIT losses.

At first blush, one may think that the best claim is against the KBS REIT itself and its management but one needs to remember why they first invested. Undoubtedly, the KBS REIT and other REIT investments were recommended by your brokerage firm and financial advisor who have a fiduciary duty to not misrepresent or omit to state important facts, perform due diligence on any REIT and first make sure that the investment is suitable at all for any investor and then specifically ensure that the investment is appropriate in light of the investor's actual age, investment experience, investment objectives, tax and financial condition. If the brokerage firm and its advisor fail in fulfilling any one of these duties under common law and under the FINRA Code of Conduct, investors will have the right to recover their investment losses against them through a FINRA arbitration proceeding and/or court if no arbitration agreement has been executed.

The most common misrepresentation and misleading statement claims that the KBS REIT and other REIT investors have been making relate to the risk associated with the non-traded REITs. Many investors have complained that the KBS REIT and other REITs were not adequately represented before purchase and that they did not know the real truth about the valuations, performance, prospects, liquidity, or distribution and redemption practices of management relating to their investment. Many elderly investors seeking income were overconcentrated in the KBS REITs and other REITs because they needed income. Sadly they learned too late that there were no guarantees that distributions would be made. Some REIT investors have just learned that they would no longer be receiving distributions or that the distributions they actually received were derived from loans and not the true cash flow of the REIT. Brokerage firms and their financial advisors were eager to push REIT investments on their clients for the high commissions compared to other products. Unfortunately, many investors are locked in and unable to sell their REIT investments without suffering without selling into deeply discounted secondary market for some other REIT investments. If you are a KBS REIT investor with the same complaints, we believe we can help you recover your REIT losses!

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.

NO MORE KBS REIT CLASS ACTION

On July 23^rd, KBS REIT investors' lead plaintiff George Stewart withdrew his class action suit against KBS REIT, alleging that KBS made misrepresentations about the REIT, including its investment objectives, the dividend payment policy and the value of the REIT's investments. No reason was given, but the Motion to Dismiss the Complaint pointed out the onerous pleading requirements of securities class actions. Perhaps Mr. Stewart will proceed to take his case to arbitration, the more traveled and less bumpy road to resolve investors' disputes. While the pending class action lawsuit against KBS has been withdrawn, investors in KBS can still file FINRA arbitration claims to attempt to recover their losses. In any event, KBS REIT investors will not benefit from his decision and need to take matters in their own hands!

Brokerage firms have a fiduciary duty to their clients to perform adequate due diligence on investments before recommending them to their clients. Based on what is now known about KBS REIT, it appears that the firms that sold the product will be unable to demonstrate that they performed adequate due diligence. Rather, it appears that the firms that sold KBS REIT were more interested in the high commissions selling the investment created (and not whether the investment was appropriate for investors).

KBS REIT I raised $1.7 billion in equity in its initial offering, according to an investor presentation the company filed with the Securities and Exchange Commission in March. It has $3.4 billion in property assets, and holds loans and other debt of $2.3 billion. Investors in KBS REIT I were notified in March that the REIT's value would be cut to $5.16 per share, from $7.32, a drop of 29%. The REIT's offering price was $10 per share. It also said it was stopping distributions to investors. Investors have good reason to be upset with KBS REIT, and more reason to complain about the brokers who recommended the investment.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website,www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.