THE FUTURE OF REAL ESTATE INVESTING: DIRECT ACCESS TO INSTITUTIONAL-QUALITY REAL ESTATE We empower accredited investors and Registered Investment Advisors to invest directly in commercial real estate with no upfront fees or commissions paid by investors 1
Disclaimer This document does not contain all the information necessary to fully evaluate any transaction or investment, and you should not rely solely on the contents of this document. Any investment decision should be made based solely upon appropriate due diligence and, if applicable, upon receipt and careful review of any offering documents. Further, important information about KBS Growth & Income Real Estate Investment Trust is included in the Private Placement Memorandum dated December 11, 2017, as supplemented (the PPM ) and statements herein about KBS Growth & Income Real Estate Investment Trust are qualified in their entirety by the information in the PPM. This document may include forward-looking statements that represent the opinions, expectations, beliefs, intentions, estimates or strategies of KBS Growth & Income Real Estate Trust, its affiliates, and members of their management teams, regarding the future, which may not be realized. These statements may be identified by the use of words like anticipate, believe, estimate, expect, intend, may, plan, will, should, seek, and similar expressions. The forward-looking statements reflect views and assumptions with respect to future events as of the date of this document and are subject to risks and uncertainties. Actual and future results and trends could differ materially from those described by such statements due to various factors, including those beyond our ability to control or predict. Given these uncertainties, you should not rely upon forward-looking statements. North Capital Private Securities and KBS Growth & Income Real Estate Trust do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Past performance is not indicative of future results. Recipients of this document should neither treat and should not rely on the contents of this document as advice relating to legal, taxation or investment matters and are advised to consult their own professional advisers. 2
KBS Direct Strategy Core-Plus Real Estate Institutional Quality Industry Leadership Aligned Interests Expert regional teams underwrite, acquire, and improve Investors enjoy direct access to Institutional-grade Backed by a sponsor with nearly $35 billion of KBS Capital Advisors does not receive any properties in high U.S. job growth markets. growth and income properties and KBS active experience in commercial and residential real performance-based fee until investors, together asset management style, without paying upfront estate transactions across a total of 1600+ as a collective group, have received 100% return fees or commissions. properties. of their invested capital, and a 6% per year cumulative, non-compounded return. For more information on the incentive fee, see the Private Placement Memorandum at KBSDirect.com. 3
Our Track Record Since 1992, KBS and its affiliated companies have invested in and sold nearly $38 billion in commercial and residential real estate transactions on behalf of large institutions, including public and private pension funds, endowments, foundations, institutional and sovereign wealth funds, and seven public non-traded real estate investment trusts. 61 Institutional Clients 26 Years of Real Estate Investment Experience 7th Largest Office Owner Globally 1 $25.2 Billion Invested or Managed Nationwide 14 Institutional Investment Funds 42.5 million sq. ft. have gone full-cycle $11.4+ Billion Under Management 37.5 Million SF Under Management $37+ Billion Transactional volume 157.3 Million SQ. FT. Acquired 119.8 msf sold 1,644 Assets Acquired 1,517 sold 1. National Real Estate Investor. December 31, 2017. 4
KBS Growth & Income Board of Directors Independent Directors: Charles J. Schreiber Jr. has more than 45 years of industry experience and serves as Chief Executive Officer and co-founder of KBS Realty Advisors and KBS Capital Advisors. Both are nationally recognized real estate investment firms. He is based in Newport Beach, CA. George R. Bravante, Jr. has served on the KBS Growth and Income Real Estate Investment Trust s Board of Directors since March of 2016. Mr. Bravante is CEO of Pacific Agricultural Partners. Peter M. Bren Has more than 46 years of industry experience and serves as Chairman of the Board, President, and co-founder of KBS Realty Advisors and KBS Capital Advisors. He is based in New York, NY. Jon D. Kline has served on the KBS Growth and Income Real Estate Investment Trust s Board of Directors since March of 2016. Mr. Kline is the CEO of Clearview Hotel Capital. Keith P. Russell has served on the KBS Growth and Income Real Estate Investment Trust s Board of Directors since March of 2016. Mr. Russell is the President of Russell Financial, Inc. 5
The KBS Investment Committee The Committee That Reviews and Approves All Acquisitions for KBS Peter M. Bren, Chairman of the Board, President, co-founder of KBS, and President and Director of the KBS Growth & Income Real Estate Investment Trust. Kenneth Robertson, Central Regional President. Charles J. Schreiber, Chief Executive Officer, co-founder of KBS, and Chief Executive Officer, and Chairman of the board for the KBS Growth & Income Real Estate Investment Trust. Marc DeLuca, Eastern Regional President, Chairman of the KBS Investment Committee. James C. Chiboucas, Vice Chairman and Chief Legal Officer Mimi Nguyen, Executive Vice President, Underwriting Rodney Richerson, Western Regional President Robert Durand, Executive Vice President, Financing. 6
KBS Growth & Income Real Estate Investment Trust s portfolio of properties can benefit from the experience of approximately $38 billion in commercial and residential real estate acquisitions and dispositions across more than 1,640 properties. KBS is one of the nation s largest and most respected commercial real estate companies and ranked by National Real Estate Investor as the 7th largest office owner globally, based on volume of office space as of December 31, 2017. KBS Growth and Income Real Estate Investment Trust has $85.8 Million in equity and four office buildings for a gross value of $197.8 million in major cities including Houston, TX, Irvine, CA, Chicago, IL and Portland, OR. 1. National Real Estate Investor. December 31, 2017. 7
Key Deal Points MAXIMUM OFFERING: $1 Billion of Common Stock TARGETED PORTFOLIO PROFILE: Core-Plus Institutional Quality Commercial Real Estate INVESTOR PROFILE: Accredited Investors NO UPFRONT FEES OR COMMISSIONS PAID BY INVESTORS CURRENT DIVIDEND YIELD: 6.0%* Annualized (Distributed Monthly) SHARE PRICE: $8.79 MINIMUM INVESTMENT: $10,000 *Our board of directors has increased the dividend from 5.5% annualized to 6.0% annualized commencing May 1, 2018. Skydeck of Commonwealth in Portland, OR 8
Investing For Growth & Income The Benefits of a Value-Creating Core Strategy 1 Some real estate assets have predictable cash flows but offer the opportunity for value enhancement. For example, a property may be mostly leased with favorable terms to high-quality tenants, but it might also benefit from some moderate upgrades or moderate renovations. These types of real estate assets can provide an opportunity to achieve more significant capital appreciation by increasing occupancy, negotiating new leases with higher rental rates and/or executing enhancement projects. Through this value-creating process, the property can potentially be sold at higher levels. Core real estate assets are generally the highest-grade real estate properties, fully stabilized with creditworthy quality tenants. 2 These properties are often newly constructed or renovated, energyefficient Class A 3 properties that require few, if any, improvements. Core assets are usually located in major metropolitan markets and stabilized employment centers. The majority of total return with these properties stems from the operating cash flow rather than terminal value (or cash flow from sale). 1 There is no guarantee that the Company will be able to provide long-term growth and stable income to its stockholders. 2 According to Institutional Real Estate, Inc., core properties tend to have been built within the past five years or have been recently renovated. They are substantially leased (90% or better) with higher-credit tenants and weli-structured long-term leases with the majority fairly early in the term of the lease. Core assets generate stable income with the potential for appreciation. 3 According to Building Owners and Managers Association International, Class A office buildings are the most prestigious buildings competing for premier office users with rents above average for the area. Buildings have high-quality standard finishes, state-of-the-art-systems, exceptional accessibility and a definite market presence. 213 W. Institute Place, Chicago, IL 9
Markets Office Demand Confidence is a critically important economic indicator for the CRE industry. When consumers are confident, they spend more. That, in turn, boosts business profits, which creates jobs, ultimately translating into demand for CRE space. Greater consumer spending could, result in stronger real GDP growth. In general, when GDP is strengthening, so too are property markets. Demographics LIVE/WORK/PLAY. Millennials are a growing segment of the work force, and their cultural preferences are shaping many factors of the office market. Millennials seek mixed-use developments offering walkability to nearby restaurants, shops, entertainment venues, and accessibility to alternative transportation. 1 Over the next 10 15 years, some of the most desirable office properties may be those with the right set of amenities, such as fitness centers, conference facilities and food service. 2 1 PWC and Urban Land Institute. Emerging Trends in Real Estate 2016. September 2015. 2 Ponsen, Adrian and Schwieger, Charles. Aging to Perfection: How U.S. Office Investors Can Survive and Thrive During the Coming Demographic Cliff. CoStar Portfolio Strategy. August 2014. 10
Commonwealth 421 SW 6th Ave, Portland, OR 97204 PROPERTY TYPE Class A 1 Office ACQUISITION DATE June 30, 2016 PURCHASE PRICE $69,000,000 SQUARE FOOTAGE 219,742 SF 1 According to Building Owners and Managers Association International, Class A office buildings are the most prestigious buildings competing for premier office users with rents above average for the area. Buildings have high-quality standard finishes, state-of-the-art-systems, exceptional accessibility and definite market presence. NO. OF BUILDINGS: 1 NO. OF STORIES: 14 SITE SIZE:.46Acres YEAR BUILT: 1948/2013 2015 LEASED PERCENTAGE AT ACQUISITION: 95% SUBMARKET: Portland CBD KEY TENANTS: % of Bldg. Quantum Spatial: 11% City of Portland: 9.4% NEEA: 9.4% 11
THE OFFICES AT GREENHOUSE 19219 Katy Freeway, Houston, TX 77094 PROPERTY TYPE Class A 1 Office ACQUISITION DATE November 14, 2016 PURCHASE PRICE $47,000,000 SQUARE FOOTAGE 203,221 SF 1 According to Building Owners and Managers Association International, Class A office buildings are the most prestigious buildings competing for premier office users with rents above average for the area. Buildings have high-quality standard finishes, state-of-the-art-systems, exceptional accessibility and definite market presence. NO. OF BUILDINGS: 1 NO. OF STORIES: 5 SITE SIZE: 4.6 Acres YEAR BUILT: 2014 LEASED PERCENTAGE AT ACQUISITION: 95% SUBMARKET: Energy Corridor KEY TENANTS: % of Bldg. Aecom: 69.2% J. Connor Consulting: 15.8% World Fuel Services: 4.5% 12
VON KARMAN TECH CENTER 16842 Von Karman Ave, Irvine, CA 92606 PROPERTY TYPE Class B Office ACQUISITION DATE August 12, 2015 PURCHASE PRICE $21,500,000 SQUARE FOOTAGE 101,161 SF NO. OF BUILDINGS: 1 NO. OF STORIES: 2 SITE SIZE: 4.16 Acres YEAR BUILT: 1980/2013 2014 LEASED PERCENTAGE AT ACQUISITION: 100% SUBMARKET: Irving Airport Area KEY TENANTS: % of Bldg. Hosting: 44.3% Combatant Gentlemen: 9.2% Lee & Sakahara Architects: 7.2% 13
213 WEST INSTITUTE 213 West Institute Place, Chicago IL PROPERTY TYPE Class B Office ACQUISITION DATE November 9, 2017 PURCHASE PRICE $43,500,000 SQUARE FOOTAGE 157,166 SF NO. OF BUILDINGS: 1 NO. OF STORIES: 7 SITE SIZE:.67Acres YEAR BUILT: 1908/2017 LEASED PERCENTAGE AT ACQUISITION: 92% SUBMARKET: River North KEY TENANTS: % of Bldg. Cushing: 12% Headquarters Beercade: 11% Chicago Portfolio School: 9% 14
Common Questions Common Questions Liquidity vs. Non-Liquidity? What is the cost to buy? Where does the dividend income come from? Shares in KBS Growth & Income Real Estate Investment Trust are not traded on a public stock exchange, and their value isn t subject to the volatility swings that often accompany traded stocks. While the value of shares in KBS Growth & Income Real Estate Investment Trust is based on the value of real estate assets it owns and is subject to less volatility, they have less liquidity and price transparency than listed shares. Returns and performance depend on the quality of the real estate acquired in the portfolio, the quality, experience, and expertise of management entrusted with adding value to the properties, as well as factors affecting real estate, including various economic factors, such as the state of financial markets, general economic conditions and tenant composition. KBS Growth & Income Real Estate Investment Trust is not loaded up with high front-end fees or commissions paid to brokers to sell shares. By purchasing shares in KBS Growth and Income Real Estate Investment Trust through KBS Direct, 100% of every investor s capital goes to work. The current price per share as of December 12, 2017 is $8.79. Generally, our policy is to pay cash distributions from cash flow generated by effectively and actively managing the properties in the portfolio. However, we may not have sufficient cash flow from operations available to fully fund our distribution until we make substantial investments. During our offering stage, when we may raise capital more quickly than we acquire income producing assets, and for some period after our offering stage, we may not be able to pay distributions solely from our cash flow from operations. 15
Selected Risk Factors Neither the Securities and Exchange Commission (the SEC ) nor any state securities authority, has approved or disapproved of these securities or passed on the adequacyoraccuracyof the KBS Growth & Income REIT s Private Placement Memorandum (the PPM ). Any representation to the contraryis a criminal offense. Investing in KBS Growth & Income REIT includes substantial risks. These risks include, but are not limited to: the possibility of losing your entire investment; no guarantees regarding performance; upon sale or distribution of assets you may receive less than your initial investment; fluctuation of the value of the assets owned by KBS Growth & Income REIT; lack of a public market for shares of KBS Growth & Income REIT; limited liquidity; limited transferability; reliance on KBS Capital Advisors LLC, the REIT s advisor, to select, manage and dispose of assets; and various economic factors that may include changes in interest rates, laws, operating expenses, insurance costs and tenant turnover. Shares of KBS Growth & Income REIT are not suitable for all investors. Investors should read and consider the PPM carefully before investing. KBS Growth & Income REIT may fund distributions from any source including, without limitation, from offering proceeds or borrowings. Distributions have been funded in part with cash flow from operating activities and part with debt financing, including advances from the REIT s advisor. Distributions funded from sources other than the REIT s cash flow from operations will result in dilution to subsequent investors, reduce funds available to make real estate investments and may reduce the overall return to the REIT s stockholders. There are no guarantees that KBS Growth & Income REIT will pay distributions. KBS Growth & Income REIT pays fees to KBS Capital Advisors and its affiliates in connection with the management of the REIT s investments that are based on the cost of the investment, not on the quality of the investment or the services rendered to the REIT. These fees reduce the amount of cash available for distribution to stockholders. The REIT may also pay fees during its liquidation stage. KBS Capital Advisors and its affiliates, and KBS Growth & Income REIT s executive officers, its affiliated directors and other key professionals face conflicts of interest, including significant conflicts created by the advisor s compensation arrangements with the REIT and other KBS-sponsored programs and KBS-advised investors. Although the REIT has adopted corporate governance measures to ameliorate some of the risks posed by these conflicts, these conflicts could result in action or inaction that is not in the best interest of stockholders. 16
Selected Risk Factors KBS Growth & Income REIT may make adjustments to its target portfolio at any time without the consent of its stockholders, which could result in the REIT making investments that are different from, and possibly riskier than, the investments described in the PPM. KBS Growth & Income REIT uses debt in connection with its investments, which increases the risk of loss associated with these investments and could hinder its ability to pay distributions to its stockholders or could decrease the value of its stockholders investments if income generated by, or the value of, the property securing the debt declines. If KBS Growth & Income REIT does not raise significant proceeds in this offering it will be limited in the number of investments it makes; the value of an investment in the REIT will fluctuate with the performance of the specific assets the REIT acquires; and the REIT s general and administrative expenses will constitute a greater percentage of its revenue. KBS Growth & Income REIT elected to be taxed as a REIT beginning with the taxable year ended December 31, 2015. Should KBS Growth & Income REIT not qualify as a REIT, it may be subject to adverse tax consequences. Please refer to the PPM for more detailed information regarding these consequences. KBS Growth & Income REIT has a limited operating history and as of December 11, 2017 owns four office buildings with an aggregate cost basis of approximately $197.8 million. KBS Growth & Income REIT s primary offering price per share may not be indicative of the price at which its shares would trade if they were listed on a national securities exchange or actively traded. The offering price is equal to the estimated net asset value per share of the REIT s common stock established by its board of directors and was determined by dividing the REIT s estimated net asset value by the number of shares outstanding as of a particular point in time. See the PPM for a full description of the methodologies used to value KBS Growth & Income REIT s assets and liabilities in connection with the calculation of the estimated value per share and the limitations related thereto. 17
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