Keppel Pacific Oak US REIT: Key Developments on US Asset Manager and Substantial Unitholder

Summary of Key Points

• Termination of Advisory Agreement: Pacific Oak Strategic Opportunity REIT, Inc (“Pac Oak REIT”) has announced it will terminate its advisory agreement with Pacific Oak Capital Advisors, LLC (“POCA”), effective 31 January 2026.
• Transition to New Asset Manager: Keppel Pacific Oak US REIT Management Pte. Ltd. (the “Manager”) is in late-stage negotiations with a third-party US asset manager to replace POCA as the outsourced asset manager of KORE’s portfolio.
• Orderly Transition Expected: POCA is anticipated to provide an orderly transition, and the current asset management team is expected to move to the new manager, ensuring no disruption in property management or services.
• Pac Oak REIT’s Stake and Potential Liquidation: Pac Oak REIT holds approximately a 6.14% stake in KORE and has announced its intention to pursue a plan of liquidation, subject to approval by its board and stockholders.
• Potential Sale of KORE Units: Pac Oak REIT has reached out to the Manager to discuss the potential sale of its KORE units, with the Manager facilitating contact with a financial institution for these discussions.
• No Current Sale of Units: As of the date of the announcement, there has been no sale of KORE units by Pac Oak REIT, but any future sale crossing substantial unitholding thresholds will require disclosure.
• Independence of KPA: KORE Pacific Advisors Pte. Ltd. (KPA), which holds 50% of the shares in the Manager, is independent from Pac Oak REIT despite some common shareholders with POCA.

Detailed Report and Investor Implications

Keppel Pacific Oak US REIT (“KORE”) is undergoing significant changes in its US asset management structure following a series of strategic decisions by its substantial unitholder and asset management partners.

Termination of Relationship with POCA

According to a Form 8-K filing by Pac Oak REIT, the advisory agreement between Pac Oak REIT and Pacific Oak Capital Advisors, LLC (POCA) will be terminated on 31 January 2026. POCA currently serves as the outsourced US asset manager for KORE’s portfolio assets. This termination is part of a broader restructuring, as the co-owners of POCA are also the majority shareholders of KORE Pacific Advisors Pte. Ltd. (KPA), which holds a 50% stake in the Manager of KORE.

Transition to a New Asset Management Arrangement

In response to this development, KORE’s Manager has disclosed that it has been evaluating alternative asset management partners and is now in late-stage negotiations with a new third-party US asset manager. The current expectation is that the existing outsourcing arrangement with POCA will be terminated “in due course.”

Importantly for investors, there is no anticipated interruption to the management of KORE’s properties or services. POCA is expected to oversee an orderly transition, and the current asset management team will likely transfer to the new third-party manager once an agreement is finalized. This approach is designed to ensure a seamless transition of the asset management function, mitigating operational risk.

Pac Oak REIT’s Liquidation and Potential Sale of KORE Stake

Pac Oak REIT, which indirectly holds about 6.14% of KORE’s units, has formed a Special Committee which has agreed to pursue a plan of liquidation, pending approval by its board and stockholders. As part of this process, Pac Oak REIT has contacted the Manager regarding the potential sale of its KORE units. The Manager has facilitated contact with a financial institution to enable further discussions about a potential sale.

As of the date of the announcement, there has been no sale of KORE units by Pac Oak REIT. However, should Pac Oak REIT proceed with any sale that crosses substantial unitholding thresholds, it would be required to make the necessary regulatory disclosures. This potential sale of a significant block of units could have a material impact on KORE’s unit price, depending on market conditions and the scale of the transaction.

Corporate Structure and Independence

The Manager has clarified that KPA, which holds a significant interest in the Manager, is independent from Pac Oak REIT. While there are common shareholders between KPA and the former manager of Pac Oak REIT, KPA itself is not involved in Pac Oak REIT’s management or its decision to liquidate.

The Manager has reiterated its commitment to strengthening operations, maintaining a diversified portfolio in key US growth markets, and exercising disciplined capital management. The focus remains on delivering sustainable value for unitholders.

Key Considerations for Investors

• Investors should closely monitor further announcements regarding the new asset manager appointment, as changes in management could impact operational effectiveness and investor confidence.
• The possible sale of a substantial stake by Pac Oak REIT could introduce volatility to KORE’s unit price, especially if the market perceives the sale as a negative signal or if the sale is executed at a discount to prevailing market prices.
• The Manager has committed to providing timely updates on any material developments, in accordance with SGX listing rules.
• There is no guarantee of unit liquidity or price stability in the short term as the REIT navigates these changes.

Contact and Further Information

The Manager has provided its contact details for investor queries, and will release additional disclosures on the Singapore Exchange Securities Trading Limited (SGX-ST) as required.

Disclaimer

Important Notice: This article is for informational purposes only and does not constitute an invitation or offer to acquire, purchase, or subscribe for units in Keppel Pacific Oak US REIT. It may contain forward-looking statements involving risks and uncertainties. Actual future performance, outcomes, and results may differ materially from those expressed herein due to various factors including but not limited to market conditions, interest rates, capital availability, regulatory changes, and other risks. The value of KORE units and income derived from them may fall as well as rise, and investments are subject to the risk of capital loss. Past performance is not indicative of future results. Investors should not place undue reliance on forward-looking statements and should consult their own financial advisors before making investment decisions.

View KepPacOakReitUSD Historical chart here