EX-99.1 2 kbsrii8kex991.htm NOVEMBER 21, 2019 PRESENTATION kbsrii8kex991
Exhibit 99.1 !"#$"%&'()*)+',%-'#&') ./0"%1)211%&(3 4'51671,)89:)8;9< 1


 
The information contained herein should be read in conjunction with, and is qualified by, the information in KBS Real Estate Investment Trust II’s (the “Company” or “KBS REIT II”) Annual Report on Form 10-K for the year ended December 31, 2018 (the “Annual Report”), Quarterly Report on Form 10-Q for the period ended September 30, 2019 (the “Quarterly Report”) and in KBS REIT II’s preliminary proxy Important statement filed with the SEC on November 15, 2019 (the “Preliminary Proxy Statement”), including the “Risk Factors” contained therein. For a full description of the limitations, methodologies and assumptions used to value KBS REIT II’s assets and liabilities in connection with the calculation of KBS REIT II’s estimated value per share, see Disclosures Current Report on Form 8-K, filed with the SEC on November 15, 2019 (the “Valuation 8-K”). Forward-Looking Statements Certain statements contained herein may be deemed to be forward-looking statements within the meaning of the Federal Private Securities Litigation Reform Act of 1995. The Company intends that such forward-looking statements be subject to the safe harbors created by Section 21E of the Securities Exchange Act of 1934, as amended. These statements include statements regarding the intent, belief or current expectations of the Company and members of its management team, as well as the assumptions on which such statements are based, and generally are identified by the use of words such as “may,” “will,” “seeks,” “anticipates,” “believes,” “estimates,” “expects,” “plans,” “intends,” “should” or similar expressions. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, unless required by law. Such statements are subject to known and unknown risks and uncertainties which could cause actual results to differ materially from those contemplated by such forward-looking statements. The Company makes no representation or warranty (express or implied) about the accuracy of any such forward-looking statements. These statements are based on a number of assumptions involving the judgment of management. As discussed in the Preliminary Proxy Statement, in connection with a review of potential strategic alternatives available to KBS REIT II, the board of directors of KBS REIT II has determined that it is in the best interest of KBS REIT II and its stockholders to sell all or substantially all of KBS REIT II’s properties and assets and liquidate and dissolve KBS REIT II pursuant to the Plan of Liquidation (defined herein). The Plan of Liquidation requires the affirmative vote of holders of shares of KBS REIT II’s common stock entitled to cast a majority of all the votes entitled to be cast on the Plan of Liquidation proposal. If the Plan of Liquidation is approved by KBS REIT II’s stockholders, there are many factors that may affect the amount of liquidating distributions ultimately paid to KBS REIT II’s stockholders, including, among other things, the ultimate sale price of each asset, changes in market demand for office properties during the sales process, the amount of taxes, transaction fees and expenses relating to the liquidation and dissolution, and unanticipated or contingent liabilities that could arise. No assurance can be given as to the amount or timing of liquidating distributions KBS REIT II will ultimately pay to its stockholders. If KBS REIT II underestimated its existing obligations and liabilities or if unanticipated or contingent liabilities arise, the amount of liquidating distributions ultimately paid to KBS REIT II’s stockholders could be less than estimated. The Company may fund distributions from any source including, without limitation, from borrowings. Distributions paid through September 30, 2019 have been funded in part with cash flow from operating activities, debt financing, proceeds from the sales of real estate properties and the repayment or sale of real estate loans receivables. Actual events may cause the value and returns on the Company’s investments to be less than that used for purposes of the Company’s estimated NAV per share and estimated net proceeds from liquidation. With respect to the estimated NAV per share, the appraisal methodology used for the appraised properties assumes the properties realize the projected net operating income and expected exit cap rates and that investors would be willing to invest in such properties at yields equal to the expected discount rates. Though the appraisals of the appraised properties, with respect to CBRE, and the valuation estimates used in calculating the estimated value per share, with respect to the Company’s advisor and the Company, are the respective party’s best estimates as of September 30, 2019 and November 13, 2019, as applicable, the Company can give no assurance in this regard. Even small changes to these assumptions could result in significant differences in the appraised values of the appraised properties, the estimated value per share and the estimated net proceeds from liquidation. The statements herein also depend on factors such as: future economic, competitive and market conditions; the Company’s ability to maintain and/or improve occupancy levels and rental rates at its real estate properties; the Company’s ability to sell its real estate properties at the times and at the prices it expects; the Company’s ability to successfully negotiate modifications, extensions or any needed refinancing of its debt obligations; and other risks identified in Part I, Item 1A of the Company’s Annual Report and in Part II, Item 1A of the Quarterly Report and in the Preliminary Proxy Statement. ===>)?@A>BC2 !


 
Important Important Information for Stockholders, Additional Information and Where to Find It. On November 15, 2019, the Company filed a Preliminary Proxy Statement and the Company plans to file a definitive proxy statement for its Annual Meeting of Stockholders with the SEC. The definitive proxy statement will be sent or given to the Company’s stockholders and will contain information about the proposals to be voted on by the Disclosures Company’s stockholders at the Annual Meeting of Stockholders, including information relating to the Plan of Liquidation referenced in this presentation. This presentation does not constitute a solicitation of any vote or proxy from any stockholder of the Company. STOCKHOLDERS ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT CAREFULLY AND IN ITS ENTIRETY WHEN IT IS AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS OR MATERIALS FILED OR TO BE FILED WITH THE SEC OR (cont.) INCORPORATED BY REFERENCE IN THE DEFINITIVE PROXY STATEMENT, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSALS TO BE VOTED ON BY THE COMPANY’S STOCKHOLDERS AT THE ANNUAL MEETING OF STOCKHOLDERS. Stockholders will be able to obtain a copy of the definitive proxy IMPORTANT INFORMATION FOR statement and other relevant documents, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (which will be sent or given to the STOCKHOLDERS, ADDITIONAL Company’s stockholders with the definitive proxy statement), free of charge at the SEC’s website, www.sec.gov, on the Investor Information page of the Company’s website at www.kbsreitii.com, or by directing a request by mail to KBS Capital Markets Group Investor Relations, 800 Newport Center Drive, Suite 700, Newport Beach, CA INFORMATION AND WHERE TO FIND 92660, or by calling the Broadridge proxy help line at (844) 858-7384. IT. Participation in this Solicitation The Company, its directors and executive officers, KBS Capital Advisors LLC, the Company’s external advisor (the “Advisor”) and the Advisor’s officers and employees may be deemed to be participants in the solicitation of proxies from the Company’s stockholders with respect to the proposals to be voted on at the Annual Meeting of Stockholders, including the Plan of Liquidation. Information regarding the Company, its directors and executive officers and the Advisor, including detailed information regarding the interests of such entities or persons in the solicitation, is included in the Company’s Preliminary Proxy Statement and will be included in the definitive proxy statement in connection with the Annual Meeting of Stockholders. Stockholders may obtain the definitive proxy statement and other relevant documents free of charge as described above. ===>)?@A>BC2 "


 
Transactional volume in excess of $42.3 billion1, About KBS AUM of $11.2 billion1 and 35.3 million square feet under management1. Formed by Peter Bren and Chuck 8th Largest Office Owner Globally, National Schreiber in 1992. Real Estate Investor2. Over 26 years of investment and Among Top 44 Global Real Estate Investment management experience with Managers, Pensions & Investments3. extensive long-term investor relationships. Buyer and seller of well-located, yield- generating office and industrial properties. Advisor to public and private pension plans, endowments, foundations, sovereign wealth funds and publicly registered non-traded REITs. 1 As of September 30, 2019. A trusted landlord to thousands of office and 2 The ranking by National Real Estate Investor is based on volume of office space owned globally, as of December 31, industrial tenants nationwide. 2017. The results were generated from a survey conducted by National Real Estate Investor based on advertising and website promotion of the survey, direct solicitation of responses, direct email to subscribers and other identified office owners and A preferred partner with the nation’s largest daily newsletter promotion of the survey, all supplemented with a review of public company SEC filings. lenders. 3 KBS was ranked #44 on Pensions & Investments List of Largest Real Estate Investment Managers, September 30, 2019. Ranked by total worldwide real estate assets, in millions, as of June 30, 2019. Real estate assets were reported net of leverage, including contributions committed or received, but not yet A development partner for office, mixed-use invested and multi-family developments. ===>)?@A>BC2 #


 
KBS REIT II Asset Map Current Equity Assets Sold and Liquidated Assets (Equity and Debt) ===>)?@A>BC2 $


 
Fund and Portfolio FUND OVERVIEW PORTFOLIO OVERVIEW Overview Total Equity Raised Total Equity Sales & Debt Asset Payoffs4 As of September 30, 2019, unless otherwise noted. The $1.82 billion $2.59 billion Portfolio Overview information shown includes both Total Acquisitions/Originations1 Dec. 2019 Est. Value of Current Portfolio5 Campus Drive properties, which were classified as held for sale (“HFS”) as of September 30, 2019. Please see $3.3 billion $1.08 billion pages 9 & 10 for detailed portfolio information not 2 6 including HFS assets. Current Net Asset Value (NAV) Current Rentable Sq. Ft $3.79 per share 3,907,464 !"#$%&'(")'*+&,-.",)./%.-,"0..-(.1"2--"'%(-"3"4-+%51 6"7#8"0."%9"7%:-$4-;"!<="6>!?1"2--"@A2"BCDE"DDF."G&;;-'("B-/%;("%'"H%;$"IJ@"9)+-," 3 7 5)(K"(K-"2CG"%'"7%:-$4-;"!5="6>!?1 Total Distributions Paid Total Leased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otal Leverage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


 
Portfolio Leased Real Estate Asset Location Purchase Price Cost Basis1 Occupancy at 9/30/20192 Summary CURRENT ASSETS Willow Oaks Corporate Center Fairfax, VA $ 112,173,598$ 157,208,059 59.7% As of September 30, 2019 Union Bank Los Angeles, CA 208,121,099 246,667,345 80.6% Granite Tower Denver, CO 149,004,683 179,034,689 94.0% Fountainhead Plaza Phoenix, AZ 136,000,000 136,073,228 100.0% Corporate Tech Centre San Jose, CA 165,254,496 181,862,469 41.6% Total - Current Real Estate Assets $ 770,553,876 $ 900,845,790 76.3% HELD FOR SALE ASSETS 100 & 200 Campus Drive Buildings3 Florham Park, NJ $ 180,700,000$ 238,167,326 85.6% 300 - 600 Campus Drive Buildings3 Florham Park, NJ 184,300,000 234,865,309 93.4% Total - Current Real Estate Assets $ 365,000,000$ 473,032,635 89.4% !"G%.("40.).")'*+&,-."%;)L)'0+"/&;*K0.-"/;)*-="*0/)(0+"-U/-',)(&;-."0'," +-0.)'L"*%$$)..)%'."0."%9"2-/(-$4-;"<>="6>!?1 6"V-0.-,"%**&/0'*M")'*+&,-."9&(&;-"+-0.-."(K0( K0,"4--'"-U-*&(-,"4&(" Total REIT II Real Estate Assets $ 1,135,553,876 $ 1,373,878,42 80.2% K0,"'%("M-("*%$$-'*-,"0."%9"2-/(-$4-;"<>="6>!?1 5 <"W;%/-;()-."0;-"*&;;-'(+M"&',-;"*%'(;0*("(%".-++1 ===>)?@A>BC2 &


 
Net Sales Net Sales Asset Sale Date Cost Basis1 Debt Payoff Net Proceeds Portfolio Sales Price2 Proceeds3 Hartman II 6/28/2012$ 11,113,000$ 12,650,000$ 12,283,407$ 6,755,627$ 5,527,780 Summary Mountain View 5/14/2014 33,316,000 25,417,000 24,394,290 12,624,000 11,770,290 Dallas Cowboys 6/11/2014 19,273,000 22,250,000 21,645,478 11,793,118 9,852,360 601 Tower at Carlson Center 6/11/2014 60,405,000 74,946,000 72,586,261 16,320,000 56,266,261 As of September 30, 2019 Plano Business Park 6/16/2014 18,229,000 23,297,000 22,683,492 10,266,968 12,416,524 Metropolitan Center 6/27/2014 108,075,000 108,458,000 105,404,679 33,360,000 72,044,679 300 N LaSalle 7/7/2014 663,847,000 849,604,000 817,845,664 344,600,796 473,244,868 Torrey Reserve West 7/10/2014 29,489,000 39,150,000 38,164,856 16,827,945 21,336,911 Two Westlake 7/25/2014 94,759,000 119,899,000 117,407,448 53,130,000 64,277,448 City Place Tower 8/21/2014 130,996,000 149,878,000 145,920,077 71,000,000 74,920,077 I-81 Industrial 11/18/2014 92,900,000 103,871,000 100,811,567 56,822,369 43,989,198 Crescent VIII 11/20/2014 14,500,000 16,438,000 15,823,796 7,970,927 7,852,869 One Main Place 12/24/2014 64,500,000 84,424,000 82,675,208 16,938,500 65,736,708 National City Tower 2/13/2015 124,600,000 124,000,000 121,764,391 89,700,000 32,064,391 350 E. Plumeria 5/17/2016 38,123,000 42,336,000 41,217,212 22,800,000 18,417,212 Gateway Corporate Center 6/14/2017 51,835,000 47,100,000 45,687,621 - 45,687,621 !"G%.("40.).")'*+&,-."%;)L)'0+"/&;*K0.-"/;)*-="*0/)(0+" Horizon Tech Center 11/21/2017 43,151,000 39,451,000 37,721,399 18,000,000 19,721,399 -U/-',)(&;-.="0',"+-0.)'L"*%$$)..)%'."0."%9",0(-"%9".0+-1 6"7-(".0+-."/;)*-")."-Q&0+"(%"(K-"L;%..".0+-."/;)*-"+-.." Corporate Tech Centre4 2018 75,505,987 97,446,000 94,014,468 94,580,074 (565,606) *%'*-..)%'.1 <"D'*+&,-."(K-")$/0*("%9".-++)'L"*%.(."0',"9--.="0."5-++"0." Pierre Laclede 5/23/2019 119,756,875 93,571,212 91,638,334 42,623,563 49,014,771 ,-4("/;-/0M$-'("*%.(.1 3"B-9+-*(."(K;--"4&)+,)'L.".%+,",&;)'L"R6"6>!I1"#."%9" Emerald View 5/23/2019 40,642,673 39,869,305 38,646,623 28,066,098 10,580,525 2-/(-$4-;"<>="6>!?="9):-"4&)+,)'L.";-$0)'")'"(K-"G%;/%;0(-" E-*K"G-'(;-"/;%/-;(M1 Total $ 1,835,016,535$ 2,114,055,517$ 2,048,336,271 $ 954,179,985$ 1,094,156,285 ===>)?@A>BC2 '


 
Debt Sales Purchase / Sale Sale / Payoff Debt Asset Origination Repayment Debt Payoff Net Proceeds Date Summary Amount Proceeds As of September 30, 2019 Northern Trust A & B Notes 6/27/2012 $ 59,428,000$ 84,932,000 - $ 84,932,000 One Liberty Plaza 10/11/2013 66,700,000 113,091,000 - 113,091,000 One Kendall Square 12/4/2013 87,500,000 87,500,000 - 87,500,000 Tuscan Inn 2/7/2014 20,200,000 20,200,000$ 12,216,074 7,983,926 Chase Tower 2/14/2014 59,200,000 64,117,000 35,747,036 28,369,964 Pappas Commerce 6/9/2014 32,673,000 32,673,000 19,325,428 13,347,572 Summit I & II 8/4/2015 58,750,000 59,624,000 - 59,624,000 Sheraton Charlotte Airport Hotel 6/1/2018 14,500,000 14,500,000 8,711,462 5,788,538 Total $ 398,951,000$ 476,637,000$ 76,000,000$ 400,637,000 ===>)?@A>BC2 (


 
Portfolio Overview1 DE)'-)A1/%1671,)F;:)8;9< Key Statistics Geographic Diversification3 No. of Assets 5 Total Rentable Sq. Ft. 2,738,618 VA Wtd Avg Lease Term 6.6 years 15% CA 36% Economic Occupancy 74.0% AZ Leased Occupancy2 76.3% 22% No. of Tenants 83 CO Leverage (including HFS) 38.9% 27% Region 1 Leased Occupancy2 125% Occupied SF Expirations as of September 30, 2019 100.0% 600,000 100% 94.0% 80.6% 500,000 24% 75% 59.7% 23% 400,000 50% 41.6% 300,000 25% 200,000 0% 9% Occupied SF Expiring 7% Fountainhead Granite Tower Union Bank Plaza Willow Oaks Corporate Tech 6% 6% 6% 100,000 4% 5% Plaza Center 3% 2% 1% 2% 2% 0 !"X'+-.."%(K-;5).-"'%(-,=",0(0"-U*+&,-."!>> Y"6>>"G0$/&."Z;):-"Y"<>>JS>>"G0$/&."Z;):-"0."(K%.-"/;%/-;()-."5-;-"*+0..)9)-,"0."K-+,"9%;" .0+-"0."%9"2-/(-$4-;"<>="6>!?1 MTM 2019 2021 6"V-0.-,"%**&/0'*M")'*+&,-."9&(&;-"+-0.-."(K0("K0,"4--'"-U-*&(-,"4&("K0,"'%("M-("*%$$-'*-,"0."%9"2-/(-$4-;"<>="6>!?1 2020 2022 2023 2024 2025 2026 2027 2028 2029 2030 <"A0.-,"%'"%**&/)-,".Q&0;-"9--("0."%9"2-/(-$4-;"<>="6>!?1 Thereafter ===>)?@A>BC2 )*


 
Tenancy Overview1 DE)'-)A1/%1671,)F;:)8;9< Leased2 SF 3 Top 10 Tenants Industry Property Industry Diversification % of Portfolio Educational Fountainhead The University of Phoenix 21.3% Services Plaza Mining, Oil & Granite Anadarko Petroleum Corporation 17.3% Gas Extraction Tower Union Bank Finance Union Bank 14.1% Public Fairfax County School Board Administration Willow Oaks 5.9% Computer Corporate NXP USA, Inc Systems 4.6% Tech Centre Design Computer Corporate CDK Global, Inc Systems 3.7% Tech Centre Design Granite Personal Capital Advisors Corp. Finance 1.5% Tower Granite Robinson, Waters & O’Drisio Legal Services 1.0% Tower Yoka & Smith, LLP Legal Services Union Bank 0.9% Mining, Oil & Granite Inflection Energy, LLC 0.9% Gas Extraction Tower TOTAL (based on total occupied square feet) 71.2% Weighted Average Lease Term (Top 10 Tenants) 7.7 years !"X'+-.."%(K-;5).-"'%(-,=",0(0"-U*+&,-."!>> Y"6>>"G0$/&."Z;):-"Y"<>>JS>>"G0$/&."Z;):-"0."(K%.-"/;%/-;()-."5-;-"*+0..)9)-,"0."K-+,"9%;".0+-" 0."%9"2-/(-$4-;"<>="6>!?1 6"V-0.-,"%**&/0'*M")'*+&,-."9&(&;-"+-0.-."(K0("K0,"4--'"-U-*&(-,"4&("K0,"'%("M-("*%$$-'*-,"0."%9"2-/(-$4-;"<>="6>!?1 <"A0.-,"%'"%**&/)-,".Q&0;-"9--("0."%9"2-/(-$4-;"<>="6>!?1 3"D'*+&,-.":0;)%&."%(K-;")',&.(;)-."(K0(")',):),&0++M";-/;-.-'("+-.."(K0'"<[1 ===>)?@A>BC2 ))


 
2019 Estimated Value Per Share )!


 
KBS REIT II is providing this estimated value per share (i) to assist KBS REIT II in calculating the range of Valuation estimated net proceeds from its proposed liquidation and dissolution (the “Plan of Liquidation”) as discussed in Information1 the Preliminary Proxy Statement, which proposed Plan of Liquidation will be submitted to the stockholders of KBS REIT II for their consideration along with KBS REIT II’s definitive proxy statement upon its filing with the SEC and (ii) to assist broker-dealers that participated in KBS REIT II’s initial public offering in meeting their customer account statement reporting obligations under Financial Industry Regulatory Authority (“FINRA”) Rule 2231. KBS REIT II’s estimated value per share was determined in accordance with the IPA’s Valuation Guidelines. CBRE, an independent, third-party real estate valuation firm, was engaged to provide appraisals for five real estate properties (the “Appraised Properties”) as of September 30, 2019. Two properties under contract to sell subsequent to September 30, 2019 were valued at the contractual sales price less estimated closing credits. The estimated value per share did not include an enterprise (portfolio) premium or discount. On November 13, 2019, KBS REIT II’s board of directors approved $3.79 as the estimated value per share2 of KBS REIT II’s common stock as recommended by KBS Capital Advisors (the “Advisor”) and KBS REIT II’s conflicts committee, which approximates the mid-range value of the $3.55 to $3.99 range in the estimated value per share indicated in the Advisor’s valuation report. !"H%;"$%;-")'9%;$0()%'=".--"(K-"80+&0()%'"IJ@"9)+-,"5)(K"(K-"2CG %'"7%:-$4-;"!O=" 6>!?1 6"EK-"-.()$0(-,":0+&-"%9"@A2"BCDE"DDF."0..-(."+-.."(K-"-.()$0(-,":0+&-"%9"(K-" BCDEF."+)04)+)()-.="%;"7#8=",):),-,"4M"(K-"'&$4-;"%9".K0;-."%&(.(0',)'L="0++"0."%9" 2-/(-$4-;"<>="6>!?="-U*-/("9%;"*-;(0)'")(-$.",).*&..-,")'"(K-"80+&0()%'"IJ@"9%;" 5K)*K"-.()$0(-,":0+&-."5-;-"0,\&.(-,".&4.-Q&-'("(%"2-/(-$4-;"<>="6>!?1 ===>)?@A>BC2 )"


 
Valuation November 20191 December 20182 Estimated Value Estimated Value Summary Assets: $1,142.4 Million $1,362.9 Million Real Estate Properties $1,076.0 Million (94.2%) $1,264.7 Million (92.8%) Cash $63.8 Million (5.6%) $93.3 Million (6.8%) Other Assets3 $2.6 Million (0.2%) $4.9 Million (0.4%) Liabilities: $438.5 Million $438.7 Million Mortgage and Other Debt $418.2 Million $416.3 Million Other Liabilities4 $20.3 Million $22.4 Million !"A0.-,"%'",0(0"0."%9"2-/(-$4-;"<>="6>!?="-U*-/("9%;"*-;(0)'")(-$." ,).*&..-,")'"(K-"80+&0()%'"IJ@"9%;"5K)*K"-.()$0(-,":0+&-."5-;-"0,\&.(-," .&4.-Q&-'("(%"2-/(-$4-;"<>="6>!?1 6"A0.-,"%'",0(0"0."%9"2-/(-$4-;"<>="6>!I1 Net Equity at Estimated Value $703.9 Million $924.2 Million <"D'*+&,-.";-'(."0',"%(K-;";-*-):04+-.=",-/%.)(."0',"/;-/0),"-U/-'.-."0." 0//+)*04+-1 3"D'*+&,-."0**%&'(."/0M04+-="0**;&-,"+)04)+)()-.=".-*&;)(M",-/%.)(."0'," /;-/0),";-'(1 ===>)?@A>BC2 )#


 
Valuation December 2018 estimated value per share $4.95 Real Estate Summary Real Estate Properties (0.30) On November 13, 2019, KBS REIT II’s Board Selling costs related to properties sold (0.02) of Directors approved an estimated value per share of $3.791. The following is a Capital expenditures on real estate (0.34) summary of the estimated value per share changes within each asset and liability Total changes related to real estate (0.66) group. Monthly distributions in excess of operating cash flows2 (0.04) Special Distribution declared in June 2019 (0.45) Notes payable (0.01) Total change in estimated value per share (1.16) !"A0.-,"%'"(K-"-.()$0(-,":0+&-"%9"@A2"BCDE"DDF."0..-(."+-.."(K-"-.()$0(-," :0+&-"%9"@A2"BCDE"DDF."+)04)+)()-.=",):),-,"4M"(K-"'&$4-;"%9".K0;-." November 2019 estimated value per share $3.79 %&(.(0',)'L="0++"0."%9"2-/(-$4-;"<>="6>!?="-U*-/("9%;"*-;(0)'")(-$." ,).*&..-,")'"(K-"80+&0()%'"IJ@"9%;"5K)*K"-.()$0(-,":0+&-."5-;-"0,\&.(-," .&4.-Q&-'("(%"2-/(-$4-;"<>="6>!?1 6"]/-;0()'L"*0.K"9+%5";-9+-*(."$%,)9)-,"9&',."9;%$"%/-;0()%'."^_`HH]ab" 0,\&.(-,"(%"0,,"40*c"(K-"0$%;()d0()%'"%9",-9-;;-,"9)'0'*)'L"*%.(.1"@A2"BCDE" DD"*%$/&(-."`HH]")'"0**%;,0'*-"5)(K"(K-",-9)')()%'")'*+&,-,")'"(K-"/;0*()*-" L&),-+)'-")..&-,"4M"(K-"DW#")'"7%:-$4-;"6>!>1" ===>)?@A>BC2 )$


 
Campus Drive Properties (100 & 200 Campus Drive and 300-600 Campus Drive) Significant Real As of September 30, 2019, the Campus Drive Properties were classified as held for sale and the value was based on the contractual sales price less estimated closing credits. The value declined $56.3 million (15.7%) from the December 2018 Estate Changes appraised value primarily due to the following: • Despite renovations to modernize the park, the addition of ample amenities and creative connectivity to rail via a proprietary shuttle service, certain institutional investors that would have previously been in the market for this asset have either too much exposure in suburban office or have moved away from suburban properties and thus did not pursue the asset. • With institutions on the side line, the asset is too large for small and mid-sized investors, who otherwise like the asset, but are unable to put the funds together without an institutional partner. • A buyer has been selected and signed a purchase and sale agreement for a $311 million gross sale price with a $4.0 million hard deposit and a closing date of December 16, 2019. The buyer has two closing extension rights through January 16, 2020 and through January 31, 2020, both for an additional $1.0 million deposit. Union Bank The value declined $15.0 million (6.0%) from the December 2018 appraised value primarily due to the following • Union Bank gave back approximately 43,000 SF more than was previously anticipated in the prior year appraisal. • TI spend for unleased suites have increased from the prior appraisal. • Building improvements to the interior, lobby & coral tree plaza were higher than anticipated in the prior year appraisal. • The land north of the office tower was deemed historic by the LA Conservancy and no value was associated to that land in the current year appraisal as it cannot be developed further. ===>)?@A>BC2 )%


 
The November 2019 estimated value per share was performed in accordance with the provisions of and also to comply with Stockholder the IPA Valuation Guidelines. As with any valuation methodology, the methodologies used are based upon a number of estimates and assumptions that may not be accurate or complete. Different parties with different assumptions and estimates could derive a different estimated value per share of KBS REIT II’s common stock, and this difference could be significant. Performance The estimated value per share is not audited and does not represent the fair value of KBS REIT II’s assets less the fair value of KBS REIT II’s liabilities according to GAAP. KBS REIT II can give no assurance that: The November 2019 updated estimated • a stockholder would be able to resell his or her shares at • independent third-party appraiser or third-party value per share is based solely on the KBS REIT II’s estimated value per share; valuation firm would agree with KBS REIT II’s estimated value per share; or estimated value of KBS REIT II’s assets less • KBS REIT II’s shares of common stock would trade at the estimated value per share on a national securities • the methodology used to determine KBS REIT II’s the estimated value of KBS REIT II’s exchange; estimated value per share would be acceptable to FINRA liabilities as of September 30, 2019, or for compliance with ERISA reporting requirements. except for certain items discussed in the The value of KBS REIT II’s shares will fluctuate over time in response to developments related to individual assets in KBS REIT II’s Valuation 8-K for which estimated values portfolio and the management of those assets, the real estate and finance markets and due to other factors. KBS REIT II’s estimated were adjusted subsequent to September value per share does not reflect a discount for the fact that KBS REIT II is externally managed, nor does it reflect a real estate portfolio premium/discount versus the sum of the individual property values. KBS REIT II’s estimated value per share does not take into 30, 2019. account estimated disposition costs and fees for real estate properties, debt prepayment penalties that could apply upon the prepayment of certain of KBS REIT II’s debt obligations or the impact of restrictions on the assumption of debt. KBS REIT II has generally incurred disposition costs and fees related to the sale of each real estate property since inception of 1.7% to 4.4% of the gross sales price less concessions and credits, with the weighted average being approximately 2.4%. The November 13, 2019 estimated value per share does not represent a liquidation value of KBS REIT II’s assets and liabilities. If the Plan of Liquidation is approved by the stockholders and KBS REIT II is able to successfully implement the plan, KBS REIT II estimates that its net proceeds from liquidation and, therefore, the amount of cash the stockholders would receive for each share of KBS REIT II’s common stock they then hold, could range between approximately $3.40 and $3.83 per share. See Slide 19 “Liquidation Discussion.” ===>)?@A>BC2 )&


 
Hypothetical Performance of Early and Late Investor Stockholder Performance $14.18 total value1 for early cash investors $12.62 total value1 for late cash investors Assumes all distributions received in cash through November 2019 Breakdown of Early Cash Investor Value Breakdown of Late Cash Investor Value $14.55 $14.46 $14.52 $14.67 $14.35 $14.66 $12.99 $12.90 $12.96 $13.11 $12.79 $13.09 $13.80 $14.18 $12.24 $12.62 $13.10 $11.59 $12.27 $10.76 $4.89 $4.95 $3.79 $4.89 $4.95 $3.79 $6.05 $5.86 $5.62 $5.49 $6.05 $5.86 $5.62 $5.49 $10.00 $10.00 $10.29 $10.29 $10.29 $4.55 $5.00 $10.29 $4.55 $5.00 $10.11 $4.55 $4.55 $10.11 $4.55 $4.55 $4.55 $4.55 $4.55 $4.55 $4.55 $4.55 $0.05 $4.63 $4.91 $5.16 $5.39 $0.05 $3.46 $3.95 $4.05 $4.35 $3.07 $3.35 $3.59 $3.83 $2.16 $2.81 $1.90 $2.38 $2.49 $2.79 $0.65 $1.30 2011 2012 2013 2011 2012 2013 Offering… Offering… Sep-2014 Dec-2014 Dec-2015 Dec-2016 Dec-2017 Dec-2018 Nov-2019 Sep-2014 Dec-2014 Dec-2015 Dec-2016 Dec-2017 Dec-2018 Nov-2019 Regular Distributions Special Distributions Estimated Value Per Share !"E%(0+":0+&-"-Q&0+."^)b"*&$&+0():-",).(;)4&()%'."/0),"(K;%&LK"7%:-$4-;"<>="6>!?"/+&."^))b"(K-"7%:-$4-;"6>!?"-.()$0(-,":0+&-"/-; .K0;-"%9"N<1T?1"EK).",%-."'%("(0c-")'(%"*%'.),-;0()%'".-++)'L"0',"+)Q&),0()%'"*%.(.1 _G&$&+0():-",).(;)4&()%'.a"9%;"0'"-0;+M"*0.K")':-.(%;"0',"0"+0(-"*0.K")':-.(%;"0..&$-."0++",).(;)4&()%'.";-*-):-,")'"*0.K"0', '% .K0;-";-,-$/()%'.="0',";-9+-*("(K-"*0.K"/0M$-'("0$%&'(."^0++",).(;)4&()%'."/0),".)'*-")':-.($-'(b"/-;".K0;-"9%;"0"KM/%(K-()*0+")':-.(%;"5K%")':-.(-,"%'"P&'-"63="6>>I"0',"Z-*-$4-;"<!=" 6>!>=";-./-*():-+M1""EK-"_%99-;)'L"/;)*-a"%9"N!>1>>";-9+-*(."(K-"/;)*-"$%.(")':-.(%;."/0),"(%"/&;*K0.-".K0;-.")'"(K-"/;)$0;M")')()0+"/&4+)*"%99-;)'L1""H%;"-.()$0(-,":0+&-"/-;".K0;-")'9%;$0()%'=".--"@A2"BCDE"DDF."G&;;-'("B-/%;(."%'"H%;$"IJ@"9)+-,"5)(K"(K-"2CG"%'"Z-*-$4-;"6!="6>!!="Z-*-$4-;"!?="6>!6="Z-*-$4-;" !?="6>!<="Z-*-$4-;"3="6>!3="Z-*-$4-;"?="6>!O="Z-*-$4-;"!O="6>!S="Z-*-$4-;"!!="6>!T="Z-*-$4-;"T="6>!I"0',"7%:-$4-;"!O="6>!?1 ===>)?@A>BC2 )'


 
Following a lengthy process of evaluating strategic alternatives, the Company’s board of directors and a committee composed of independent directors (the “Special Committee”) each has unanimously determined (i) Liquidation that a liquidation of the Company pursuant to a plan of complete liquidation and dissolution of the Company on terms described in the Company’s definitive proxy statement that will be filed with the SEC and sent or given to Discussion stockholders (the “Plan of Liquidation”) is in the Company’s best interest and the best interest of its stockholders and (ii) that the terms of the Plan of Liquidation are fair to the Company’s stockholders, advisable and in the stockholders’ best interest. Pursuant to the Plan of Liquidation, the Company would sell all of its remaining properties, pay all of its known liabilities, provide for the payment of its unknown or contingent liabilities, distribute its remaining cash to its stockholders, wind up its operations and dissolve. Pursuant to Maryland law and the Company’s charter, the Plan of Liquidation must be approved by the affirmative vote of a majority of all of the shares of common stock entitled to vote thereon. The Company currently estimates that, if the Plan of Liquidation Proposal is approved by its stockholders and the Company is able to implement the plan successfully, the Company’s net proceeds from liquidation and, therefore, the amount of cash that each stockholder would receive for each share of the Company’s common stock that each stockholder then holds, would range between approximately $3.40 and $3.83 per share. The Company expects to pay liquidating distributions to its stockholders during the liquidation process and to pay the final liquidating distribution after it sells all of its properties, pays all of its known liabilities and provides for unknown liabilities, which activities the Company expects to complete within 24 months after stockholder approval of the Plan of Liquidation. A final liquidating distribution to the Company’s stockholders may not be paid until all of its liabilities have been satisfied. There can be no assurances regarding the amounts of any distributions or the timing thereof. ===>)?@A>BC2 )(


 
Stockholder Hypothetical Performance of Early and Late Investors Performance Assumes All Distributions Received in Cash and Stockholder has Held Shares Since Dates Shown Based on liquidation range Range in Estimated Cumulative Cash Liquidation Proceeds Range in Selling and Distributions Received Per Share Total Liquidation Costs through November 2019 As of November 13, 2019 Early Investor: Invested at Escrow Break (June 24,2008) $10.39 $3.55 - $3.99 (0.15) - (0.16) $13.79 - $14.22 Late Investor: Invested at Close of Public Offering (December 31, 2010) $8.83 $3.55 - $3.99 (0.15) - (0.16) $12.23 - $12.66 ===>)?@A>BC2 !*!*")


 
e KBS REIT II’s expectations about the amount of liquidating distributions that it will pay and when it will pay them Challenges and are based on estimates and assumptions, one or more of which may be incorrect, which could result in the actual amount of liquidating distributions to be more or less than the REIT estimates and the liquidating Risks distributions may be paid later than it predicts. e Many factors could affect the amounts available for distribution, including, among other things, the ultimate sale price of each asset, changes in market demand for office properties during the sales process, the amount of taxes, transaction fees and expenses relating to the Plan of Liquidation, and unanticipated or contingent liabilities that could arise. e There can be no assurance that the Plan of Liquidation will maximize stockholder value to a greater extent at this time than would otherwise occur through other alternatives considered by the board of directors and Special Committee, and described in the Preliminary Proxy Statement. e KBS REIT II’s directors and officers and the Advisor and its affiliates have conflicts of interest that may influence their support of the Plan of Liquidation and may cause them to manage the liquidation in a manner not solely in the best interest of the REIT’s stockholders. ===>)?@A>BC2 !)!)")


 
Property Updates !!!!


 
District | 237 San Jose, CA e District | 237 (formerly Corporate Technology Centre) was re- branded and repositioned in early 2019 after the vacancy of Ericsson which allowed KBS to better position the asset for today’s technology companies. The newly branded District | Sold 3 Bldgs. in 2018 for $97.4 mm 237 comprises five buildings ranging in size from 46,000 square feet to 100,000 square feet. 3Q19 Fully Leased to NXP e In the first quarter of 2019, KBS executed a full-building lease Marketing for Lease 3Q19 Lease Under at 250 Holger Way with CDK Global for 76,000 SF. Negotiation for both 1Q19 Fully buildings Leased to CDK e In the third quarter of 2019, KBS was successful with another full building lease to NXP for 96,500 square feet at 350 Holger Way. e KBS is currently negotiating a lease with a large company for the 100 Headquarters Drive and 200 Holger Way buildings which if completed would total approximately 143,000 SF. e If the aforementioned leases are completed, the only remaining building to lease up would be 300 Holger Way. ===>)?@A>BC2 !"


 
Granite Tower Before Renovations Denver, CO e We continue to complete our renovation and repositioning strategy at the property. ===>)?@A>BC2 !#


 
Granite Tower Renovations Underway Denver, CO ===>)?@A>BC2 !$


 
REIT II Goals & Objectives Continue to strategically sell assets and pay special distributions Negotiate lease renewals or new leases that facilitate the sales process and enhance property stability for prospective buyers Complete capital projects, such as renovations or amenity enhancements, to attract quality buyers Obtain final stockholder approval to complete the plan of liquidation ===>)?@A>BC2 !%


 
Q&A For additional questions, contact KBS Capital Markets Group Investor Relations (866) 527-4264 !&