Pacific Oak Strategic Opportunity Reit, Inc. · OTC:PCOK
Pacific Oak Strategic Opportunity Reit — Corporate Update (December 2023)
19 slides from Pacific Oak Strategic Opportunity Reit's corporate update, Dec 7, 2023
Slide 1: Valuation and Portfolio Update
PAC I F I C O AK S T R AT E G I C O P P O R T U N I T Y R E I T Va l u a t i o n a n d P o r t f o l i o U p d a t e DECEMBER 6, 2023 Exhibit 99.4
Slide 2: Forward-Looking Statements
2 FORWARD-LOOKING STATEMENTS I M P O R T A N T D I S C L O S U R E S - The information contained herein should be read in conjunction with, and is qualified by, the information in the Pacific Oak Strategic Opportunity REIT, Inc. (“Pacific Oak Strategic Opportunity REIT” or the “Company”) Annual Repo
Slide 3: Valuation
3 VALUATION(1) • Estimated share value of $8.03, using information as of September 30, 2023. • The Company followed the Institute for Portfolio Alternatives Valuation Guidelines, which included third-party valuations for all of its consolidated properties and two properties owned via unconsolidated
Slide 4: Estimated value per share notes and footnotes
4 1 Based on data as of September 30, 2023. For further information, see the Company’s Current Report on Form 8-K filed with the SEC on December 6, 2023. 2 Includes the related change in non-controlling interests in consolidated entities. 3 Operating cash flow reflects modified funds from operations
Slide 5: Estimated value per share limitations
5 The Company is providing this estimated value per share to assist broker-dealers, custodians, and other financial institutions that participated in its initial public offering in meeting their customer account statement reporting obligations. As with any valuation methodology, the methodologies us
Slide 6: Stockholder Performance
6 $0.44 $0.62 $0.98 $1.36 $1.73 $1.78 $1.81 $1.82 $1.82 $1.82 $1.82 $0.72 $1.47 $1.49 $1.49 $1.49 $1.67 $1.67 $2.89 $5.44 $5.83 $5.31 $5.86 $7.56 $5.78 $10.00 $11.27 $12.24 $13.44 $14.81 $11.50 $9.91 $10.63 $9.68 $10.68 $10.50 $8.03 $10.00 $11.71 $12.86 $14.42 $16.17 $16.84 $18.60 $19.76 $18.30 $19.
Slide 7: Portfolio & Market Updates
7 PORTFOLIO & MARKET UPDATES
Slide 8: Portfolio Update
8 P O RT F O L I O U P D AT E Investment Type Dec. 2023 NAV Value1 % of Total6 Occupancy/ Hotel RevPAR 9/30/233 Occupancy/ Hotel RevPAR 9/30/223 Occupancy/ Hotel RevPAR 9/30/193 Office $1,110,560,000 46.1% 74.5% 68.0% 79.6% Residential Homes & Apartments $658,924,000 32.8% 94.0% 93.6% 94.9% Land $35
Slide 9: Green Street CPPI and US stock market indices
9 $10.63 Property Type Index Value Change in Commercial Property Values (Unlevered) Past 12 months From Recent Peak All Property 129.5 -11% -16% Core Sector 129.6 -12% -19% Apartment 148.9 -16% -22% Industrial 235.4 2% -7% Mall 81.5 2% -16% Office 78.0 -27% -31% Strip Retail 111.5 -8% -15% Healthcar
Slide 10: Cap and discount rates and office market challenges
10 Cap and discount rates have increased rapidly Cap and discount rates are highly correlated to interest rate changes in particular Office market faces challenges from many sources, though the challenges and outcome may vary widely depending on market, location, asset quality and age, and other p
Slide 11: The Rise of Interest Rates
11 T HE RISE OF INT EREST RAT ES SOURCE: Bloomberg SOFR 10-Year Treasury Yield Short-term rates rose from about 3.0% to 5.3% in line with rate increases by the Federal Reserve between September 30, 2022 and September 30, 2023 10-Year Treasury yield increased from 3.83% to 4.57% between September
Slide 12: S&P Composite 1500 Office REITs Index Performance
12 S&P COMPOSIT E 1500 OFFICE REITs INDEX PERFORMANCE, 1 - AND 4-YEARS Index, 1-Year Index, 4-Year SOURCE: Bloomberg Index value fell from 73.36 to 57.06 between September 30, 2022 and September 30, 2023, a decline of 22% Index value fell from 123.48 to 57.06 between September 30, 2019 and Septe
Slide 13: Office REIT Stock Performance
13 OFFICE REIT STOCK PERFORMANCE, 4 -YEARS SL Green Realty Corp. (SLG), 4-Year Boston Properties Inc. (BXP), 4-Year SOURCE: Bloomberg Stock price fell from 86.71 to 37.30 between September 30, 2019 and September 30, 2023, a decline of 57% Stock price fell from 129.66 to 59.48 between September 3
Slide 14: Value-Add Opportunities
14 VALUE-ADD OPPORTUNITIES
Slide 15: Opportunities in offices and residential rental home platform
15 COMPANY’S OTHER OFFICES HAVE THE OPPORTUNITY TO GROW OCCUPANCY & NET OPERATING INCOME: Offices excluding 110 William represent 38.7% of the portfolio’s total value Offices excluding 110 William have an occupancy of only 68% at September 30, 2023 Company will continue to explore strategies t
Slide 16: Debt and equity restructured
16 DEBT RESTRUCTURED, TO LOWER LEVERAGE AND INTEREST RATE, EXTEND THE MATURITY UP TO 5 YEARS, & PROVIDE FUTURE FUNDING Former mezzanine loan, which had a balance of $89.0 million and interest rate of 1-month SOFR + 9.50% as of June 30, 2023, was converted to a 22.5% preferred equity interest in th
Slide 17: Park Highlands residential development, Las Vegas
17 The Company is amongst the largest residential land owners in Las Vegas via its Park Highlands investment, owning approximately 632 developable acres as of Sept. 30, 2023 and 517 developable acres after 115 acres were sold to one of the country’s largest homebuilders on Oct. 3, 2023. The Company
Slide 18: 2024 Goals & Objectives
18 2024 GOALS & OBJECT IVES (1) SELL PROPERTIES OPPORTUNISTICALLY, TO INCREASE THE COMPANY’S LIQUIDITY MAXIMIZE TOTAL RETURNS ON THE PORTFOLIO 1 There is no guarantee that the Company’s objectives will be met. CONTINUE TO MONITOR MARKET CONDITIONS AND LOOK FOR IMPROVEMENTS WHICH COULD OFFER OPPORTUN
Slide 19: Thank You
19 PACIFIC OAK LOS ANGELES, CA PACIFIC OAK COSTA MESA, CA 3200 Park Center Drive, Suite 800 Costa Mesa, CA 92626 11766 Wilshire Blvd., Suite 1670 Los Angeles, CA 90025 1-866-PAC-OAK7 INFO@PACIFICOAKCAPITAL.COM PacificOakCapitalMarkets.com // PacificOakCapitalAdvisors.com THANK YOU!
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