A nine-property portfolio in the Kansas City, Kansas, metro area was sold by a Newport Beach real estate investment trust for $100 million.
Dallas-based DFW Land Real Estate, a company specializing in land acquisitions, bought Park Place Village from KBS Capital Markets Group LLC. Real estate advisory firm Newmark helped arrange a $62 million acquisition loan for DFW Land’s purchase of Park Place Village.
The sale price was a 21% discount from the nearly $127 million Newport Beach-based KBS paid for the portfolio in 2015.
“By proactively managing the asset and curating a retail experience that enhanced the overall office offering, KBS strategically exited the property at 100% occupancy—even while navigating post-pandemic market challenges,” KBS Capital Markets Chief Executive Marc DeLuca said in a statement.
“The result is an office product that remained relevant and resilient, and delivered consistent cash flow at a time when many office assets have struggled.”
The properties, located in Leawood, Kansas, also have retail, residential and office uses.
The residential portion of Park Place Village includes more than 200 apartments, 30 town homes and 27 loft units. Other uses include boutique retail, high-end dining and a fitness center.
All nine buildings total nearly 485,000 square feet across nearly 10 acres. The mixed-use center was completed in phases between 2007 and 2013.
Park Place Village, a nine-property portfolio located on the Kansas State side of the Kansas City metro, serves as the corporate headquarters for AMC Theatres. Brands with a presence at Park Place Village include Piper Sandler, Raymond James and Aloft Hotel.
“Park Place Village represents a natural and strategic addition to our real estate portfolio,” DFW Land CEO Vijay Borra said in a statement.
“This asset is well-positioned to deliver long-term performance and value. Over the past 90 days, we have successfully acquired several million square feet of office and retail space, reinforcing our commitment to pursuing high-quality properties that align with our long-term investment strategy.”
KBS Capital Markets REIT
KBS was founded in 1992 by current president and chair Charles J. Schreiber Jr., Peter Bren, the late brother of Donald Bren and Don Koll.
Since 2004, when its capital arm was formed, it has raised more than $5 billion from institutional investors for several funds, including $1.7 billion for its KBS Real Estate Investment Trust III.
It’s completed $45.5 billion in transactions and has $4.8 billion in assets under management as of June 30.
The company has made a name for itself over the past decade as one of the county’s biggest office investors. Some of its notable properties include Gateway Tech Center in Salt Lake City, The Almaden in San Jose, Accenture Tower in Chicago, 515 Congress in Austin, Texas, and Sterling Plaza in Dallas.
However, it has faced rough patches since the pandemic.
In 2024, it gave up ownership of an 18-story office tower in San Francisco’s financial district; it had bought the building for $121 million in 2013.
It also suffered a foreclosure on a historic office it previously owned in Portland, Oregon, and the sale of a skyscraper in downtown Los Angeles at a steep loss in 2023.
“Historically high interest rates have impacted everyone from not only investors in real estate but also consumers,” DeLuca told the Business Journal via email in 2023. “In San Francisco, increases in crime and homelessness have caused many stores and companies to close or relocate.”
Additionally, “the city’s slow repopulation of the workplace has diminished office space demand for us and every other property owner in the region.”
KBS REIT III refinanced or extended an estimated $1.3 billion of maturing debt across six different loans, for the 12-month period ended Feb. 6.
Market Stabilizing?
Park Place Village, according to KBS REIT III documents reviewed by the Business Journal, had an outstanding balance of $65 million and an initial maturity date of Aug. 31. The maturity date was extended to Aug. 31, 2027.
KBS Capital Markets, in a market forecast, said any portfolio transaction with nearly 100% office occupancy is “very difficult if not impossible to achieve,” especially in a market where current real estate valuations are at “a significant discount to previous market values.”
“KBS REIT III’s conflicts committee and our board of directors believe the best course of action is to carefully manage the portfolio through the current challenging market environment in order to be ready to complete a liquidation or strategic transaction once the markets have improved,” according to a KBS Capital Markets forecast.
“Even for U.S. office properties, it does appear that the market is stabilizing, as additional debt and equity capital is beginning to be deployed into certain markets, especially for smaller well-located office properties,” the forecast continued.
