SOURCE: KBS Real Estate Investment Trust II

KBS Real Estate Investment Trust II

September 15, 2010 17:30 ET

KBS REIT II Buys Landmark Downtown L.A. Office Tower

Purchase of Union Bank Plaza Increases Acquisition by KBS Affiliates to 4.4 Million Square Feet in 2010

LOS ANGELES, CA--(Marketwire - September 15, 2010) -  KBS Real Estate Investment Trust II (KBS REIT II) has acquired Union Bank Plaza, a landmark 627,334-square-foot office tower and retail complex in downtown Los Angeles. The 40-story tower, located between the 110 Freeway and Figueroa Street, has proven to be one of downtown L.A.'s most sought-after office properties since its completion. Current occupancy stands at more than 96 percent.

The acquisition price was $208 million, or $331.56 per square foot. KBS arranged financing of $119.3 million for five years, interest only, $105 million of which was funded at close at a fixed rate of 3.445%.

The transaction increases the commercial real estate acquired by KBS-affiliated companies in 2010 to 4.4 million square feet. In addition to Los Angeles, KBS has acquired signature office properties this year in Chicago, Dallas, St. Louis, San Diego, Portland, Ore., and Herndon, Va., near Washington, D.C.

Designed by the Southern California architecture firm A.C. Martin, the property is named for its anchor tenant, Union Bank, N.A., which has had a presence in the building since its completion and currently occupies 55 percent of the rentable square feet. Union Bank, N.A. is the primary subsidiary of UnionBanCal, the second largest commercial bank holding company headquartered in California with $84 billion in assets as of June 30, 2010.

Union Bank Plaza consists of a 607,517-square-foot office tower, a two-level, 19,817-square-foot retail plaza, and a 914-space, four-level parking structure.

"As one of downtown L.A,'s few truly iconic office towers, Union Bank Plaza serves as an ideal addition to the KBS REIT II portfolio," explained Bill Milligan, Western Region president for KBS Realty Advisors. "We expect the building's Class A-quality, prime address and high profile to contribute to continued tenant retention over the long term."

Located at 445 South Figueroa Street, between 4th and 5th Streets, Union Bank Plaza has been completely renovated and updated. The property is serviced by 16 passenger elevators arranged in three banks, as well as an extensive outdoor plaza with reflecting pools, tree-shaded seating areas and a 1,250-square-foot pavilion available for meetings and conferences. A two-story retail center provides al fresco dining, restaurants and convenience services. Union Bank Plaza occupies an entire city block.

"Union Bank Plaza is perfectly positioned to benefit from the ongoing renaissance of downtown L.A., resulting from a $15-billion infusion of public/private investment responsible for the creation of such mixed-use complexes as L.A. Live, The Grand and various urban residential developments," explained Christopher Aust, KBS senior vice president and director of acquisitions for the Southwest Region.

Michael Zietsman and David Doupé of the Los Angeles office of Jones Lang LaSalle represented the seller, the Hines Organization, in the acquisition, which closed today. KBS Capital Advisors represented KBS REIT II.

About KBS Companies
Headquartered in Newport Beach, Calif., KBS Capital Markets Group (www.kbs-cmg.com) is the dealer manager for all KBS REITs and KBS Capital Advisors is the advisor for all KBS REITs. Both companies are affiliates of KBS Realty Advisors, a private equity real estate company and SEC-registered investment advisor founded in 1992 by Peter Bren and Chuck Schreiber. Since 1992, KBS has completed transactional activity exceeding $18 billion via 19 separate accounts, six commingled funds and four non-traded REITs. KBS has offices in Newport Beach, San Francisco, Chicago, Boston, Dallas, New York, Washington, D.C., Atlanta, and Los Angeles. For information, visit www.kbsrealty.com.

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These statements are subject to known and unknown risks, uncertainties and other factors which may cause KBS REIT II's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These include statements regarding the intent, belief or current expectations of KBS REIT II 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. Actual results may differ materially from those contemplated by such forward-looking statements. Further, forward-looking statements speak only as of the date they are made, and KBS REIT II 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.

The following are some of the risks and uncertainties, although not all risks and uncertainties, that could cause KBS REIT II's actual results to differ materially from those presented in KBS REIT II' s forward-looking statements: KBS REIT II can provide no guarantees regarding (i) its future performance or the performance of Union Bank Plaza, (ii) the financial stability of the tenants leasing Union Bank Plaza; or (iii) whether current or future disruptions in the national or local economy will materially adversely affect the operations of Union Bank Plaza.

(0910-05)

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