Pacific Oak Strategic Opportunity REIT, Inc. reported a net loss attributable to common stockholders of $100.8 million for the fiscal year ending December 31, 2024, a decrease from a loss of $144.2 million in the previous year. The company's total revenue for the year was $133.5 million, down from $145.4 million in 2023, primarily due to a decline in rental income, which fell to $120.5 million from $128.1 million. This decrease was attributed to the sale of 89 residential homes and one apartment property, which collectively reduced rental income by approximately $6.4 million. The company also experienced a significant impairment charge of $76.1 million, reflecting declines in market conditions and projected cash flows for several properties.
In terms of operational metrics, as of December 31, 2024, Pacific Oak owned nine office complexes totaling 3.2 million rentable square feet, with an occupancy rate of 67%. Additionally, the company held a residential home portfolio of 2,093 homes and an apartment property with 317 units, achieving occupancy rates of 93% and 92%, respectively. The company’s strategic focus on opportunistic real estate investments has been challenged by the current market environment, particularly in the office sector, which has been adversely affected by remote work trends and elevated cap rates.
During the fiscal year, Pacific Oak executed several strategic initiatives, including the sale of various properties, which generated $119 million in gains. The company also issued Series D bonds totaling approximately $161.4 million to bolster its capital structure. However, the board of directors suspended the share redemption program effective July 30, 2024, due to liquidity concerns, limiting stockholder options for liquidity. As of December 31, 2024, the company had $876.8 million in outstanding debt, with $244.5 million maturing in 2025.
Looking ahead, Pacific Oak anticipates continued challenges in the office sector, which represents nearly 50% of its property portfolio. The company is focused on managing its liquidity through asset sales and refinancing efforts, although it does not expect to have funds available for stockholder liquidity in the near term. The management believes that the office sector will eventually stabilize, leading to improved occupancy and transaction activity, which could enhance the company's financial position and allow for a reassessment of liquidity strategies for stockholders.
About Pacific Oak Strategic Opportunity REIT, Inc.
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