FALSE000145293600014529362022-05-112022-05-11

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________

 

FORM 8-K

__________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 11, 2022

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

(Exact name of registrant specified in its charter)

______________________________________________________

Maryland

000-54382

26-3842535

(State or other jurisdiction of incorporation or organization)

(Commission File Number)

(IRS Employer Identification No.)

11766 Wilshire Blvd., Suite 1670

Los Angeles, California 90025

(Address of principal executive offices)

Registrant’s telephone number, including area code: (424) 208-8100

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class			Trading Symbol(s)			Name of each exchange on which registered
None			N/A			N/A

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

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ITEM 7.01 REGULATION FD DISCLOSURE

Pacific Oak SOR (BVI) Holdings, Ltd. (the “BVI”), a wholly-owned subsidiary of Pacific Oak Strategic Opportunity REIT, Inc. (the “Company”), completed offerings of Series B debentures to investors in Israel in February 2020 and additional offerings in subsequent periods. Such offerings were registered with the Israel Securities Authority. Consequently, the BVI is required to prepare and file with the Israel Securities Authority certain financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”). The English translation of the IFRS interim consolidated financial statements as of March 31, 2022 are attached as Exhibit 99.1 to this Form 8-K. The English translation of the IFRS separate financial data annexed to the consolidated financial statements as of March 31, 2022 are attached as Exhibit 99.2 to this Form 8-K.

The information in this Item 7.01 of Form 8-K and the attached Exhibit 99.1 and Exhibit 99.2 are furnished to the Securities and Exchange Commission (“SEC”), and shall not be deemed to be “filed” with the SEC for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(d)						Exhibits
Ex.						Description
99.1						Pacific Oak SOR (BVI) Holdings, Ltd. Consolidated Interim Financial Statements as of March 31, 2022 (unaudited)
99.2						Pacific Oak SOR (BVI) Holdings, Ltd. Financial Statements as of March 31, 2022 (unaudited)

1

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

Dated: May 11, 2022

BY:

/s/ Michael A. Bender

Michael A. Bender

Chief Financial Officer, Treasurer and Secretary

Exhibit 99.1

PACIFIC OAK SOR (BVI) HOLDINGS, LTD.

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF MARCH 31, 2022

UNAUDITED

U.S. DOLLARS IN THOUSANDS

INDEX

			Page
Consolidated Statements of Financial Position			2
Consolidated Statements of Profit or Loss			3
Consolidated Statements of Equity			4
Consolidated Statements of Cash Flows			5-6
Notes to Interim Consolidated Financial Statements			7-11

- - - - - - - - - - - - - - - - - - -

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PACIFIC OAK SOR (BVI) HOLDINGS LTD.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

						March 31,															December 31,
						2022						2021									2021
						Unaudited															Audited
						U.S. dollars in thousands
ASSETS
CURRENT ASSETS
Cash and cash equivalents						$	59,124					$	96,481								$	83,215
Financial assets at fair value through profit or loss						104,574						94,217									112,096
Rents and other receivables, net						3,180						5,703									5,493
Prepaid expenses and other assets						6,118						5,213									4,575
Due from affiliate						8,240						—									7,039
Restricted cash						3,684						910									2,446
						184,920						202,524									214,864
NON-CURRENT ASSETS
Investment properties						1,531,633						1,620,047									1,524,989
Property plant and equipment - hotels, net						132,779						135,530									133,512
Goodwill						13,534						16,342									13,534
Investment in joint ventures						209,081						214,106									208,879
Restricted cash						34,439						16,461									18,812
						1,921,466						2,002,486									1,899,726
Total assets						$	2,106,386					$	2,205,010								$	2,114,590
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Notes payable, net						$	161,549					$	221,247								$	223,350
Debentures, net						—						95,465									—
Accounts payable and accrued liabilities						17,381						17,690									22,666
Due to affiliates						4,058						5,347									2,079
Distribution payable to Owner						8,750						10,608									—
Other liabilities						33,974						21,566									25,756
Lease obligation						360						360									360
Series A Cumulative Convertible Redeemable Preferred Stock						15,233						15,233									15,233
						241,305						387,516									289,444
LONG-TERM LIABILITIES
Notes payable, net						568,162						642,094									516,826
Debentures, net						252,218						166,221									258,773
Lease obligation						9,021						8,938									9,000
Rental security deposits						6,784						5,782									5,895
						836,185						823,035									790,494
Total liabilities						1,077,490						1,210,551									1,079,938
EQUITY
Owner's net equity						1,001,352						959,482									1,008,076
Non-controlling interests						27,544						34,977									26,576
Total equity						1,028,896						994,459									1,034,652
Total liabilities and equity						$	2,106,386					$	2,205,010								$	2,114,590

The accompanying notes are an integral part of the interim consolidated financial statements.

2

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PACIFIC OAK SOR (BVI) HOLDINGS LTD.

CONSOLIDATED STATEMENTS OF PROFIT OR LOSS

						Three months ended March 31,												Year ended December 31,
						2022						2021						2021
						Unaudited												Audited
						U.S. dollars in thousands
Revenues and other income:
Rental income						$	26,959					$	30,175					$	115,037
Tenant reimbursements						3,169						3,270						12,323
Hotel revenues						5,917						2,575						30,806
Other operating income						397						553						1,937
Total revenues and other income						36,442						36,573						160,103
Expenses:
Operating, maintenance, and management fees						(10,473)						(11,182)						(45,833)
Real estate taxes and insurance						(5,024)						(5,289)						(20,768)
Hotel expenses						(5,111)						(3,390)						(20,990)
Total expenses						(20,608)						(19,861)						(87,591)
Gross profit						15,834						16,712						72,512
Fair value adjustment of investment properties, net						10,137						8,634						87,999
Depreciation						(790)						(738)						(3,102)
Equity in loss of unconsolidated joint ventures						(1,156)						(3,059)						(17,631)
Asset management fees to affiliate						(3,127)						(3,852)						(14,012)
Impairment charges on goodwill						—						—						(2,808)
General and administrative expenses						(1,336)						(639)						(4,777)
Operating profit						19,562						17,058						118,181
Transaction and related costs						(108)						—						(397)
Finance income						46						45						194
Finance (loss) income from financial assets at fair value through profit or loss						(5,134)						13,506						38,289
Finance expenses						(9,754)						(10,163)						(41,422)
Gain (loss) on extinguishment of debt						2,367						—						(4,757)
Foreign currency transaction adjustments, net						7,265						8,346						(7,445)
Net income						$	14,244					$	28,792					$	102,643
Net income attributable to owner						$	13,276					$	29,712					$	106,863
Net income (loss) attributable to non-controlling interests						968						(920)						(4,220)
Net income						$	14,244					$	28,792					$	102,643
Total comprehensive income						$	14,244					$	28,792					$	102,643

The accompanying notes are an integral part of the interim consolidated financial statements.

3

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PACIFIC OAK SOR (BVI) HOLDINGS LTD.

CONSOLIDATED STATEMENTS OF EQUITY

						Owner contributions (distributions)						Retained earnings						Paid-in Capital resulting from transactions with non-controlling interests						Owner's net equity						Non-controlling interests						Total equity
						Unaudited
						U.S. dollars in thousands
Balance at January 1, 2022						$	693,554					$	271,448					$	43,074					$	1,008,076					$	26,576					$	1,034,652
Net income						—						13,276						—						13,276						968						14,244
Total comprehensive income						—						13,276						—						13,276						968						14,244
Distribution declared to Owner						—						(20,000)						—						(20,000)						—						(20,000)
Balance at March 31, 2022						$	693,554					$	264,724					$	43,074					$	1,001,352					$	27,544					$	1,028,896

						Owner contributions (distributions)						Retained earnings						Paid-in Capital resulting from transactions with non-controlling interests						Owner's net equity						Non-controlling interests						Total equity
						Unaudited
						U.S. dollars in thousands
Balance at January 1, 2021						$	693,554					$	194,585					$	41,631					$	929,770					$	35,877					$	965,647
Net income (loss)						—						29,712						—						29,712						(920)						28,792
Total comprehensive income (loss)						—						29,712						—						29,712						(920)						28,792
Non-controlling interest contributions						—						—						—						—						20						20
Balance at March 31, 2021						$	693,554					$	224,297					$	41,631					$	959,482					$	34,977					$	994,459

						Owner contributions (distributions)						Retained earnings						Paid-in Capital resulting from transactions with non-controlling interests						Owner's net equity						Non-controlling interests						Total equity
						U.S. dollars in thousands
Balance at December 31, 2020						$	693,554					$	194,585					$	41,631					$	929,770					$	35,877					$	965,647
Net income (loss)						—						106,863						—						106,863						(4,220)						102,643
Total comprehensive income (loss)						—						106,863						—						106,863						(4,220)						102,643
Distribution to Owner						—						(30,000)						—						(30,000)						—						(30,000)
Non-controlling interests contributions						—						—						—						—						183						183
Non-controlling interests buyout						—						—						1,443						1,443						(5,264)						(3,821)
Balance at December 31, 2021						$	693,554					$	271,448					$	43,074					$	1,008,076					$	26,576					$	1,034,652

The accompanying notes are an integral part of the interim consolidated financial statements.

4

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PACIFIC OAK SOR (BVI) HOLDINGS LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

			Three months ended March 31,												Year ended December 31,
			2022						2021						2021
			Unaudited												Audited
			U.S. dollars in thousands
Cash Flows from Operating Activities:
Net income			$	14,244					$	28,792					$	102,643
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Equity in loss of unconsolidated joint ventures			1,156						3,059						17,631
Fair value adjustment on investment properties, net			(10,137)						(8,634)						(87,999)
Depreciation			790						738						3,102
Impairment charges on goodwill			—						—						2,808
Transaction and related costs			108						—						397
(Gain) loss on extinguishment of debt			(2,367)						—						4,757
Deferred rent			(1,051)						(1,211)						(2,230)
Credit loss on financial assets			597						750						3,317
Finance expenses			9,754						10,187						41,422
Finance income			(46)						(45)						(194)
Finance loss (income) from financial assets at fair value through profit or loss			5,134						(13,506)						(38,289)
Foreign currency transaction (gain) loss, net			(7,265)						(8,346)						7,445
			10,917						11,784						54,810
Changes in assets and liabilities:
Restricted cash			(2,336)						792						(885)
Rents and other receivables			(590)						57						(80)
Prepaid expenses and other assets			(1,373)						(1,733)						(1,068)
Accounts payable and accrued liabilities			(638)						(3,756)						(646)
Rental security deposits			889						63						176
Due to affiliates			1,979						2,252						(966)
Other liabilities			(2,915)						55						635
Lease incentive additions			182						(484)						1,014
			(4,802)						(2,754)						(1,820)
Net cash provided by operating activities			6,115						9,030						52,990
Cash Flows from Investing Activities:
Acquisitions of investment properties			—						(2,037)						(4,818)
Improvements to investment properties			(6,253)						(4,789)						(21,705)
Proceeds from sales of investment properties, net			9,468						166						194,711
Additions to property plant and equipment - hotels			(57)						(6)						(352)
Investment in unconsolidated joint venture			(1,500)						(1,180)						(10,555)
Distribution of capital from investment in unconsolidated joint venture			142						—						—
Proceeds from the sale of investments in financial assets at fair value through profit or loss, net			—						14,439						14,439
Purchase of interest rate cap			(506)						(18)						(18)
Proceeds from disposition of foreign currency collars			—						—						1,198
Finance income received			45						46						193
Dividend income received from financial assets at fair value through profit or loss			4,595						2,943						7,629
Funding for development obligations			—						—						(4,427)
Advances to affiliate			(1,201)						—						(7,039)
Restricted cash released (deposited) for capital expenditures			1,308						(4,067)						—
Net cash provided by investing activities			6,041						5,497						169,256

The accompanying notes are an integral part of the interim consolidated financial statements.

5

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PACIFIC OAK SOR (BVI) HOLDINGS LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

			Three months ended March 31,												Year ended December 31,
			2022						2021						2021
			Unaudited												Audited
			U.S. dollars in thousands
Cash Flows from Financing Activities:
Proceeds from debentures, notes and bonds payable			$	53,758					$	97,125					358,931
Principal payments on notes and bond payable			(64,136)						(61,300)						(473,133)
Payments of deferred financing costs			(861)						(1,054)						(8,463)
Interest paid			(11,122)						(11,448)						(35,066)
(Contribution) release of restricted cash for debt service obligations			(2,500)						(358)						943
Non-controlling interests contributions			—						20						183
Non-controlling interests buyout			—						—						(3,819)
Dividends to Owner			(11,250)						(1,150)						(41,758)
Other financing proceeds, net			—						2,367						2,367
Net cash (used in) provided by financing activities			(36,111)						24,202						(199,815)
Effect of exchange rate changes on cash and cash equivalents			(136)						(1,635)						1,397
Net (decrease) increase in cash and cash equivalents			(24,091)						37,094						23,828
Cash and cash equivalents, beginning of period			83,215						59,387						59,387
Cash and cash equivalents, end of period			$	59,124					$	96,481					$	83,215

Supplemental Disclosure of Noncash Activities:
Accrual improvements to real estate			$	2,685					$	3,906					$	2,660
Distribution payable to Owner			$	8,750					$	10,608					$	—

The accompanying notes are an integral part of the interim consolidated financial statements.

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PACIFIC OAK SOR (BVI) HOLDINGS LTD.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands

NOTE 1:    GENERAL INFORMATION

These financial statements have been prepared in a condensed format as of March 31, 2022 and for the three months period then ended ("interim condensed financial statements"). These interim condensed financial statements should be read in conjunction with the Company's annual financial statements as of December 31, 2021 and for the year then ended and the accompanying notes ("annual financial statements").

The Company and its subsidiaries (the "Group") operate in the investment real estate segment in the United States, which includes mainly investment in office and residential real estate and undeveloped lands. In addition, the Company invests in real estate equity securities. The Company has three reporting segments: 1) strategic opportunistic properties 2) single-family homes and 3) hotels.

COVID-19 has significantly disrupted economic markets and impacted commercial activity worldwide, including the US, and the prolonged economic impact is uncertain. Because the Company’s property investments are located in the United States, COVID-19 has had an impact to our properties and operating results, including reduced occupancy, as well as increased the cost of operation. Customers and potential customers of the properties could be affected by the disruption caused by COVID-19.

As of March 31, 2022, the Company owned eight office properties, one office portfolio consisting of two office buildings and 14 acres of undeveloped land, encompassing, in the aggregate, approximately 3.2 million rentable square feet. As of March 31, 2022, these properties were 73% occupied. In addition, the Company owned one residential home portfolio consisting of 1,814 single-family homes and encompassing approximately 2.5 million rental square feet and two apartment properties, containing 609 units and encompassing approximately 0.5 million rentable square feet, which were 92% and 96% occupied, respectively as of March 31, 2022. As of March 31, 2022, the Company also owned two hotel properties with an aggregate of 649 rooms and three investments in undeveloped land with approximately 800 developable acres and one office/retail development property.

NOTE 2:    SIGNIFICANT ACCOUNTING POLICY

Basis of presentation of the interim consolidated financial statements:

The interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles for the preparation of financial statements for interim periods, as prescribed in IAS 34, "Interim Financial Reporting", and in accordance with the disclosure requirements of Chapter D of the Securities Regulations (Periodic and Immediate Reports), 1970.

The accounting policies adopted in the preparation of the interim consolidated financial statements are consistent with those followed in the preparation of the annual consolidated financial statements.

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PACIFIC OAK SOR (BVI) HOLDINGS LTD.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands

NOTE 3:    INVESTMENT IN JOINT VENTURES

As of March 31, 2022, the Company’s investments in unconsolidated entities were composed of the following (dollars in thousands):

						Number of Properties as of March 31, 2022																		Investment Balance as of
Joint Venture												Location						Ownership %						March 31, 2022
110 William Joint Venture(1)						1						New York, New York						60.0%						$	85,113
353 Sacramento Joint Venture						1						San Francisco, California						55.0%						84,313
Pacific Oak Opportunity Zone Fund I						3						Various						46.0%						27,215
PORT II OP LP						251						Various						91.9%						12,440
																								$	209,081

(1) Subsequent to March 31, 2022, the 110 William Joint Venture extended the maturity date of the mortgage loan to June 8, 2022.

The Company does not attach the financial statements of its joint ventures since their reports are insignificant to the Company's financial statements.

NOTE 4:    FINANCIAL INSTRUMENTS

The fair value of non-current notes payables as of March 31, 2022 is not materially different from its fair value as presented in the annual consolidated financial statements as of December 31, 2021. The fair value of the debentures payable as of March 31, 2022 was approximately $262.5 million (844.1 million NIS).

The Series B Debentures contains the following covenants: (i) Consolidated Equity Capital of the Company (not including minority rights) shall not be less than USD 475 million; (ii) the Net Adjusted Financial Debt to Net Adjusted Cap (shall not exceed a rate of 75%); (iii) Adjusted NOI shall be no lower than USD 35 million; and (iv) the consolidated scope of the projects for development of the Company shall not exceed 10% of the adjusted balance. As of March 31, 2022, the Company was in compliance with all covenants under the deed of trust of the Series B Debentures; (i) Consolidated Equity Capital of the Company as of March 31, 2022 was $1.0 billion; (ii) the Net Adjusted Debt to Net Adjusted Cap was 51%; (iii) the Adjusted NOI was $87.5 million for the trailing twelve months ended March 31, 2022; and (iv) the consolidated scope of projects was $0 as of March 31, 2022.

As of March 31, 2022, the Company had a working capital shortfall amounting to $56.4 million, primarily attributed to loans maturing in the year following the date of the statement of financial position. The Company intends to refinance loans as they come due and does not anticipate any challenges in refinancing such loans given the relatively low leverage of the Company’s properties, the Company’s relationship with third-party lenders and its past experience placing debt on its properties. Accordingly, the Company does not view the working capital shortfall as a liquidity problem. See note 7, subsequent events - notes payable refinancing, for more information.

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PACIFIC OAK SOR (BVI) HOLDINGS LTD.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands

NOTE 4:    FINANCIAL INSTRUMENTS (CONTINUED)

The Company's investments in real estate equity securities are carried at their estimated fair value based on quoted market prices (Level 1) for the securities. Unrealized gains and losses are reported in finance (loss) income from financial assets at fair value through profit or loss.

NOTE 5:    SEGMENT INFORMATION

The operating segments are identified on the basis of information that is reviewed by the chief operating decision maker ("CODM") to make decisions about resources to be allocated and asses its performance. All corporate related costs are included in the strategic opportunistic properties segment to align with how financial information is presented to the CODM. The selected financial information for the reporting segments as of and for the three months ended March 31, 2022 and 2021 and as of and the year ended December 31, 2021 is as follows (in thousands):

						March 31, 2022
						Strategic Opportunistic Properties						Single-Family Homes						Hotel						Total
Investment properties						$	1,249,604					$	282,029					$	—					$	1,531,633
Property plant and equipment - hotels, net						$	—					$	—					$	132,779					$	132,779
Total assets						$	1,646,826					$	309,751					$	149,809					$	2,106,386
Total liabilities						$	853,502					$	138,794					$	85,194					$	1,077,490
						Three months ended March 31, 2022
						Strategic Opportunistic Properties						Single-Family Homes						Hotel						Total
Total revenues and other income						$	24,617					$	5,908					$	5,917					$	36,442
Gross profit						$	12,235					$	2,793					$	806					$	15,834
Finance expenses						$	6,794					$	1,510					$	1,450					$	9,754

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PACIFIC OAK SOR (BVI) HOLDINGS LTD.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands

NOTE 5:    SEGMENT INFORMATION (CONTINUED)

						March 31, 2021
						Strategic Opportunistic Properties						Single-Family Homes						Hotel						Total
Investment properties						$	1,399,290					$	220,757					$	—					$	1,620,047
Property plant and equipment - hotels, net						$	—					$	—					$	135,530					$	135,530
Total assets						$	1,824,951					$	233,192					$	146,867					$	2,205,010
Total liabilities						$	992,557					$	130,278					$	87,716					$	1,210,551
						Three months ended March 31, 2021
						Strategic Opportunistic Properties						Single-Family Homes						Hotel						Total
Total revenues and other income						$	28,526					$	5,472					$	2,575					$	36,573
Gross profit (loss)						$	14,962					$	2,565					$	(815)					$	16,712
Finance expenses						$	7,117					$	1,566					$	1,480					$	10,163

						December 31, 2021
						Strategic Opportunistic Properties						Single-Family Homes						Hotel						Total
Investment properties						$	1,272,138					$	252,851					$	—					$	1,524,989
Property plant and equipment - hotels, net						$	—					$	—					$	133,512					$	133,512
Total assets						$	1,666,098					$	292,778					$	155,714					$	2,114,590
Total liabilities						$	853,028					$	140,205					$	86,705					$	1,079,938
						Year ended December 31, 2021
						Strategic Opportunistic Properties						Single-Family Homes						Hotel						Total
Total revenues and other income						$	106,645					$	22,652					$	30,806					$	160,103
Gross profit (loss)						$	51,876					$	10,820					$	9,816					$	72,512
Finance expenses						$	28,934					$	6,544					$	5,944					$	41,422

10

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PACIFIC OAK SOR (BVI) HOLDINGS LTD.

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands

NOTE 6:    SIGNIFICANT EVENTS DURING THE REPORTING PERIOD

Recent Real Estate Sale - Greenway Buildings

On January 24, 2022, the Company, through an indirect wholly owned subsidiary, sold two office buildings related to the Richardson Portfolio and containing 141,950 rentable square feet in Richardson, Texas (“Greenway Buildings”) to a purchaser unaffiliated with the Company or to Pacific Oak Capital Advisor, LLC, the Company’s advisor, for $11.0 million, before closing costs and credits. The fair value of the Greenway Buildings as of the disposition date was $14.4 million and the sale resulted in a $3.9 million loss recorded as fair value adjustment of investment properties, net in the accompanying consolidated statements of profit or loss. In connection with the sale of the Greenway Buildings, the Company repaid $9.1 million of the outstanding principal balance due under the mortgage loan secured by the Greenway Buildings.

Recent Refinancing - Lincoln Court and Crown Pointe

During the three months ended March 31, 2022, the Company refinanced two of its notes payable. Lincoln Court extended the maturity date to August 1, 2022. Crown Pointe extended the maturity date to April 1, 2025.

Real Estate Purchase and Sale Contract - Park Highlands Land

On November 11, 2021, the Company, through an indirect wholly owned subsidiary, entered into a purchase and sale agreement, as amended, to sell 238 developable acres of undeveloped land located in North Las Vegas, Nevada (“Park Highlands”) for gross sales proceeds of approximately $123.9 million, before closing costs and credits. The due diligence period expired on February 23, 2022 and the buyer’s deposit of $13.5 million is no longer refundable and is recognized as restricted cash on the consolidated statements of financial position within Restricted cash. This deposit is held in an escrow account and will become available once the sale is completed in 2023. Following the sale, the Company is expected to own approximately 522 developable acres of Park Highlands.

NOTE 7:    SUBSEQUENT EVENTS

The Company evaluates subsequent events up until the date the consolidated financial statements are issued.

Georgia 400 Mortgage Loan Deposit

On April 4, 2022, the Company paid a deposit of $20.4 million to the lender of the Georgia 400 Center Mortgage Loan as a result of being out of compliance with the debt service coverage requirement and required a cash sweep.

Additional Series B Debentures Issuance

On May 2, 2022, the Company raised approximately $95.3 million (approximately 320.4 million Israeli new Shekels at a price of 0.96 for every 1) of additional Series B Debentures to Israeli investors pursuant to a private offering registered with the Israel Securities Authority. The Series B Debentures would be identical in the terms and pari passu to the existing bonds.

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11

Exhibit 99.2

PACIFIC OAK SOR (BVI) HOLDINGS, LTD.

PRESENTATION OF SEPARATE FINANCIAL DATA FROM THE

CONSOLIDATED FINANCIAL STATEMENTS ATTRIBUTABLE TO THE COMPANY

March 31, 2022 (Unaudited)

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PACIFIC OAK SOR (BVI) HOLDINGS, LTD.

PRESENTATION OF SEPARATE FINANCIAL DATA

FROM THE CONSOLIDATED FINANCIAL STATEMENTS

ATTRIBUTABLE TO THE COMPANY

AS OF MARCH 31, 2022

(UNAUDITED)

U.S. DOLLARS IN THOUSANDS

INDEX

			Page
Special Report Presented Pursuant to Regulation 38d			2
Financial Information from the Consolidated Statements of Financial Position Attributable to the Company			3
Financial Information from the Consolidated Statements of Profit or Loss Attributable to the Company			4
Financial Information from the Consolidated Statements of Cash Flows Attributable to the Company			5
Additional Information			6

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Special Report in accordance with Regulation 38d

Financial Information and Financial Data from the

Consolidated Financial Statements Attributable to the Company

Below is separate financial information and financial data attributable to the Company from the Group's consolidated financial statements as of March 31, 2022, published as part of the periodic reports ("consolidated financial statements"), presented in accordance with Regulation 38d to the Israeli Securities Regulations (Periodic and Immediate Reports), 1970.

2

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PACIFIC OAK SOR (BVI) HOLDNGS, LTD.

Financial Information from the Consolidated Statements of Financial Position Attributable to the Company

						March 31,												December 31,
						2022						2021						2021
						Unaudited												Audited
						U.S. dollars in thousands
ASSETS
Non-current assets
Investments in investees						$	1,261,726					$	1,160,461					$	1,261,541
Restricted cash						5,739						6,358						5,900
						1,267,465						1,166,819						1,267,441
Current assets
Cash and cash equivalents						907						71,667						6,137
Derivative asset						—						—						22
						907						71,667						6,159
Total assets						$	1,268,372					$	1,238,486					$	1,273,600
EQUITY						$	1,001,352					$	959,482					$	1,008,076
NON-CURRENT LIABILITIES
Debentures, net						252,218						166,221						258,773
Current liabilities
Accounts payable and accrued liabilities						1,994						1,363						4,672
Debentures, net						—						95,465						—
Due to Owner						4,058						5,347						2,079
Distribution payable to Owner						8,750						10,608						—
						14,802						112,783						6,751
Total liabilities						267,020						279,004						265,524
Total equity and liabilities						$	1,268,372					$	1,238,486					$	1,273,600

The accompanying notes are an integral part of the condensed interim financial data.

3

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PACIFIC OAK SOR (BVI) HOLDNGS, LTD.

Financial Information from the Consolidated Statements of Profit or Loss Attributable to the Company

						Three months ended March 31,												Year ended December 31,
						2022						2021						2021
						Unaudited												Audited
						U.S. dollars in thousands
Share of profit from investees, net						$	13,986					$	28,989					$	146,798
Asset management fees to affiliate						(3,127)						(3,852)						(14,012)
General and administrative expenses						(1,334)						(639)						(4,776)
Operating income						9,525						24,498						128,010
Finance expense						(3,516)						(3,134)						(13,709)
Finance income						2						2						8
Foreign currency transaction adjustments, net						7,265						8,346						(7,446)
Net income						$	13,276					$	29,712					$	106,863
Total comprehensive income						$	13,276					$	29,712					$	106,863

The accompanying notes are an integral part of the condensed interim financial data.

4

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PACIFIC OAK SOR (BVI) HOLDNGS, LTD.

Financial Information from the Consolidated Statements of Cash Flows Attributable to the Company

						Three months ended March 31,												Year ended December 31,
						2022						2021						2021
						Unaudited												Audited
						U.S. dollars in thousands
Cash flows from operating activities
Net income for the period						$	13,276					$	29,712					$	106,863
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Share of profit from investees						(13,986)						(28,989)						(146,798)
Finance expense						3,516						3,134						13,709
Distribution from investees, net						11,083						14,363						53,904
Foreign currency transaction adjustments, net						(7,265)						(8,346)						7,446
Changes in operating assets and liabilities:
Accounts payable and accrued liabilities						45						36						67
Restricted cash for operational expenditures						19						(358)						(283)
Due to Owner						1,979						2,302						(966)
Net cash provided by operating activities						8,667						11,854						33,942
Cash flows from investing activities
Distributions from investees, net						2,718						41,507						20,138
Proceeds from termination of derivative financial instrument						—						—						1,198
Net cash provided by investing activities						2,718						41,507						21,336
Cash flows from financing activities
Proceeds from debentures						—						74,232						256,894
Payments of deferred financing costs						—						(923)						(6,121)
Principal payments on debentures						—						(58,889)						(264,089)
Interest paid						(5,229)						(5,285)						(8,363)
Release of restricted cash for debt service obligations						—						—						943
Distribution to Owner						(11,250)						(1,150)						(41,758)
Net cash (used in) provided by financing activities						(16,479)						7,985						(62,494)
Effect of exchange rate changes on cash and cash equivalents						(136)						(1,635)						1,397
Increase in cash						(5,230)						59,711						(5,819)
Cash, beginning of the period						6,137						11,956						11,956
Cash, end of the period						$	907					$	71,667					$	6,137

The accompanying notes are an integral part of the condensed interim financial data.

5

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PACIFIC OAK SOR (BVI) HOLDINGS, LTD.

Additional Information

U.S. dollars in thousands

NOTE 1:    BASIS OF PREPARATION

Separate financial information is prepared in a condensed format as of March 31, 2022 and for the three months then ended, in accordance with Regulation 38D of the Securities Regulations (Periodic and Immediate Reports), 1970.

Please refer to the separate financial information in this regard to the financial information on the annual financial statements of the Company as of December 31, 2021 and for the year then ended, and the information accompanying notes (hereinafter - the annual consolidated financial statements).

As of March 31, 2022, the Company had a working capital shortfall amounting to $13.9 million, primarily attributed to the debentures principal payment maturing in the year following the date of the statement of financial position. The Company intends to make the debentures principal payment from distribution from investees. Accordingly, the Company does not view the working capital shortfall as a liquidity problem.

NOTE 2:    SIGNIFICANT EVENTS DURING THE REPORTING PERIOD

Series B Debentures

The Series B Debentures contains the following covenants: (i) Consolidated Equity Capital of the Company (not including minority rights) shall not be less than USD 475 million; (ii) the Net Adjusted Financial Debt to Net Adjusted Cap (shall not exceed a rate of 75%); (iii) Adjusted NOI shall be no lower than USD 35 million; and (iv) the consolidated scope of the projects for development of the Company shall not exceed 10% of the adjusted balance. As of March 31, 2022, the Company was in compliance with all covenants under the deed of trust of the Series B Debentures; (i) Consolidated Equity Capital of the Company as of March 31, 2022 was $1.0 billion; (ii) the Net Adjusted Debt to Net Adjusted Cap was 51%; (iii) the Adjusted NOI was $87.5 million for the trailing twelve months ended March 31, 2022; and (iv) the consolidated scope of projects was $0 as of March 31, 2022.

NOTE 3:    SUBSEQUENT EVENT

Additional Series B Debentures Issuance

On May 2, 2022, the Company raised approximately $95.3 million (approximately 320.4 million Israeli new Shekels at a price of 0.96 for every 1) of additional Series B Debentures to Israeli investors pursuant to a private offering registered with the Israel Securities Authority. The Series B Debentures would be identical in the terms and pari passu to the existing bonds.

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6