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): December 4, 2020

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 o
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



ITEM 7.01 REGULATION FD DISCLOSURE
Information for Pacific Oak Strategic Opportunity REIT, Inc.'s (the “Company”) stockholders regarding its estimated value per share and other distribution information is attached as Exhibit 99.4 to this Current Report on Form 8-K.
The information in this Item 7.01 of Form 8-K and the attached Exhibit 99.4 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 8.01 OTHER EVENTS
Estimated Value Per Share
On February 19, 2020, the Company, Pacific Oak SOR II, LLC, an indirect subsidiary of the Company (“Merger Sub”), and Pacific Oak Strategic Opportunity REIT II, Inc. (“POSOR II”) entered into an Agreement and Plan of Merger (the “Merger Agreement”). Pursuant to the Merger Agreement, on October 5, 2020, POSOR II merged with and into Merger Sub (the “Merger”), with Merger Sub surviving the Merger (the “Surviving Entity”), such that following the Merger, the Surviving Entity continued as an indirect subsidiary of the Company. In accordance with the applicable provisions of the Maryland General Corporation Law, the separate existence of POSOR II ceased. At the effective time of the Merger, each issued and outstanding share of POSOR II’s common stock converted into the right to receive 0.9643 shares of the Company's common stock, or 28,973,906 shares of the Company's common stock. The Company acquired two hotel properties, three office properties, one apartment building, one consolidated entity to develop one office/retail property, two investments in real estate equity securities and two investments in unconsolidated entities.
On December 4, 2020, the Company’s board of directors approved an estimated value per share of the Company’s common stock of $9.68 based on the estimated value of the Company’s assets less the estimated value of the Company’s liabilities, or net asset value, divided by the number of shares outstanding, all as of September 30, 2020, with the exception of the following adjustments: (i) an adjustment for the Merger and related expenses incurred and (ii) the issuance of 28,973,906 shares of the Company's common stock in connection with the Merger, as described further herein (collectively the “Adjustments”). Other than the Adjustments, there have been no material changes between September 30, 2020 and the date of this filing to the net values of the Company’s assets and liabilities that materially impacted the overall estimated value per share. The Company is providing this estimated value per share to assist broker-dealers that participated in the Company’s initial public offering in meeting their customer account statement reporting obligations under National Association of Securities Dealers Conduct Rule 2340 as required by the Financial Industry Regulatory Authority (“FINRA”). This valuation was performed in accordance with the provisions of and also to comply with Practice Guideline 2013–01, Valuations of Publicly Registered Non-Listed REITs, issued by the Institute for Portfolio Alternatives (“IPA”) in April 2013.
The Company’s conflicts committee, composed of all of the Company’s independent directors, is responsible for the oversight of the valuation process, including the review and approval of the valuation process and methodologies used to determine the Company’s estimated value per share, the consistency of the valuation and appraisal methodologies with real estate industry standards and practices and the reasonableness of the assumptions used in the valuations and appraisals. The estimated value per share was based upon the recommendation and valuation prepared by Pacific Oak Capital Advisors, LLC (the “Advisor”), the Company’s external advisor. The Advisor’s valuation of the Company’s consolidated investments in real estate properties and its unconsolidated properties 110 William Street and 353 Sacramento was based on valuations performed by third-party valuation firms. The Advisor’s valuation of the Company's three other unconsolidated entity investments was based on (i) its equity capital contributions in the case of two unconsolidated entities having a value of $28.6 million or $0.29 per share and (ii) the actual cash received as a final liquidating distribution in the case of one unconsolidated entity having a value of $0.1 million or $0.00 per share. The aforementioned third-party valuations represented appraisals for the Company’s consolidated entity investments in real estate properties and its unconsolidated properties 110 William Street and 353 Sacramento, and automated valuation model estimates for each individual home in the Company’s consolidated single-family rental home portfolio (“SFR portfolio”) of 1,769 homes. The appraisals were performed by Duff & Phelps, LLC (“Duff & Phelps”), except for the undeveloped land which was appraised by Colliers International Valuation & Advisory Services, LLC (“Colliers”). Valuation of the SFR portfolio was performed by ClearCapital.com, Inc. (“Clear Capital”). Duff & Phelps, Colliers and Clear Capital, each an independent third-party valuation firm, also prepared appraisal/valuation reports, summarizing key inputs and assumptions, for each of the real estate properties they respectively valued. The Advisor performed valuations with respect to the Company’s real estate-related investments, three of its unconsolidated entities, cash, other assets, mortgage debt and other liabilities. The methodologies and assumptions used to determine the estimated value of the Company’s assets and the estimated value of the Company’s liabilities are described further below.
1

The Advisor used the valuations from the third-party valuation firms together with the Advisor’s estimated values to calculate and recommend an estimated value per share of the Company’s common stock. Upon (i) the conflicts committee’s receipt and review of the Advisor’s valuation report, including the Advisor’s summary of the appraisal/valuation reports prepared by Duff & Phelps, Colliers and Clear Capital and the Advisor’s estimated value of each of the Company’s other assets and the Company’s liabilities, (ii) the conflicts committee’s review of the reasonableness of the Company’s estimated value per share resulting from the Advisor’s valuation process and (iii) in light of other factors considered by the conflicts committee and the conflicts committee’s own extensive knowledge of the Company’s assets and liabilities, the conflicts committee concluded that the estimated value per share proposed by the Advisor was reasonable and recommended to the board of directors that it adopt $9.68 as the estimated value per share of the Company’s common stock. At the special meeting of the board of directors, the board of directors unanimously agreed to accept the recommendation of the conflicts committee and approved $9.68 as the estimated value of the Company’s common stock, which determination is ultimately and solely the responsibility of the board of directors.
The table below sets forth the calculation of the Company’s estimated value per share as of December 4, 2020, as well as the calculation of the Company’s prior estimated value per share as of December 17, 2019:
December 4, 2020
Estimated Value per Share
December 17, 2019
Estimated Value per Share (1)
Change in Estimated Value per Share
Real estate properties (2)
$ 17.44  $ 15.03  $ 2.41 
Real estate equity securities
0.92  1.14  (0.22)
Cash
0.89  1.47  (0.58)
Investments in unconsolidated entities
2.12  3.15  (1.03)
Other assets
0.28  0.24  0.04 
Mortgage debt (3)
(8.68) (6.44) (2.24)
Series A Debentures (4)
(1.62) (3.26) 1.64 
Series B Debentures (5)
(0.61) —  (0.61)
Pacific Oak Capital Advisors participation fee potential liability
—  (0.03) 0.03 
Merger-related liabilities (6)
(0.06) —  (0.06)
Other liabilities
(0.50) (0.47) (0.03)
Noncontrolling Series A Preferred Stock (7)
(0.16) —  (0.16)
Non-controlling interest (8)
(0.34) (0.20) (0.14)
Estimated value per share
$ 9.68  $ 10.63  $ (0.95)
Estimated enterprise value premium
None assumed None assumed None assumed
Total estimated value per share
$ 9.68  $ 10.63  $ (0.95)
_____________________
(1) The December 17, 2019 estimated value per share was based upon the recommendation and valuation of the Advisor. The Company engaged Duff & Phelps and Colliers to provide appraisals of the Company’s real estate properties, investments in undeveloped land and two of its unconsolidated investments in real estate properties and the Advisor performed valuations of the Company’s real estate-related investments, cash, other assets, mortgage debt and other liabilities. For more information relating to the December 17, 2019 estimated value per share and the assumptions and methodologies used by Duff & Phelps, Colliers and the Advisor, see the Company’s Current Report on Form 8-K filed with the SEC on December 19, 2019.
(2) The increase in the estimated value of real estate properties was primarily due to the Merger and property acquisitions, partially offset by declines in property fair values and property dispositions.
(3) The increase in mortgage debt was primarily due to the Merger, borrowings to fund acquisitions of real estate and capital expenditures on real estate, partially offset by repayments upon asset sales.
(4) Amount relates to Series A Debentures issued in Israel on March 8, 2016. The decrease is primarily due to a principal payment which was due March 1, 2020 and a decline in the quoted bond price on the Tel Aviv Stock Exchange and the issuance of 28,973,906 shares of the Company's common stock in connection with the Merger.
(5) Amount relates to Series B Debentures issued in Israel on February 16, 2020. The increase is due to the issuance of the debentures, partially offset by a decline in the quoted bond price on the Tel Aviv Stock Exchange.
(6) Represents the fees payable to the Company’s and POSOR II’s third-party financial advisors related to the Merger and estimated property transfer tax liabilities, all incurred upon closing of the Merger on October 5, 2020.
(7) Represents the par value plus accrued unpaid dividends on the Series A cumulative convertible redeemable preferred stock issued by Pacific Oak Residential Trust, Inc. on November 6, 2019.
(8) The increase in non-controlling interests was primarily due to the Merger and an increase from the Company’s issuance of common equity units in the operating partnership of Pacific Oak Residential Trust, Inc. to the Battery Point Trust, Inc. seller as acquisition consideration for the Company’s Battery Point Trust, Inc. acquisition on July 1, 2020, partially offset by decreases tied to the declines in consolidated entities property fair values.
2

The decrease in the Company’s estimated value per share from the previous estimate was primarily due to the items noted below, which reflect the significant contributors to the decrease in the estimated value per share from $10.63 to $9.68. The changes are not equal to the change in values of each real each asset and liability group presented in the table above due to real estate property acquisitions, dispositions, debt financings and other factors, which caused the value of certain asset or liability groups to change with no impact to the Company’s fair value of equity or the overall estimated value per share.
Change in Estimated Value per Share
December 17, 2019 estimated value per share
$ 10.63 
Changes to estimated value per share
Investments
Real estate
(0.11)
Investments in unconsolidated entities
(0.46)
Investments in debt and equity securities
(0.30)
Capital expenditures on real estate
(0.38)
Merger (1)
(0.36)
Total change related to investments
(1.61)
Operating cash flows in excess of distributions declared (2)
0.17 
Foreign currency gain
0.15 
Merger and property selling, acquisition and financing costs (3)
(0.09)
Advisor disposition and acquisition fees (4)
— 
Mortgage debt, Series A debentures and Series B debentures
0.38 
Advisor participation fee potential liability
0.03 
Other
0.02 
Total change in estimated value per share
$ (0.95)
December 4, 2020 estimated value per share
$ 9.68 
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(1) Merger impact reflects changes in the net asset values of the Company and POSOR II after the Merger Agreement was signed on February 19, 2020.
(2) Operating cash flow reflects modified funds from operations (“MFFO”) adjusted to deduct capitalized interest expense, real estate taxes and insurance and add back the amortization of deferred financing costs. The Company computes MFFO in accordance with the definition included in the practice guideline issued by the IPA in November 2010.
(3) Merger and property selling, acquisition and financing costs include approximately (i) $6.1 million, or $0.06 per share, for fees payable to the Company’s and POSOR II’s third-party financial advisors related to the Merger and estimated property transfer tax liabilities incurred upon closing of the Merger on October 5, 2020, (ii) $2.6 million, or $0.03 per share, for financing costs including the issuance costs related to the Company’s Series B debentures and Series A cumulative convertible redeemable preferred stock issuance costs, and (iii) $0.4 million, or $0.00 per share, for acquisition and selling costs.
(4) Advisor disposition and acquisition fees were $0.3 million, or $0.00 per share.
As with any valuation methodology, the methodologies used are based upon a number of estimates and assumptions that may not be accurate or complete. Different parties using different assumptions and estimates could derive a different estimated value per share, and these differences could be significant. The estimated value per share is not audited and does not represent the fair value of the Company’s assets less the fair value of the Company’s liabilities according to U.S. generally accepted accounting principles (“GAAP”), nor does it represent a liquidation value of the Company’s assets and liabilities or the price at which the Company’s shares of common stock would trade at on a national securities exchange. The estimated value per share does not reflect a discount for the fact that the Company is externally managed, nor does it reflect a real estate portfolio premium/discount versus the sum of the individual property values. The estimated value per share also does not take into account estimated disposition costs and fees for real estate properties that are not under contract to sell, debt prepayment penalties that could apply upon the prepayment of certain of the Company’s debt obligations, the impact of restrictions on the assumption of debt or swap breakage fees that may be incurred upon the termination of certain of the Company’s swaps prior to expiration.
3

Methodology
The Company’s goal for the valuation was to arrive at a reasonable and supportable estimated value per share, using a process that was designed to be in compliance with the IPA Valuation Guidelines and using what the Company and the Advisor deemed to be appropriate valuation methodologies and assumptions. The following is a summary of the real estate valuation engagements as well as the methodologies, assumptions and estimates used to value the Company’s assets and liabilities:
Real Estate
Independent Valuation Firm
Duff & Phelps(1) was selected by the Advisor and approved by the Company’s conflicts committee to appraise all of the Company’s consolidated real estate properties, 110 William Street, and 353 Sacramento, but excluding the Company’s investments in undeveloped land and the single-family rental home portfolio. Colliers(2) was selected by the Advisor and approved by the Company’s conflicts committee to appraise the Company’s investments in undeveloped land (hereinafter the properties appraised by Duff & Phelps and Colliers are the “Appraised Properties”). Clear Capital(3) was selected by the Advisor and approved by the Company’s conflicts committee to provide a value for the Company’s single-family rental home portfolio using its proprietary automated valuation models. Clear Capital’s values were not appraisals and should not be construed as appraisals. Duff & Phelps and Colliers are engaged in the business of appraising commercial real estate properties, and Clear Capital is engaged in the business of real estate valuations, data, and analytics and none are affiliated with the Company or the Advisor. The compensation the Company pays to Duff & Phelps, Colliers, and Clear Capital is based on the scope of work and not on the values of the Company’s real estate properties. In preparing their valuation reports, Duff & Phelps, Colliers, and Clear Capital did not, and were not requested to, inspect or otherwise evaluate the physical conditions of the Company’s properties or solicit third-party indications of interest for the Company’s properties or common stock in connection with possible purchases thereof or the acquisition of all or any part of the Company.
_____________________
(1) Duff & Phelps is actively engaged in the business of appraising commercial real estate properties similar to those owned by the Company in connection with public securities offerings, private placements, business combinations and similar transactions. The Company engaged Duff & Phelps to deliver an appraisal report relating to all of the Company’s consolidated investments in real estate properties, 110 William Street and 353 Sacramento, but excluding the Company’s investments in undeveloped land and the single-family rental home portfolio, and Duff & Phelps received fees upon the delivery of such report. In addition, the Company has agreed to indemnify Duff & Phelps against certain liabilities arising out of this engagement. In the six years prior to the date of this filing, Duff & Phelps and its affiliates have provided a number of commercial real estate, appraisal and valuation services for the Company and/or its affiliates and have received fees in connection with such services. Duff & Phelps and its affiliates may from time to time in the future perform other commercial real estate, appraisal and valuation services for the Company and its affiliates in transactions related to the properties that are the subjects of the appraisals, so long as such other services do not adversely affect the independence of the applicable Duff & Phelps appraiser as certified in the applicable appraisal reports.
(2) Colliers is actively engaged in the business of appraising commercial real estate properties similar to those owned by the Company in connection with public securities offerings, private placements, business combinations and similar transactions. The Company engaged Colliers to deliver appraisal reports relating to certain of the Company’s investments in undeveloped land and Colliers received fees upon the delivery of such reports. In addition, the Company has agreed to indemnify Colliers against certain liabilities arising out of this engagement. Colliers and its affiliates are engaged in the ordinary course of business in many areas related to commercial real estate and related services. Colliers and its affiliates may from time to time in the future perform other commercial real estate, appraisal, valuation and financial advisory services for the Company and its affiliates in transactions related to the properties that are the subjects of the appraisals, so long as such other services do not adversely affect the independence of the applicable Colliers appraiser as certified in the applicable appraisal reports.
(3) Clear Capital is actively engaged in the business of real estate valuation, data, and analytics related to homes similar to those owned by the Company. The Company engaged Clear Capital to provide a valuation for each of the single-family rental homes in its portfolio, and Clear Capital received fees upon the delivery of its valuation report. Clear Capital’s proprietary valuations provide estimates of value based on multiple factors, but are not guarantees of property value, characteristics or condition. Clear Capital’s valuations were provided to assist the Advisor in calculating the estimated value per share of the Company’s common stock. Clear Capital did not make an independent determination as to whether its valuation methodology was suitable for such purpose or calculate or participate in the calculation of the estimated value per share. In addition, the Company has agreed to indemnify Clear Capital against certain liabilities arising out of this engagement. Clear Capital is engaged in the ordinary course of business in many areas related to real estate and related services. Clear Capital and its affiliates may from time to time in the future perform other valuation and advisory services for the Company related to the properties that are the subjects of the valuation report, so long as such other services do not adversely affect the independence of Clear Capital.
4

Duff & Phelps, Colliers, and Clear Capital collected all reasonably available material information that each deemed relevant for the requested valuation products and took into account customary real estate valuation and financial considerations and procedures as each deemed relevant with respect to the requested valuation products. Duff & Phelps relied in part on property-level information provided by the Advisor, including (i) property historical and projected operating revenues and expenses; (ii) property lease agreements; and (iii) information regarding recent or planned capital expenditures. Colliers was provided with land surveys and development plans and relied in part on such information. Clear Capital was provided with property addresses, purchase prices and dates, and certain characteristics for each of the Company’s homes and relied in part on such information. Duff & Phelps, Colliers, and Clear Capital relied on the information supplied or otherwise made available by the Company and the Advisor to be accurate and complete, prepared in good faith, and to reflect the best currently available estimates and judgments of the Company and the Advisor, and did not independently verify any such information. In addition, Duff & Phelps, Colliers, and Clear Capital relied on the Company or the Advisor to inform them if any information previously provided became inaccurate or needed updating during the course of their engagements or if there were any exceptions to the typical assumptions that the Company has clear and marketable title to each real estate property, that no title defects exist, that any improvements were made in accordance with law, that no hazardous materials are present or were present previously, that no deed restrictions exist, and that no changes to zoning ordinances or regulations governing use, density or shape are pending or being considered. Duff & Phelps, Colliers, and Clear Capital did not independently verify any such information.
For the appraisals, Duff & Phelps and Colliers performed the appraisals in accordance with the Code of Ethics and the Uniform Standards of Professional Appraisal Practice, or USPAP, the real estate appraisal industry standards created by The Appraisal Foundation, as well as the requirements of the state where each real property is located. Each appraisal was reviewed, approved and signed by an individual with the professional designation of MAI (Member of the Appraisal Institute). The use of the appraisal reports is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. In the appraisals, and as outlined in the appraisal reports, Duff & Phelps and Colliers necessarily made numerous assumptions as of various points in time and with respect to general business, economic, and regulatory conditions, industry performance, and other matters, many of which are beyond Duff & Phelps’ and Colliers’ control and the Company’s control.
For the single-family rental home valuations, Clear Capital generated an estimated value for each individual home using its proprietary automated valuation models built to leverage machine learning algorithms and an extensive database that may include public records, MLS information, and insights from a nationwide network of independent real estate professionals including appraisers, brokers, and agents. Each individual home was assigned the ClearAVM value, an estimated value generated by a computer model which utilizes recent sales prices for homes considered comparable to the subject given a custom geographic boundary, home characteristics, and features of nearby properties, unless the confidence score provided with the ClearAVM value did not meet a specified threshold. In those cases, the individual home was assigned what is called the trended Home Data Index value, an estimated value calculated by multiplying a property's last sale price by a price change factor which is generated by the combination of a repeat sales computer model and a price per square foot model that is designed to measure the change in home prices over time at granular geographic levels. For the Company’s single-family rental home portfolio, approximately 80% of the individual homes were assigned the ClearAVM value and 20% were assigned the trended Home Data Index value. Clear Capital’s valuations were not appraisals and should not be construed as appraisals, and were based on computer models developed by Clear Capital which utilize data believed to be reliable but there can be no guarantee that the data is accurate or complete.

5

Although Duff & Phelps, Colliers, and Clear Capital considered any comments received from the Company or the Advisor to their valuations, ultimately the valuations were determined by Duff & Phelps, Colliers, and Clear Capital. The valuations were necessarily estimates, and the price at which the Company’s properties may actually be sold could differ materially from the valuations. The valuations were necessarily based on assumptions, analyses, opinions, and conclusions reflecting the general business, economic, financial and other circumstances and conditions, and data in existence as of or prior to the date of the valuations. Material change in assumptions, circumstances, conditions, matters, or data after the date of the valuations, or discovery after the date of the valuations that data which had been considered reliable and which had been utilized was in fact unreliable, inaccurate, or incomplete, may affect such valuations. The Duff & Phelps, Colliers, and Clear Capital engagement letters and the appraisal reports contain qualifications and limitations that qualify the analyses, opinions, and conclusions reflected in the valuations. The valuations are addressed solely to the Company to assist the Advisor in calculating and recommending an updated estimated value per share of the Company’s common stock, and Duff & Phelps, Colliers, and Clear Capital have not made independent determinations as to whether the valuations are suitable for such a purpose. The valuations are not addressed to the public and may not be relied upon by any other person to establish an estimated value per share of the Company’s common stock and do not constitute a recommendation to any person to purchase or sell any shares of the Company’s common stock. Duff & Phelps, Colliers, and Clear Capital were responsible only for the valuation services outlined in their engagement letters, and were not responsible for, did not calculate, and did not participate in the determination of the estimated value per share of the Company’s common stock.
The foregoing is a summary description of the engagements, standard assumptions, qualifications and limitations that generally apply to the Duff & Phelps, Colliers, and Clear Capital valuations.
Real Estate Valuation
Upon closing of the Merger, the Company had 21 consolidated real estate properties (consisting of nine office properties, one office portfolio consisting of four office buildings, two apartment properties, a portfolio of 1,769 single-family rental homes, two hotel properties, one office/retail development property, two investments in 14 acres of undeveloped land, and three investments in undeveloped land with approximately 1,000 developable acres). The Company’s consolidated real estate properties had a total value of $1,712.1 million. These properties had a total cost basis of $1,581.1 million as of September 30, 2020 (adjusted to reflect the Merger), which is the total of acquisition prices of $1,441.1 million including a purchase price allocation for the properties acquired from POSOR II, $20.0 million for the acquisition of minority interests in unconsolidated entities, $103.5 million in capital expenditures, leasing commissions and tenant improvements since inception and $16.6 million of acquisition fees and expenses including foreclosure costs and certain costs due upon closing of the Merger. The Company’s consolidated real estate value compared to this cost basis represents an increase of approximately 8.3%.
The Company obtained appraisals for each of the consolidated real estate properties except for the single-family rental home portfolio which was valued as previously described. The Company’s consolidated Appraised Properties had a total appraised value of $1,505.7 million, and the Company’s consolidated single-family rental home portfolio had a total estimated value of $206.4 million.
For the appraisals, Duff & Phelps and Colliers used various methodologies, as appropriate, such as the direct capitalization approach, discounted cash flow analyses and sales comparison approach. Duff & Phelps relied primarily on 10-year discounted cash flow analyses for the final valuations of each of the real estate properties (which exclude undeveloped land) and Colliers relied primarily on the sales comparison approach for the final valuations of the undeveloped land that it appraised. Duff & Phelps calculated the discounted cash flow value of the Company’s real estate properties (which exclude undeveloped land) using property-level cash flow estimates, terminal capitalization rates and discount rates that fall within ranges they believe would be used by similar investors to value the properties the Company owns based on recent comparable market transactions adjusted for unique property and market-specific factors. Colliers relied primarily on the sales comparison approach and estimated the value of the undeveloped land based on the most applicable recent comparable market transactions. For the valuation of the single-family rental home portfolio, Clear Capital calculated the total of the estimated values of each individual home using its proprietary automated valuation models.

6

The following table summarizes the key assumptions that were used to value the Appraised Properties and single-family homes:
Range in Values Weighted-Average Basis
Consolidated Appraised Properties (Excluding Undeveloped Land and Office/Retail Development Property)
Terminal capitalization rate 4.50% to 7.50% 6.43%
Discount rate 6.00% to 9.50% 7.60%
Net operating income compounded annual growth rate (1)
2.74% to 17.46% 5.91%
Undeveloped Land
Price per acre (2)
$210,000 to $957,000 $225,000
Office/Retail Development Property
Price per FAR (Floor area ratio) (3)
$625 to $875 $875
Single-Family Homes
Price per square foot $16.41 to $318.39 $86.50
_____________________
(1) The net operating income compounded annual growth rates (“CAGRs”) reflect both the contractual and market rents and reimbursements (in cases where the contractual lease period is less than the valuation period) net of expenses over the valuation period. The range of CAGRs shown is the constant annual rate at which the net operating income is projected to grow to reach the net operating income in the final year of the hold period for each of the properties.
(2) The weighted-average price per acre was primarily driven by the Company’s two investments in undeveloped land with approximately 1,000 developable acres located in North Las Vegas, Nevada. The weighted-average price per acre for these two investments in undeveloped land was approximately $210,000.
(3) Price per FAR is before deducting for the ground lease liability and estimated demolition costs, and the range in values reflects different development scenarios.
While the Company believes that Duff & Phelps’, Colliers’, and Clear Capital’s assumptions and inputs are reasonable, a change in these assumptions and inputs would significantly impact the estimated values of the Company’s real estate properties and, thus, its estimated value per share. As of September 30, 2020, certain of the Company’s real estate assets have non-stabilized occupancies. Appraisals may provide a sense of the value of the investment, but any appraisal of the property will be based on numerous estimates, judgments and assumptions that significantly affect the appraised value of the underlying property. An appraisal of a non-stabilized property, in particular, involves a high degree of subjectivity due to high vacancy levels and uncertainties with respect to future market rental rates and timing of lease-up and stabilization. Accordingly, different assumptions may materially change the appraised value of the property. The table below illustrates the impact on the estimated value per share if the terminal capitalization rates or discount rates were adjusted by 25 basis points, and assuming all other factors remain unchanged, with respect to the consolidated Appraised Properties referenced in the table above (excluding undeveloped land and office/retail development property). Additionally, the table below illustrates the impact on the estimated value per share if the terminal capitalization rates or discount rates for these properties were adjusted by 5% in accordance with the IPA guidance:
Increase (Decrease) on the Estimated Value per Share due to
Decrease of 25 basis points Increase of 25 basis points Decrease of 5% Increase of 5%
Terminal capitalization rates $ 0.34  $ (0.31) $ 0.40  $ (0.35)
Discount rates 0.23  (0.22) 0.30  (0.29)
The table below illustrates the impact on the estimated value per share if the price per acre of the investments in undeveloped land was adjusted by 5%:
Increase (Decrease) on the Estimated Value per Share due to
Decrease of 5% Increase of 5%
Price per acre $ (0.11) $ 0.11 

7

The table below illustrates the impact on the estimated value per share if the price per FAR of the investment in the office/retail development property was adjusted by 5%:
Increase (Decrease) on the Estimated Value per Share due to
Decrease of 5% Increase of 5%
Price per FAR $ (0.02) $ 0.02 
The table below illustrates the impact on the estimated value per share if the price per square foot of the single-family rental home portfolio was adjusted by 5%:
Increase (Decrease) on the Estimated Value per Share due to
Decrease of 5% Increase of 5%
Price per square foot $ (0.10) $ 0.10 
Investments in Unconsolidated Entities
Upon closing of the Merger, the Company held five investments in unconsolidated entities including: 110 William Street, 353 Sacramento, Pacific Oak Opportunity Zone Fund I, Pacific Oak Residential Trust II and a participating loan facility.
110 William Street is an office property containing 928,157 rentable square feet located in New York, New York and the Company holds a 60% interest in an entity that owns 110 William Street. The appraised value of 110 William Street as provided by Duff & Phelps was $500.8 million. The Advisor relied on the appraised value provided by Duff & Phelps along with the fair value of other assets and liabilities as determined by the Advisor, and then calculated the amount that the Company would receive in a hypothetical liquidation of the real estate at the appraised value and the other assets and liabilities at their fair values based on the profit participation thresholds contained in the entity agreement. The resulting amount was the fair value assigned to the Company’s 60% interest in this unconsolidated entity. As of September 30, 2020, the carrying value and estimated fair value of the Company’s investment in this unconsolidated entity were $0 and $102.1 million, respectively. The Company’s carrying value for this investment is $0 due to a $7.8 million distribution from the 110 William Street Entity during the first quarter of 2019 and this distribution exceeded the book value for this investment.
Duff & Phelps relied on a 10-year discounted cash flow analyses for the final valuation of 110 William Street. The terminal capitalization rate, discount rate and CAGR used in the discounted cash flow model to arrive at the appraised value were 5.50%, 7.00% and 12.48%, respectively.
353 Sacramento is an office building containing 284,751 rentable square feet located in San Francisco, California and the Company holds a 55% interest in an entity that owns 353 Sacramento. The appraised value of 353 Sacramento as provided by Duff & Phelps was $255.6 million. The Advisor relied on the appraised value provided by Duff & Phelps along with the fair value of other assets and liabilities as determined by the Advisor, and then calculated the amount that the Company would receive in a hypothetical liquidation of the real estate at the appraised value and the other assets and liabilities at their fair values based on the profit participation thresholds contained in the entity agreement. The resulting amount was the fair value assigned to the Company’s 55% interest in this unconsolidated entity. As of September 30, 2020, the carrying value and estimated fair value of the Company’s investment in this unconsolidated entity were $43.8 million and $77.8 million, respectively.
Duff & Phelps relied on a 10-year discounted cash flow analyses for the final valuation of 353 Sacramento. The terminal capitalization rate, discount rate and CAGR used in the discounted cash flow model to arrive at the appraised value were 5.25%, 7.25% and 4.49%, respectively.
The table below illustrates the impact on the estimated value per share if the terminal capitalization rates or discount rates were adjusted by 25 basis points, and assuming all other factors remain unchanged, with respect to 110 William Street and 353 Sacramento. Additionally, the table below illustrates the impact on the estimated value per share if the terminal capitalization rates or discount rates for 110 William Street and 353 Sacramento were adjusted by 5% in accordance with the IPA guidance:
Increase (Decrease) on the Estimated Value per Share due to
Decrease of 25 basis points Increase of 25 basis points Decrease of 5% Increase of 5%
Terminal capitalization rates $ 0.12  $ (0.11) $ 0.13  $ (0.11)
Discount rates 0.07  (0.07) 0.11  (0.10)

8

The Company also holds 104 Class A Units of Pacific Oak Opportunity Zone Fund I, LLC and the units were valued by the Advisor at the purchase price since the units were recently acquired via several investments from June to December 2019, the fund’s properties are still under construction, and the Advisor does not believe there has been any material changes in the unit value since the Company’s purchases. As of September 30, 2020, the carrying value and estimated fair value of the Company’s investment in this unconsolidated entity were $23.9 million and $23.6 million, respectively, with the latter equal to $0.24 per share. If the per-unit price were adjusted by 5%, it would impact the estimated value per share value by $0.01.
The Company’s other investments in unconsolidated entities were valued at their carrying values of $5.1 million as of September 30, 2020, which is $0.05 per share. If the estimated fair value were adjusted by 5%, it would have no impact on the estimated value per share.
Real Estate Equity Securities
Upon closing of the Merger, the Company owned investments in three real estate equity securities: 64,165,352 shares of common units of Keppel Pacific Oak US REIT, 6,791,734 shares of Franklin Street Properties Corp, and 1,560,660 shares of Plymouth Industrial REIT, Inc. The fair values of these real estate equity securities were based on quoted prices in an active market on a major stock exchange. Upon closing of the Merger, the fair value and carrying value of the Company’s real estate equity securities was $90.6 million.
Notes Payable
The estimated values of the Company’s notes payable are equal to the GAAP fair values calculated using a discounted cash flow analysis, but they do not equal the book value in accordance with GAAP. For the discounted cash flow analysis, the contractual cash flows were discounted by estimated market interest rates for instruments with similar characteristics, including remaining loan term, loan-to-value ratio and type of collateral.
Upon closing of the Merger, the GAAP fair value and carrying value of the Company’s notes payable were $852.5 million and $847.4 million, respectively. The weighted-average discount rate applied to the future estimated debt payments, which have a weighted-average remaining term of 1.5 years, was approximately 3.46%. The table below illustrates the impact on the Company’s estimated value per share if the discount rates were adjusted by 25 basis points, and assuming all other factors remain unchanged, with respect to the Company’s notes payable. Additionally, the table below illustrates the impact on the estimated value per share if the discount rates were adjusted by 5% in accordance with the IPA guidance:
Increase (Decrease) on the Estimated Value per Share due to
Decrease of 25 basis points Increase of 25 basis points Decrease of 5% Increase of 5%
Discount rates $ (0.03) $ 0.03  $ (0.02) $ 0.02 
Series A & B Debentures
The Company’s Series A & B Debentures are publicly traded on the Tel-Aviv Stock Exchange. The estimated value of the Company’s Series A & B Debentures is based on the quoted bond price as of September 30, 2020 on the Tel-Aviv Stock Exchange of 93.7% and 82.0% of face value (including accrued interest expense), respectively, and foreign currency exchange rates as of September 30, 2020. As of September 30, 2020, the fair value and GAAP carrying value of the Company’s Series A & B debentures were $218.9 million and $240.3 million, respectively.
Non-controlling Interests
The Company has an ownership interest in eight consolidated entities as of September 30, 2020. As the Company consolidates these entities, the entire amount of the underlying assets and liabilities are reflected at their fair values in the corresponding line items of the estimated value per share calculation. Given this and the September 30, 2020 appraisal date for the real estate properties, the Company also must consider the fair value of any non-controlling interest liability as of September 30, 2020. In determining this fair value, the Company considered the various interests, including profit participation thresholds in each of the entities that must be measured in determining the fair value of the Company’s non-controlling interest liability. The Company used the real estate valuations provided by Duff & Phelps, Colliers, and Clear Capital and calculated the amount that the non-controlling interests would receive in a hypothetical liquidation of the underlying real estate properties (including all current assets and liabilities) at their current values and the payoff of any related debt at its fair value, based on agreements. The estimated payment to the non-controlling interests were then reflected as the non-controlling interest liability in the Company’s calculation of its estimated value per share.

9

Participation Fee Potential Liability Calculation
In accordance with the new advisory agreement with the Advisor, the Advisor is entitled to receive a participation fee equal to (A) 15.0% of the Company’s net cash flows, whether from continuing operations, net sale proceeds or otherwise, after the Company’s stockholders have received, together as a collective group, aggregate distributions (including distributions that may constitute a return of capital for federal income tax purposes) sufficient to provide (i) a return of their net invested capital, or the amount calculated by multiplying the total number of shares purchased by stockholders by the issue price (except that all shares issued to stockholders of POSOR II in connection with the Merger are deemed to have been purchased by such stockholders at the effective time of the Merger and at a price of $10.63 per share), reduced by any amounts to repurchase shares pursuant to the Company’s share redemption program, and (ii) a 7.0% per year cumulative, noncompounded return on such net invested capital from Company inception, less (B) $36.3 million, which is the grant date value of the restricted stock issued to the Company's former advisor, KBS Capital Advisors LLC, in connection with its termination on October 31, 2019. Net sales proceeds means the net cash proceeds realized by the Company after deduction of all expenses incurred in connection with a sale, including disposition fees paid to the Advisor. The 7.0% per year cumulative, noncompounded return on net invested capital from Company inception is calculated on a daily basis. In making this calculation, the net invested capital is reduced to the extent distributions in excess of a cumulative, noncompounded, annual return of 7.0% are paid (from whatever source), except to the extent such distributions would be required to supplement prior distributions paid in order to achieve a cumulative, noncompounded, annual return of 7.0% (invested capital is only reduced as described in this sentence; it is not reduced simply because a distribution constitutes a return of capital for federal income tax purposes). The 7.0% per year cumulative, noncompounded return is not based on the return provided to any individual stockholder. Accordingly, it is not necessary for each of the Company’s stockholders to have received any minimum return in order for the Advisor to participate in the Company’s net cash flows. In fact, if the Advisor is entitled to participate in the Company’s net cash flows, the returns of the Company’s stockholders will differ, and some may be less than a 7.0% per year cumulative, noncompounded return. This fee is payable only if the Company is not listed on an exchange. For purposes of determining the estimated value per share, the Advisor calculated the potential liability related to this incentive fee based on a hypothetical liquidation of the assets and liabilities at their estimated fair values, after considering the impact of any potential closing costs and fees related to the disposition of real estate properties. The Advisor estimated the fair value of this liability to be $0 as of the valuation date, and reflected this in its calculation of the Company’s estimated value per share.
Other Assets and Liabilities
The carrying values of a majority of the Company’s other assets and liabilities are considered to equal their fair value due to their short maturities or liquid nature. Certain balances, such as straight-line rent receivables, lease intangible assets and liabilities, accrued capital expenditures, deferred financing costs, unamortized lease commissions and unamortized lease incentives, have been eliminated for the purpose of the valuation due to the fact that the value of those balances were already considered in the valuation of the related asset or liability. The Advisor has also excluded redeemable common stock as temporary equity does not represent a true liability to the Company and the shares that this amount represents are included in the Company’s total outstanding shares of common stock for purposes of calculating the estimated value per share of the Company’s common stock.
Different parties using different assumptions and estimates could derive a different estimated value per share, and these differences could be significant. The value of the Company’s shares will fluctuate over time in response to developments related to individual assets in the Company’s portfolio and the management of those assets and in response to the real estate and finance markets.

10

Limitations of Estimated Value Per Share
As mentioned above, the Company is providing this estimated value per share to assist broker dealers that participated in the Company’s initial public offering in meeting their customer account statement reporting obligations. This valuation was performed in accordance with the provisions of and also to comply with IPA valuation guidelines. The estimated value per share set forth above will first appear on the December 31, 2020 customer account statements that will be mailed in January 2021. As with any valuation methodology, the methodologies used are based upon a number of estimates and assumptions that may not be accurate or complete. Different parties with different assumptions and estimates could derive a different estimated value per share. The estimated value per share is not audited and does not represent the fair value of the Company’s assets less the fair value of the Company’s liabilities according to GAAP.
Accordingly, with respect to the estimated value per share, the Company can give no assurance that:
•a stockholder would be able to resell his or her shares at this estimated value per share;
•a stockholder would ultimately realize distributions per share equal to the Company’s estimated value per share upon liquidation of the Company’s assets and settlement of its liabilities or a sale of the Company;
•the Company’s shares of common stock would trade at the estimated value per share on a national securities exchange;
•an independent third-party appraiser or other third-party valuation firm would agree with the Company’s estimated value per share; or
•the methodology used to calculate the Company’s estimated value per share would be acceptable to FINRA or for compliance with ERISA reporting requirements.
Further, the estimated value per share as of December 4, 2020 is based on the estimated value of the Company’s assets less the estimated value of the Company’s liabilities divided by the number of shares outstanding, all as of September 30, 2020, after giving effect to the Adjustments. As of September 30, 2020, taking into account the Merger, there were 98,198,922 shares issued and outstanding. The value of the Company’s shares will fluctuate over time in response to developments related to individual assets in the Company’s portfolio and the management of those assets and in response to the real estate and finance markets. The estimated value per share does not reflect a discount for the fact that the Company is externally managed, nor does it reflect a real estate portfolio premium/discount versus the sum of the individual property values. The estimated value per share does not take into account estimated disposition costs and fees for real estate properties that are not held for sale or under contract for sale, debt prepayment penalties that could apply upon the prepayment of certain of the Company’s debt obligations or the impact of restrictions on the assumption of debt. The estimated value per share does consider any participation or incentive fees that would be due to the Advisor based on the aggregate net asset value of the Company which would be payable in a hypothetical liquidation of the Company as of the valuation date in accordance with the terms of the Company’s advisory agreement. The Company currently expects to utilize the Advisor and/or an independent valuation firm to update the estimated value per share no later than December 2021.
Dividend Reinvestment Plan
In accordance with its dividend reinvestment plan, at such time as the Company announces an updated estimated value per share, participants in the dividend reinvestment plan will acquire shares of common stock under the plan at a price equal to the updated estimated value per share of the Company’s common stock. The updated estimated value per share of the Company’s common stock is $9.68, and commencing on the next purchase date, participants will acquire shares under the dividend reinvestment plan at $9.68 per share.
If a participant wishes to terminate participation in the dividend reinvestment plan effective as of the next purchase date, participants must notify the Company in writing of such decision, and the Company must receive the notice at least four business days prior to the last business day prior to the next purchase date.
Notice of termination should be sent by facsimile to (833) 258-6305 or by mail to:
Regular Mail

Pacific Oak Strategic Opportunity REIT, Inc.
c/o DST Systems, Inc.
PO Box 219183
Kansas City, MO 64121-9183
Overnight Address

Pacific Oak Strategic Opportunity REIT, Inc.
c/o DST Systems, Inc.
430 W. 7th Street
Kansas City, MO 64105-1407

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Share Redemption Program
On December 4, 2020 the Company’s board of directors adopted a twelfth amended and restated share redemption program (the “Twelfth SRP”). The Twelfth SRP makes available $2.0 million of redemptions in connection with a stockholder's death, “qualifying disability”, or “determination of incompetence” for the December 2020 redemption date and carry forward until depleted. In addition, the Twelfth SRP made changes to the definition of “qualifying disability” to be as defined in Section 72(m)(7) of the Internal Revenue Code. There were no other changes to the share redemption program. A copy of the full Twelfth SRP is filed as Exhibit 99.5 to this Current Report on Form 8-K.
In accordance with the Company’s share redemption program, except for redemptions made upon a stockholder’s death, “qualifying disability” or “determination of incompetence” (each as defined in the share redemption program), the price at which the Company will redeem shares is 95% of the Company’s most recent estimated value per share as of the applicable redemption date.  Upon the death, “qualifying disability” or “determination of incompetence” of a stockholder, the redemption price will continue to be equal to the Company’s most recent estimated value per share.
Generally, the Company redeems all shares in connection with a stockholder’s death, “qualifying disability” or “determination of incompetence” on the last business day of each month and redeems all other shares on the last business day of the quarter.
On December 4, 2020, the Company’s board of directors approved an estimated value per share of the Company’s common stock of $9.68. The redemption prices based on the estimated value per share of $9.68 will be effective for the December 2020 redemption date, which is December 31, 2020. Excluding redemption requests made upon a stockholder’s death, “qualifying disability” or “determination of incompetence,” the redemption price is $9.20 per share. For a stockholder’s shares to be eligible for redemption in a given month or to withdraw a redemption request, the Company must receive a written notice from the stockholder or from an authorized representative of the stockholder in good order and on a form approved by the Company at least five business days before the redemption date, or by December 23, 2020 in the case of the December 31, 2020 redemption date.
Historical Estimated Values per Share
The historical reported estimated values per share of the Company’s common stock approved by the board of directors are set forth below:
Estimated Value per Share   Effective Date of Valuation   Filing with the Securities and Exchange Commission
$10.63 December 17, 2019 Current Report on Form 8-K, filed November 15, 2018
$9.91 November 12, 2018 Current Report on Form 8-K, filed November 15, 2018
$11.50 December 7, 2017 Current Report on Form 8-K, filed December 13, 2017
$14.81 December 8, 2016 Current Report on Form 8-K, filed December 15, 2016
$13.44 December 8, 2015 Current Report on Form 8-K, filed December 10, 2015
$12.24 December 9, 2014 Current Report on Form 8-K, filed December 11, 2014
$11.27 March 25, 2014 Current Report on Form 8-K, filed March 27, 2014
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Forward-Looking Statements
 The foregoing includes forward-looking statements within the meaning of the Federal Private Securities Litigation Reform Act of 1995. The Company intends that such forward-looking statements be subject to the safe harbors created by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include statements regarding the intent, belief or current expectations of the Company and members of its management team, 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. Further, forward-looking statements speak only as of the date they are made, and the Company 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. Actual results may differ materially from those contemplated by such forward-looking statements. The valuation methodology for the Company’s real estate properties assumes the properties realize the projected cash flows and expected exit cap rates and that investors would be willing to invest in such properties at yields equal to the expected discount rates. Though the valuation estimates used in calculating the estimated value per share are Duff & Phelps’, Colliers’, Clear Capital’s or the Company’s and/or the Advisor’s best estimates as of December 4, 2020, the Company can give no assurance in this regard. These statements also depend on factors such as: future economic, competitive and market conditions; the Company’s ability to maintain occupancy levels and rental rates at its real estate properties; the borrowers under the Company’s real estate debt securities investment continuing to make required payments; and other risks identified in Part I, Item IA of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 and subsequent periodic reports, as filed with the SEC. Actual events may cause the value and returns on the Company’s investments to be less than that used for purposes of the Company’s estimated value per share.
13

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits
Ex. Description
99.1
99.2
99.3
99.4
99.5

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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: December 9, 2020   BY: /s/ Michael A. Bender
      Michael A. Bender
      Chief Financial Officer, Treasurer and Secretary
       



Exhibit 99.1

CONSENT OF INDEPENDENT VALUATION EXPERT

We hereby consent to the reference to our name and description of our role in the valuation process of certain commercial real estate assets of Pacific Oak Strategic Opportunity REIT, Inc. (the “Company”) being included or incorporated by reference into the Company’s Registration Statement on Form S-3 (File No. 333-156633) and the related prospectus, included therein, by being filed on a Current Report on Form 8-K, to be filed on the date hereof. In giving this consent, we do not admit that we are within the category of persons whose consent is required by Section 7 of the Securities Act of 1933, as amended.

December 9, 2020 /s/ Duff & Phelps, LLC
  Duff & Phelps, LLC





Exhibit 99.2

CONSENT OF INDEPENDENT VALUATION EXPERT

We hereby consent to the reference to our name and description of our role in the valuation process of certain commercial real estate assets of Pacific Oak Strategic Opportunity REIT, Inc. (the “Company”) being included or incorporated by reference into the Company’s Registration Statement on Form S-3 (File No. 333-156633) and the related prospectus, included therein, by being filed on a Current Report on Form 8-K, to be filed on the date hereof. In giving this limited consent, we do not admit that we are within the category of persons whose consent is required by Section 7 of the Securities Act of 1933, as amended; nor do we consent to, adopt or otherwise express any views as to the accuracy or completeness of any other representations in the referenced documents.

December 9, 2020 /s/ Colliers International Valuation & Advisory Services, LLC
  Colliers International Valuation & Advisory Services, LLC





Exhibit 99.3

CONSENT OF INDEPENDENT VALUATION EXPERT

We hereby consent to the reference to our name and description of our role in the valuation process of certain residential real estate assets of Pacific Oak Strategic Opportunity REIT, Inc. (the “Company”) being included or incorporated by reference into the Company’s Registration Statement on Form S-3 (File No. 333-156633) and the related prospectus, included therein, by being filed on a Current Report on Form 8-K, to be filed on the date hereof. In giving this limited consent, we do not admit that we are within the category of persons whose consent is required by Section 7 of the Securities Act of 1933, as amended; nor do we consent to, adopt or otherwise express any views as to the accuracy or completeness of any other representations in the referenced documents.

December 9, 2020 /s/ ClearCapital.com, Inc.
  ClearCapital.com, Inc.




M A T C H I N G C A P I T A L W I T H O P P O R T U N I T Y P A C I F I C O A K S T R A T E G I C O P P O R T U N I T Y R E I T V a 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 9, 2020 Exhibit 99.4

 
FORWARD-LOOKING STATEMENTS I M P O R T A NT 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 I, Inc. (“Pacific Oak Strategic Opportunity REIT” or the “Company”) Annual Report on Form 10-K for the year ended December 31, 2019 (the “Annual Report”) filed with the Securities and Exchange Commission (“SEC”) on March 26, 2020 (the “Annual Report”) and the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2020 (the “Quarterly Report”) filed with the SEC on November 13, 2020, including the “Risk Factors” contained therein. For a full description of the limitations, methodologies and assumptions used to value the Company’s assets and liabilities in connection with the calculation of the Company’s estimated value per share, see the Company’s Current Report on Form 8-K, filed with the SEC on December 9, 2020. F O R W A R D L O O K I NG S T A T E M E N T S - Certain statements contained herein may be deemed to be forward-looking statements within the meaning of the Federal Private Securities Litigation Reform Act of 1995. The Company intends that such forward-looking statements be subject to the safe harbors created by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include statements regarding the intent, belief or current expectations of the Company and members of its management team, 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. Further, forward-looking statements speak only as of the date they are made, and the Company 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. Actual results may differ materially from those contemplated by such forward-looking statements. The valuation methodology for certain of the Company’s real estate investments assumes that its properties realize the projected cash flows and exit cap rates and that investors would be willing to invest in such properties at cap rates equal to the cap rates used in the valuation. Though the appraisals and valuation estimates used in calculating the estimated value per share are Duff & Phelps, LLC (“Duff & Phelps”), Colliers International Valuation & Advisory Services, LLC (“Colliers”), and ClearCapital.com, Inc. (“Clear Capital”) best estimates as of September 30, 2020, and/or the Company’s and Pacific Oak Capital Advisors LLC’s (“the Advisor”) best estimates as of December 4, 2020, the Company can give no assurance that these estimated values will be realized by the Company. These statements also depend on factors such as future economic, competitive and market conditions, the Company’s ability to maintain occupancy levels and rental rates at its properties, and other risks identified in Part I, Item IA of the Company’s Annual Report on form 10-K for the year ended December 31, 2019, and its subsequent quarterly reports. Actual events may cause the value and returns on the Company’s investments to be less than that used for purposes of the Company’s estimated value per share. 2

 
• Estimated value per share calculated using information as of September 30, 2020, with the exception of adjustments to give effect to the Merger2 which closed on October 5, 2020 and merger-related expenses incurred upon the closing. 3 • The Company followed the Institute for Portfolio Alternatives Valuation Guidelines, which included independent third-party valuations for all of its consolidated properties and properties owned via two of its unconsolidated joint ventures. The valuations represented appraisals for these properties, with the exception of the Company’s consolidated single-family rental home portfolio (“SFR portfolio”) of 1,769 homes which was valued at the total of the individual home values provided by a third-party valuation firm. The appraisals were performed by Duff & Phelps, except for the undeveloped land which was appraised by Colliers. Valuation of the SFR portfolio was performed by ClearCapital.com, Inc. • The appraisals were performed in accordance with the Code of Professional Ethics and Standards of Profession Practice set forth by the Appraisal Institute and the Uniform Standards of Professional Appraisal Practice (USPAP). • The Company’s Advisor valued the three other investments in unconsolidated entities at $28.7 million or $0.29 per share4, as well as the Company’s real estate-related investments, cash, other assets, mortgage debt, and other liabilities. • Non-controlling interest liability due to equity interests in certain consolidated entities was calculated by assuming a hypothetical liquidation of the underlying real estate properties at their current values and the payoff of any related debt at its fair value, and then valuing the different equity interests based on their contractual rights. Net asset value; no enterprise (portfolio) premium or discount applied Reflected the advisor incentive fee payable to the Company’s Advisors for shareholder returns in excess of a 7.0% per year cumulative, non- compounded return on invested capital3. 1 For more information, see the Company’s Current Report on Form 8-K filed with the SEC on December 9, 2020. 2 On October 5, 2020, Pacific Oak Strategic Opportunity REIT II, Inc. (“POSOR II”) merged into and became an indirect subsidiary of the Company and POSOR II ceased to separately exist (the “Merger”). Pursuant to the merger agreement, the Company issued 28,973,906 shares of its common stock, equal to 0.9643 shares of the Company’s common stock for each outstanding share of POSOR II’s common stock. For further information, see the Company’s Current Report on Form 8-K filed with the SEC on October 5, 2020. 3 The Company issued 3,411,737 restricted stock shares to KBS Capital Advisors on March 27, 2020 in accordance with the Company’s amended advisory agreement with KBS Capital Advisors which terminated them effective October 31, 2019, and the restricted stock value (“KBS Termination Fee Payout”) is reflected in the Company’s estimated share value announced on December 9, 2020. The Company’s advisory agreement with Pacific Oak Capital Advisors stipulates that a participation fee is payable to Pacific Oak Capital Advisors if shareholder returns exceed (i) net invested capital, or the amount calculated by multiplying the total number of shares purchased by stockholders by the issue price (except that all shares issued to stockholders of POSOR II in connection with the Merger are deemed to have been purchased by such stockholders at the effective time of the Merger and at a price of $10.63 per share), plus (ii) a 7.0% per year cumulative non-compounded return on the invested capital, and such excess is greater than the grant date value of the KBS Termination Fee Payout. The Company estimated this participation fee potential liability to be $0 for purposes of the estimated share value announced on December 9, 2020. 4 Two of the unconsolidated entities were valued at the amount of equity capital contributed by the Company ($28.6 million or $0.29 per share), and the remaining unconsolidated entity was valued at $0.1 million or $0.00 per share which was the amount of cash the Company received in a final liquidating distribution in October 2020. VALUATION1

 
4 VALUATION1 1 Based on data as of September 30, 2020, with the exception of adjustments to give effect to the Merger which closed on October 5, 2020 and merger-related expenses incurred upon the closing. 2 Based on data as of September 30, 2019, with the exception of (i) real estate which was valued as of October 31, 2019, (ii) an adjustment to reduce cash for the amount of real estate capital expenditures incurred in October 2019, (iii) an adjustment for acquisition and disposition fees and expenses incurred in connection with the acquisition of Reven Housing REIT, Inc. and disposition of 125 John Carpenter subsequent to September 30, 2019, and (iv) a number of adjustments related to the incentive fee potential liabilities to our former advisor, KBS Capital Advisors, LLC, and our current advisor, Pacific Oak Capital Advisors, LLC (the “Advisor”), in connection with the termination of KBS Capital Advisors effective October 31, 2019 and the hiring of Pacific Oak Capital Advisors on November 1, 2019. For further information, see the Company’s Current Report on Form 8-K filed with the SEC on December 19, 2019. 3 Includes restricted cash, rents and other receivables, deposits, prepaid expenses and other assets as applicable. 4 The Company’s participation fee potential liability to Pacific Oak Capital Advisors was estimated to be $0 and $2.3 million for the share value announcements on December 9, 2020 and December 19, 2019, respectively. 5 Includes merger-related expenses incurred upon the merger closing, accounts payable, accrued liabilities, security deposits, contingent liabilities, prepaid rent and other liabilities. 6 Represents the par value plus accrued dividends on the Series A cumulative convertible redeemable preferred stock issued by the Company’s subsidiary, Pacific Oak Residential Trust, Inc. (“PORT”). Assets: Real Estate Investments in Unconsolidated Entities Investments in Real Estate Equity Securities Cash and Cash Equivalents Other Assets3 Liabilities: Mortgage and Other Debt Advisor Incentive Fee4 Other Liabilities5 PORT Preferred Stock 6 Minority Interests in Consolidated Entities Stockholder Equity $1.712 Billion (81%) $208.6 Million (10%) $90.6 Million (4%) $87.4 Million (4%) $27.5 Million (1%) $1.127 Billion $1.071 Billion $ - $ 55.7 Million $ 15.2 Million $ 33.7 Million $ 950.1 Million $1.045 Billion (71%) $219.2 Million (15%) $ 79.1 Million (5%) $102.1 Million (7%) $ 16.8 Million (2%) $709.0 Million $674.3 Million $ 2.3 Million $ 32.4 Million $ - $ 13.9 Million $739.4 Million As of December 20201 As of December 20192 $2.126 Billion $1.462 Billion

 
VALUATION1 5 1 Based on data as of September 30, 2020, with the exception of adjustments to give effect to the Merger which closed on October 5, 2020 and merger-related expenses incurred upon the closing. 2 Includes the merger impact, which was a decrease in estimated share value of $0.36, reflecting the changes in the net asset values for the Company and POSOR II following the signing of the Merger Agreement on February 19, 2020. 3 Operating cash flow reflects modified funds from operations (“MFFO”) adjusted to deduct capitalized interest expense, real estate taxes, and insurance and add back the amortization of deferred financing costs. 4 Includes (i) merger-related expenses incurred upon the closing of $0.06 per share, (ii) selling, acquisition, and financing costs excluding sponsor fees of $0.03 per share, and (iii) disposition and acquisition fees to the sponsor of $0.00 per share. On December 4, 2020, the Company’s Board approved an estimated value per share of $9.68. The following summarizes the change in estimated value per share from December 2019 to December 2020: Investments Real estate2 Investments in unconsolidated entities Investments in real estate equity securities Leasing costs & capital expenditures Investment Performance Operating cash flows in excess of distributions declared3 Foreign currency gain Merger and property selling, acquisition, & financing costs4 Mortgage debt and Series A & B debentures Advisor incentive fee potential liability Other changes, net Total Change December 2020 estimated share value December 2019 estimated share value $ 10.63 (0.47) (0.46) (0.30) (0.38) (1.61) 0.17 0.15 (0.09) 0.38 0.03 0.02 (0.95) $9.68

 
6 The Company is providing this estimated value per share to assist broker dealers that participated in its initial public offering in meeting their customer account statement reporting obligations. As with any valuation methodology, the methodologies used are based upon a number of estimates and assumptions that may not be accurate or complete. Different parties with different assumptions and estimates could derive a different estimated value per share. The Company can give no assurance that: Further, the estimated value per share of $9.68 announced on December 9, 2020 is based on the estimated value of the Company's assets less the estimated value of its liabilities, or net asset value, divided by the number of shares outstanding, all as of September 30, 2020, with the exception of adjustments to give effect to the Merger which closed on October 5, 2020 and merger-related expenses incurred upon the closing. The methodology used to estimate the Company’s value per share would be acceptable to FINRA or for compliance with ERISA reporting requirements. The Company’s shares of common stock would trade at the estimated value per share on a national securities exchange; A stockholder would ultimately realize distributions per share equal to the Company’s estimated value per share upon liquidation or sale of the Company; A stockholder would be able to resell his or her shares at this estimated value per share; An independent third- party appraiser or other third-party valuation firm would agree with the Company's estimated value per share; or STOCKHOLDER PERFORMANCE

 
$0.44 $0.62 $0.98 $1.36 $1.73 $1.78 $1.81 $1.82 $0.72 $1.47 $1.49 $1.49 $2.89 $5.44 $5.83 $5.31 $10.00 $11.27 $12.24 $13.44 $14.81 $11.50 $9.91 $10.63 $9.68 $10.00 $11.71 $12.86 $14.42 $16.17 $16.84 $18.60 $19.76 $18.30 Offering Price Mar-14 Dec-14 Dec-15 Dec-16 Dec-17 Nov-18 Dec-19 Dec-20 $1.14 $1.32 $1.68 $2.06 $2.43 $2.48 $2.51 $2.52 $0.72 $1.47 $1.49 $1.49 $2.89 $5.44 $5.83 $5.31 $10.00 $11.27 $12.24 $13.44 $14.81 $11.50 $9.91 $10.63 $9.68 $10.00 $12.41 $13.56 $15.12 $16.87 $17.54 $19.30 $20.46 $19.00 Offering Price Mar-14 Dec-14 Dec-15 Dec-16 Dec-17 Nov-18 Dec-19 Dec-20 7 STOCKHOLDER PERFORMANCE Hypothet ica l Performance of F irst and Last Investors at $10.00 Offer ing Pr ice Value Breakdown for Last Cash Investor (at Offering Close Nov. 14, 2012) Estimated Value Per Share Cumulative Stock Dividend Value Dec. 2017 & Nov. 2018 Special Dividends (Cash Portion) Cumulative Cash Dividends (Excluding Dec. 2017 & Nov. 2018 Special Dividends) Value Breakdown for First Cash Investor (at Escrow Break April 19, 2010) Estimated Value Per Share Cumulative Stock Dividend Value Dec. 2017 & Nov. 2018 Special Dividends (Cash Portion) Cumulative Cash Dividends (Excluding Dec. 2017 & Nov. 2018 Special Dividends) ”Valuation Information” for a first cash investor assumes all distributions received in cash and no share redemptions and reflect the cash payment amounts (all distributions paid since inception) per share for a hypothetical investor who invested on or before escrow break and consequently has received all distributions paid by the Company. “Cumulative distributions” for a first cash investor and a last cash investor assumes all distributions received in cash (except for stock portion of special distributions) and no share redemptions, and reflect the cash payment amounts (all distributions paid or declared since investment) per share for a hypothetical investor who invested on April 19, 2010, and November 14, 2012, respectively. The “offering price” of $10.00 reflects the maximum per share purchase price in the primary initial public offering. D istrib u tio n s $ 9 .3 2 D istrib u tio n s $ 8 .6 2

 
8 STOCKHOLDER PERFORMANCE ILLUSTRATION 1 Assumes the shareholder receives 20% of the special dividend in cash and 80% in stock. If a significant number of investors elect all stock, a cash electing investor may receive more than 20% of the special dividend in cash. 2 Assumes a stock dividend rate of 0.2509 and 0.2381 shares per share of common stock outstanding, for the December 7, 2017 and November 12, 2018 special dividends, respectively, for a cumulative of 0.5488 additional shares after compounding as of November 12, 2018. Since special dividends were declared on December 7, 2017 and November 12, 2018, a comparison of the estimated value per share over time is no longer a fair reflection of stockholder performance. The following illustration shows the performance of the first cash investor who bought 1 share, to focus on the performance of both the share and account value. Estimated Value Per Share Total Shares Total Share Value Cash Dividends Total Account Value Offering Price $10.00 1.0000 $10.00 $10.00 Estimated Value Per Share Increase $5.11 $5.11 $5.11 Cash Dividends to December 7, 2017 $2.43 $2.43 December 7, 2017 Before Special Dividend $15.11 1.0000 $15.11 $2.43 $17.54 December 2017 Special Dividend (1) Cash Dividend ($0.72) ($0.72) $0.72 $0.00 Stock Dividend Value (2) ($2.89) 0.2509 $0.00 $0.00 December 7, 2017 After Special Dividend $11.50 1.2509 $14.39 $3.15 $17.54 Estimated Value Per Share Increase $1.36 $1.71 $1.71 Cash Dividends to November 12, 2018 $0.05 $0.05 November 12, 2018 Special Dividend (1) Cash Dividend ($0.59) ($0.75) $0.75 $0.00 Stock Dividend Value (2) ($2.36) 0.2979 $0.00 $0.00 November 12, 2018 After Special Dividend (2) $9.91 1.5488 $15.35 $3.95 $19.30 Estimated Value Per Share Increase $0.72 $1.11 $1.11 Cash Dividends to December 17, 2019 $0.05 $0.05 December 17, 2019 After Special Dividend (2) $10.63 1.5488 $16.46 $4.00 $20.46 Estimated Value Per Share Decrease ($0.95) -$1.47 ($1.47) Cash Dividends to December 17, 2019 $0.01 $0.01 December 4, 2020 After Special Dividend (2) $9.68 1.5488 $14.99 $4.01 $19.00

 
9 PORTFOLIO OVERVIEW & HIGHLIGHTS

 
10 1 Reflects the property values for all real estate, including the properties owned via joint ventures, as well as real estate equity securities values used in the December 2020 share value, after adjusting for the Company’s share of consolidated and unconsolidated joint entities. The total value would be $2,587,692,000 including the minority interests in consolidated and unconsolidated entities. 2 Calculated as (i) consolidated debt principal net of cash, restricted cash, and real estate equity securities divided by (ii) consolidated real estate value, as reflected in the December 2020 share value. 3 Represents the weighted-average of the Company’s and POSOR II’s interest rate in effect on consolidated mortgages and debentures as of September 30, 2020. 4 Represents (i) leased occupancy, which includes leases signed but future commencing, for the consolidated and unconsolidated offices, SFR, and apartments in the portfolio as of September 30, 2020 and (ii) average occupancy for Q3 2020 and Q3 2019 for the hotels. RevPAR for the hotels was $47.73 for Q3 and Q2 2020 combined, versus $123.97 for Q3 and Q2 2019 combined, a decline of 61.5% which was primarily attributed to the COVID-19 pandemic and related, temporary closures. Both hotels were temporarily closed on March 31, 2020, with Springmaid Beach Resort reopening on May 1, 2020 and Q&C Hotel reopening on Sept. 1, 2020. RevPAR is an abbreviation for revenue per available room, a commonly cited metric in the hotel industry. 5 Percentage of total rent charges for September 2020 which were collected as of October 2020. Investment Types1 By value in December 2020 NAV December 2020 Estimated Value of Portfolio1………….……….$2,141,710,000 Rentable Square Feet…….…………………………………………………..........7,945,590 Leverage, net2…………………………………………………………………………………….….53% Weighted-Avg. Interest Rate at 9/30/203………………………………………….3.23% Geographic Allocation1 By value in December 2020 NAV Investment Type Dec. 2020 NAV Value1 % of Total Occupancy 9/30/204 Occupancy 9/30/194 Sept 2020 Rent Collection5 Office $1,315,019,000 61.4% 77.7% 80.0% 96.3% SFR $188,129,000 8.8% 91.4% N/A 97.7% Apt $165,040,000 7.7% 87.5% 93.1% 88.2% Land $276,721,000 12.9% N/A N/A N/A Hotel $106,165,000 5.0% 41.8% 74.8% N/A Financial Assets $90,636,000 4.2% TOTAL: $2,141,710,000

 
Property Name City, State Property Type/ No. of Buildings Date Acquired by Company/POSOR II Size (SF) Occupancy % Ownership % CONSOLIDATED PROPERTIES: OFFICES Oakland City Center Oakland, CA Office 2 Buildings 8/18/2017 368,032 78.3% 100% City Tower Orange, CA Office 1 Building 3/6/2018 435,177 94.1% 100% The Marq Minneapolis, MN Office 1 Building 3/1/2018 522,656 83.6% 100% Crown Pointe Dunwoody, GA Office 2 Buildings 2/14/2017 509,792 75.0% 100% Georgia 400 Center Alpharetta, GA Office 3 Buildings 5/23/19 419,567 83.0% 100% Eight & Nine Corporate Centre Franklin, TN Office 2 Buildings 6/8/2018 315,299 80.3% 100% Richardson Portfolio (JV) Richardson, TX Office 4 Buildings & 14 Acres of Land 11/23/2011 569,980 74.0% 90% Lincoln Court Campbell, CA Office 1 Building 5/20/2016 123,529 73.6% 100% Park Centre Austin, TX Office 3 Buildings 3/28/2013 205,095 78.2% 100% Madison Square (JV) Phoenix, AZ Office 3 Buildings 10/3/2017 313,561 47.1% 90% Subtotal: 3,778,670 77.7% P rope r t i e s 11

 
CONSOLIDATED PROPERTIES: APARTMENTS & SINGLE-FAMILY RENTALS (SFR) 1180 Raymond Newark, NJ 317 Unit Apartment Building 8/20/2013 268,648 87.4% 100% Lofts at NoHo Commons (JV) N. Hollywood, CA 292 Unit Apartment Building 11/16/2016 224,755 87.7% 90% Pacific Oak Residential Trust 1,769 Single Family Homes Multiple 2,451,012 91.4% 96% Subtotal: 2,944,415 90.7% CONSOLIDATED PROPERTIES: HOTELS Springmaid Beach Resort (JV) Myrtle Beach, SC Resort/Hospitality 2 Buildings 12/30/2014 N/A N/A 90% Q&C Hotel (JV) New Orleans, LA Hospitality 2 Buildings 12/17/2015 N/A N/A 90% CONSOLIDATED PROPERTIES: LAND Tule Springs North Las Vegas, NV 1,000 Acres of Developable Land 12/30/2011, 12/10/2013 N/A N/A 100% Richardson Land (JV) Richardson, TX 14 Acres of Undeveloped Land 9/4/2014 N/A N/A 90% 210 West 31st Street (JV) New York, NY Office/Retail Development 12/1/2016 N/A N/A 80% P rope r t i e s ( con t i nued ) Property Name City, State Property Type/ No. of Buildings Date Acquired by Company/POSOR II Size (SF) Occupancy % Ownership % 12

 
Property Name City, State Property Type/ No. of Buildings Date Acquired by Company/POSOR II Size (SF) Occupancy % Ownership % UNCONSOLIDATED PROPERTIES 353 Sacramento (JV) San Francisco, CA Office 1 Building 7/11/2016 284,751 90.9% 55% 110 William Street (JV) New York, NY Office 1 Building 5/2/2014 928,157 73.4% 60% Pacific Oak Opportunity Zone Fund I N/A 2019 N/A N/A N/A Pacific Oak Residential Trust, II 7 Q3 2020 N/A 100% 100% Subtotal: 1,222,505 77.7% Total: 7,945,590 82.5% P rope r t i e s ( con t i nued ) 13

 
14 DISPOSITIONS HISTORY 1 Equals the sale price, net of seller concessions, without adjustment for joint venture partners’ share of consolidated joint ventures. Excludes selling costs and fees. 2 Equals the acquisition price (excluding acquisition costs and fees) plus capital expenditures and allocated cost for acquisitions of minority interests in joint ventures, without adjustment for joint venture partners’ share of consolidated joint ventures. 3 Reflects sale of 11 properties to subsidiaries of Keppel-KBS US REIT, a then newly formed Singapore real estate investment trust (the “SREIT”) which was listed on the Singapore Stock Exchange. The SREIT has since been renamed Keppel Pacific Oak US REIT. For further information on the property sale, please see the Company’s Current Report on Form 8-K filed with the SEC on November 9, 2017. Fol lowing is a summary of the Company’s real estate d ispos it ions f rom incept ion to September 30, 2020: Acquisition Disposition Sale Cost Basis Sale Price vs. Property Date Date Sq. Ft. Price (1) at Sale (2) Cost Basis Richardson Portfolio (Consolidated JV) Multiple Multiple 151,937 27,848,197$ 13,252,350$ 14,595,846$ Powers Ferry Landing (6151 & 6201 Bldgs) Sep-12 Oct-13 246,475 18,540,128 11,856,283 6,683,845 Park Highlands Multiple Multiple N/A 42,691,289 18,014,138 24,677,151 50 Congress Street Jul-13 May-17 179,872 78,784,521 55,181,314 23,603,206 SREIT (11 Properties) (3) Multiple Nov-17 3,103,313 795,385,695 670,876,898 124,508,797 Central Building Jul-13 Jul-18 193,968 67,351,484 39,873,064 27,478,420 Westpark Portfolio May-16 Nov-18 782,035 166,424,343 144,668,958 21,755,386 Bedford (JV) Jan-14 Jan-19 49,220 43,786,766 41,415,046 2,371,720 Burbank (JV) Dec-12 Jul-19 39,035 25,900,000 18,806,736 7,093,264 125 John Carpenter Sep-17 Nov-19 445,317 99,557,239 88,900,923 10,656,316 Total 5,191,172 1,366,269,662$ 1,102,845,712$ 263,423,950$

 
559 single family homes located primarily in Ohio, Indiana, and North Carolina via the acquisition of Battery Point Trust on July 1, 2020 15 994 single family homes located primarily in Atlanta, Birmingham, Houston, Jacksonville, Memphis and Oklahoma City via the acquisition of Reven (NASDAQ: RVEN) on Nov. 4, 2019 196 single family homes located in Chicago acquired May 28, 2020 20 single family homes located primarily in Memphis were acquired in Q3-2020 (1) PORT is a consolidated subsidiary of the Company focused on single-family rental homes, of which the Company owns a 96.1% economic interest as of September 30, 2020. The Company has also invested $5.0 million in Pacific Oak Residential Trust II (“PORT II”), an unconsolidated entity, as of September 30, 2020. Information herein relates only to PORT and excludes the 7 single family homes located in Memphis which are owned by PORT II as of September 30, 2020. 15 Acquisition Strategy: Acquire a large, integrated portfolio of affordable single- family rental homes that address the work force housing needs in the United States. Cap rate arbitrage and aggregation play

 
# of HOMES BY MARKET As of September 30, 2020, PORT owns 1,769 homes which are 91.4% occupied and generate a levered income yield of 10.98% (1). NOI BY MARKET (1) Assumes occupancy of 100% because (i) there has not been a long enough operating history for the Company to estimate a representative, normalized occupancy and (ii) lease timing might fluctuate as of an individual quarter-end. Also, income measures are before maintenance and turnover capital expenditures. (2) Cash flow yield is the (i) NOI less interest and maintenance and turnover capital expenditures divided by (ii) equity invested. 16 # of Homes 9/30/20 Occupancy Avg. Sq. Ft. Avg. Monthly Rent Purchase Price Equity Basis Gross Potential NOI (1) Gross Potential NOI Less Interest (1) Unlevered Income Yield (1) Levered Income Yield (1) Levered Cash Flow Yield (2) 1,769 91.4% 1,386 $1,048 $185,122,949 $57,238,709 $12,105,000 $6,286,000 6.54% 10.98% 8.44%

 
Wood Village near Portland, OR (Closed): • 173 apartments, $45.9 million construction cost • Q1 2021 estimated completion Imperial Apartments, Phoenix, AZ (Closed): • 140 workforce apartments, $15.0 million construction cost • 2H 2021 estimated completion St. Ambrose Apartments, Phoenix, AZ (Closed): • 241 apartments, $28.3 million construction cost • Q1 2022 estimated completion Presidential Apartments, Phoenix, AZ (Pending): • 84 apartments, $19.1 million construction cost • Q4 2020 expected closing, 2022 estimated completion 17 $150 million fund, with seed capital from the Company and POSOR II ($23.6 million) and Pacific Oak principals ($1.0 million). (1) The Company and POSOR II collectively invested $23.6 million to acquire 104 Class A units of Pacific Oak Opportunity Zone Fund I, an unconsolidated entity, as of September 30, 2020. Information herein relates to the capital raise and investments by Pacific Oak Opportunity Zone Fund I.

 
18 COVID-19 Commen ta ry U.S. Economy Office Sector But the pandemic has hit the office sector. At the national level, vacant and sublease spaces are on the rise and net absorption is expected to be negative for the first time since 2009 and average rent is expected to experience its first annual decline since 2010.(2) The long-term outlook for office remains positive, and although the remote working trend could reduce the need for office space in the near-term, the idea of significant abandonment of office over the long-term is premature and baseless in the opinions of many market observers. Tenants are indeed taking a “wait and see approach” and re-evaluating their space needs. But leases are still being signed today and tenants who have historically been dense users of office space may need even more space going forward to provide physical distancing and comfort for employees. U.S. GDP grew at an annual rate of 33.1% in Q3-2020, as Americans adjusted to life amidst the COVID-19 pandemic, activities resumed, and businesses reopened. This followed Q2-2020 when the GDP recorded the largest quarterly contraction in 75 years (-32.9%).(1) Economic forecasts turned positive over the summer, generally, and now with the announcements of effective vaccines there is a cautious optimism that the economy will return toward normal and the end of the pandemic may be within sight. Nevertheless, what the recent surge in cases and the winter season may mean for the U.S. economy, employment, and restrictions remains to be seen, as does the speed and shape of the recovery by the economy and specific sectors. 96.3% of September 2020 rent charges were collected as of October 2020. An insignificant number of office tenants have requested rent relief or deferral, and the Company has carefully managed the requests on a case- by-case basis, granting deferrals to only a small number of tenants to date. The Company is careful to reject the requests of tenants looking to take advantage of the situation. (1) U.S. Commerce Department’s Bureau of Economic Analysis (2) https://www.cbre.com/research-and-reports/Global-Real-Estate-Market-Outlook-2020-Office (3) CBRE Office 2021 U.S. Real Estate Market Outlook Early indications are that certain office-using sectors are resilient, with the drop in office-using employment being relatively moderate and less for the larger sectors such as financial services, technology, and law.(2)

 
19 COVID-19 Commen ta ry Apartment & SFR Sectors Hotel Sector The collection rates contrast with the rate for residential renters overall. An estimated 1 in 6 tenants are behind on their rent as of September 2020 and as many as 34 million people in the U.S. may be at risk of eviction following the expiration of legislation passed during the pandemic to protect people from eviction.(4) The Coronavirus Aid, Relief and Economic Security Act (“CARES”) granted some measure of protection against evictions and the Centers for Disease Control (“CDC”) just announced in September 2020 that lower-income tenants struggling to pay their rent will be allowed to stay in their homes until the end of the year. Local municipalities have also passed legislation protecting tenants from eviction during the pandemic. Of the September 2020 rent charges, 88.2% and 97.7% were collected for the apartments and SFR, respectively, as of October 2020. CONCLUSION: There is cautious optimism that the economy will return toward normal and vaccine distribution in the near-term will bring with it the end of the pandemic. Pent-up demand and federal st imulus should provide a boost to the economic recovery. The long-term outlook for the office, apartment & SFR, and hotel sectors remain posit ive, interest rates are expected to remain historical ly low, and expectat ions are that there is st i l l a considerable amount of equity and debt capital which wil l be eager to be invested. Both hotels were temporarily closed on March 31, 2020 due to COVID-19. Springmaid Beach Resort reopened on May 1, 2020 and Q&C Hotel reopened on Sept. 1, 2020, resulting in sharp declines in hotel NOI for Q2 and Q3 2020. This NOI is not considered indicative of levels moving forward, though the forecast for the near-term, at least, is highly uncertain. When the hotels will return to NOI levels achieved pre-pandemic will depend on the pandemic’s duration, whether a recession is triggered, and the related impacts to the consumer and business behavior driving leisure and business travel. (4) https://www.cnbc.com/2020/10/02/millions-of-americans-may-not-be-able-to-pay-rent-in-October.html

 
20 VALUE ADD OPPORTUNITES CONTINUE

 
21

 
22

 
23 SOLD SOLD SOLD Current Offers Sold Storm Basin

 
24 Grand Teton Drive

 
25 2021 GOALS & OBJECTIVES Convert to NAV REIT Prov ide enhanced shareho lder l iqu id i ty Se l l propert ies at attract ive r isk-adjusted pr ices and re invest capi ta l for perpetua l NAV REIT Lease-up and stabi l i ze propert ies to dr ive income and va lue growth, and pursue a l l va lue-add opportuni t ies

 
THANK YOU! 1 - 8 6 6 - P A C - O A K 7 (1-866-722-6257) INFO@PACIFICOAKCAPITAL.COM 11766 Wilshire Blvd, Suite 1670 Los Angeles, CA 90025 PACIFICOAKCAPITAL.COM 26 FOLLOW US ON LINKEDIN For more information, please contact your financial advisor or Pacific Oak Capital Markets Group at (866) 722-6257.

 
Exhibit 99.5
TWELFTH AMENDED AND RESTATED SHARE REDEMPTION PROGRAM
Effective as of December 23, 2020
    The board of directors of Pacific Oak Strategic Opportunity REIT, Inc., a Maryland corporation (the “Company”), has adopted a Twelfth Amended and Restated Share Redemption Program (the “SRP”), the terms and conditions of which are set forth below. Capitalized terms shall have the same meaning as set forth in the Company’s charter unless otherwise defined herein.
1.Qualifying Stockholders. “Qualifying Stockholders” are (a) holders of the Company’s shares of Common Stock (the “Shares”) who have held their Shares for at least one year, provided that, if the Company is redeeming all of a stockholder’s Shares, then there is no holding period requirement for Shares purchased pursuant to the Company’s dividend reinvestment plan and (b) stockholders or authorized representatives of stockholders qualifying for the special redemption provisions set forth in paragraphs 6, 7 and 8 below.
For purposes of determining the time period a redeeming stockholder has held each Share, the time period begins as of the date the stockholder acquired the Share; provided, that (i) Shares purchased by the redeeming stockholder pursuant to the Company’s dividend reinvestment plan will be deemed to have been acquired on the same date as the initial Share to which the dividend reinvestment plan Shares relate and (ii) Shares received by the redeeming stockholder as consideration in the merger (“Merger Shares”) of Pacific Oak Strategic Opportunity REIT II, Inc. (“SOR II”) with and into Pacific Oak SOR II, LLC will be deemed to have been acquired on the same date as the shares of common stock of SOR II to which the Merger Shares relate. The date of the Share’s original issuance by the Company is not determinative.
2.Share Redemption. Subject to the terms and conditions of this SRP, including the limitations on redemptions set forth in paragraph 4 and the procedures for redemption set forth in paragraph 5, the Company will redeem such number of Shares as requested by a Qualifying Stockholder.
3.Redemption Price. Except as stated in paragraph 6 below with respect to redemption requests made upon a stockholder’s death, Qualifying Disability (as defined in paragraph 7 below) or Determination of Incompetence (as defined in paragraph 8 below), the Company will redeem the Shares of a Qualifying Stockholder at a price equal to 95.0% of the Company’s most recent estimated value per Share as of the applicable Ordinary Redemption Date (as defined in paragraph 5 below).
4.Limitations on Redemption. Notwithstanding anything contained in this SRP to the contrary, the Company’s obligation to redeem Shares pursuant to paragraphs 2 and 6 hereof is limited by each of the following:
a.Unless the Shares are being redeemed in connection with a stockholder’s death, Qualifying Disability (as defined in paragraph 7) or Determination of Incompetence (as defined in paragraph 8), the Company may not redeem Shares unless the stockholder has held the shares for one year.


b.Subject to paragraph 4(c) below, during any calendar year, the Company may redeem only the number of Shares that the Company can purchase with the amount of net proceeds from the sale of Shares under the Company’s dividend reinvestment plan during the prior calendar year; provided, however, that this limit may be increased or decreased by the Company upon ten business days’ notice to the Company’s stockholders. The Company’s board of directors may approve an increase in this limit to the extent that the Company has received proceeds from asset sales or the refinancing of debt or for any other reason deemed appropriate by the board of directors. The Company may provide notice by including such information (a) in a Current Report on Form 8-K or in its annual or quarterly reports, all publicly filed with the Securities and Exchange Commission or (b) in a separate mailing to the stockholders. To the extent that the Company redeems less than the number of Shares that the Company can purchase in any calendar year with the amount of net proceeds from the sale of Shares under the Company’s dividend reinvestment plan during the prior calendar year plus any additional funds approved by the Company, such excess capacity to redeem Shares during any calendar year shall be added to the Company’s capacity to otherwise redeem Shares during the subsequent calendar year. Furthermore, during any calendar year, once the Company has received requests for redemptions, whether in connection with a stockholder’s death, Qualifying Disability (as defined in paragraph 7) or Determination of Incompetence (as defined in paragraph 8), or otherwise, that if honored, and when combined with all prior redemptions made during the calendar year, would result in the amount of remaining funds available for the redemption of additional Shares in such calendar year being $1.0 million or less, the last $1.0 million of available funds shall be reserved exclusively for Shares being redeemed in connection with a stockholder’s death, Qualifying Disability (as defined in paragraph 7) or Determination of Incompetence (as defined in paragraph 8). To the extent that, in the last month of any calendar year, the amount of redemption requests in connection with a stockholder’s death, Qualifying Disability or Determination of Incompetence is less than the amount of available funds reserved for such redemptions in accordance with the previous sentence, any excess funds may be used to redeem shares not in connection with a stockholder’s death, Qualifying Disability or Determination of Incompetence during such month.
c.Separate from the funding provided by Section 4(b) above, upon the effectiveness of this SRP, $2.0 million in funding will be available exclusively for Shares being redeemed in connection with a stockholder’s death, Qualifying Disability or Determination of Incompetence. This funding will carry forward indefinitely until depleted.
d.During any fiscal quarter, the Company may redeem no more than $3.0 million of Shares (excluding Shares redeemed in connection with a stockholder’s death, Qualifying Disability or Determination of Incompetence). To the extent that, in a given fiscal quarter, the Company redeems less than the sum of (a) $3.0 million of Shares (excluding Shares redeemed in connection with a stockholder’s death, Qualifying Disability or Determination of Incompetence) and (b) any excess capacity carried over to such fiscal quarter from a prior fiscal quarter as described below, any remaining excess capacity to redeem Shares in such fiscal quarter shall be added to the Company’s capacity to otherwise redeem Shares (excluding Shares redeemed in connection with a
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stockholder’s death, Qualifying Disability or Determination of Incompetence) during the succeeding fiscal quarter. This limit may be increased or decreased by the Company upon ten business days’ notice to the Company’s stockholders. The Company’s board of directors may approve an increase in this limit to the extent that the Company has received proceeds from asset sales or the refinancing of debt or for any other reason deemed appropriate by the board of directors. The Company may provide notice by including such information (a) in a Current Report on Form 8-K or in its annual or quarterly reports, all publicly filed with the Securities and Exchange Commission or (b) in a separate mailing to the stockholders. For the avoidance of doubt, any additional funds authorized by the Company’s board of directors pursuant to the terms of a prior version of the SRP and not used for redemptions in prior fiscal quarters shall continue to be available for redemptions in succeeding fiscal quarters under this paragraph 4.
e.During any calendar year, the Company may redeem no more than 5% of the weighted-average number of Shares outstanding during the prior calendar year.
f.The Company has no obligation to redeem Shares if the redemption would violate the restrictions on distributions under Maryland General Corporation Law, as amended from time to time, which prohibits distributions that would cause a corporation to fail to meet statutory tests of solvency.
5.Procedures for Redemption. The Company has engaged a third party to administer the SRP. Upon any change to the identity or the mailing address of the program administrator, the Company will notify stockholders of such change. The Company will redeem Shares in connection with a stockholder’s death, Qualifying Disability or Determination of Incompetence on the last business day of each month (the “Special Redemption Date”). The Company will redeem all other Shares on the last business day of each fiscal quarter (the “Ordinary Redemption Date”). For a stockholder’s Shares to be eligible for redemption in a given month or quarter, as applicable, the program administrator must receive a written redemption request from the stockholder or from an authorized representative of the stockholder setting forth the number of Shares requested to be redeemed at least five business days before the Special Redemption Date or the Ordinary Redemption Date, as applicable. If the Company cannot repurchase all Shares presented for redemption in any month or quarter, as applicable, because of the limitations on redemptions set forth in paragraph 4, then the Company will honor redemption requests on a pro rata basis, except that if a pro rata redemption would result in a stockholder owning less than the minimum purchase requirement described in a currently effective, or the most recently effective, registration statement of the Company as such registration statement has been amended or supplemented, then the Company would redeem all of such stockholder’s Shares.
    If the Company does not completely satisfy a redemption request on a Special Redemption Date or Ordinary Redemption Date, as applicable, because the program administrator did not receive the request in time, because of the limitations on redemption set forth in paragraph 4, or because of a suspension of the SRP, then the Company will treat the unsatisfied portion of the redemption request as a request for redemption at the next Special Redemption Date or Ordinary Redemption Date, as applicable, on which funds are available for redemption, unless the redemption request is withdrawn. Any stockholder can withdraw a
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redemption request by sending written notice to the program administrator, provided such notice is received at least five business days before the Special Redemption Date or Ordinary Redemption Date, as applicable.
6.Special Provision upon a Stockholder’s Death, Qualifying Disability or Determination of Incompetence. The Company will treat redemption requests made upon a stockholder’s death, Qualifying Disability (as defined in paragraph 7) or Determination of Incompetence (as defined in paragraph 8) differently, as follows:
i.There is no one-year holding requirement.
ii.The redemption price per Share will be the Company’s most recent estimated value per Share as of the applicable Special Redemption Date (as defined in paragraph 5 above).
Except as specifically set forth in this paragraph 6, redemptions upon a stockholder’s death, Qualifying Disability (as defined in paragraph 7) or Determination of Incompetence (as defined in paragraph 8) are subject to the same limitations and terms and conditions as other redemptions, including the limitations on redemptions set forth in paragraph 4 and the redemption request procedures set forth in paragraph 5.
7.Qualifying Disability Determinations. In order for a disability to entitle a stockholder to the special redemption terms described in paragraph 6 (a “Qualifying Disability”), the stockholder must be a natural person who is deemed to have a qualifying disability (as such term is defined in Section 72(m)(7) of the Internal Revenue Code), we must receive written notice and proof of such disability from such stockholder (which may be provided by a certification from a physician on a form provided by the Company), and the condition causing the qualifying disability must not have been pre-existing on the date that the stockholder became a stockholder.
8.Determination of Incompetence. In order for a determination of incompetence or incapacitation to entitle a stockholder to the special redemption terms described in paragraph 6 (a “Determination of Incompetence”), a state or federal court located in the United States (a “U.S. Court”) must declare, determine or find the stockholder to be (i) mentally incompetent to enter into a contract, to prepare a will or to make medical decisions or (ii) mentally incapacitated, in both cases such determination must be made by a U.S. court after the date the stockholder acquired the Shares to be redeemed.
    A determination of incompetence or incapacitation by any person or entity other than a U.S. Court, or for any purpose other than those listed above, will not entitle a stockholder to the special redemption terms described in paragraph 6. Redemption requests following a Determination of Incompetence by a U.S. Court must be accompanied by the court order, determination or the certificate of the court declaring the stockholder incompetent or incapacitated.
9.Termination, Suspension or Amendment of the SRP by the Company. The Company may amend, suspend or terminate the SRP for any reason upon ten business days’ notice to the Company’s stockholders. The Company may provide notice by including such
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information (a) in a Current Report on Form 8-K or in its annual or quarterly reports, all publicly filed with the Securities and Exchange Commission or (b) in a separate mailing to the stockholders.
The SRP provides stockholders a limited ability to redeem Shares for cash until a secondary market develops for the Shares. If and when such a secondary market develops, the SRP will terminate.
10.Notice of Redemption Requests. Qualifying Stockholders who desire to redeem their Shares must provide written notice to the Company on the form provided by the Company.
11.Liability of the Company. The Company shall not be liable for any act done in good faith or for any good faith omission to act.
12.Governing Law. The SRP shall be governed by the laws of the State of Maryland.

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