Form 8-K - Current report

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): November 28, 2024

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: (866) 722-6257

Not Applicable

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

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

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

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

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

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

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


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

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

Emerging growth company ☐

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

ITEM 7.01 REGULATION FD DISCLOSURE

Pacific Oak SOR (BVI) Holdings, Ltd. (the “BVI”), a wholly-owned subsidiary of Pacific Oak Strategic Opportunity REIT, Inc., completed offerings of Series B, C and D bonds since February 2020. Such offerings were made to investors in Israel and were registered with the Israel Securities Authority. Consequently, the BVI is required to prepare and file with the Israel Securities Authority certain financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”).

On November 28, 2024, the BVI filed IFRS consolidated and separate interim financial statements. The English translations of the IFRS consolidated and separate interim financial statements, as of and for the three and nine months ended September 30, 2024, are attached as Exhibits 99.1 and 99.2, respectively, to this Form 8-K.

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

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS


(d)						Exhibits

Ex.						Description

99.1						Pacific Oak SOR (BVI) Holdings, Ltd. Consolidated Interim Financial Statements as of September 30, 2024 (unaudited)

99.2						Pacific Oak SOR (BVI) Holdings, Ltd. Separate Interim Financial Statements as of September 30, 2024 (unaudited)

104						Cover Page Interactive Data File (embedded within the Inline XBRL document)

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 2, 2024

BY:

/s/ Michael A. Bender

Michael A. Bender

Chief Financial Officer, Treasurer and Secretary

Exhibit 99.1


This English translation is for convenience purposes only. This is not an official translation and is not binding. Whilst reasonable care and skill have been exercised in the preparation hereof, no translation can ever perfectly reflect the original Hebrew version. In the event of any discrepancy between the Hebrew version and this translation, the Hebrew version shall prevail.

PACIFIC OAK SOR (BVI) HOLDINGS, LTD.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2024

UNAUDITED

U.S. DOLLARS IN THOUSANDS

INDEX


			Page

Condensed Consolidated Statements of Financial Position			2

Condensed Consolidated Statements of Profit or Loss			3

Condensed Consolidated Statements of Equity			4-5

Condensed Consolidated Statements of Cash Flows			6-7

Notes to Interim Condensed Consolidated Financial Statements			8-18

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

PACIFIC OAK SOR (BVI) HOLDINGS LTD.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION


	September 30,				December 31,
	2024		2023		2023
	Unaudited				Audited
	U.S. dollars in thousands
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	18,786	$	69,741	$	95,092
Financial assets at fair value through profit or loss	17,325		26,909		41,609
Rents and other receivables, net	2,892		2,738		3,366
Prepaid expenses and other assets	5,524		8,073		9,669
Restricted cash	16,164		28,583		36,452
	60,691		136,044		186,188


NON-CURRENT ASSETS
Investment properties	1,322,496		1,580,508		1,493,587
Property plant and equipment - hotel, net	33,016		40,858		40,634
Goodwill	949		2,165		949
Investment in joint ventures	164,822		160,333		148,582
Restricted cash	9,261		31,164		23,171
	1,530,544		1,815,028		1,706,923
Total assets	$	1,591,235	$	1,951,072	$	1,893,111

LIABILITIES AND EQUITY
CURRENT LIABILITIES
Notes payable	$	125,300	$	170,391	$	163,823
Bonds payable	20,205		98,184		107,241
Accounts payable and accrued liabilities	25,018		21,202		28,660
Due to affiliates	12,524		6,355		9,538
Other liabilities	20,876		28,481		19,107
	203,923		324,613		328,369



NON-CURRENT LIABILITIES
Notes payable, net	435,840		482,921		456,439
Bonds payable, net	345,568		281,822		301,180
Lease obligation	9,248		9,334		9,177
Rental security deposits	4,509		4,667		4,623
Other liabilities	9,528		16,757		10,433
	804,693		795,501		781,852
Total liabilities	1,008,616		1,120,114		1,110,221

EQUITY
Owner's net equity	579,124		820,518		772,166
Non-controlling interests	3,495		10,440		10,724
Total equity	582,619		830,958		782,890
Total liabilities and equity	$	1,591,235	$	1,951,072	$	1,893,111

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

November 27 2024

/s/ Michael Allen Bender

/s/ Jodi Kremerman

/s/ Keith David Hall

Date of approval of

Bender, Michael Allen

Kremerman, Jodi

Hall, Keith David

financial statements

Chief Financial Officer

Chairwoman of Board of Directors

Chief Executive Officer

PACIFIC OAK SOR (BVI) HOLDINGS LTD.

CONDENSED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS


	Nine months ended September 30,				Three months ended September 30,				Year ended December 31,
	2024		2023		2024		2023		2023
	Unaudited								Audited
	U.S. dollars in thousands
Revenues and other income:
Rental income	$	86,077	$	90,595	$	28,462	$	30,811	$	121,974
Tenant reimbursements	8,623		8,673		3,001		2,557		12,309
Hotel revenues	6,225		6,673		1,186		1,195		9,153
Other operating income	1,422		1,612		461		573		2,097
Total revenues and other income	102,347		107,553		33,110		35,136		145,533

Expenses:
Operating, maintenance, and management fees	(35,639)		(36,504)		(12,694)		(13,278)		(50,446)
Real estate taxes and insurance	(18,648)		(18,541)		(5,617)		(6,281)		(28,213)
Hotel expenses	(5,018)		(5,275)		(1,361)		(1,330)		(6,945)
Total expenses	(59,305)		(60,320)		(19,672)		(20,889)		(85,604)
Gross profit	43,042		47,233		13,438		14,247		59,929

Fair value adjustment of investment properties, net	(109,641)		(96,355)		(29,881)		(2,982)		(113,281)
Depreciation	(864)		(886)		(292)		(257)		(1,263)
Equity in (loss) income of joint ventures, net	(45,639)		(28,397)		(36,358)		24,624		(43,187)
Asset management fees to affiliates	(11,946)		(11,380)		(3,972)		(3,697)		(15,415)
Impairment charges on goodwill	—		(3,271)		—		(3,271)		(4,487)
Impairment charges on property plant and equipment, hotel	(6,400)		—		(2,946)		—		—
General and administrative expenses	(6,364)		(3,847)		(1,774)		(175)		(4,932)
Operating (loss) profit	(137,812)		(96,903)		(61,785)		28,489		(122,636)

Finance income	1,117		2,295		379		1,079		3,347
Finance (loss) income from financial assets at fair value through profit or loss	(7,824)		(15,658)		8,727		(1,646)		(718)
Finance expenses, net	(55,361)		(49,747)		(20,579)		(17,928)		(68,216)
Foreign currency transaction gain (loss), net	6,724		(4,675)		(4,556)		(1,123)		(18,712)
Net (loss) income before income taxes	$	(193,156)	$	(164,688)	$	(77,814)	$	8,871	$	(206,935)
Income tax provision	—		(3,662)		—		—		(6,576)
Net (loss) income	$	(193,156)	$	(168,350)	$	(77,814)	$	8,871	$	(213,511)

Net (loss) income attributable to owner	$	(188,042)	$	(166,862)	$	(75,734)	$	9,418	$	(212,214)
Net loss attributable to non-controlling interests	(5,114)		(1,488)		(2,080)		(544)		(1,297)
Net (loss) income	$	(193,156)	$	(168,350)	$	(77,814)	$	8,874	$	(213,511)
Total comprehensive (loss) income	$	(193,156)	$	(168,350)	$	(77,814)	$	8,874	$	(213,511)

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

PACIFIC OAK SOR (BVI) HOLDINGS LTD.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY


	Owner contributions		Retained earnings (deficit)		Paid-in Capital resulting from transactions with non-controlling interests		Owner's net equity		Non-controlling interests		Total equity
	Unaudited
	U.S. dollars in thousands
Balance as of January 1, 2024	$	693,554	$	35,538	$	43,074	$	772,166	$	10,724	$	782,890
Net loss	—		(188,042)		—		(188,042)		(5,114)		(193,156)
Total comprehensive loss	—		(188,042)		—		(188,042)		(5,114)		(193,156)

Distributions to owner	—		(5,000)		—		(5,000)		—		(5,000)
Non-controlling interest contributions	—		—		—		—		493		493
Non-controlling interests distributions	—		—		—		—		(2,608)		(2,608)
Balance as of September 30, 2024	$	693,554	$	(157,504)	$	43,074	$	579,124	$	3,495	$	582,619


	Owner contributions		Retained earnings		Paid-in Capital resulting from transactions with non-controlling interests		Owner's net equity		Non-controlling interests		Total equity
	Unaudited
	U.S. dollars in thousands
Balance as of January 1, 2023	$	693,554	$	256,752	$	43,074	$	993,380	$	12,572	$	1,005,952
Net loss	—		(166,862)		—		(166,862)		(1,488)		(168,350)
Total comprehensive loss	—		(166,862)		—		(166,862)		(1,488)		(168,350)
Distributions to owner	—		(6,000)		—		(6,000)		—		(6,000)
Non-controlling interest contribution	—		—		—		—		450		450
Non-controlling interests distributions	—		—		—		—		(1,094)		(1,094)
Balance as of September 30, 2023	$	693,554	$	83,890	$	43,074	$	820,518	$	10,440	$	830,958


	Owner contributions		Retained deficit		Paid-in Capital resulting from transactions with non-controlling interests		Owner's net equity		Non-controlling interests		Total equity
	Unaudited
	U.S. dollars in thousands
Balance as of July 1, 2024	$	693,554	$	(81,770)	$	43,074	$	654,858	$	7,816	$	662,674
Net loss	—		(75,734)		—		(75,734)		(2,080)		(77,814)
Total comprehensive loss	—		(75,734)		—		(75,734)		(2,080)		(77,814)
Distributions to owner	—		—		—		—		—		—
Non-controlling interest contributions	—		—		—		—		96		96
Non-controlling interest distribution	—		—		—		—		(2,337)		(2,337)
Balance as of September 30, 2024	$	693,554	$	(157,504)	$	43,074	$	579,124	$	3,495	$	582,619

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

PACIFIC OAK SOR (BVI) HOLDINGS LTD.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (CONTINUED)


	Owner contributions		Retained earnings		Paid-in Capital resulting from transactions with non-controlling interests		Owner's net equity		Non-controlling interests		Total equity
	Unaudited
	U.S. dollars in thousands
Balance as of July 1, 2023	$	693,554	$	78,472	$	43,074	$	815,100	$	11,015	$	826,115
Net income (loss)	—		9,418		—		9,418		(544)		8,874
Total comprehensive income (loss)	—		9,418		—		9,418		(544)		8,874
Distribution to owner	—		(4,000)		—		(4,000)		—		(4,000)
Non-controlling interest contribution	—		—		—		—		450		450
Non-controlling interest distribution	—		—		—		—		(481)		(481)
Balance as of September 30, 2023	$	693,554	$	83,890	$	43,074	$	820,518	$	10,440	$	830,958


	Owner contributions		Retained earnings		Paid-in Capital resulting from transactions with non-controlling interests		Owner's net equity		Non-controlling interests		Total equity
	Audited
	U.S. dollars in thousands
Balance as of January 1, 2023	$	693,554	$	256,752	$	43,074	$	993,380	$	12,572	$	1,005,952
Net loss	—		(212,214)		—		(212,214)		(1,297)		(213,511)
Total comprehensive loss	—		(212,214)		—		(212,214)		(1,297)		(213,511)
Distributions to owner	—		(9,000)		—		(9,000)		—		(9,000)
Non-controlling interests contributions	—		—		—		—		543		543
Non-controlling interests distributions	—		—		—		—		(1,094)		(1,094)
Balance as of December 31, 2023	$	693,554	$	35,538	$	43,074	$	772,166	$	10,724	$	782,890

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

PACIFIC OAK SOR (BVI) HOLDINGS LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


	Nine months ended September 30,				Three months ended September 30,				Year ended December 31,
	2024		2023		2024		2023		2023
	Unaudited								Audited
	U.S. dollars in thousands
Cash Flows from Operating Activities:
Net (loss) income	$	(193,156)	$	(168,350)	$	(77,814)	$	8,874	$	(213,511)
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Equity in loss (income) of joint ventures, net	45,639		28,397		36,358		(24,624)		43,187
Fair value adjustment on investment properties, net	109,641		96,355		29,881		2,982		113,281
Depreciation	864		886		292		257		1,263
Impairment charges on goodwill	—		3,271		—		3,271		4,487
Impairment charges on property plant and equipment - hotel	6,400		—		2,946		—		—
Income tax provision	—		3,662		—		—		6,576
Deferred rent	(815)		(1,253)		(490)		349		(176)
Credit loss on financial assets	1,819		2,189		921		1,201		4,923
Finance expenses, net	55,361		49,747		20,579		17,928		68,216
Finance income	(1,117)		(2,295)		(379)		(1,079)		(3,347)
Finance loss (gain) from financial assets at fair value through profit or loss	7,824		15,658		(8,727)		1,646		718
Foreign currency transaction (gain) loss, net	(6,724)		4,675		4,556		1,122		18,712
	25,736		32,942		8,123		11,927		44,329
Changes in assets and liabilities:
Restricted cash	14,114		11,635		3,709		(2,174)		5,107
Rents and other receivables, net	(1,345)		(1,858)		(772)		(805)		(5,096)
Prepaid expenses and other assets	(486)		(2,080)		643		490		(115)
Accounts payable and accrued liabilities	(2,894)		(2,676)		115		4,836		(2,175)
Rental security deposits	(114)		(608)		(19)		347		(1,868)
Due to affiliates	3,836		3,741		950		(329)		6,924
Other liabilities	(1,450)		2,116		2,288		(555)		3,336
Lease incentive additions	—		(414)		—		(142)		—
	11,661		9,856		6,914		1,668		6,113
Net cash provided by operating activities	37,397		42,798		15,037		13,595		50,442

Cash Flows from Investing Activities:
Improvements to investment properties	(22,039)		(16,348)		(4,527)		(6,000)		(23,177)
Proceeds from sales of investment properties, net	87,411		40,867		84,285		73		123,846
Additions to property plant and equipment - hotels	—		(46)		—		—		—
Taxes paid related to sales of investment properties	—		—		—		—		(11,500)
Contributions to joint ventures	(63,376)		(28,388)		(24,687)		(28,388)		(30,284)
Distribution of capital from joint venture	1,497		1,144		—		—		—
Proceeds from the sale of investments in financial assets at fair value through profit or loss, net	16,379		13,791		—		234		13,946
Purchase of interest rate caps	(1,447)		(1,236)		—		(889)		(1,236)
Proceeds from interest rate caps	2,439		—		752		—		—
Payments on foreign currency derivatives, net	(478)		(26,523)		—		(8,559)		(30,209)
Finance income received	1,117		2,248		379		1,053		3,176
Dividend income received from financial assets at fair value through profit or loss	81		3,930		—		1,684		4,014
Proceeds for development obligations	5		1,855		—		—		12,005
Payments for development obligations	(7,338)		(1,825)		(3,433)		(404)		(8,689)
(Funding) proceeds for capital expenditures	—		(209)		—		72		209


Net cash provided by (used in) investing activities	14,251		(10,740)		52,769		(41,124)		52,101

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

PACIFIC OAK SOR (BVI) HOLDINGS LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)


	Nine months ended September 30,				Three months ended September 30,				Year ended December 31,
	2024		2023		2024		2023		2023
	Unaudited								Audited
	U.S. dollars in thousands
Cash Flows from Financing Activities:
Proceeds from notes and bonds payable	$	179,787	$	93,117	$	80,937	$	92,137	$	98,502
Principal payments on notes and bonds payable	(273,173)		(77,673)		(158,004)		(20,751)		(111,243)
Payments of deferred financing costs	(6,454)		(5,028)		(2,564)		(3,426)		(5,416)
Interest paid	(49,136)		(43,726)		(18,646)		(19,307)		(58,884)
Non-controlling interests contributions	493		450		96		450		543
Non-controlling interests distributions	(2,608)		(1,094)		(2,337)		(481)		(1,094)
Release (distribution) of restricted cash for debt service obligations	28,692		(16,640)		13,480		(16,640)		(16,640)
Distributions to owner	(5,850)		(5,731)		(2,000)		(3,731)		(7,453)
Net cash (used in) provided by financing activities	(128,249)		(56,325)		(89,038)		28,251		(101,685)
Effect of exchange rate changes on cash and cash equivalents	295		(383)		(406)		(325)		(157)
Net (decrease) increase in cash and cash equivalents	(76,306)		(24,650)		(21,638)		397		701
Cash and cash equivalents, beginning of period	95,092		94,391		40,424		69,344		94,391
Cash and cash equivalents, end of period	$	18,786	$	69,741	$	18,786	$	69,741	$	95,092


Supplemental Disclosure of Noncash Activities:

Accrued development obligations	$	3,880	$	8,578	$	3,880	$	8,578	$	11,213


Distribution payable to owner	$	704	$	—	$	704	$	—	$	1,750
Asset management fee reimbursement payable to owner	$	10,609	$	4,625	$	10,609	$	4,625	$	7,047

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

PACIFIC OAK SOR (BVI) HOLDINGS LTD.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands

NOTE 1: GENERAL INFORMATION

These financial statements have been prepared in a condensed format as of September 30, 2024 and for the nine and three months period then ended ("interim condensed consolidated financial statements"). These interim condensed consolidated financial statements should be read in conjunction with the Company's annual financial statements as of December 31, 2023 and for the year then ended and the accompanying notes ("annual financial statements").

The Company and its subsidiaries (the "Group") operate in the investment real estate industry in the United States, which includes mainly investment in office, residential real estate, and undeveloped lands. In addition, the Company invests in joint ventures and a real estate equity security. The Company has three reporting segments: 1) strategic opportunistic properties 2) residential homes and 3) hotel.

As of September 30, 2024, the Company consolidated nine office complexes, encompassing, in the aggregate, approximately 3.2 million rentable square feet and these properties were 66% occupied. In addition, the Company owned one residential home portfolio consisting of 2,145 residential homes, and one apartment property containing 317 units, which were 94% and 95% occupied, respectively. The Company also owned one hotel property with 196 rooms, four investments in undeveloped land with approximately 581 developable acres, and one office/retail development property, three investments in unconsolidated joint ventures and one financial assets at fair value through profit or loss.

Due to elevated interest rates, we may experience restrictions in our liquidity with respect to certain financial covenant requirements, our inability to refinance maturing debt in part or in full as it comes due and higher debt service costs and reduced yields relative to cost of debt. If we are unable to find alternative credit arrangements or other funding in a high interest environment, our business needs may not be adequately met. Based on interest rates as of September 30, 2024, if interest rates were 100 basis points higher or lower during the nine months ending September 30, 2024, the annualized interest expense on our variable rate debt would increase or decrease by $2.7 million and $2.8 million, respectively.

In addition, tenants and potential tenants of the Company’s properties may be adversely impacted by inflation and rising interest rates, which could negatively impact the Company’s tenants’ ability to pay rent and the demand for the Company’s properties. Such adverse impacts on the Company’s tenants may cause increased vacancies, which may add pressure to lower rents and increase the Company’s expenditures for re-leasing.

As of September 30, 2024, the Company had a working capital shortfall amounting to $143.2 million, primarily attributed to loan and bond payments due in the year following the date of the statement of financial position. The Company intends to refinance or restructure loans as they come due or utilize funding facilities when available based on the Company’s relationship with third-party lenders and its past experience placing debt on its properties. There are no significant limitations on the Company’s ability to withdraw funds from the Company’s subsidiaries, except for restricted cash. The Company expects to generate cash flow from additional asset sales in the year following the date of the statement of financial position. Accordingly, the Company and the board of directors does not view the working capital shortfall as a liquidity problem.

PACIFIC OAK SOR (BVI) HOLDINGS LTD.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands

NOTE 2: SIGNIFICANT ACCOUNTING POLICY

Basis of presentation of the interim condensed consolidated financial statements:

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

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

Disclosures of new standards in the period prior to their adoption:

IFRS 18 "Presentation and Disclosures in Financial Statements":

On April 9, 2024, the IASB issued IFRS 18 "Presentation and Disclosures in Financial Statements" to set out requirements for the presentation and disclosure of information in general purpose financial statements. The standard is effective for annual periods beginning on or after January 2027. The Company is assessing the impact of the new standard, including the impact of amendments to other accounting standards, as a result of the new standard on the consolidated financial statements. Early adoption is permitted and would need to be disclosed.

NOTE 3: INVESTMENT IN JOINT VENTURES

As of September 30, 2024, the Company’s investment in joint ventures was composed of the following (dollars in thousands):


	Properties as of September 30, 2024			Investment Balance as of
				September 30,					December 31, 2023
				2024			2023
Joint Venture		Location	Ownership %	Unaudited					Audited
110 William Joint Venture	1	New York, New York	(1)	$	129,629		$	112,540	$	112,514
Pacific Oak Opportunity Zone Fund I	4	Various	47.0%	35,193			36,039		36,068
353 Sacramento Joint Venture	1	San Francisco, California	55.0%	—		(2)	11,754		—
				$	164,822		$	160,333	$	148,582

_____________________

(1)As of September 30, 2024, the Company owned 77.5% of preferred interest and 100% of common interest in the joint venture. As of September 30, 2024, the Company had funded $91.7 million and subsequent to September 30, 2024, the Company funded $13.3 million to the joint venture. Additionally, the 110 William Joint Venture met funding conditions with an aggregate available borrowing capacity of $56.7 million, subject to the Company’s guarantee. As of September 30, 2024, there was no outstanding balance under the $56.7 million funding facility.

(2)The Company’s investment in the 353 Sacramento Joint Venture is limited to the investment balance, as such, the Company does not guarantee any debt or other obligations associated with the joint venture.

PACIFIC OAK SOR (BVI) HOLDINGS LTD.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands

NOTE 3: INVESTMENT IN JOINT VENTURES (CONTINUED)

The equity in (loss) profit of joint ventures for the nine and three months ended September 30, 2024 and 2023 and the year ended December 31, 2023 was as follows (in thousands):


	Nine Months Ended September 30,				Three Months Ended September 30,				Year ended December 31, 2023
	2024		2023		2024		2023
	Unaudited				Unaudited				Audited
110 William Joint Venture	$	(46,261)	$	36,587	$	(36,256)	$	53,196	33,448
Pacific Oak Opportunity Zone Fund I	622		(736)		(102)		486		(706)
353 Sacramento Joint Venture	—		(64,248)		—		(29,058)		(75,929)
Equity in (loss) income of joint ventures, net	$	(45,639)	$	(28,397)	$	(36,358)	$	24,624	$	(43,187)

110 William Joint Venture:

Summarized information about the statements of financial position and the statements of profit or loss of Pacific Oak SOR SREF III 110 William, LLC (100%) (in thousands):


	September 30,				December 31,
	2024		2023		2023
	Unaudited				Audited

Current assets	$	17,381	$	10,853	$	8,911
Non-current assets (investment property)	403,600		386,400		386,670
Current liabilities	11,489		10,622		10,514
Non-current liabilities	248,555		248,518		248,555

Equity	160,937		138,113		136,512

Equity attributable to equity holders of the Company (Based on the waterfall mechanism)	$	129,629	$	112,540	$	112,514


	Nine Months Ended September 30,				Three Months Ended September 30,				Year ended December 31, 2023
	2024		2023		2024		2023
	Unaudited				Unaudited				Audited
Revenues	$	12,010	$	18,473	$	3,945	$	5,535	$	24,474
Gross profit	212		3,296		(215)		(804)		4,908
Operating loss *)	(24,463)		(32,385)		(24,901)		(22,895)		(30,776)
Net (loss) income *)	(38,951)		9,628		(29,968)		37,310		4,988
Share of equity in (loss) income from joint venture (Based on the waterfall mechanism)	(46,261)		36,587		(36,256)		53,196		33,448
*) Includes revaluation of investment properties	$	(24,665)	$	(35,402)	$	(24,695)	$	(22,088)	$	(35,402)

PACIFIC OAK SOR (BVI) HOLDINGS LTD.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands

NOTE 3: INVESTMENT IN JOINT VENTURES (CONTINUED)

Pacific Oak Opportunity Zone Fund I:

Summarized information about the statements of financial position and the statements of profit or loss of Pacific Oak Opportunity Zone Fund 1, LLC (100%) (in thousands):


	September 30,				December 31,
	2024		2023		2023
	Unaudited				Audited

Current assets	$	2,786	$	2,898	$	3,123
Non-current assets (investment properties)	130,852		125,656		125,691
Current liabilities	1,307		1,347		1,626
Non-current liabilities	58,386		50,785		50,771

Equity	74,143		76,422		76,417

Equity attributable to equity holders of the Company (Based on the waterfall mechanism)	$	35,193	$	36,039	$	36,068


	Nine Months Ended September 30,				Three Months Ended September 30,				Year ended December 31, 2023
	2024		2023		2024		2023
	Unaudited				Unaudited				Audited
Revenues	$	6,880	$	5,576	$	2,265	$	2,108	$	7,744
Gross profit	5,738		4,580		1,759		1,678		6,776
Operating profit (loss) *)	2,837		(6,184)		632		(8,214)		(5,050)
Net income (loss) *)	1,041		(7,762)		(201)		(8,939)		(7,162)
Share of equity in income (loss) from joint venture (Based on the waterfall mechanism)	622		(736)		(102)		486		(706)
*) Includes revaluation of investment properties	$	361	$	(8,045)	$	—	$	(9,067)	$	(7,587)

PACIFIC OAK SOR (BVI) HOLDINGS LTD.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands

NOTE 3: INVESTMENT IN JOINT VENTURES (CONTINUED)

353 Sacramento Joint Venture:

Summarized information about the statements of financial position and the statements of profit or loss of 353 Sacramento Street, Pacific Oak SOR Acquisition XXIX, LLC (100%) (in thousands):


	September 30,				December 31,
	2024		2023		2023
	Unaudited				Audited

Current assets	$	1,764	$	13,297	$	12,552
Non-current assets (investment property)	110,059		121,500		98,800
Current liabilities	121,999		2,211		113,157
Non-current liabilities	1,662		112,806		1,662

(Deficit) equity	(11,840)		19,780		(3,467)

Equity attributable to equity holders of the Company (Based on the waterfall mechanism)	$	—	$	11,754	$	—


	Nine Months Ended September 30,				Three Months Ended September 30,				Year ended December 31, 2023
	2024		2023		2024		2023
	Unaudited				Unaudited				Audited
Revenues	$	8,784	$	8,724	$	2,976	$	3,104	$	12,102
Gross profit	3,274		2,887		1,081		784		4,896
Operating profit (loss) *)	2,831		(109,184)		744		(49,347)		(130,218)
Net loss *)	(8,373)		(116,188)		(3,506)		(51,976)		(140,272)
Share of loss from joint venture (Based on the waterfall mechanism)	—		(64,248)		—		(29,058)		(75,929)
*) Includes revaluation of investment properties	$	—	$	(112,021)	$	—	$	(50,342)	$	(134,537)

The Company does not attach the financial statements related to the investment in joint ventures, as the reports do not add more information to the contained above.

NOTE 4: FINANCIAL INSTRUMENTS

The following were the fair values of the Company’s financial instruments as of September 30, 2024 and 2023, and December 31, 2023 (in thousands):


		September 30,				December 31,
	2024			2023			2023
		Unaudited					Audited



Notes payable		$	557,592	$	686,606		$	611,725

Series B bonds		$	119,179	$	275,995		$	296,380
Series C bonds		$	99,457	$	90,070		$	102,664
Series D bonds		$	157,458	$	—		$	—

PACIFIC OAK SOR (BVI) HOLDINGS LTD.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands

NOTE 4: FINANCIAL INSTRUMENTS (CONTINUED)

The Series B bonds contains the following covenants: (i) Consolidated Equity Capital of the Company (not including minority rights) shall not be less than USD 475 million; (ii) the Net Adjusted Financial Debt to Net Adjusted Cap (shall not exceed a rate of 75%); (iii) Adjusted NOI shall be no lower than USD 35 million; and (iv) the consolidated scope of the projects for development of the Company shall not exceed 10% of the adjusted balance. As of September 30, 2024, the Company was in compliance with all covenants under the deed of trust of the Series B bonds; (i) Consolidated Equity Capital of the Company as of September 30, 2024 was $579.1 million; (ii) the Net Adjusted Debt to Net Adjusted Cap was 66%; (iii) the Adjusted NOI was $63.9 million for the trailing twelve months ended September 30, 2024; and (iv) the consolidated scope of projects was $0 as of September 30, 2024.

The Series C bonds contains the following covenants: (i) Consolidated Equity Capital of the Company (not including minority rights) shall not be less than USD 450 million; (ii) the Net Adjusted Financial Debt to Net Adjusted Cap (shall not exceed a rate of 75%); (iii) and the Loan to Collateral Ratio shall not exceed a rate of 75%. As of September 30, 2024, the Company was in compliance with all covenants under the deed of trust of the Series C bonds; (i) Consolidated Equity Capital of the Company as of September 30, 2024 was $579.1 million; (ii) the Net Adjusted Debt to Net Adjusted Cap was 66%; (iii) and the Loan to Collateral Ratio as of September 30, 2024 was 49%.

The Series D bonds contains the following covenants: (i) Consolidated Equity Capital of the Company (not including minority rights) shall not be less than USD 450 million; (ii) the Net Adjusted Financial Debt to Net Adjusted Cap (shall not exceed a rate of 75%); (iii) Adjusted NOI shall be no lower than USD 35 million. As of September 30, 2024, the Company was in compliance with all covenants under the deed of trust of the Series D bonds; (i) Consolidated Equity Capital of the Company as of September 30, 2024 was $579.1 million; (ii) the Net Adjusted Debt to Net Adjusted Cap was 66%; (iii) and the Adjusted NOI was $63.9 million for the trailing twelve months ended September 30, 2024.

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

PACIFIC OAK SOR (BVI) HOLDINGS LTD.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands

NOTE 5: SEGMENT INFORMATION

The operating segments are identified on the basis of information that is reviewed by the chief operating decision maker ("CODM") to make decisions about resources to be allocated and asses its performance. All corporate related costs are included in the strategic opportunistic properties segment to align with how financial information is presented to the CODM. The selected financial information for the reporting segments as of and for the nine and three months ended September 30, 2024 and 2023 and as of and the year ended December 31, 2023 is as follows (in thousands):


	September 30, 2024

	Strategic Opportunistic Properties		Residential Homes		Hotel		Total
	Unaudited
Investment properties	$	913,518	$	408,978	$	—	$	1,322,496
Property plant and equipment - hotel, net	$	—	$	—	$	33,016	$	33,016
Total assets	$	1,136,347	$	419,319	$	35,569	$	1,591,235
Total liabilities	$	783,353	$	201,538	$	23,725	$	1,008,616











	Nine months ended September 30, 2024
	Strategic Opportunistic Properties		Residential Homes		Hotel		Total
	Unaudited
Total revenues and other income	$	69,459	$	26,663	$	6,225	$	102,347
Gross profit	$	29,390	$	12,445	$	1,207	$	43,042
Finance expenses, net	$	46,582	$	7,052	$	1,727	$	55,361

	Three months ended September 30, 2024
	Strategic Opportunistic Properties		Residential Homes		Hotel		Total
	Unaudited
Total revenues and other income	$	23,283	$	8,641	$	1,186	$	33,110
Gross profit (loss)	$	9,150	$	4,463	$	(175)	$	13,438
Finance expenses, net	$	17,683	$	2,343	$	553	$	20,579

PACIFIC OAK SOR (BVI) HOLDINGS LTD.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands

NOTE 5: SEGMENT INFORMATION (CONTINUED)


	September 30, 2023

	Strategic Opportunistic Properties		Residential Homes		Hotel		Total
	Unaudited
Investment properties	$	1,142,250	$	438,258	$	—	$	1,580,508
Property plant and equipment - hotel, net	$	—	$	—	$	40,858	$	40,858
Total assets	$	1,442,128	$	463,247	$	45,697	$	1,951,072
Total liabilities	$	874,239	$	219,893	$	25,982	$	1,120,114











	Nine months ended September 30, 2023
	Strategic Opportunistic Properties		Residential Homes		Hotel		Total
	Unaudited
Total revenues and other income	$	72,611	$	28,269	$	6,673	$	107,553
Gross profit	$	31,883	$	13,952	$	1,398	$	47,233
Finance expenses, net	$	40,286	$	7,735	$	1,726	$	49,747

	Three months ended September 30, 2023
	Strategic Opportunistic Properties		Residential Homes		Hotel		Total
	Unaudited
Total revenues and other income	$	24,453	$	9,487	$	1,196	$	35,136
Gross profit (loss)	$	9,824	$	4,557	$	(134)	$	14,247
Finance expenses, net	$	14,753	$	2,561	$	614	$	17,928


	December 31, 2023


	Strategic Opportunistic Properties		Residential Homes		Hotel		Total
	Audited
Investment properties	$	1,087,376	$	406,211	$	—	$	1,493,587
Property plant and equipment - hotel, net	$	—	$	—	$	40,634	$	40,634
Total assets	$	1,407,870	$	436,394	$	48,847	$	1,893,111
Total liabilities	$	879,854	$	203,410	$	26,957	$	1,110,221

	Year ended December 31, 2023
	Strategic Opportunistic Properties		Residential Homes		Hotel		Total
	Audited
Total revenues and other income	$	97,743	$	38,637	$	9,153	$	145,533
Gross profit	$	41,438	$	16,283	$	2,208	$	59,929
Finance expenses, net	$	55,590	$	10,279	$	2,347	$	68,216

PACIFIC OAK SOR (BVI) HOLDINGS LTD.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands

NOTE 6: SIGNIFICANT EVENTS DURING THE REPORTING PERIOD

Sale of Financial Assets

During the nine months ended September 30, 2024, the Company sold the remaining interest in one of the Company’s financial assets (real estate equity securities) for gross sale proceeds of approximately $16.4 million, and has one interest in a financial asset remaining.

Park Highland Sales

In March 2024, the Company, through indirect wholly owned subsidiaries, entered into a purchase and sale agreement for the sale of approximately 454 developable acres of Park Highlands undeveloped land, from the Company’s strategic opportunistic properties segment for gross sale proceeds of approximately $195.0 million, before closing costs, credits and taxes. The sale is expected to be completed in three phases. The phases are anticipated to be sold to the buyer for approximately $91.0 million, $52.3 million and $51.7 million in December 2024, December 2026 and December 2027, respectively. Note that the anticipated closing dates may be changed in certain circumstances. There can be no assurance that the Company will complete the sales and the purchaser is not affiliated with the Company or the Company's advisor.

Recent Debt Transactions

In January 2024, the Company obtained an interest-only mortgage loan with a maximum principal amount of $23.5 million, of which $20.0 million was funded at the time of closing. The loan is secured by the Eight & Nine Corporate Centre office complex, has a contractual interest rate of the greater of 8.90% or a floating rate of 490 basis points over the one-month SOFR rate, has an initial maturity date of February 9, 2026, and three one-year extension options.

In January 2024, the Company made the first principal installment payment of 388.1 million Israeli new Shekels (approximately $106.6 million as of January 31, 2024) in connection with the Company’s Series B bonds. Subsequent to the first installment payment, two additional Series B bond installments remain, each, due on January 31, 2025 and 2026, respectively.

In June 2024, the Company refinanced and consolidated two of its mortgage loans into one loan with an outstanding principal balance of $34.2 million, a contractual interest rate of 350 basis points over the one-month SOFR rate and a maturity date of April 30, 2025. The loan is cross-collateralized by the Richardson Office and Q&C Hotel properties and also has a cross-default clause.

PACIFIC OAK SOR (BVI) HOLDINGS LTD.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands

NOTE 6: SIGNIFICANT EVENTS DURING THE REPORTING PERIOD (CONTINUED)

In August 2024, the Company issued an additional 299.0 million Israeli new shekels (approximately $80.8 million as of August 20, 2024) par value of Series D bonds to Israeli investors pursuant to offerings registered with the Israeli Securities Authority. The additional Series D bonds would be identical in the terms and pari passu to the existing Series D bonds, and all proceeds were used for the Series B bond payment. In September 2024, the Company prepaid 312.8 million Israeli new shekels (approximately $83.2 million as of September 19, 2024) of the 388.1 million Israeli new shekels (approximately $103.2 million as of September 19, 2024) January 31, 2025 Series B bond payment and 6.1 million Israeli new shekels (approximately $1.6 million as of September 19, 2024) of accrued interest.

Dividend Approval

On May 16, 2024, the Company’s board of directors approved a distribution of dividend in the amount of $5.0 million to the owner. As of September 30, 2024, $0.7 million remains to be distributed.

The Lofts at NoHo Commons Sale

In September 2024, the Company, through an indirect partially owned (90%) subsidiary, sold the Lofts at NoHo Commons for $92.5 million, before net closing costs and credits of approximately $7.1 million. The sales price is according to the fair value as of June 30, 2024. As a result of the sale, the Company repaid $68.5 million of the outstanding principal due under the secured mortgage loan and distributed $2.0 million to the non-controlling interest. The purchaser was not affiliated with the Company or the Company's advisor.

NOTE 7: SUBSEQUENT EVENTS

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

Park Highlands Land

In October 2024, the Company, through an indirect wholly owned subsidiary, sold approximately 122 developable acres of Park Highlands undeveloped land for gross sale proceeds of approximately $75.5 million, before net closing costs and credits and future development costs of approximately $15.0 million. Part of the Park Highlands undeveloped land was used as collateral for the Series C bonds and due to the sale, approximately $10.6 million of the sales proceeds was held in an escrow account for the Series C bonds to maintain the loan-to-collateral ratio. The purchaser was not affiliated with the Company or the Company's advisor.

Residential Home Sales

In October 2024, the Company, through an indirect wholly owned subsidiary, sold 45 residential homes for gross sale proceeds of approximately $8.3 million, before closing costs and credits. In connection with the sale, the Company repaid $3.2 million of the outstanding principal due under the secured mortgage loan. The purchaser was not affiliated with the Company or the Company's advisor.

PACIFIC OAK SOR (BVI) HOLDINGS LTD.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

U.S. Dollars in thousands

NOTE 7: SUBSEQUENT EVENTS (CONTINUED)

Georgia 400 Mortgage Loan

In October 2024, the Company received a notice from the lender stating that the non-repayment of the Georgia 400 mortgage loan constitutes a default event under the loan agreements. As of the report issuance date, the Company continues to pay interest on the loan. Loan extension negotiations between the Company and lenders are ongoing as of the date of filing of this report.

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

Exhibit 99.2


This English translation is for convenience purposes only. This is not an official translation and is not binding. Whilst reasonable care and skill have been exercised in the preparation hereof, no translation can ever perfectly reflect the original Hebrew version. In the event of any discrepancy between the Hebrew version and this translation, the Hebrew version shall prevail.

PACIFIC OAK SOR (BVI) HOLDINGS, LTD.

PRESENTATION OF SEPARATE FINANCIAL DATA FROM THE

CONSOLIDATED FINANCIAL STATEMENTS ATTRIBUTABLE TO THE COMPANY

September 30, 2024 (Unaudited)

PACIFIC OAK SOR (BVI) HOLDINGS, LTD.

PRESENTATION OF SEPARATE FINANCIAL DATA

FROM THE CONSOLIDATED FINANCIAL STATEMENTS

ATTRIBUTABLE TO THE COMPANY

AS OF SEPTEMBER 30, 2024

(UNAUDITED)

U.S. DOLLARS IN THOUSANDS

INDEX


			Page

Special Report Presented Pursuant to Regulation 38d			2

Financial Information from the Consolidated Statements of Financial Position Attributable to the Company			3

Financial Information from the Consolidated Statements of Profit or Loss Attributable to the Company			4

Financial Information from the Consolidated Statements of Cash Flows Attributable to the Company			5

Additional Information			6-7

- - - - - - - - - - -

Special Report in accordance with Regulation 38d

Financial Information and Financial Data from the

Consolidated Financial Statements Attributable to the Company

Below is separate financial information and financial data attributable to the Company from the Group's consolidated financial statements as of September 30, 2024, published as part of the periodic reports ("consolidated financial statements"), presented in accordance with Regulation 38d to the Israeli Securities Regulations (Periodic and Immediate Reports), 1970.

PACIFIC OAK SOR (BVI) HOLDINGS, LTD.

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


	September 30,				December 31,
	2024		2023		2023
	Unaudited				Audited
	U.S. dollars in thousands
ASSETS
NON-CURRENT ASSETS
Investments in investees	$	949,315	$	1,143,793	$	1,135,916
Restricted cash	8,445		11,103		6,231
	957,760		1,154,896		1,142,147
CURRENT ASSETS
Cash and cash equivalents	631		33,954		21,503
Restricted cash	3,072		23,800		28,849
Other assets	—		—		3,655
	3,703		57,754		54,007
Total assets	$	961,463	$	1,212,650	$	1,196,154

EQUITY	$	579,124	$	820,518	$	772,166

NON-CURRENT LIABILITIES
Bonds payable, net	345,568		281,822		301,180

CURRENT LIABILITIES
Accounts payable and accrued liabilities	5,247		4,382		6,029
Bonds payable	20,205		98,184		107,241
Other liabilities	—		3,119		—
Due to owner	11,319		4,625		9,538
	36,771		110,310		122,808
Total liabilities	382,339		392,132		423,988
Total equity and liabilities	$	961,463	$	1,212,650	$	1,196,154

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

November 27, 2024

/s/ Michael Allen Bender

/s/ Jodi Kremerman

/s/ Keith David Hall

Date of approval of

Bender, Michael Allen

Kremerman, Jodi

Hall, Keith David

financial statements

Chief Financial Officer

Chairwoman of Board of Directors

Chief Executive Officer

PACIFIC OAK SOR (BVI) HOLDINGS, LTD.

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


	Nine months ended September 30,				Three months ended September 30,				Year ended December 31,
	2024		2023		2024		2023		2023
	Unaudited								Audited
	U.S. dollars in thousands

Share of (loss) income from investees, net	$	(160,740)	$	(134,873)	$	(57,636)	$	19,589	$	(157,546)
Advisory fees to affiliate	(9,329)		(7,953)		(3,368)		(2,523)		(11,776)
General and administrative expenses	(2,254)		(3,847)		(682)		(172)		(2,039)
Operating (loss) income	(172,323)		(146,673)		(61,686)		16,894		(171,361)
Finance expense	(23,280)		(15,906)		(9,810)		(6,723)		(22,897)
Finance income	837		392		318		368		756
Foreign currency transaction gain (loss), net	6,724		(4,675)		(4,556)		(1,122)		(18,712)
Net (loss) income	$	(188,042)	$	(166,862)	$	(75,734)	$	9,417	$	(212,214)
Total comprehensive (loss) income	$	(188,042)	$	(166,862)	$	(75,734)	$	9,417	$	(212,214)

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

PACIFIC OAK SOR (BVI) HOLDINGS, LTD.

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


	Nine months ended September 30,				Three months ended September 30,				Year ended December 31,
	2024		2023		2024		2023		2023
	Unaudited								Audited
	U.S. dollars in thousands
Cash flows from operating activities
Net (loss) income	$	(188,042)	$	(166,862)	$	(75,734)	$	9,417	$	(212,214)
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Share of loss (profit) from investees	160,740		134,873		57,636		(19,590)		157,546
Finance expense	23,280		15,906		9,810		6,723		22,897
Distribution from (to) investees, net	41,709		(352)		14,133		(1,623)		3,712
Foreign currency transaction adjustments, net	(6,724)		4,675		4,556		1,122		18,712
Changes in operating assets and liabilities:
Accounts payable and accrued liabilities	75		(211)		(6)		(157)		(1,709)
Restricted cash for operational expenditures	553		(3,925)		(93)		(1,602)		2,105
Due to affiliates	2,631		1,995		951		(479)		6,908
Net cash provided by (used in) operating activities	34,222		(13,901)		11,253		(6,189)		(2,043)
Cash flows from investing activities
Distributions (to) from investees, net	(15,848)		3,148		(20,944)		(14,450)		(15,712)
Payments on foreign currency derivatives, net	(478)		(26,523)		—		(8,559)		(30,209)
Net cash used in investing activities	(16,326)		(23,375)		(20,944)		(23,009)		(45,921)
Cash flows from financing activities
Proceeds from bonds payable	156,746		92,136		81,119		92,136		101,636
Payment on bonds payable	(190,203)		—		(84,182)		—		—
Payments of deferred financing costs	(4,850)		(4,014)		(2,516)		(4,014)		(4,223)

Interest paid	(19,191)		(12,948)		(8,179)		(6,292)		(20,879)
Release of restricted cash for debt service obligations	24,285		(16,640)		7,552		(16,978)		(18,267)
Distributions to owner	(5,850)		(5,731)		(2,000)		(3,731)		(7,453)
Net cash (used in) provided by financing activities	(39,063)		52,803		(8,206)		61,121		50,814
Effect of exchange rate changes on cash and cash equivalents	295		(383)		(406)		(325)		(157)
(Decrease) increase in cash	(20,872)		15,144		(18,303)		31,598		2,693
Cash, beginning of the period	21,503		18,810		18,934		2,356		18,810
Cash, end of the period	$	631	$	33,954	$	631	$	33,954	$	21,503

Supplemental Disclosure of Noncash Activities:
Distribution payable to owner	$	704	$	—	$	704	$	—	$	1,750
Asset management fee reimbursement payable to owner	$	10,609	$	4,625	$	10,609	$	4,625	$	7,047

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

PACIFIC OAK SOR (BVI) HOLDINGS, LTD.

Additional Information

NOTE 1: BASIS OF PREPARATION

Separate financial information is prepared in a condensed format as of September 30, 2024 and for the nine and three months then ended, in accordance with Regulation 38D of the Securities Regulations (Periodic and Immediate Reports), 1970.

Please refer to the separate financial information in this regard to the financial information on the annual financial statements of the Company as of December 31, 2023 and for the year then ended and the information accompanying notes (hereinafter - the annual consolidated financial statements).

As of September 30, 2024, the Company had a working capital shortfall amounting to $33.1 million, primarily attributed to the debentures principal payment maturing in the year following the date of the statement of financial position. The Company intends to make the debentures principal payment from distribution from investees and there are no limitations on the Company's ability to withdraw funds from the investees. Accordingly, the Company does not view the working capital shortfall as a liquidity problem.

NOTE 2: SIGNIFICANT EVENTS DURING THE REPORTING PERIOD

Series B Bonds

In January 2024, the Company made the first principal installment payment of 388.1 million Israeli new Shekels (approximately $106.6 million as of January 31, 2024) in connection with the Company’s Series B bonds. Additionally, in September 2024 and due to the additional issuance of Series D bonds, below, the Company prepaid 312.8 million Israeli new shekels (approximately $83.2 million as of September 19, 2024) of the 388.1 million Israeli new shekels (approximately $103.2 million as of September 19, 2024) January 31, 2025 Series B bond payment and 6.1 million Israeli new shekels (approximately $1.6 million as of September 19, 2024) of interest. Subsequent to these payments two additional Series B bond installments remain, each, due on January 31, 2025 and 2026, respectively.

Series C Bonds

PACIFIC OAK SOR (BVI) HOLDINGS, LTD.

Additional Information

NOTE 2: SIGNIFICANT EVENTS DURING THE REPORTING PERIOD (CONTINUED)

Series D Bonds

In April 2024, the Company issued 288.1 million Israeli new shekels (approximately $76.2 million as of April 24, 2024) of Series D bonds to Israeli investors pursuant to offerings registered with the Israeli Securities Authority. The Series D bonds have an effective interest rate of 9.5% and have principal installment payments equal to 33.33% of the face amount due on February 28th from 2027 to 2029. In August 2024, the Company issued an additional 299.0 million Israeli new shekels (approximately $80.8 million as of August 20, 2024) par value of Series D bonds to Israeli investors pursuant to offerings registered with the Israeli Securities Authority. The additional Series D bonds are identical in the terms and pari passu to the existing Series D bonds, and all proceeds were used for the Series B payment.

The Series D bonds contains the following covenants: (i) Consolidated Equity Capital of the Company (not including minority rights) shall not be less than USD 450 million; (ii) the Net Adjusted Financial Debt to Net Adjusted Cap (shall not exceed a rate of 75%); (iii) Adjusted NOI shall be no lower than USD 35 million. As of September 30, 2024, the Company was in compliance with all covenants under the deed of trust of the Series D Bonds; (i) Consolidated Equity Capital of the Company as of September 30, 2024 was $579.1 million; (ii) the Net Adjusted Debt to Net Adjusted Cap was 66%; (iii) and the Adjusted NOI was $63.9 million for the trailing twelve months ended September 30, 2024.

Dividend Approval

On May 16, 2024, the Company’s board of directors approved a distribution of dividend in the amount of $5.0 million to the owner. As of September 30, 2024, $0.7 million remains to be distributed.

NOTE 3: SUBSEQUENT EVENT

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

Investment Land Disposition

In October 2024, the Company, through an investee, sold approximately 122 developable acres of undeveloped land. Part of the land was used as collateral for the Series C bonds and due to the sale, approximately $10.6 million of the sales proceeds was held in an escrow account for the Series C bonds to maintain the loan-to-collateral ratio. The purchaser is not affiliated with the Company or the Company's advisor.

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

Cover	Nov. 28, 2024
Cover [Abstract]
Document Type	8-K
Document Period End Date	Nov. 28, 2024
Entity Registrant Name	PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.
Entity Incorporation, State or Country Code	MD
Entity File Number	000-54382
Entity Tax Identification Number	26-3842535
Entity Address, Address Line One	11766 Wilshire Blvd.
Entity Address, Address Line Two	Suite 1670
Entity Address, City or Town	Los Angeles
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	90025
City Area Code	866
Local Phone Number	722-6257
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Entity Central Index Key	0001452936
Amendment Flag	false