Former KBS Executives Form Strategic Capital Companies

Four former executives of KBS Capital Markets Group have once again joined together to form a new financial services organization, Strategic Capital Companies, LLC. The four principals, Pat Miller, Ken Jaffe, Mike McDaniel and Mark Brandenberger, have contributed to the growth and development of such distribution giants as AXA Distributors and MetLife Investors. Their most recent experience was helping to build KBS Capital Markets Group where, during their tenure, KBS Capital Markets Group raised $2.3 billion in equity capital in approximately 36 months.

Strategic Capital Companies is comprised of both a FINRA registered broker dealer – SC Distributors, LLC – as well as a separate advisory services organization – Strategic Capital Advisory Services, LLC. Together the two organizations allow Strategic Capital Companies to create what it anticipates will be a powerful platform designed to provide financial advisors and their clients with access to a focused group of what it believes are “best-in-class” investment managers. “We all shared a vision to create a new distribution model,” stated Pat Miller, President of SC Distributors, LLC, “One that has been specifically designed to connect professional financial intermediaries with high quality product sponsors.”

After nearly 18 months, that vision is finally coming to fruition. The new company plans to begin by focusing its efforts in the alternative investment sector, with an emphasis on non-traded REITs. To help identify, analyze and evaluate potential REIT sponsors, Strategic Capital Companies enlisted the help of an experienced investment banking group - Macquarie Capital USA, a division of the $15 billion Macquarie Group. Since 2002, Macquarie Capital USA has conducted over $90.0 billion in real estate transactions. They have also completed over $530 billion in M&A advisory assignments since 2000. “The team at Macquarie was invaluable in helping us better understand and evaluate a wide range of real estate and investment management organizations looking to raise capital in the retail channels,” added Miller.

Through SC Distributors, the Company is preparing to enter the market with a select group of non-traded REIT offerings (each from different real estate sponsors) between now and the fourth quarter of 2011. SC Distributors is already slated to be the dealer manager for the up to $1.5 billion Carter Validus Mission Critical REIT. According to a prospectus filed with the SEC, the REIT will acquire mission critical real estate assets in the data center, healthcare and education sectors. Mission critical real estate assets are purpose-built facilities that have been designed to support the most essential business operations of the tenant. In addition, SC Distributors will serve as dealer manager for a second non-traded REIT, the up to $1.0 billion O’Donnell Strategic Gateway REIT, which was filed with the SEC in October of 2010. According to the SEC filing, the O’Donnell Strategic Gateway REIT intends to acquire “green” industrial warehouse / distribution facilities located in strategic U.S. distribution hubs.

“We want to align ourselves with leading sponsors that have a demonstrated history of success and can help us design and deliver what we believe are fully differentiated, best-of-breed-type investment products,” said Mike McDaniel, National Sales Manager for SC Distributors. “We believe in this marketplace and want to play an active role in raising the bar relative to transparency, communication and investment performance. We are focused on providing our advisors and broker / dealer partners with the people, technology and tools to enable a seamless, single point of contact experience.”

The principals each acknowledged that all of the work and planning will mean little without the right people to help them execute their mission. On that front, the company has made tremendous progress thus far. “We’re delighted with the quality of the professionals who have decided to join us,” said Mark Brandenberger, Chief Financial Officer of SC Distributors. “We’re fortunate that we’ve been able to attract key management talent and look forward to rounding out the organization over the next few weeks.”

SC Distributors has announced the following key hires:

• Holly Hughes, Director of National Accounts. Ms. Hughes served as Vice President and Head of Strategic Accounts at AXA Distributors.
• Robert Bruce, Director of Marketing. Mr. Bruce served as Vice President of Marketing for Cornerstone Real Estate Funds.
• Jim Condon, Sales Desk Manager. Mr. Condon led internal sales efforts with American Funds, Schroder Investment Management and REFCO Alternative Investments.
• Jim Kearny, Chief Compliance Officer. Mr. Kearny brings more than 20 years of senior level experience in various operations and compliance roles to SC Distributors.
• Tony Llopis, Director of Financial Operations. Mr. Llopis most recently served as Assistant Vice President of Finance at MetLife Investors.

When a firm like SC Distributors starts recruiting some of the most well regarded talent in the industry, it certainly helps create a buzz in the financial services community. “We believe we’re well positioned to help the industry continue to grow and we couldn’t be more enthusiastic about the potential of our new venture,” stated Mr. Miller. Only time will tell what this organization has in store for the future.

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements involve risk and uncertainties which could cause actual results to vary materially from those expressed in or indicated by the forward-looking statements. Factors that may cause actual results to differ materially include changes in general economic conditions, changes in real estate conditions, changes in interest rates, lease-up risks, lack of financing availability and lack of capital proceeds.

This is not an offer or a solicitation to purchase securities. Such an offer can be made only by means of a prospectus that includes more complete information on the fees and risk factors involved. Investors should read a prospectus carefully before investing. To obtain a prospectus, please contact your investment professional or SC Distributors, LLC at 610 Newport Center Drive, Suite 350 Newport Beach, CA 92660 (877-907-1148). Securities offered through SC Distributors, LLC member FINRA and SIPC. Investments are not FDIC insured, not bank guaranteed and may lose value.