Pacific Oak Strategic Opportunity REIT Moves Toward Liquidation

The company restructures leadership and funding agreements as it prepares for a full wind-down.

January 26, 2026

Board Approves Liquidation Strategy

Pacific Oak Strategic Opportunity REIT, Inc. is beginning its wind-down. The board’s special committee, made up entirely of independent directors, has decided to pursue a formal plan of liquidation. This decision follows months of financial strain and discussions with bondholders, including those tied to its subsidiary, Pacific Oak SOR (BVI) Holdings, Ltd. The company expects to seek board and shareholder approval soon.

As part of that shift, Pacific Oak entered into a new agreement with the BVI entity on January 23, 2026. Going forward, the BVI will manage its real estate assets through Westdale Asset Management and oversee reporting and compliance through R2 Advisors. Pacific Oak will terminate its advisory agreement with Pacific Oak Capital Advisors (POCA) on January 31. That also brings an end to the prior “Back-to-Back” agreement where Pacific Oak covered POCA’s costs. From here, BVI assumes full responsibility for Westdale and R2.

To help cover current obligations and move forward with the liquidation plan, BVI has agreed to provide up to $905,000 in short-term funding over the next three months. This support is tied to available cash and is aimed at helping Pacific Oak meet ongoing regulatory requirements and continue its public reporting. A broader funding plan tied to a potential bond restructuring remains under discussion.

Vendor Agreements Shift Operational Control

On the operations side, the BVI has signed a one-year asset management agreement with Westdale. Westdale will oversee day-to-day operations for most of the BVI’s real estate, excluding assets held through Pacific Oak Residential Trust. Monthly compensation is based on either property income or a set minimum. Westdale is also entitled to a small disposition fee when assets are sold, along with reimbursement for approved operating expenses.

R2’s role centers on reporting and compliance. The BVI will pay a base fee of $80,895 per month, along with scheduled lump sums and reimbursable expenses. The scope includes:

Accounting and recordkeeping

Tax and compliance coordination

Cash management and insurance support

Corporate governance services

R2 is majority-owned by the company’s Chief Accounting Officer.

Company-Level Agreement with R2

Separately, Pacific Oak itself has signed a scaled-down agreement with R2 for similar services. This contract runs through August and includes six monthly payments of $15,000, plus hourly billing for out-of-scope work. That agreement will automatically end if the BVI terminates its contract with R2.

Leadership Transitions in Place

Leadership changes have also taken effect. On January 23, Brian Ragsdale was named President, CEO, and CFO. He replaces Peter McMillan and Keith Hall, who were removed from their executive roles and asked to step down from the board. Ragsdale previously served as Executive Vice President at POCA, where he handled asset management and transactions across the company’s portfolio. His background also includes work at KBS Capital Advisors in debt placement and REIT operations.

Looking Ahead

All of these changes are aimed at positioning Pacific Oak to carry out an orderly liquidation. With new leadership in place, revised vendor contracts, and a short-term funding bridge, the company is aligning its structure with a narrower operational focus while continuing to manage obligations tied to its debt and regulatory requirements.