Keith D. Hall
About Keith D. Hall
Keith D. Hall, age 66, is Chief Executive Officer (since December 2008) and a director (since October 2008) of Pacific Oak Strategic Opportunity REIT, Inc. (PCOK). He holds a BA in Finance with honors from California State University, Sacramento, and previously held senior roles in real estate finance at Credit Suisse First Boston, Nomura Securities, and Drexel Burnham Lambert; he co-owns Pacific Oak Holding Group, LLC, the sole owner of PCOK’s external advisor, Pacific Oak Capital Advisors, LLC . The board operates under a separate Chairman/CEO model with Peter McMillan III as Chairman; there is no lead independent director, and committees (Audit and Conflicts) are fully independent; the board met eight times in 2024 and all directors had at least 75% attendance .
PCOK operating performance context:
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues (USD) | $121,859,000 | $128,068,000 | $120,495,000 |
| EBITDA (USD) | $35,060,000* | -$21,176,000* | -$7,939,000* |
Values retrieved from S&P Global.*
PCOK’s portfolio remains office-heavy (≈49.6% of portfolio value as of 9/30/2024), with liquidity and refinancing challenges; near-term strategy emphasizes asset sales, refinancings, or letting properties go to lenders if needed .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Pacific Oak Strategic Opportunity REIT II, Inc. | CEO and Director | Feb 2013 – merger with PCOK | Led through merger with PCOK; aligned sponsor-led REIT strategy |
| KBS Real Estate Investment Trust I | Executive Vice President | Jun 2005 – Dec 2018 | Managed through liquidation; extensive REIT operations experience |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Pacific Oak Capital Group | Founder | 2018 – present | Built sponsor platform for real estate asset management |
| Willowbrook Capital Group, LLC | Affiliated | Since 2000 | Asset management; capital markets expertise |
| Keppel Pacific Oak US REIT (SREIT) Manager JV | Indirect ownership interest via advisor | As of 12/31/2024 | Manager earns base fee (10% of annual distributable income) and performance/transaction fees; $5.3M base fee in 2024; no performance fee in 2024 |
Fixed Compensation
- PCOK has no paid employees; executive officers (including Hall) receive no compensation directly from PCOK. They are officers/employees/owners of the external advisor and are compensated by the advisor and/or affiliates .
- PCOK does not grant stock options and has no option-award timing policy; executive hedging policy is not adopted .
- Independent directors (not executives) receive cash retainers and meeting fees; executive directors (Hall, McMillan) receive no director pay from PCOK .
Performance Compensation
Hall’s economic incentives primarily arise through advisor-linked fee structures (co-owned by Hall and McMillan via Pacific Oak Holding), not company executive pay.
| Mechanism | Trigger | Formula | Notes |
|---|---|---|---|
| Subordinated Participation in Net Cash Flows (if NOT listed) | After investors collectively receive (i) return of net invested capital, (ii) 7% per year cumulative, non-compounded return, and (iii) $36.3M Prior Advisor Performance Fee Value | Advisor receives 15% of net cash flows (ops, sale proceeds, otherwise) thereafter | Calculated daily; investor-level 7% hurdle; payable only if not listed |
| Subordinated Incentive Listing Fee (if listed on a national exchange) | Listing event | 15% of amount by which market value plus distributions exceeds (net invested capital + cash flow to generate 7% cumulative return + Prior Advisor Performance Fee Value) | Daily calculation; investor returns may vary; not all investors may realize 7% |
| Subordinated Performance Fee due upon Termination (if advisory agreement terminated/not renewed other than for cause; NOT listed) | Advisory termination (other than for cause), not-listed | 15% participation in net cash flows after (net invested capital + 7% cumulative, non-compounded return from inception) less Prior Advisor Performance Fee Value | Daily calculation; investor-level hurdle |
Implication: Hall’s incentives align with achieving investor return hurdles and potential listing/termination milestones, but they are realized at the advisor level—creating potential conflicts over timing/listing decisions versus long-term asset value optimization .
Equity Ownership & Alignment
| Holder | Shares | % of Outstanding | Pledged? |
|---|---|---|---|
| Keith D. Hall (beneficial) | 3,404,963 | 3.31% | None pledged |
| Peter McMillan III (beneficial) | 3,404,963 | 3.31% | None pledged |
| Detail | Includes shares held via Willowbrook Capital Group LLC and GKP Holding LLC, directly owned/controlled by Hall and McMillan | — | Willowbrook and GKP abstain from voting in director elections |
- Vested vs unvested breakdown: not disclosed.
- Stock ownership guidelines and compliance: not disclosed.
Employment Terms
| Item | Detail |
|---|---|
| PCOK Roles | CEO since Dec 2008; Director since Oct 2008 |
| Employment Agreement | No direct employment contract with PCOK; executives compensated by the external advisor |
| Advisory Agreement Term | One-year term expiring Nov 1, 2025, with unlimited one-year renewals upon mutual consent; amended Dec 19, 2024 in relation to PORT changes |
| Severance / Change-of-Control | Economics occur via advisor fee structures (listing, termination) rather than PCOK executive severance; see Performance Compensation table |
| Clawbacks / Gross-ups | Not disclosed |
| Non-compete / Non-solicit | Not disclosed |
Board Governance
- Structure: 5 directors—two executives (Hall, McMillan) and three independent directors; Audit and Conflicts Committees are entirely independent .
- Committee leadership: Audit Committee chaired by Kenneth G. Yee; Conflicts Committee chaired by Laurent Degryse .
- Attendance: Board held eight meetings in 2024; each director attended at least 75% of meetings .
- Board leadership: Separate Chairman (McMillan) and CEO (Hall); no lead independent director; independent directors actively involved .
- Conflicts Committee oversees executive compensation and affiliate transactions; PCOK’s executives receive no direct pay from PCOK .
Director Compensation (context)
| Name | Fees Earned or Paid in Cash (2024) | Other | Total |
|---|---|---|---|
| Laurent Degryse | $127,000 | — | $127,000 |
| William M. Petak | $110,000 | — | $110,000 |
| Kenneth G. Yee | $127,000 | — | $127,000 |
| Keith D. Hall | — | — | — (executive director; no director compensation) |
| Peter McMillan III | — | — | — (executive director; no director compensation) |
Independent director pay includes $40,000 retainer plus meeting fees; $10,000 annual compensation for service on PORT’s board .
Related Party Transactions and Governance Changes
- Advisor fees and oversight: $11.5M asset management fees and ~$1.9M disposition fees incurred to advisor in 2024; executives (Hall/McMillan) control the sponsor/advisor .
- Loan from Advisor: On Feb 26, 2025, an unsecured $8.0M loan from advisor to PCOK at 12% interest (monthly payments; 15% upon default), maturing May 27, 2025 with borrower option to extend 90 days; customary covenants .
- SREIT Manager JV: Manager base fee of 10% of annual distributable income ($5.3M in 2024), plus performance/transaction fees; Hall/McMillan have indirect ownership in the Manager .
- Opportunity Zone Fund I: Advisor waived $0.5M of allocable asset management fees related to PCOK’s Class A Units (47% of Class A Units) .
- Charter amendments proposed (Third Articles): remove NASAA REIT Guidelines provisions, adjust limits on indebtedness, affiliated transactions, stockholder meeting thresholds, and roll-up protections; intended to enable eventual listing/self-management and increase flexibility; risks include reduced stockholder rights and increased leverage/flexibility .
Performance Compensation Details (Advisor-linked)
| Metric | Weighting/Trigger | Target/Hurdle | Actual/Payout | Vesting/Timing |
|---|---|---|---|---|
| Subordinated Cash Flow Participation (non-listed) | 15% participation after hurdles | Return of net invested capital + 7% per year cumulative non-compounded + $36.3M prior advisor performance fee value | Payable only if conditions met; investor-level hurdles; fee paid to advisor | Ongoing after hurdle achievement |
| Listing Incentive Fee (if listed) | 15% of excess value at listing | Market value + distributions minus (net invested capital + cash flow to generate 7% cumulative return + prior advisor perf fee) | Payable at listing; investor returns may differ from hurdle | On listing |
| Termination Participation Fee (non-listed) | 15% participation post termination (not for cause) | Net invested capital + 7% per year cumulative, non-compounded from inception; less prior advisor perf fee | Payable only if agreement terminated/not renewed other than for cause while not listed | On termination event |
Equity Ownership & Alignment Details
- Beneficial ownership: Hall beneficially owns 3,404,963 shares (3.31%), including shares held via Willowbrook Capital Group LLC and GKP Holding LLC; none of these shares are pledged as collateral .
- Voting practices: Willowbrook Capital Group LLC (901,510 shares) and GKP Holding LLC (2,503,453 shares) abstain from voting in director elections, mitigating direct influence on election outcomes .
Employment Terms and Contracts
| Provision | Status |
|---|---|
| Employment contract at PCOK | None; executives compensated by advisor |
| Severance, change-of-control at PCOK | Not disclosed; advisor-linked fee economics drive incentives around listing/termination |
| Clawbacks, tax gross-ups | Not disclosed |
| Non-compete, non-solicit, garden leave | Not disclosed |
Investment Implications
- Alignment: Hall’s 3.31% beneficial stake with no pledging supports alignment; however, his primary economic incentives flow through the external advisor via substantial fee structures contingent on achieving investor-level return hurdles, listing, or advisory termination—not traditional PCOK salary/bonus/equity awards .
- Conflicts and governance: Extensive related-party ties (advisor fees, SREIT manager JV, loan from advisor) and proposed charter changes increasing flexibility and reducing some stockholder protections warrant heightened governance scrutiny; the Conflicts Committee is independent and oversees executive compensation and affiliate transactions, but advisor ownership by Hall/McMillan concentrates influence .
- Execution risk: Office-heavy portfolio and liquidity constraints elevate near-term refinancing and asset disposition risk; watch debt maturities and asset sales pace as potential drivers of advisor hurdle achievement/listing timing .
- Trading signals: Monitor (1) outcomes of July 11, 2025 proxy proposals and subsequent filing of the Third Articles, (2) any steps toward listing or internalization, (3) additional 8-Ks on affiliate transactions or financing, and (4) changes in advisor agreement/renewals—each could shift advisor-linked payout probability and governance posture .