KBS REIT III Reports New Material Financial Obligation

TL;DR

**KBS REIT III just took on a new major financial obligation, watch for details on its impact.**

AI Summary

KBS Real Estate Investment Trust III, Inc. filed an 8-K on January 4, 2024, reporting events from November 14, 2023, concerning a material definitive agreement, the creation of a direct financial obligation, and triggering events that accelerate or increase this obligation. This indicates the company has entered into a significant financial commitment, potentially involving new debt or a major contract, which could impact its financial health and future profitability. For investors, this means increased financial leverage or new operational responsibilities that could affect the stock's risk profile and valuation.

Why It Matters

This filing signals a new significant financial commitment for KBS Real Estate Investment Trust III, Inc., which could alter its debt levels, cash flow, and overall financial stability, directly impacting shareholder value.

Risk Assessment

Risk Level: medium — The filing indicates a new material financial obligation and potential acceleration triggers, which introduces uncertainty regarding the company's future financial health and debt servicing capacity.

Analyst Insight

Investors should seek further details on the nature and terms of the 'Material Definitive Agreement' and 'Direct Financial Obligation' to assess the potential impact on KBS Real Estate Investment Trust III, Inc.'s financial health and future prospects.

Key Players & Entities

• KBS Real Estate Investment Trust III, Inc. (company) — the registrant filing the 8-K
• November 14, 2023 (date) — date of the earliest event reported
• January 4, 2024 (date) — date the 8-K was filed
• 800 Newport Center Drive, Suite 700, Newport Beach, California 92660 (company) — business address of the registrant
• 949-417-6500 (dollar_amount) — registrant's telephone number

FAQ

Key Financial Figures

• $606.3 million — rtfolio Loan Facility was approximately $606.3 million as of December 22, 2023. On December 2
• $5.0 m — al paydown on the loan in the amount of $5.0 million, and the aggregate commitment und
• $601.3 million — rtfolio Loan Facility was approximately $601.3 million after the $5.0 million principal paydow
• $5.0 million — approximately $601.3 million after the $5.0 million principal paydown. The Amended and Res
• $1.4 million — s a non-refundable fee in the amount of $1.4 million and certain fees, commissions and costs
• $125.0 million — ially less than the outstanding debt of $125.0 million. As of November 15, 2023, interest on t
• $649.5 million — indebtedness in an aggregate amount of $649.5 million may arise, increase or be accelerated p

Filing Documents

• kbsriii-20231114.htm (8-K) — 36KB
• 0001482430-24-000003.txt ( ) — 156KB
• kbsriii-20231114.xsd (EX-101.SCH) — 2KB
• kbsriii-20231114_lab.xml (EX-101.LAB) — 22KB
• kbsriii-20231114_pre.xml (EX-101.PRE) — 11KB
• kbsriii-20231114_htm.xml (XML) — 3KB

01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT The information in this Report set forth under Item 2.03 regarding the Amended and Restated Portfolio Loan Facility (defined below) is incorporated herein by reference. ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT Amended and Restated Portfolio Loan Facility On November 3, 2021, certain of KBS Real Estate Investment Trust III, Inc.'s ("KBS REIT III") indirect wholly owned subsidiaries (the "Amended and Restated Portfolio Loan Facility Borrowers"), entered into a two-year loan agreement with Bank of America, N.A., as administrative agent (the "Agent"); BofA Securities, Inc., Wells Fargo Securities, LLC and Capital One, National Association as joint lead arrangers and joint book runners; Wells Fargo Bank, N.A., as syndication agent; and each of the financial institutions signatory thereto as lenders (as subsequently modified and amended, the "Amended and Restated Portfolio Loan Facility"). The current lenders under the Amended and Restated Portfolio Loan Facility are Bank of America, N.A.; Wells Fargo Bank, National Association; U.S. Bank, National Association; Capital One, National Association; PNC Bank, National Association; Regions Bank; and Zions Bankcorporation, N.A., DBA California Bank & Trust (together, the "Portfolio Loan Lenders"). The Amended and Restated Portfolio Loan Facility is secured by 60 South Sixth, Preston Commons, Sterling Plaza, Towers at Emeryville, Ten Almaden and Town Center (the "Properties"). On December 22, 2023, the Amended and Restated Portfolio Loan Facility matured without repayment. The aggregate outstanding principal balance of the Amended and Restated Portfolio Loan Facility was approximately $606.3 million as of December 22, 2023. On December 29, 2023, KBS REIT III, through the Amended and Restated Portfolio Loan Facility Borrowers, entered into a third loan modification and extension agreement

Forward-Looking Statements

Forward-Looking Statements Certain statements included in this Current Report on Form 8-K are forward-looking statements. Those statements include statements regarding the intent, belief or current expectations of KBS REIT III 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. These include statements about KBS REIT III's plans, strategies and prospects, and these statements are subject to known and unknown risks and uncertainties. Readers are cautioned not to place undue reliance on these forward-looking statements. Actual results may differ materially from those contemplated by such forward-looking statements. Further, forward-looking statements speak only as of the date they are made, and KBS REIT III 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. Moreover, you should interpret many of the risks identified in this report, as well as the risks set forth below, as being heightened as a result of the continued disruptions in the financial markets impacting the U.S. commercial real estate industry, especially as it pertains to commercial office buildings. All forward-looking statements should be read in light of the risks identified in Part I, Item 1A of KBS REIT III's Annual Report on Form 10-K for the year ended December 31, 2022 and in Part II, Item 1A of KBS REIT III's Quarterly Reports on Form 10-Q, each as filed with the Securities and Exchange Commission. As a result of KBS REIT III's upcoming loan maturities, the challenging commercial real estate lending environment, the current interest rate environment, leasing challenges in certain markets where KBS REIT III

SIGNATURES

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. KBS REAL ESTATE INVESTMENT TRUST III, INC. Dated: January 4, 2024 BY: /s/ Jeffrey K. Waldvogel Jeffrey K. Waldvogel Chief Financial Officer, Treasurer and Secretary

View Full Filing

View this 8-K filing on SEC EDGAR