Company: KBSR
Filing Date: 2025-05-12
Form Type: 10-Q
Source: 0001482430-25-000036
Chunk: 29

Company: KBS Real Estate Investment Trust III, Inc.
Filing Date: 2025-05-12
Form: 10-Q
Item: Part I, Item 1
Chunk 29
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 2025 and December 31, 2024 (dollars in thousands):March 31, 2025December 31, 2024Derivative InstrumentsBalance Sheet LocationNumber of InstrumentsFair ValueNumber of InstrumentsFair ValueDerivative instruments not designated as hedging instrumentsInterest rate swapsPrepaid expenses and other assets, at fair value11$6,099 14$10,509 Interest rate swapsOther liabilities, at fair value1$(113)—$— 

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Table of ContentsPART I. FINANCIAL INFORMATION (CONTINUED)Item 1.  Financial Statements (continued)KBS REAL ESTATE INVESTMENT TRUST III, INC.CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)March 31, 2025(unaudited)9.      DERIVATIVE INSTRUMENTS (CONTINUED)

The following table summarizes the effects of derivative instruments on the Company’s consolidated statements of operations (in thousands):  For the Three Months EndedMarch 31, 20252024Derivatives not designated as hedging instrumentsRealized gain recognized on interest rate swaps$(2,688)$(7,070)Unrealized loss (gain) on interest rate swaps4,523 (8,904)Gains related to swap terminations— (178)Net loss (gain) on derivative instruments$1,835 $(16,152)

10.      FAIR VALUE DISCLOSURES

Under GAAP, the Company is required to measure certain financial instruments at fair value on a recurring basis.  In addition, the Company is required to measure other non-financial and financial assets at fair value on a non-recurring basis (e.g., carrying value of impaired real estate loans receivable and long-lived assets).  Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  The GAAP fair value framework uses a three-tiered approach.  Fair value measurements are classified and disclosed in one of the following three categories:  •Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities;  •Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which significant inputs and significant value drivers are observable in active markets;