Company: KBSR
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001482430-25-000042
Chunk: 231

Company: KBS Real Estate Investment Trust III, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 2
Chunk 231
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 ended June 30, 2024.  General and administrative costs consisted primarily of portfolio legal fees, directors’ and officers’ insurance coverage costs, board of directors fees, third party transfer agent fees, financial and advisory consulting fees and audit costs.  

Depreciation and amortization decreased from $56.0 million for the six months ended June 30, 2024 to $51.6 million for the six months ended June 30, 2025, primarily due to the sale of a real property in November 2024, a decrease in depreciation and amortization due to lease expirations at a property held throughout both periods and the classification of a real property to held for sale.  Upon classifying a property as held for sale, we cease depreciation and amortization expense for that property.  We expect depreciation and amortization to increase in future periods as a result of additional capital improvements, offset by a decrease in amortization related to fully amortized tenant origination and absorption costs and to the extent we dispose of properties.

Interest expense decreased from $65.7 million for the six months ended June 30, 2024 to $58.9 million for the six months ended June 30, 2025.  Included in interest expense was (i) $59.7 million and $53.0 million of interest expense payments for the six months ended June 30, 2024 and 2025, respectively, and (ii) the amortization of deferred financing costs of $6.0 million and $5.9 million for the six months ended June 30, 2024 and 2025, respectively.  The decrease in interest expense was primarily due to less interest expense incurred as a result of loan paydowns in connection with the sales of real properties in February 2024 and November 2024 and the disposition of an office property and related forgiveness of debt in connection with a deed-in-lieu of foreclosure transaction in January 2024, partially offset by higher interest rate spreads as a result of recent refinancings subsequent to June 30, 2024 and the impact on interest expense of additional loan draws.  In general, we expect interest expense to decrease due to required loan paydowns, to vary based on fluctuations in interest rates (for our variable rate debt) and the amount of future borrowings and to increase due to higher interest rate spreads as a result of recent refinancings.  

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Table of ContentsPART I.