Company: KBSR
Filing Date: 2025-05-12
Form Type: 10-Q
Source: 0001482430-25-000036
Chunk: 213

Company: KBS Real Estate Investment Trust III, Inc.
Filing Date: 2025-05-12
Form: 10-Q
Item: Part I, Item 2
Chunk 213
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44

Table of ContentsPART I. FINANCIAL INFORMATION (CONTINUED)Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Our calculation of FFO, which we believe is consistent with the calculation of FFO as defined by NAREIT, is presented in the following table, along with our calculation of MFFO, for the three months ended March 31, 2025 and 2024 (in thousands).  No conclusions or comparisons should be made from the presentation of these periods.  

For the Three Months EndedMarch 31,20252024Net (loss) income$(33,272)$37,574 Depreciation of real estate assets22,581 23,496 Amortization of lease-related costs3,825 4,038 Unrealized loss on real estate equity securities5,223 19,512 Gain on sale of real estate, net — (14,781)FFO (1)(1,643)69,839 Straight-line rent and amortization of above- and below-market leases, net(2,316)(3,648)Gain from extinguishment of debt— (56,372)Unrealized loss (gain) on derivative instruments4,523 (8,904)Gains related to swap terminations— (178)MFFO (1)$564 $737 

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(1) FFO and MFFO for the three months ended March 31, 2025 and 2024 include expenses of $1.1 million and $3.7 million, respectively, related to legal fees and financial and advisory consulting fees related to our development and pursuit of our debt restructuring plan and capital raising efforts.

FFO and MFFO may also be used to fund all or a portion of certain capitalizable items that are excluded from FFO and MFFO, such as tenant improvements, building improvements and deferred leasing costs.  

Critical Accounting Policies and Estimates

Our consolidated interim financial statements have been prepared in accordance with GAAP and in conjunction with the rules and regulations of the SEC.  The preparation of our financial statements requires significant management judgments, assumptions and estimates about matters that are inherently uncertain.  These judgments affect the reported amounts of assets and liabilities and our disclosure of contingent assets and liabilities as of the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods.  With different estimates or assumptions,