Company: KBSR
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001482430-25-000021
Chunk: 235

Company: KBS Real Estate Investment Trust III, Inc.
Filing Date: 2025-03-14
Form: 10-K
Item: Item 7
Chunk 235
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ing depreciation and other noncash reserves) and 58% of the book value (before deducting depreciation) of our tangible assets, respectively.  This leverage limitation is based on cost and not fair value, and our leverage may exceed 75% of the fair value of our tangible assets.  

We have not declared any distributions since June 2023.  We have experienced a reduction in our net cash flows from operations in recent periods primarily due to higher interest expense and a decrease in dividend income received from the SREIT and to a lesser extent, due to lease rollover and reduced demand for office space.  We are unable to predict when or if we will be in a position to pay distributions to our stockholders.  Due to certain restrictions and covenants included in our loan agreements as a result of refinancing certain of our debt facilities, we do not expect to pay any dividends or distributions until certain loans are repaid or refinanced.  One of the loans with these restrictions has a current maturity of January 2027 but may be extended subject to the terms and conditions of the loan agreement.  On March 15, 2024, we terminated our dividend reinvestment plan.  

We did not redeem any shares of our common stock during the year ended December 31, 2024.  Due to certain restrictions and covenants included in our loan agreements as a result of refinancing certain of our debt facilities, we do not expect to redeem any shares of common stock until certain loans are repaid or refinanced.  One of the loans with these restrictions has a current maturity of January 2027 but may be extended subject to the terms and conditions of the loan agreement.  We terminated our share redemption program on March 15, 2024.  

Under our charter, we are required to limit our total operating expenses to the greater of 2% of our average invested assets or 25% of our net income for the four most recently completed fiscal quarters, as these terms are defined in our charter, unless the conflicts committee has determined that such excess expenses were justified based on unusual and non-recurring factors.  Operating expenses for the four fiscal quarters ended December 31, 2024 did not exceed the charter-imposed limitation.

Cash Flows from Operating Activities

During the years ended December 31, 2024 and 2023, net cash provided by operating activities was $7.7 million and $41.6 million, respectively.  Net cash provided by operating activities was lower