Company: KBSR
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001482430-25-000021
Chunk: 1

Company: KBS Real Estate Investment Trust III, Inc.
Filing Date: 2025-03-14
Form: 10-K
Item: Item 7A
Chunk 1
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833$62,852$—$—$1,332,623$1,324,677Weighted-average contractual interest rate (4)6.2 %7.2 %7.3 %— %— %6.8 %

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(1) The average pay rate is based on the interest rate swap fixed rate.  

(2) The average receive rate is based on the one-month Term SOFR rate as of December 31, 2024.  

(3) Subsequent to December 31, 2024, we completed the modification and extension of the Amended and Restated Portfolio Loan Facility.  As a result, as of March 14, 2025, we had debt obligations in the aggregate principal amount of $1.5 billion, with a weighted-average remaining term of 1.5 years.  See Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations – Subsequent Events – Eighth Modification of the Amended and Restated Portfolio Loan Facility.”

(4) The weighted-average contractual interest rate represents the actual interest rate in effect as of December 31, 2024, consisting of the contractual interest rate and using interest rate indices as of December 31, 2024, where applicable.  

We borrow funds at a combination of fixed and variable rates.  Interest rate fluctuations will generally not affect our future earnings or cash flows on our fixed rate debt, unless such instruments mature or are otherwise terminated.  However, interest rate changes will affect the fair value of our fixed rate instruments.  As of December 31, 2024, the fair value of our fixed rate debt was $118.1 million and the outstanding principal balance of our fixed rate debt was $118.4 million.  The fair value estimate of our fixed rate debt is calculated using a discounted cash flow analysis utilizing rates we would expect to pay for debt of a similar type and remaining maturity if the loan was originated as of December 31, 2024.  As we expect to hold our fixed rate instruments to maturity (unless the property securing the debt is sold and the loan is repaid) and the amounts due under such instruments would be limited to the outstanding principal balance and any accrued and unpaid interest, we do not expect that fluctuations in interest rates, and the resulting change in fair value of our fixed rate instruments, would have a significant impact on our operations.  

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