Company: KBSR
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001482430-25-000021
Chunk: 133

Company: KBS Real Estate Investment Trust III, Inc.
Filing Date: 2025-03-14
Form: 10-K
Item: Item 1
Chunk 133
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, extend the maturity date of the loan from January 23, 2025 to January 22, 2027.  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.” 

We expect that our debt financing and other liabilities will be between 45% and 65% of the cost of our tangible assets (before deducting depreciation and other non-cash reserves).  There is no limitation on the amount we may borrow for the purchase of any single asset.  We limit our total liabilities to 75% of the cost of our tangible assets (before deducting depreciation and other non-cash reserves) meaning that our borrowings and other liabilities may exceed our maximum target leverage of 65% of the cost of our tangible assets without violating these borrowing restrictions.  We may exceed the 75% limit only if a majority of the conflicts committee approves each borrowing in excess of this limitation and we disclose such borrowings to our stockholders in our next quarterly report with an explanation from the conflicts committee of the justification for the excess borrowing.  To the extent financing in excess of this limit is available on attractive terms, the conflicts committee may approve debt in excess of this limit.  From time to time, our total liabilities could also be below 45% of the cost of our tangible assets due to the lack of availability of debt financing.  As of December 31, 2024, our borrowings and other liabilities were approximately 56% of the cost (before deducting 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.

Economic Dependency

We are dependent on our advisor for certain services that are essential to us, including the disposition of investments; management of the daily operations and leasing of our portfolio; and other general and administrative responsibilities.  In the event that our advisor is unable to provide these services, we will be required to obtain such services from other sources.  

Competitive Market Factors 

The U.S. commercial real estate investment and leasing markets remain competitive.  We face competition from various entities for disposition opportunities, for prospective tenants and to retain our current tenants, including other REITs, pension funds, insurance companies, investment funds and companies,