Company: KBSR
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001482430-25-000042
Chunk: 210

Company: KBS Real Estate Investment Trust III, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 2
Chunk 210
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, we had mortgage debt obligations in the aggregate principal amount of $1.4 billion, with a weighted-average remaining term of 1.1 years.  As of August 14, 2025, our debt obligations consisted of $117.4 million of fixed rate notes payable and $1.3 billion of variable rate notes payable. As of August 14, 2025, the interest rates on $1.0 billion of our variable rate notes payable were effectively fixed through interest rate swap agreements.

As of August 14, 2025, we have $556.5 million of loan maturities and required principal paydowns during the next 12 months and $503.0 million of loan maturities and required principal paydowns from August 14, 2026 through December 31, 2026.  In addition, we determined we did not meet the debt service coverage ratio required under one of our loan agreements as of March 31, 2025, and as a result, on August 7, 2025, we received a demand notice from the agent under the loan agreement of a required paydown of approximately $4.2 million.  We have not made this paydown and are in discussions with the agent in regard to this matter.  In accordance with the loan agreement, we have 30 days from the notice date to cause the outstanding principal balance of the loan to not exceed the amount available as determined by the debt service coverage ratio test.  The receipt of the demand letter does not constitute a default under the loan agreement.  As of June 30, 2025, we believe we were in compliance with the debt covenants under our notes payable.

Our loan agreements require us to sell two properties in 2025, two properties in 2026 and up to four properties in 2027.  Subsequent to June 30, 2025, we closed on the sale of one real estate property and we received a nonrefundable deposit related to another property that was under contract to sell with an anticipated close in the third quarter of 2025.  Selling real estate assets in the current market may result in a lower sale price than we would otherwise obtain.  We may continue to evaluate raising capital through the issuance of new equity or debt to the extent we see improvement in the capital markets.  We may also defer noncontractual expenditures to manage our liquidity needs.

If we are unable to