Company: KBSR
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001482430-25-000054
Chunk: 247

Company: KBS Real Estate Investment Trust III, Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 2
Chunk 247
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 securities of $6.2 million, and during the nine months ended September 30, 2024, we recorded unrealized losses on real estate equity securities of $7.4 million, as a result of the change in the closing price of the units of the SREIT on the SGX-ST. 

During the nine months ended September 30, 2024, we recognized a gain on extinguishment of debt of $56.4 million in connection with the deed-in-lieu of foreclosure transaction related to the 201 Spear Street Mortgage Loan.  The gain on extinguishment of debt related to the 201 Spear Street Mortgage Loan represents the difference between the carrying amount of the outstanding debt and other liabilities of approximately $128.7 million and the carrying value of the real estate property and other assets of approximately $72.3 million, at the time of the transfer of the 201 Spear Street property and other assets in satisfaction of the loan.  We did not record any gain on extinguishment of debt during the nine months ended September 30, 2025.

We recognized a gain on sale of real estate of $77.4 million during the nine months ended September 30, 2025 related to the dispositions of Sterling Plaza in July 2025 and Park Place Village in September 2025.  We recognized a gain on sale of real estate of $14.8 million during the nine months ended September 30, 2024 related to the disposition of the McEwen Building in February 2024.  

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

Funds from Operations and Modified Funds from Operations

We believe that funds from operations (“FFO”) is a beneficial indicator of the performance of an equity REIT.  We compute FFO in accordance with the current National Association of Real Estate Investment Trusts (“NAREIT”) definition.  FFO represents net income, excluding gains and losses from sales of operating real estate assets (which can vary among owners of identical assets in similar conditions based on historical cost accounting and useful-life estimates), gains and losses from change in control, impairment losses on real estate assets, depreciation and amortization of real estate assets, and adjustments for unconsolidated partnerships and joint ventures.  In addition, we elected the option to exclude mark-to-market changes in value recognized on real estate equity securities in the calculation