Company: KBSR
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001482430-25-000054
Chunk: 202

Company: KBS Real Estate Investment Trust III, Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 202
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 from mark-to-market adjustments on interest rate swaps.  The change in fair value of interest rate swaps not designated as a hedge are non-cash adjustments recognized directly in earnings and are included in interest expense.  We have excluded these adjustments in our calculation of MFFO to more appropriately reflect the economic impact of our interest rate swap agreements; and

•Gains related to swap terminations.  Gains related to swap terminations represent the difference between the settlement fees received and the value of interest rate swaps terminated, which are included in net (gain) loss on derivative instruments.  Although these amounts increase net income, we exclude them from MFFO to more appropriately reflect the ongoing impact of our interest rate swap agreements.  

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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)

Our calculation of FFO, which we believe is consistent with the calculation of FFO as defined by NAREIT, is presented in the following table, along with our calculation of MFFO, for the three and nine months ended September 30, 2025 and 2024 (in thousands).  No conclusions or comparisons should be made from the presentation of these periods.  

For the Three Months EndedSeptember 30,For the Nine Months EndedSeptember 30,2025202420252024Net loss$(4,154)$(38,544)$(59,875)$(29,589)Depreciation of real estate assets19,697 23,679 63,835 70,980 Amortization of lease-related costs3,506 3,860 10,967 12,579 Impairment charges on real estate 65,475 6,847 65,475 6,847 Unrealized (gain) loss on real estate equity securities(8,547)(16,620)(6,173)7,403 Gain on sale of real estate, net (77,401)— (77,401)(14,781)FFO (1)(1,424)(20,778)(3,172)53,439 Straight-line rent and amortization of above- and below-market leases, net(1,135)(2,126)(5,399)(8,083)Gain from extinguishment of debt— — — (56,372)Unrealized loss on derivative instruments2,177