Company: KBSR
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001482430-25-000042
Chunk: 186

Company: KBS Real Estate Investment Trust III, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 186
---
 impact on interest expense of additional loan draws.  In general, we expect interest expense to decrease due to required loan paydowns, to vary based on fluctuations in interest rates (for our variable rate debt) and the amount of future borrowings and to increase due to higher interest rate spreads as a result of recent refinancings.  

48

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

We recorded net loss on derivative instruments of $0.9 million for the six months ended June 30, 2025.  Included in net loss on derivative instruments was (i) unrealized loss on interest rate swaps of $6.3 million, offset by (ii) realized gain on interest rate swaps of $5.4 million, for the six months ended June 30, 2025.  We recorded net gain on derivative instruments of $21.1 million for the six months ended June 30, 2024.  Included in net gain on derivative instruments was (i) realized gain on interest rate swaps of $13.4 million, (ii) unrealized gain on interest rate swaps of $7.5 million, and (iii) gains related to swap terminations of $0.2 million, for the six months ended June 30, 2024.  The change in net loss (gain) on derivative instruments was primarily due to changes in fair values with respect to our interest rate swaps that are not accounted for as cash flow hedges during the six months ended June 30, 2025.  In general, we expect net gains or losses on derivative instruments to vary based on fair value changes with respect to our interest rate swaps that are not accounted for as cash flow hedges.  In addition, as the remaining lives of our interest rate swaps that are not accounted for as cash flow hedges decrease, we expect the fair values of these interest rate swaps to move towards zero, decreasing the net gains or losses on derivative instruments.

During the six months ended June 30, 2025 and 2024, we recorded unrealized losses on real estate equity securities of $2.4 million and $24.0 million, respectively, as a result of the change in the closing price of the units of the SREIT on the SGX-ST. 

During the six months ended June 30, 2024