Company: KBSR
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001482430-25-000021
Chunk: 126

Company: KBS Real Estate Investment Trust III, Inc.
Filing Date: 2025-03-14
Form: 10-K
Item: Item 1
Chunk 126
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 office properties, the challenging interest rate environment and lack of activity in the debt markets, the limited availability in the debt markets for commercial real estate transactions in the office sector, and the lack of transaction volume in the U.S. office market for assets similar in size to those of ours, and on August 12, 2024, our conflicts committee unanimously determined to postpone approval of our liquidation.  Section 5.11 of our charter requires that the conflicts committee revisit the issue of liquidation at least annually.

As our advisor, KBS Capital Advisors manages our day-to-day operations and our portfolio of real estate investments.  KBS Capital Advisors provides asset-management, disposition, marketing, investor-relations and other administrative services on our behalf.  Our advisor owns 20,857 shares of our common stock.  We have no paid employees.  

Going Concern Considerations

The accompanying consolidated financial statements and notes in this Annual Report have been prepared assuming we will continue as a going concern.  The ongoing challenges affecting the U.S. commercial real estate industry, especially as it pertains to commercial office buildings, continues to be one of the most significant risks and uncertainties we face.  The combination of elevated interest rates and persistent inflation (or the perception that any of these events may continue), as well as a low level of lending activity in the debt markets, have contributed to continued weakness in the commercial real estate markets.  The usage and leasing activity of our assets in several markets remains lower than pre-pandemic levels, and we cannot predict when economic activity and demand for office space will return to pre-pandemic levels in those markets.  Both upcoming and recent tenant lease expirations and leasing challenges in certain markets amidst the aforementioned headwinds coupled with slower than expected return-to-office, most notably in the greater San Francisco Bay Area where we own several assets, have had direct and material impacts to property appraisal values used by our lenders and have impacted our ability to access certain credit facilities and our ongoing cash flow, which, in large part, provide liquidity for capital expenditures needed to manage our real estate assets.  

Since February 2024, we have refinanced, restructured or extended $1.3 billion of maturing debt obligations. As of March 14, 2025, we had debt obligations in the aggregate principal amount of $1.5 billion, with a weighted-average remaining term of 1.5 years.  

In order to refinance, restructure or extend our maturing debt obligations