Company: KBSR
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001482430-25-000054
Chunk: 173

Company: KBS Real Estate Investment Trust III, Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 173
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billion of our variable rate notes payable were effectively fixed through interest rate swap agreements.

As of November 14, 2025, we have $790.0 million of loan maturities and required principal paydowns during the next 12 months and $175.5 million of loan maturities and required principal paydowns from November 14, 2026 through December 31, 2026.  As of September 30, 2025, we believe we were in compliance with the financial debt covenants under our notes payable.

Our loan agreements require us to sell two properties in 2025 (which we have completed), two properties in 2026 and up to four properties in 2027.  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 make required principal paydowns under certain loans, sell assets or satisfy certain covenants and conditions in our loan agreements, the lenders may seek to foreclose on the underlying collateral.  Our loan agreements contain cross default provisions whereby the occurrence of (or a demand following) an “event of default” under one or more of our debt facilities may trigger a default under certain other debt facilities and the guaranty obligations in respect thereof.  The cross default provisions vary across the loan agreements and some require that lenders affirmatively elect that an event of default is triggered and/or that payment demands are made in excess of a threshold amount before an event of default is triggered; however, depending upon which facilities default and the guaranty obligations thereunder, there is a risk that an event of default under one loan agreement could cause an event of default under other debt facilities thereby giving lenders a right to accelerate the relevant debt obligations and exercise their enforcement rights with respect thereto.  In addition, we have pledged the equity of certain of our subsidiaries (and all proceeds therefrom) in connection with the restructuring of certain of our subsidiaries’ debt facilities and, therefore, if an event of default occurs under certain debt facilities and the lenders party thereto elect to exercise their enforcement rights thereunder, one of the remedies available to them is to take possession of the relevant pledged equity.  We have directly and/or indirectly pledged the equity of subsidiaries owning the following properties: Gateway