Company: KBSR
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001482430-25-000021
Chunk: 179

Company: KBS Real Estate Investment Trust III, Inc.
Filing Date: 2025-03-14
Form: 10-K
Item: Item 1A
Chunk 179
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 economically insurable, or may be insured subject to limitations, such as large deductibles or co-payments.  Insurance risks associated with potential acts of terrorism could sharply increase the premiums we pay for coverage against property and casualty claims.  We may not be able to obtain insurance against the risk of terrorism because it may not be available or may not be available on terms that are economically feasible.  The terrorism insurance that we obtain may not be sufficient to cover loss for damages to our properties as a result of terrorist attacks.  The inability to obtain sufficient terrorism insurance or any terrorism insurance at all could limit our financing and refinancing options as mortgage lenders sometimes require that specific coverage against terrorism be purchased by commercial owners as a condition for providing loans.  In such instances, we may be required to provide other financial support, either through financial assurances or self-insurance, to cover potential losses.  We may not have adequate coverage for such losses.  If any of our properties incurs a casualty loss that is not fully insured, the value of our assets will be reduced by any such uninsured loss, which will reduce the value of our stockholders’ investment in us.  In addition, other than any working capital reserve or other reserves we may establish, we have limited sources of funding to repair or reconstruct any uninsured property.  Also, to the extent we must pay unexpectedly large amounts for insurance, we could suffer reduced earnings.  

We rely on property managers to operate our properties and leasing agents to lease vacancies in our properties.  

Our advisor hires property managers to manage our properties and leasing agents to lease vacancies in our properties.  The property managers have significant decision-making authority with respect to the management of our properties.  Our ability to direct and control how our properties are managed on a day-to-day basis may be limited because we engage other parties to perform this function.  Thus, the success of our business may depend in large part on the ability of our property managers to manage the day-to-day operations and the ability of our leasing agents to lease vacancies in our properties.  Any adversity experienced by, or problems in our relationship with, our property managers or leasing agents could adversely impact the operation and profitability of our properties.  

Risks Related to Real Estate-Related Investments

Our investment in common equity securities is subject to specific risks relating to the issuer of the securities and may involve greater risk of loss than secured debt financings.  

We have made a significant investment in the common equity of the SREIT.  Our investment in the common equity securities