Company: KBSR
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001482430-25-000021
Chunk: 218

Company: KBS Real Estate Investment Trust III, Inc.
Filing Date: 2025-03-14
Form: 10-K
Item: Item 5
Chunk 218
---
19, 2019, at an aggregate purchase price of $189.9 million.  On March 28, 2024, the SREIT issued an additional unit for every 10 existing units held by its unitholders as of March 4, 2024, increasing our investment in the units of the SREIT to 237,426,088 units.

While we believe that Kroll’s assumptions and inputs are reasonable, a change in these assumptions and inputs would significantly impact the estimated value of the units of the SREIT held by us and thus, our estimated value per share.  If the volatility rate Kroll used to value these units was adjusted by 5% in accordance with the IPA Valuation Guidelines, assuming all other factors remain unchanged, there would be no material impact to our estimated value per share.

Notes Payable

The estimated values of our notes payable are equal to the GAAP fair values disclosed in our Quarterly Report on Form 10-Q for the period ended September 30, 2024, but do not equal the book value of the loans in accordance with GAAP.  Our advisor estimated the values of our notes payable using a discounted cash flow analysis.  The discounted cash flow analysis was based on projected cash flow over the remaining loan terms and on management’s estimates of current market interest rates for instruments with similar characteristics, including remaining loan term, loan-to-value ratio, type of collateral and other credit enhancements.  

As of September 30, 2024, the GAAP fair value and the carrying value of our notes payable were $1.6 billion and $1.6 billion, respectively.  The weighted-average discount rate applied to the future estimated debt payments was approximately 7.7%.  Our notes payable had a weighted-average remaining term of 0.5 years as of September 30, 2024.  

51

The table below illustrates the impact on our estimated value per share if the discount rates our advisor used to value our notes payable were adjusted by 25 basis points, assuming all other factors remain unchanged.  Additionally, the table below illustrates the impact on our estimated value per share if these discount rates were adjusted by 5% in accordance with the IPA Valuation Guidelines, assuming all other factors remain unchanged:

Increase (Decrease) on the Estimated Value per Share due toDecrease of 25 basis pointsIncrease of 25 basis pointsDecrease of 5%Increase of 5%Discount rate$(0.02)$