Company: KBSR
Filing Date: 2025-05-12
Form Type: 10-Q
Source: 0001482430-25-000036
Chunk: 208

Company: KBS Real Estate Investment Trust III, Inc.
Filing Date: 2025-05-12
Form: 10-Q
Item: Part I, Item 2
Chunk 208
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 31, 2024 to $28.3 million for the three months ended March 31, 2025.  Included in interest expense was (i) $30.0 million and $26.0 million of interest expense payments for the three months ended March 31, 2024 and 2025, respectively, and (ii) the amortization of deferred financing costs of $2.5 million and $2.3 million for the three months ended March 31, 2024 and 2025, respectively. The decrease in interest expense was primarily due to less interest expense incurred as a result of loan paydowns in connection with the sales of real properties in February 2024 and November 2024 and the disposition of an office property and related forgiveness of debt in connection with a deed-in-lieu of foreclosure transaction in January 2024, partially offset by higher interest rate spreads as a result of recent refinancings subsequent to March 31, 2024 and the impact on interest expense of additional revolver draws and recent loan modifications which have resulted in additional loan fees being amortized to interest expense in 2025.  In general, we expect interest expense to vary based on fluctuations in interest rates (for our variable rate debt) and the amount of future borrowings, to increase due to higher interest rate spreads as a result of recent refinancings and to decrease due to required loan paydowns.  

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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 $1.8 million for the three months ended March 31, 2025.  Included in net loss on derivative instruments was (i) realized gain on interest rate swaps of $2.7 million, offset by (ii) unrealized loss on interest rate swaps of $4.5 million, for the three months ended March 31, 2025. We recorded net gain on derivative instruments of $16.2 million for the three months ended March 31, 2024.  Included in net gain on derivative instruments was (i) realized gain on interest rate swaps of $7.1 million, (ii) unrealized gain on interest rate swaps of $8.9 million, and (iii) gains related to swap terminations of $0.2 million, for the three months