Company: KBSR
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001482430-25-000021
Chunk: 215

Company: KBS Real Estate Investment Trust III, Inc.
Filing Date: 2025-03-14
Form: 10-K
Item: Item 5
Chunk 215
---
roll did not, and was not requested to, solicit third-party indications of interest for our common stock in connection with possible purchases thereof or the acquisition of all or any part of us.  

The foregoing is a summary of the standard assumptions, qualifications and limitations that generally apply to Kroll’s appraisal reports.  All of Kroll’s appraisal reports, including the analyses, opinions and conclusions set forth in such reports, are qualified by the assumptions, qualifications and limitations set forth in the respective appraisal reports.  

Real Estate Valuation

As of September 30, 2024, we owned 15 real estate properties (consisting of 14 office properties and one mixed-use office/retail property).  Kroll appraised each of our real estate properties, with the exception of Preston Commons, an office property that was sold on November 15, 2024 and valued at its contractual sales price, net of closing credits and disposition costs.  Kroll appraised each of the Appraised Properties using various methodologies including the direct capitalization approach, discounted cash flow analyses and sales comparison approach and relied primarily on a discounted cash flow analyses for the final appraisal of each of the Appraised Properties.  Kroll calculated the discounted cash flow value of each of the Appraised Properties using property-level cash flow estimates, terminal capitalization rates and discount rates that fall within ranges it believes would be used by similar investors to value the Appraised Properties, based on recent comparable market transactions adjusted for unique properties and market-specific factors. 

Our 15 real estate properties were acquired for a total purchase price of $2.0 billion, including $28.2 million of acquisition fees and acquisition expenses, and as of September 30, 2024, we had invested $810.5 million in capital expenses and tenant improvements in these properties.  The total appraised value of the Appraised Properties as of September 30, 2024 was $2.0 billion.  Based on the appraisal and valuation methodologies described above, the estimated value of our 15 real estate properties, including the estimated value for Preston Commons, used in the December 12, 2024 estimated value per share was $2.2 billion which, when compared to the total purchase price plus subsequent capital improvements through September 30, 2024 of $2.8 billion, results in an overall decrease in the estimated value of these properties of approximately 22.9%.

The following table summarizes the key assumptions that Kroll used in the discounted cash flow analyses