Company: KBSR
Filing Date: 2025-04-28
Form Type: DEF 14A
Source: 0001482430-25-000025
Chunk: 22

Company: KBS Real Estate Investment Trust III, Inc.
Filing Date: 2025-04-28
Form: DEF 14A
Chunk 22
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 below 45% of the cost of our tangible assets due to the lack of availability of debt financing. As of December 31, 2024, our borrowings and other liabilities were approximately 56% of the cost (before deducting depreciation and other noncash reserves) and 58% of the book value (before deducting depreciation) of our tangible assets, respectively. This leverage limitation is based on cost and not fair value and our leverage may exceed 75% of the fair value of our tangible assets.

Policy Regarding Distributions and Redemptions . Due to certain restrictions and covenants included in our loan agreements as a result of refinancing certain of our debt facilities, we do not expect to pay any dividends or distributions or redeem any shares of common stock until certain loans are repaid or refinanced. One of the loans with these restrictions has a current maturity of January 2027 but may be extended subject to the terms and conditions of the loan agreement. We terminated our share redemption program on March 15, 2024. We are unable to predict when or if we will be in a position to pay distributions to or provide liquidity to our stockholders. If and when we pay distributions, we will likely fund distributions from the sale of assets.

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Policy Regarding Working Capital Reserves . We establish an annual budget for capital requirements and working capital reserves that we update periodically during the year. As of April 23, 2025, six of our debt facilities (representing $1.3 billion of our outstanding debt that are secured by 13 of our properties) are subject to cash sweep arrangements, whereby each month the excess cash flow from the properties securing the loan is deposited into a cash management account held for the benefit of our lenders. In certain cases, we may request disbursements from the cash management accounts to fund capital or operating shortfalls at the underlying assets. However, such cash management accounts place limits on our access to cash flows from these properties and restrict our operating flexibility.

Policies Regarding Operating Expenses. Under our charter, we are required to limit our total operating expenses to the greater of 2% of our average invested assets or 25% of our net income for the four most recently completed fiscal quarters, as these terms are defined in our charter, unless the conflicts committee has determined that such excess expenses were justified based on unusual and non-recurring factors. Operating expenses for the four fiscal quarters ended December 31, 2024 did not exceed the charter