Company: KBSR
Filing Date: 2025-12-19
Form Type: 8-K
Source: 0001482430-25-000057
Chunk: 10

Company: KBS Real Estate Investment Trust III, Inc.
Filing Date: 2025-12-19
Form: 8-K
Item: Item 8.01
Chunk 10
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 can sell the subject units into a public market without upsetting the market’s equilibrium. Kroll’s analysis of the discount for the holding period risk applicable to the Company’s holdings had three elements: (i) analysis of trading volume in Prime US REIT’s units and the shares of other listed REITs in order to estimate the quantity of units that might be saleable by the Company in the public market; (ii) an estimate of the expected future price volatility of Prime US REIT’s units, which is the key variable in the valuation of the hypothetical series of put options; and (iii) application of the Black-Scholes model in the valuation of the series of put options. Based on its analysis, the estimated value of the units of Prime US REIT held by the Company as of November 14, 2025 was $39.1 million. The Company acquired 215,841,899 of its 237,426,088 units of Prime US REIT on July 19, 2019, at an aggregate purchase price of $189.9 million. On March 28, 2024, Prime US REIT issued an additional unit for every 10 existing units held by its unitholders as of March 4, 2024, increasing the Company’ s investment in the units of Prime US REIT to 237,426,088 units.

While the Company believes 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 Prime US REIT held by the Company and thus, the Company’s 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 the Company’s estimated value per share.

Notes Payable

With the exception of The Almaden Mortgage Loan (discussed below), the estimated values of the Company’s notes payable are equal to the GAAP fair values disclosed in the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2025, but do not equal the book value of the loans in accordance with GAAP. Other than The Almaden Mortgage Loan, the Advisor estimated the values of the Company’s 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