Company: KBSR
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001482430-25-000021
Chunk: 236

Company: KBS Real Estate Investment Trust III, Inc.
Filing Date: 2025-03-14
Form: 10-K
Item: Item 7
Chunk 236
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 during the year ended December 31, 2024 primarily as a result of higher interest expense, a decrease in dividend income received from the SREIT, the sales of real estate properties in February 2024 and November 2024, an increase in legal fees and financial and advisory consulting fees related to our development and pursuit of our debt restructuring plan and capital raising efforts, and the timing of payments and cash receipts, offset by $6.6 million of interest rate swap settlement proceeds received in 2024 for early terminated swaps.

Cash Flows from Investing Activities

Net cash provided by investing activities was $157.9 million for the year ended December 31, 2024 due to $192.4 million of net proceeds from the sales of the McEwen Building and Preston Commons, offset by $34.5 million used in improvements to real estate.  

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Cash Flows from Financing Activities

During the year ended December 31, 2024, net cash used in financing activities was $174.9 million and primarily consisted of the following:  

•$173.1 million of net cash used in debt financing as a result of principal payments on notes payable of $198.5 million and payments of deferred financing costs of $10.5 million, partially offset by proceeds from notes payable of $35.9 million; and

•$1.9 million of restricted cash surrendered in connection with the deed-in-lieu of foreclosure transaction related to 201 Spear Street.

We also expect to use our capital resources to make certain payments to our advisor.  We currently make payments to our advisor in connection with the management of our investments and costs incurred by our advisor in providing services to us.  We also pay fees to our advisor in connection with the disposition of investments.  We reimburse our advisor and dealer manager for certain stockholder services.  In addition, our advisor is entitled to an incentive fee upon achieving certain performance goals.  

Among the fees payable to our advisor is an asset management fee.  With respect to investments in real property, the asset management fee is a monthly fee equal to one-twelfth of 0.75% of the amount paid or allocated to acquire the investment, plus the cost of any subsequent development, construction or improvements to the property.  This amount includes any portion of the investment that was debt financed and is inclusive of acquisition expenses related thereto (but excludes acquisition fees paid to our advisor).  In the case of investments made through joint ventures, the asset management fee is determined based