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

Company: KBS Real Estate Investment Trust III, Inc.
Filing Date: 2025-12-19
Form: 8-K
Item: Item 8.01
Chunk 8
---
 the total purchase price plus subsequent capital improvements through September 30, 2025 of $2.4 billion, results in an overall decrease in the estimated value of these properties of approximately 31.6%.

The following table summarizes the key assumptions that Kroll used in the discounted cash flow analyses to arrive at the appraised value of the Appraised Properties:

                                                              Range in Values      Weighted-Average Basis  
  Terminal capitalization rate                                7.25% to 9.00%                        8.17%  
  Discount rate                                               8.00% to 11.00%                       9.50%  
  Net operating income compounded annual growth rate (1)      0.18% to 18.34%                       5.35%  

_____________________

(1) The net operating income compounded annual growth rates (the “ CAGRs”) reflect both the contractual and market rents and reimbursements (in cases where the contractual lease period is less than the valuation period of the property) net of expenses over the valuation period for each of the properties. The range of CAGRs shown is the constant annual rate at which the net operating income is projected to grow to reach the net operating income in the final year of the hold period for each of the properties and can be significantly impacted by current occupancy at the properties. For appraised properties over 90% occupied, the CAGR range is 0.18% to 3.12% with a weighted average CAGR of 2.53%.

While the Company believes that Kroll’s assumptions and inputs are reasonable, a change in these assumptions and inputs would significantly impact the appraised value of the Appraised Properties and thus, the Company’s estimated value per share. The table below illustrates the impact on the Company’s estimated value per share if the terminal capitalization rates or discount rates Kroll used to appraise the Appraised Properties were adjusted by 25 basis points, assuming all other factors remain unchanged. Additionally, the table below illustrates the impact on the Company’s estimated value per share if these terminal capitalization rates or discount rates were adjusted by 5% in accordance with the IPA Valuation Guidelines, assuming all other factors remain unchanged:

                                    Increase (Decrease) on the Estimated Value per Share due to                                                                                                           
                                    Decrease of 25 basis points                                                Increase of 25 basis points                  Decrease of 5%                Increase of 5%  
 ─────────────────────────────────────────────────────────────────────────────────────────────────────────