Company: KBSR
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001482430-25-000021
Chunk: 180

Company: KBS Real Estate Investment Trust III, Inc.
Filing Date: 2025-03-14
Form: 10-K
Item: Item 1A
Chunk 180
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 of the SREIT involves special risks relating to the issuer of the securities, including the financial condition and business outlook of the issuer.  As a REIT, the SREIT is subject to the inherent risks associated with real estate investments.  See above “—General Risks Related to Investments in Real Estate.”  Furthermore, our investment in common equity securities may involve greater risk of loss than secured debt financings due to a variety of factors, including that such investment is unsecured and is subordinated to other obligations of the issuer.  As a result, our investment in the common equity of the SREIT is subject to risks of (i) limited liquidity in the secondary trading market, (ii) substantial market price volatility resulting from changes in prevailing interest rates, (iii) subordination to the claims of banks and senior lenders to the issuer, (iv) the possibility that earnings of the issuer may be insufficient to meet its debt service and distribution obligations, and (v) the declining creditworthiness and potential for insolvency of the issuer during periods of rising interest rates and economic downturn.  These risks may adversely affect the value of the securities and the ability of the SREIT to make distribution payments to us.  

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Our significant investment in the SREIT is subject to the risks inherent in investing in traded securities.  As of    March 14, 2025, based solely on the closing trading price of the units of the SREIT on the SGX-ST of $0.136 per unit on such date and without taking into account any potential discount for the holding period risk due to the quantity of units held by us relative to the normal level of trading in the units, we owned approximately $32.3 million of units in the SREIT, representing an approximate 18.2% interest in the units of the SREIT.  The SREIT’s units were first listed for trading on the SGX-ST on July 19, 2019.  If an active trading market for the units does not develop or is not sustained, it may be difficult to sell our units.  The market for Singapore REITs may trade a small number of securities and may be unable to respond effectively to increases in trading volume, potentially making prompt liquidation of our investment in the SREIT difficult.  Even if an active trading market develops or we are able to negotiate block trades, if we or other significant investors sell or are perceived as intending to sell a substantial amount of units in