Company: KBSR
Filing Date: 2025-02-12
Form Type: 8-K
Source: 0001482430-25-000006
Chunk: 1

Company: KBS Real Estate Investment Trust III, Inc.
Filing Date: 2025-02-12
Form: 8-K
Item: Item 1.01
Chunk 1
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 and subject to the terms and conditions of, the Eighth Modification Agreement. The Additional Loan Proceeds may be used solely for approved tenant improvements, leasing commissions and capital improvement costs, and taxes and insurance attributable to the Properties. The advances of Additional Loan Proceeds are only available to the extent sufficient funds are not available from certain cash accounts established under the Eighth Modification Agreement.

The Eighth Modification Agreement requires the Portfolio Loan Borrowers to paydown a portion of the loan such that the Maximum Facility Amount is not greater than (i) $420.0 million on or before December 31, 2025, (ii) $300.0 million on or before December 31, 2026 and (iii) $150.0 million on or before December 31, 2027. In connection with the paydown provisions, the Eighth Modification Agreement requires the sale of Counted Projects (defined below), from time to time, such that KBS REIT III does not own more than five Counted Projects as of December 31, 2025, four Counted Projects as of December 31, 2026 and three Counted Projects as of December 31, 2027. The Counted Projects are the Properties and the Accenture Tower Property. In connection with the sale of the Properties, the Eighth Modification Agreement provides for up to $30 million of sales proceeds from the sale of the first Property and up to a total of $15 million of sales proceeds from the sale of subsequent Properties to be funded into the Cash Sweep Collateral Account (defined below) that can be used as described below. Commencing September 30, 2025 and each quarter thereafter, the Eighth Modification Agreement also requires that the Properties meet certain leasing requirements.

The Eighth Modification Agreement provides that 100% of excess cash flow from the Properties be deposited monthly into cash collateral accounts (the “ Cash Sweep Collateral Account”). Excess cash flow for any calendar month is generally defined as (a) gross revenues from the Properties plus amounts received under certain pledged swaps, less (b) approved operating expenses of the Properties, payments under the Amended and Restated Portfolio Loan Facility, and in certain cases REIT-level general and administrative costs and Permitted Asset Management Fees. Subject to the requirements contained therein, the Portfolio Loan Borrowers will be permitted to withdraw funds from the Cash Sweep Collateral Account to pay or reimburse the Portfolio Loan Borrowers for approved tenant improvements, leasing commissions and capital improvements, for operating shortfalls related to the Properties to the extent they occur in