Company: KBSR
Filing Date: 2025-05-12
Form Type: 10-Q
Source: 0001482430-25-000036
Chunk: 115

Company: KBS Real Estate Investment Trust III, Inc.
Filing Date: 2025-05-12
Form: 10-Q
Item: Part I, Item 8
Chunk 115
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 ongoing liquidity needs in the Company’s real estate portfolio, the Company may be required to sell assets into a challenged real estate market in an effort to manage its liquidity needs.  Selling real estate assets in the current market may result in a lower sale price than the Company would otherwise obtain.  In addition, the Company may continue to evaluate raising capital through the issuance of new equity or debt.  The Company may also defer noncontractual expenditures.  Additionally, elevated interest rates, reductions in real estate values and future tenant turnover in the portfolio will have a further impact on the Company’s ability to meet loan compliance tests and may further reduce the available liquidity under the Company’s loan agreements.  See also, Note 2, “Going Concern.”  During the three months ended March 31, 2025 and 2024, the Company’s interest expense related to notes payable was $28.3 million and $32.5 million, respectively, which excludes the impact of interest rate swaps and caps put in place to mitigate the Company’s exposure to rising interest rates on its variable rate notes payable.  See Note 9, “Derivative Instruments.”  Included in interest expense was the amortization of deferred financing costs of $2.3 million and $2.5 million for the three months ended March 31, 2025 and 2024, respectively.  As of March 31, 2025 and December 31, 2024, $8.8 million and $8.6 million of interest expense were payable, respectively.  The following is a schedule of maturities, including principal amortization payments, for all notes payable outstanding as of March 31, 2025 (in thousands):April 1, 2025 through December 31, 2025$143,057 2026997,565 2027327,500 2028— 2029— Thereafter— $1,468,122 

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Table of ContentsPART I. FINANCIAL INFORMATION (CONTINUED)Item 1.  Financial Statements (continued)KBS REAL ESTATE INVESTMENT TRUST III, INC.CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)March 31, 2025(unaudited)8.       NOTES PAYABLE (CONTINUED)

The Company’s notes payable contain financial debt covenants.  Except with regards to a debt service coverage ratio covenant related