KBS REIT III Kicks Off 2025 by Extending Maturity Date on Another Loan
KBS Real Estate Investment Trust III, Inc., a publicly registered non-traded real estate investment trust, has extended the maturity date of a loan agreement, previously dated to Nov. 3, 2024, to Feb. 6, 2025. The lenders – Bank of America N.A., Wells Fargo Bank, National Association, U.S. Bank, National Association, Capital One, and others – agreed to advance the $4.97 million for the payment of real property taxes related to two properties, subject to the conditions of this month’s extension agreement.
The aggregate outstanding principal balance of the amended loan was approximately $465.9 million, inclusive of the advance amount noted above. The facility is secured by five of the REIT’s properties – 60 South Sixth in Minneapolis; Sterling Plaza in Dallas; and Towers at Emeryville, Ten Almaden, and Town Center in Northern California – according to the latest filing.
KBS REIT III said it was continuing to work to potentially reach a longer-term extension of the loan.
This early 2025 activity follows on a challenging previous year for the REIT, which first issued a “going concern” warning in late 2023, a warning which remained as of its Sept. 30, 2024 quarterly filing.
In December 2024, the REIT amended its loan agreement with U.S. Bank, Bank of America and other lenders on its Chicago Accenture Tower property to extend the loan’s maturity date to Nov. 2, 2026. This marked the fourth modification agreement for that loan.
As of Dec. 20, 2024, the outstanding principal balance of that loan was $306 million. In addition to extending the maturity date, the new modification agreement added $16 million of new funding, raising the loan total to $322 million and raising the secured overnight financing rate from 235 basis points to 300 basis points.
The REIT reported that its net asset value, as of Dec. 12, 2024, fell to $3.89 per share, a decrease of 30.5% compared to the Dec. 12, 2023, valuation of $5.60 per share. The REIT attributed the lower valuation to a decrease in the appraised value of real estate properties, a decrease in capital expenditures, interest rate swaps and loan financing fees. At one time, the REIT’s estimated net asset value was more than $12 per share.
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