KBS REIT III Makes No Recommendation on Latest Comrit Tender Offer
KBS Real Estate Investment Trust III, Inc., a publicly registered non-traded real estate investment trust, remained neutral and made no recommendation regarding whether the company’s stockholders should accept or reject the mini-tender offer made by Comrit Investments 1, LP for up to 1,562,500 shares of the REIT’s common stock, which is approximately 1.05% of the company’s outstanding shares.
After acquiring nearly 1.79 million shares of KBS REIT III in a previous tender offer, Comrit’s latest offer prices the REIT’s shares at $0.80 per share. Comrit and its affiliates currently own more than 494 million shares of KBS REIT III, and Comrit is not in any way affiliated with KBS REIT III, KBS Capital Advisors LLC, or KBS Capital Markets Group LLC.
According to KBS REIT III, its board of directors’ neutrality decision follows a careful evaluation of the Comrit offer, “consulting with management, and considering the current economic environment, especially as it relates to the uncertainties in the real estate and debt markets, as well as the different liquidity needs of each of our stockholders.”
The REIT went on to say that its decision was determined primarily due to KBS REIT III’s current lack of liquidity and the uncertain timing of future liquidity to its stockholders, while recognizing that each stockholder’s financial situation is different.
As of March 3, 2025, KBS REIT III had approximately $390 million of loan maturities and approximately $80 million of required loan paydowns in the next 12 months, with extension options available on only $65 million of the maturing debt. Since Jan. 1, 2024, KBS REIT III had refinanced or extended over $1.3 billion of maturing debt obligations.
Last month, AltsWire – then The DI Wire – reported that the REIT had 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 that 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 was 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.
In December 2024, as reported by AltsWire, the REIT announced that it had amended its loan agreement with U.S. Bank, Bank of America, and other lenders on its Accenture Tower property to extend the loan’s maturity date to Nov. 2, 2026. This marked the fourth modification agreement for the loan.
In similar news, 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 NAV was more than $12.00 per share. The REIT first issued a “going concern” warning in late 2023.
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