KBS REIT III Sells Salt Lake City Office Building to Reduce Debt Load
KBS Real Estate Investment Trust III, Inc. – a publicly registered non-traded REIT – has sold the Salt Lake Hardware Building, a 210,938-square-foot, five‑story Class A office building in downtown Salt Lake City, Utah. The buyer is Dart Interests, a U.S. real estate development and investment firm. The gross disposition amount was $50 million.
Previously called Gateway Tech Center, the REIT acquired the historic asset at 155 N. 400 West in May 2012 for nearly $30.3 million.
“While the office sector continues to face broader market challenges, this sale demonstrates that well‑located, high‑quality assets with strong fundamentals continue to attract investor demand,” said Giovanni Cordoves, Western regional president for KBS. “The Salt Lake Hardware Building’s historic character, comprehensive renovation, dynamic transit-oriented location and the ability to further densify the site via additional residential development contributed to its appeal.”
KBS REIT III has a long operating history in the immediate submarket, having previously developed and sold a 453‑unit Class A multifamily community adjacent to the Salt Lake Hardware Building.
Originally constructed in 1909 to sell hardware to help the growth of the transcontinental railroad network, the Salt Lake Hardware Building is a converted historic industrial property listed on the National Register of Historic Places. The renovated creative office property combines historic character with modern infrastructure and amenities. The site includes an additional 2.45 acres zoned for mixed use, providing future development potential for approximately 340 or more residential units.
Since acquisition, the REIT had invested more than $9 million in capital improvements.
Last month, KBS REIT III entered into a fourth modification of its portfolio revolving loan facility, extending its maturity to March 25, with a possible further extension to April 15. The modification gave the trust additional time to negotiate a long-term resolution for $205.5 million in outstanding debt secured by office properties at 515 Congress in Austin and 201 17th Street in Atlanta, as well as the now-sold Salt Lake City asset.
“KBS REIT III remains focused on proactively managing its balance sheet and executing on the business plan for the portfolio,” said Marc DeLuca, chief executive officer and Eastern regional president at KBS. “The sale of the Salt Lake Hardware Building is consistent with our previously disclosed strategy for addressing near‑term loan maturities, and proceeds are expected to be used to reduce the related financing.”
As of Dec. 31, 2025, the REIT reported total assets of approximately $1.56 billion, a 14.3% decrease from approximately $1.82 billion a year earlier.
As of March 2026, a significant portion of the company’s real estate properties were core office properties located in Illinois, California, and Texas. As of March 27, 2026, KBS REIT III had $1.3 billion of loan maturities requiring principal paydowns during the next 12 months. Its loan agreements require it to sell two properties in 2025 — which it completed — three properties in 2026 and up to four properties in 2027.
Last December, the board approved an estimated net asset value of $2.70 per share, nearly a 30.6% decline from $3.89 per share in 2024. The REIT’s share redemption program remains suspended.
In 2023, the REIT first issued a “going concern” warning, and in 2024, it had to return the keys to an office building in San Francisco.
KBS has completed over $45.5 billion in transaction activity on behalf of private and institutional investors globally via 16 separate accounts and six commingled funds, for government and corporate pension funds. Additionally, KBS has sponsored five sovereign wealth funds and seven U.S. Securities and Exchange Commission-registered, non-traded REITs, as well as a publicly traded Singapore REIT.
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