KBS REIT III Uses $100M Kansas Property Sale to Pay Down Debt, Bolster Liquidity
KBS Real Estate Investment Trust III, Inc., or KBS REIT III – a publicly registered non-traded real estate investment trust – has sold Park Place Village, a mixed-use office and retail property in the Kansas City submarket of Leawood, Kan. The sale was completed on Sept. 23, 2025, to an unaffiliated buyer.
The transaction closed with a gross sales price of $100 million, significantly less than what the REIT purchased it for: $126.5 million in June 2015. After accounting for various deductions – including credits for tenant improvements, prorations, third-party closing costs, and a $0.8 million disposition fee paid to the adviser – the company realized $95.5 million in net sales proceeds.
Although it sold the property at a loss, the REIT said the net proceeds from the sale were immediately used to address significant debt obligations.
KBS REIT III paid off the entire outstanding principal and accrued interest on the Park Place Village mortgage loan, which amounted to $65.2 million. This loan, which had a committed amount of $65 million, was secured by the property and had its maturity date recently extended to Nov. 30, 2025.
The company also utilized the sale proceeds to substantially reduce its corporate debt. A $25.4 million payment was applied to the outstanding principal balance of its main credit facility, bringing the balance down significantly to $37.5 million.
According to the company, the remaining balance of the net sales proceeds will be retained by KBS REIT III to manage its general liquidity needs.
The sale of Park Place Village follows the earlier disposition of Sterling Plaza this summer amid continued challenges for the REIT. 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. Earlier this year, KBS REIT III extended the maturity date on another one of its loans. Most recently, it took a neutral stance on an $0.80 per share unsolicited tender offer.
As of June 30, 2025, the company reported total assets of approximately $1.78 billion, more than a 10% decrease from the previous year’s nearly $1.99 billion.
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