KBS REIT III Buys North Carolina Office Tower for $147 Million

KBS Real Estate Investment Trust III Inc., a publicly registered non-traded REIT, purchased the Carillon office tower in uptown Charlotte, North Carolina from Hines for $147 million plus closing costs.

In 2007, Hines, on behalf of its U.S. Core Office Fund LP, purchased the property for $140 million.

The 24-story, 476,000-square-foot class A office tower is located at 227 West Trade Street on approximately 1.8 acres of land. Carillon was constructed in 1991 and is 92 percent leased to 46 tenants with a weighted-average remaining lease term of five years.

The REIT funded the purchase of Carillon with proceeds from a mortgage loan and proceeds from its now-terminated primary initial public offering.

The mortgage loan with two unaffiliated lenders allows for borrowings of up to $95.6 million secured by the property, of which $76.5 million was term debt and $19.1 million was revolving debt.

At closing, the $76.5 million of term debt was funded and the $19.1 million of revolving debt was available for future disbursements, a portion of which is to be used for tenant improvements and leasing commissions.

The mortgage loan matures on February 1, 2020, with three one-year extension options, and bears interest at a floating rate of 165 basis points over one-month LIBOR.

KBS Real Estate Investment Trust III invests in a diverse portfolio of real estate investments, primarily focusing on core office properties located throughout the United States. KBS Capital Advisors is the external advisor to KBS Real Estate Investment Trusts. Since its inception, KBS-affiliated companies have completed transactional activity in excess of $30.5 billion via 14 separate accounts, six commingled funds, five sovereign wealth funds and six non-traded REITs.

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