KBS REIT III Buys Time on $600 Million Portfolio Loan

KBS Real Estate Investment Trust III Inc., a publicly registered non-traded real estate investment trust, announced that it has amended its loan agreement with Bank of America, Wells Fargo, and other lenders to, among other items, extend the loan’s maturity date until Nov. 20, 2024. This marks the sixth extension agreement.

The new loan agreement also waived certain milestones included in previous extension agreements, including the requirement for the REIT to raise at least $100 million in new equity, debt, or a combination thereof. The requirement for the REIT’s properties to maintain a certain minimum ongoing debt service coverage ratio was also waived.

Additionally, the REIT agreed to pay the lenders a fee of $250,000 along with certain costs and expenses in connection with the extension agreement.

According to the REIT, the outstanding principal balance of the amended loan is approximately $601.3 million, as of Oct. 11. The note is secured by six of REIT’s 14 properties.

This announcement follows on what has been a challenging year for the REIT. In February, the REIT sold an office building in Franklin, Tenn. to contribute to its loan obligations, and in January, the REIT had to return the keys to an office building in San Francisco. In December of 2023, the REIT reported “substantial doubt” regarding its “ability to continue.”

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