KBS Real Estate Investment Trust III Inc., a publicly registered non-traded REIT, signed a modified loan agreement to increase the amount of an existing portfolio loan to $255 million. The loan is divided equally between term debt and revolving debt. At closing, $127.5 million of the term debt and $7.5 million of the revolving debt was outstanding.
The REIT has the option to increase the loan two times to a maximum of $350 million, split between term debt and revolving debt, and secured by one or more properties.
Village Center Station was used as collateral for the modified loan. As of September 17, the other collateral properties include Domain Gateway, the McEwen Building, Gateway Tech Center, the Tower on Lake Carolyn, Park Place Village and Village Center Station.
KBS REIT Properties III is providing a guaranty of up to 25 percent of the outstanding principal balance.
The initial maturity date is June 1, 2019 with a one-year extension option. The loan bears interest at a floating rate of 190 basis points over one-month LIBOR. The monthly payments are interest only with the entire balance due at maturity, and prepayment options are available.
Earlier this month, The DI Wire reported that the REIT signed a purchase agreement for the Almaden Financial Plaza in downtown San Jose, California for $150 million.
KBS Real Estate Investment Trust III, which closed its initial public offering in May 2015, manages a portfolio of 22 office properties and one mixed-use office/retail property totaling approximately 9.3 million rentable square feet with a collective occupancy rate of 89 percent. The company broke escrow in March 2011, and through June 30, 2015, has raised $1.8 billion in investor equity.