Kbs Real Estate Invt Tr Iii Inc. · OTC:KBSR
Kbs Real Estate Invt Tr Iii — KBS Real Estate Investment Trust III — Corporate Update (July 2019)
71 slides from Kbs Real Estate Invt Tr Iii's corporate update, Jul 30, 2019
Slide 1: Recent Developments & Strategic Plans for KBS REIT III
EXHIBIT 99.1 Recent Developments & Strategic Plans for KBS REIT III Shareholder Webcast July 30, 2019
Slide 2: Forward-Looking Statements
The information contained herein should be read in conjunction with, and is qualified by, the information in KBS Real Estate Investment Trust III’s (the “Company” or “KBS REIT III”) Annual Important Report on Form 10-K for the year ended December 31, 2018 (the “Annual Report”), and in the Company’s
Slide 3: Agenda
I. Portfolio Sale, Proceeds , & Use of Proceeds 4 - 11 II. Summary of Current Portfolio 12 - 26 III. Strategic Alternatives 27 – 28 IV. Conclusion 29 – 30 V. Appendix 31 – 71
Slide 4: Introduction: The Portfolio Sale
ON JULY 18, 2019 The sale represents a $0.09 11 Properties Sold increase per share in the estimated $1.2 Billion Sale Price value of the Sold Portfolio2 After selling credits, third-party selling costs and On July 18, 2019, the Company executed a disposition fees to the Company’s Advisor2 Introducti
Slide 5: The Sold Portfolio Consisted of…
The Sold Portfolio Consisted of… Acq. Cost Basis Portfolio Gain on Property Location Sq. Ft. Acq. Price Date at Sale1 Sale Price Sale Tower 909 Irving, TX Dec-12 374,251 $ 45,500,000 $ 66,417,130 $ 76,300,000 $ 9,882,870 Gaithesburg, One Washington Jun-13 314,284 84,059,000 94,443,961 102,100,000 7,
Slide 6: The Portfolio Sale Generated Proceeds of $396.9 Million
The Portfolio Sale Generated Proceeds of $396.9 Million Dollars in Thousands Gross Sales Proceeds $ 1,222,150 Seller Credit [1] (10,093) KBS REIT III 33.3% Interest [2] (271,000) Subtotal-Net Sale Price Less 941,057 KBS REIT III Interest Closing Costs, Interest Rate Buydown, (19,731) Advisor Disposi
Slide 7: Use of Proceeds
Use of Proceeds Recognizing that the Company’s shareholders each have different investment objectives, timelines, and liquidity needs, the Company will consider using net proceeds from the Portfolio Sale for a variety of strategies, including: Expand the Pay a Enhance Debt Paydowns/ share special fu
Slide 8: Expanding 2019 Share Redemption
Expanding 2019 Share Redemption Dollars in Thousands The Company expects to consider [2] expanding the share redemption program Maximum Allowed for 2019 $101,400 in 2019 to its maximum allowed annual limit. [3] See calculation to the right. Less: Original Limit for Redemptions in 2019 (56,100) The e
Slide 9: Special Distribution
Option for shareholders to receive their Special special distribution as cash or additional Distribution common stock The Company will pay a special The special distribution will be in the form of distribution in Q4 2019, once we finalize cash and additional common stock. The the estimate of taxable
Slide 10: Enhance Future Shareholder Liquidity
Enhance Future The Company may enhance Shareholder Liquidity future shareholder liquidity by The Company expects to consider Redeem expanding the share redemption whether to retain the remaining program up to the 5% limitation or proceeds to provide additional conduct one or more self-tenders. share
Slide 11: Debt Paydowns / Asset Acquisitions
Debt Paydowns Debt Paydowns/ Asset Acquisitions Additional paydowns on credit facilities to maximize liquidity for shareholders. To the extent there are still proceeds remaining, the Company would consider using all or a portion of those proceeds for additional debt paydowns or asset Asset Acquisiti
Slide 12: The Current Portfolio
Real Estate Investment Trust Ill The Current Portfolio 12
Slide 13: Current Portfolio Highlights
20 Class A 8.2 Million RSF, 4.4 Years Avg. Properties 90.7% Leased2 Lease Term3 $3.1 Billion1, Urban, Well-Located, Urban, Growth Markets Institutional-Quality Live/Work/Play Diversity by and Prime Locations, Property, Markets, LocationsWithin Office Portfolio Offering with Mass Transit & Tenants th
Slide 14: The Current Portfolio
Classification Building Class Fitness Tenant Outdoor Conference Mass Transit Property Metro City Sq. Ft. (CBD, Urban, ( A,B or C) Center Lounge Amenity Facilities Availability Sub) WEST Anchor Centre Phoenix A 333,014 ✔ ✔ ✔ ✔ Suburban Metro Under Gateway Tech Center Salt Lake City A 210,256 ✔ ✔ ✔ CB
Slide 15: The Current Portfolio Map
The Current Portfolio The following map shows the markets where the current portfolio is located. It is: • In major target markets which are high-ranked as office absorption leaders in the last 10 years • In top tech markets. • In prime locations within the markets, via proximity to urban centers, a
Slide 16: West REIT III Assets
West REIT III Assets 201 Spear Street Ten Almaden San Francisco, CA San Jose, CA Towers II & III at Emeryville The Almaden Emeryville, CA San Jose, CA 16
Slide 17: West REIT III Assets
West REIT III Assets Anchor Centre Gateway Tech Center Phoenix, AZ Salt Lake City, Utah Hardware Village Salt Lake City, Utah 17
Slide 18: Central REIT III Assets
Central REIT III Assets Sterling Plaza Preston Commons Dallas, TX Dallas, TX Domain Gateway 515 Congress Austin, TX Austin, TX 18
Slide 19: Central REIT III Assets
Central REIT III Assets Legacy Town Center RBC Plaza Plano, TX Minneapolis, MN Park Place Village Accenture Tower Leawood, KS Chicago, IL 19
Slide 20: East REIT III Assets
East REIT III Assets 3001 Washington 3003 Washington Arlington, VA Arlington, VA 201 17th Street Carillon Tower Atlanta, GA Charlotte, NC 20
Slide 21: East REIT III Assets
East REIT III Assets McEwen Building Nashville, TN 21
Slide 22: Landlord Favorable Markets
Landlord Favorable Markets • Strong Tenant Rents continue to grow Demand • Rising Occupancies Located in Growth Markets 100% of portfolio Strong Population Growth Momentum Strengthening Employment Population Growth Rate (2008+ CAGR [1]) Total Employment Growth (2008+ CAGR [1]) U.S. Growth: U.S. Grow
Slide 23: As We Manage the Portfolio in the Future, We Anticipate
As We Manage the Portfolio in the Future, We Anticipate: 97% of in-place leases have built-in Maintaining an rent escalations Potential for further Attractive Dividend, NOI growth as we with Strong Dividend 10% mark-to-market continue to stabilize Coverage Provided by the portfolio Operating Cash Fl
Slide 24: Statistics for the Current Portfolio: Market and Asset Diversification
Statistics for the Current Portfolio Market Diversification [1] Asset Diversification [1] Invested in Target Markets: Asset Diversification, 46% of value1 in CBRE’s Top 10 Tech Markets Largest asset accounts for just 89% of value1 in CBRE’s Top 25 Tech Markets 16% Nashville Hardware Village 2% (Unde
Slide 25: Top Tenants
Top 10 Tenants [1] Statistics for the WEIGHTED % OF NLA TOP 10 TENANTS INDUSTRY SECTOR PROPERTY AVERAGE LEASE ANNUALIZED (SQ. FT) Current Portfolio TERM (YRS) BASE RENT[2] Management CNA Corporation 3003 Washington 152,414 9.9 4.2% Consulting Accenture will become the nd Real Estate and Rental 2 lar
Slide 26: Tenant Industries and Lease Expirations
Statistics for the Current Portfolio Over 650 Tenants with Staggered Lease Expirations and Industry Diversification Tenant Industries [1] Lease Expirations [1] STEM/TAMI[2] 29% 9.9% Annual Average Expirations [ 1 ] Annualized base rent represents annualized contractual base rental income as of June
Slide 27: Strategic Alternatives
Strategic Alternatives 27 27
Slide 28: Strategic Alternatives
Strategic Alternatives As the Board of Directors evaluates various strategic alternatives, they will Following the Portfolio Sale, the be focused on certain key attributes of Company’s Board of Directors has the Company including the current initiated a review of strategic portfolio size and perform
Slide 29: Conclusion: What the Company Accomplished with the Portfolio Sale
Conclusion What did the Company Accomplish with the Portfolio Sale? The Company has executed on an Sell 27% of its portfolio1 for $1.2 billion Capitalize on the Company’s value-creating core important strategic disposition, while strategy by selling 27% of its portfolio for $1.2 billion generating a
Slide 30: Q&A
Q&A For additional questions, contact KBS Capital Markets Group Investor Relations (866) 527-4264 30
Slide 31: Appendix
Real Estate Investment Trust Ill Appendix
Slide 32: 201 Spear Street, San Francisco: Key Statistics
201 Spear Street San Francisco, CA Key Statistics Current Market Rent/ Weighted-Avg. Lease Rentable SF Leased Occupancy1 In - Place Rent1 Term (Yrs.)1 $85.00 / $71.70 252,591 100.0% 5.7 (18.5% Mark-to-Market) Key Tenants1 Tenant Sq. Ft. % of Property RSF We Work 78,869 31.0% Verizon 42,033 16.6% Cir
Slide 33: Spear Street: Asset Attributes
201 Spear Street San Francisco, CA Asset Attributes Water and Bay Bridge views from most floors, and two outdoor decks Desirable South of Market Street location in the CBD. Two blocks from BART, Transbay Terminal, and the iconic Ferry Building Recently repositioned asset by remodeling common areas l
Slide 34: Towers II & III at Emeryville: Key Statistics
Towers II & III at Emeryville (Emeryville, CA) Key Statistics Current Market Rent/ Weighted-Avg. Lease Rentable SF Leased Occupancy1 In - Place Rent1 Term (Yrs.)1 $52.80 / $44.50 592,811 84.8% 2.7 (18.7% Mark-to-Market) Key Tenants1 Tenant Sq. Ft. % of Property RSF Gracenote 54,903 9.3% ZipRealty 34
Slide 35: Towers II & III at Emeryville: Asset Attributes
Towers II & III at Emeryville (Emeryville, CA) Asset Attributes Waterfront Location – Views of San Francisco’s skyline, San Francisco downtown, the Golden Gate and Bay Bridges, and the Oakland hills Best in class campus setting with new/modern tenant improvements Dedicated transportation to the loca
Slide 36: Ten Almaden: Key Statistics
Ten Almaden (San Jose, CA) Key Statistics Current Market Rent/ Weighted-Avg. Lease Rentable SF Leased Occupancy1 In - Place Rent1 Term (Yrs.)1 $59.40 / $46.30 309,255 93.5% 3.3 (28.2% Mark-to-Market) Key Tenants1 Tenant Sq. Ft. % of Property RSF Adobe 63,254 20.5% Berliner Cohen 43,384 14.0% LWI Fin
Slide 37: Ten Almaden: Asset Attributes
Ten Almaden (San Jose, CA) Asset Attributes Walking distance to Caltrain, Light Rail, and the future Downtown San Jose BART station Less than 3 miles from San Jose’s Norman S. Mineta International Airport Close to vibrant pedestrian-friendly restaurants, hotels, entertainment, and retail options. Ma
Slide 38: The Almaden: Key Statistics
The Almaden (San Jose, CA) Key Statistics Current Market Rent/ Weighted-Avg. Lease Rentable SF Leased Occupancy1 In - Place Rent1 Term (Yrs.)1 $57.00 / $41.40 416,126 99.8% 4.5 (37.6% Mark-to-Market) Key Tenants1 Tenant Sq. Ft. % of Property RSF Zoom Video 73,754 17.7% BridgeBank 51,974 12.5% Samsar
Slide 39: The Almaden: Asset Attributes
The Almaden (San Jose, CA) Asset Attributes Walking distance to Caltrain, Light Rail, and the future Downtown San Jose BART station Less than 3 miles from San Jose’s Norman S. Mineta International Airport Close to vibrant pedestrian-friendly restaurants, hotels, entertainment, and retail options. Ma
Slide 40: Anchor Centre: Key Statistics
Anchor Centre (Phoenix, AZ) Key Statistics Current Market Rent/ Weighted-Avg. Lease Rentable SF Leased Occupancy1 In - Place Rent1 Term (Yrs.)1 $35.00 / $29.89 333,014 92.6% 3.9 (17.1% Mark-to-Market) Key Tenants1 Tenant Sq. Ft. % of Property RSF Humana Insurance 71,221 21.4% AZ Comm. Foundation 23,
Slide 41: Anchor Centre: Asset Attributes
Anchor Centre (Phoenix, AZ) Asset Attributes Desirable location as it is in the heart of the Camelback Corridor, just minutes from downtown Phoenix & Scottsdale and a number of walkable retail amenities and hotels. A number of highly utilized amenities, including a spacious tenant lounge & conferenc
Slide 42: Gateway Tech Center: Key Statistics
Gateway Tech Center (Salt Lake City, UT) Key Statistics Current Market Rent/ Weighted-Avg. Lease Rentable SF Leased Occupancy1 In - Place Rent1 Term (Yrs.)1 $29.00 / $24.62 210,256 89.0% 1.9 (17.8% Mark-to-Market) Key Tenants1 Tenant Sq. Ft. % of Property RSF Western Electric 43,048 20.5% Spring Com
Slide 43: Gateway Tech Center: Asset Attributes
Gateway Tech Center (Salt Lake City, UT) Asset Attributes Gateway Tech Center’s creative space buildout is attracting new incoming tech companies. KBS is currently renovating the tenant lounge in the center of the building and adding a state-of-the-art fitness center. Fantastic location with light r
Slide 44: Hardware Village: Key Statistics
Hardware Village (Salt Lake City, UT) Key Statistics Rentable SF Leased Occupancy1 478,569 43.80%1 Construction Update – Hardware Village East Construction is expected to be completed by Sept. 30, 2019. Lease-up is expected to finish by Dec. 2020 based on our current forecast. [ 1 ] As of June 30, 2
Slide 45: Hardware Village: Asset Attributes
Hardware Village (Salt Lake City, UT) Asset Attributes Studios, 1- and 2-bedroom apartments, plus two-story townhomes and brownstone row homes. Modern-luxury finishes and resort-style amenities will make this the highest quality apartment complex in the area with studio. Location offers breathtaking
Slide 46: Preston Commons: Key Statistics
Preston Commons (Dallas, TX) Key Statistics Current Market Rent/ Weighted-Avg. Lease Rentable SF Leased Occupancy1 In - Place Rent1 Term (Yrs.)1 $43.08 / $38.19 427,799 94.8% 1.7 (12.8% Mark-to-Market) Key Tenants1 Tenant Sq. Ft. % of Property RSF JP Morgan Bank 41,906 9.8% KeyBank 18,120 4.2% Regus
Slide 47: Preston Commons: Asset Attributes
Preston Commons (Dallas, TX) Asset Attributes Diverse rent roll with distinguished tenant roster, industry diversification, and staggered lease expirations. Company is planning a $12 million modernization to create a best in class, high amenitized work environment, including modernizing the lobbies
Slide 48: Sterling Plaza: Key Statistics
Sterling Plaza (Dallas, TX) Key Statistics Current Market Rent/ In Weighted-Avg. Lease Rentable SF Leased Occupancy1 - Place Rent1 Term (Yrs.)1 $41.39 / $39.18 313,609 98.5% 3.1 (5.6% Mark-to-Market) Key Tenants1 Tenant Sq. Ft. % of Property RSF Blue Racer 30,447 9.7% Sammons Corp 25,982 8.3% Legacy
Slide 49: Sterling Plaza: Asset Attributes
Sterling Plaza (Dallas, TX) Asset Attributes Boutique office building located within a top submarket. Diverse rent roll with multiple tenant industries and staggered lease expirations. Best amenity offerings in submarket: fitness center, conference center, café, and shuttle service. Market Analysis
Slide 50: Legacy Town Center: Key Statistics
Legacy Town Center (Plano, TX) Key Statistics Current Market Rent/ Weighted-Avg. Lease Rentable SF Leased Occupancy1 In - Place Rent1 Term (Yrs.)1 $40.14 / $36.29 522,043 92.9% 2.8 (10.6% Mark-to-Market) Key Tenants1 Tenant Sq. Ft. % of Property RSF Toyota 54,266 10.4% WeWork 53,766 10.3% Cain, Watt
Slide 51: Legacy Town Center: Asset Attributes
Legacy Town Center (Plano, TX) Asset Attributes Located in the heart of Legacy, immediate walking proximity to the Shops at Legacy, Marriott Hotel and variety of residences. Amenities include conference center, brand new state of the art fitness and 2nd conference center are under construction, and
Slide 52: Congress Avenue: Key Statistics
515 Congress Avenue (Austin, TX) Key Statistics Current Market Rent/ Weighted-Avg. Lease Rentable SF Leased Occupancy1 In - Place Rent1 Term (Yrs.)1 $40.00 NNN / 263,058 95.2% $33.90 NNN 3.3 (18.0% Mark-to-Market) Key Tenants1 Tenant Sq. Ft. % of Property RSF Cloudera 27,222 10.4% Bright Health 14,0
Slide 53: Congress Avenue: Asset Attributes
515 Congress Avenue (Austin, TX) Asset Attributes Located on highly sought-after Congress Avenue, with walkable access to some of the most popular restaurants and retail in the city. Full height and continuous windows with efficient rectangular floorplates. Major renovations since acquisition includ
Slide 54: Domain Gateway: Key Statistics
Domain Gateway (Austin, TX) Key Statistics Current Market Rent/ In Weighted-Avg. Lease Rentable SF Leased Occupancy1 - Place Rent1 Term (Yrs.)1 $35.00 NNN / 183,911 100.0% $23.50 NNN 13.1 (48.9% Mark-to-Market) Key Tenants1 Tenant Sq. Ft. % of Property RSF Indeed, Inc. 183,911 100.0% Recent Leasing
Slide 55: Domain Gateway: Asset Attributes
Domain Gateway (Austin, TX) Asset Attributes Domain Gateway has been 100% leased since KBS acquired the building in 2011. KBS has signed a lease with Indeed, Inc. to lease the entire building for 13 years, which comes with virtually no downtime between leases and increases rents by 48.9%. Indeed, In
Slide 56: Park Place Village: Key Statistics
Park Place Village (Leawood, KS) Key Statistics Current Market Rent/ Weighted-Avg. Lease Rentable SF Leased Occupancy1 In - Place Rent1 Term (Yrs.)1 $29.07 / $29.41 483,984 94.1% 5.1 (-1.2% Mark-to-Market) Key Tenants1 Tenant Sq. Ft. % of Property RSF AMC 163,655 33.8% SCOR Global 40,286 8.3% RPS Fi
Slide 57: Park Place Village: Asset Attributes
Park Place Village (Leawood, KS) Asset Attributes Mixed-Use campus featuring a full-service hotel, office, retail and residential. Situated in South Johnson County, Kansas City’s preeminent and most affluent suburban submarket. AMC World Headquarters. Market Analysis 255,591 SF of positive net absor
Slide 58: RBC Plaza: Key Statistics
RBC Plaza (Minneapolis, MN) Key Statistics Current Market Rent/ Weighted-Avg. Lease Rentable SF Leased Occupancy1 In - Place Rent1 Term (Yrs.)1 $20.00 NNN / 710,332 97.4% $18.50 NNN 4.3 (8.1% Mark-to-Market) Key Tenants1 Tenant Sq. Ft. % of Property RSF RBC Capital Markets 296,988 41.8% Fish & Richa
Slide 59: RBC Plaza: Asset Attributes
RBC Plaza (Minneapolis, MN) Asset Attributes The Asset has undergone extensive renovations since acquisition, including a complete repositioning of the former five-story retail mall that was situated at the base of the 40- story tower above. This included a conversion of two retail floors into creat
Slide 60: Accenture Tower: Key Statistics
Accenture Tower* (Chicago, IL) Key Statistics Current Market Rent/ Weighted-Avg. Lease Rentable SF Leased Occupancy1 In - Place Rent1 Term (Yrs.)1 $28.22 / $26.89 1,457,724 82.0% 7.9 (5.0% Mark-to-Market) Key Tenants1 Tenant Sq. Ft. % of Property RSF Accenture 226,486 15.5% Expedia 113,851 7.8% Indu
Slide 61: Accenture Tower: Asset Attributes
Accenture Tower* (Chicago, IL) Asset Attributes Chicago’s largest Class A, LEED Gold-Certified building, which has twice won “Building of the Year” from The Building Owner and Managers Association. Situated atop Ogilvie Transportation Center, which produces more than 100,000 daily visitors to the pr
Slide 62: 3003 Washington: Key Statistics
3003 Washington (Arlington, VA) Key Statistics Current Market Rent/ In Weighted-Avg. Lease Rentable SF Leased Occupancy1 - Place Rent1 Term (Yrs.)1 $52.00 / $55.96 210,804 99.2% 8.6 (-7.1% Mark-to-Market) Key Tenants1 Tenant Sq. Ft. % of Property RSF CNA Corporation 152,414 72.3% The Common Applicat
Slide 63: 3003 Washington: Asset Attributes
3003 Washington (Arlington, VA) Asset Attributes Built in 2013 and is highest quality office in Clarendon submarket. That, combined with the long-term in-place leases is expected to mitigate any leasing or turnover risk. Located 1 block from the Clarendon Metrorail Station, 3 rail stops from the Dis
Slide 64: 3001 Washington: Key Statistics
3001 Washington (Arlington, VA) Key Statistics Current Market Rent/ In Weighted-Avg. Lease Rentable SF Leased Occupancy1 - Place Rent1 Term (Yrs.)1 $52.00 / $51.40 94,837 98.3% 9.1 (1.2% Mark-to-Market) Key Tenants1 Tenant Sq. Ft. % of Property RSF FP1 Strategies 29,849 31.5% HDR Architecture 29,092
Slide 65: 3001 Washington: Asset Attributes
3001 Washington (Arlington, VA) Asset Attributes Built in 2013 and is highest quality office in Clarendon submarket. That, combined with the long-term in-place leases is expected to mitigate any leasing or turnover risk. Located 1 block from the Clarendon Metrorail Station, 3 rail stops from the Dis
Slide 66: Carillon: Key Statistics
Carillon (Charlotte, NC) Key Statistics Current Market Rent/ Weighted-Avg. Lease Rentable SF Leased Occupancy1 In - Place Rent1 Term (Yrs.)1 $33.00 / $29.73 488,277 93.6% 3.3 (10.9% Mark-to-Market) Key Tenants1 Tenant Sq. Ft. % of Property RSF Cadwalader, Wickersham + 45,922 9.4% Taft Crescent Commu
Slide 67: Carillon: Asset Attributes
Carillon (Charlotte, NC) Asset Attributes Well-diversified tenant base. No tenant is greater than 9.4% of the total rentable area, providing excellent rent roll stability. Underway: a $2.25 million new fully-equipped fitness center with locker rooms, boutique fitness classes, and juice bar; target c
Slide 68: 17th Street: Key Statistics
201 17th Street (Atlanta, GA) Key Statistics Current Market Rent/ In Weighted-Avg. Lease Rentable SF Leased Occupancy1 - Place Rent1 Term (Yrs.)1 $37.50 / $36.37 355,870 92.8% 7.3 (3.1% Mark-to-Market) Key Tenants1 Tenant Sq. Ft. % of Property RSF WorldPay US, Inc 130,088 36.5% Nelson Mullins 112,37
Slide 69: 17th Street: Asset Attributes
201 17th Street (Atlanta, GA) Asset Attributes State-of-the-art conference center with 7 collaborative meeting spaces that accommodate groups of 7-10. Unparalleled access with 10 means of ingress and 8 means of egress; exposure off I-85/I-75. Part of Atlantic Station, one of the Southeast’s premier
Slide 70: McEwen Building: Key Statistics
McEwen Building (Nashville, TN) Key Statistics Current Market Rent/ Weighted-Avg. Lease Rentable SF Leased Occupancy1 In - Place Rent1 Term (Yrs.)1 $31.44 / $30.91 175,262 92.3% 2.5 (1.7% Mark-to-Market) Key Tenants1 Tenant Sq. Ft. % of Property RSF Renal Advantage 54,054 30.8% Universal Music Publi
Slide 71: McEwen Building: Asset Attributes
McEwen Building (Nashville, TN) Asset Attributes Property is positioned as the most attractive building for tenants seeking a Class A, mixed- use, amenity-rich environment, which includes Whole Foods, BrickTops restaurant and in-line retail stores. Within the last five years, The McEwen Building’s a
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