Kbs Real Estate Invt Tr Iii Inc. · OTC:KBSR
Kbs Real Estate Invt Tr Iii — KBS Real Estate Investment Trust III — Corporate Update (August 2020)
33 slides from Kbs Real Estate Invt Tr Iii's corporate update, Aug 20, 2020
Slide 1: Portfolio & Strategic Plan Update
Exhibit 99.1 Portfolio & Strategic Plan Update August 20, 2020
Slide 2: Important Disclosures: 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 Report on Form 10-K for the year ended December 31, 2019 (the “Annual Report”), and in the Company’s Quarterly
Slide 3: Important Disclosures (cont.)
Forward-Looking Statements Important The Company may fund distributions from any source including, without limitation, from offering proceeds or borrowings. Distributions paid through June 30, 2020 have been funded with cash flow from operating activities, debt financing and proceeds from asset sale
Slide 4: About KBS
Transactional volume in excess of $42.7 billion1, AUM About KBS of $8.0 billion1 and 23.2 million square feet under management1. Formed by Peter Bren and Buyer and seller of well-located, yield-generating office Chuck Schreiber in 1992. and industrial properties. Over 27 years of investment and Advi
Slide 5: Regional Focus Map
Regional Focus Map Gateway Target First-tier Target Strong Employment / Growth KBS Offices WWW. KBS.COM 5
Slide 6: The Impact of COVID-19 on Capital Markets and US Real Estate Investments
The Impact of COVID-19 on Capital Markets and US Real Estate Investments WWW. KBS.COM 6
Slide 7: COVID-19: The Economy
COVID-19:The Economy • The Department of Commerce reported that U.S. gross domestic product (GDP), the broadest measure of the nation's economic output, fell by an annualized rate of 5% in the first quarter followed by an even steeper decline of 33% in the second quarter based on initial estimates.
Slide 8: COVID-19: Office Market Demand
• According to CoStar, the full impact of the coronavirus outbreak on the US Office COVID-19: sector remains unclear, but expectations are for a drop-off in leasing and transaction Office Market volume to continue beyond the second quarter. The vacancy rate is still below the historical average of a
Slide 9: COVID-19: Office Market – the Road to Recovery
• The office market likely will see several quarters of subdued activity until a clearer timeline for reopening COVID-19: appears and a vaccine is developed. This will allow occupiers to effectively plan reopening of workplaces and accurately forecast future needs. CBRE projects that a recovery for
Slide 10: COVID-19: Space Planning and Facilities Management
COVID-19: • Most firms appear to be in no hurry to make major real estate decisions right now. This point is underscored by the spread between renewal deals and new deals. If tenants aren't facing an imminent Space Planning and lease expiration, real estate decisions are on the back burner.1 • The w
Slide 11: COVID-19: Rent Collections, Renewals and the Capital Markets
• Cash payment for office rents bottomed in May at 82% of pre-COVID levels and recovered to 95% in June. COVID-19: Primary markets saw significant declines in cash payments but are now recovering.1 • In the U.S., average rents are expected to fall by more than 6% this year—the first annual decline s
Slide 12: COVID-19: Rent Collections
COVID-19: Depending upon the duration of the various measures imposed to help control the spread of the virus and the corresponding economic slowdown, some of the Company’s tenants have or will seek rent deferrals or become unable to Rent Collections pay their rent. Through August 7th, rent collecti
Slide 13: COVID-19 Capital Management
COVID-19 Capital Management Capital Markets The impact of COVID-19 has placed significant constraints on corporate liquidity in the financial markets. As a result, we are slightly delaying the timing of refinancings and certain asset sales. We believe the Company’s low leverage and liquidity positio
Slide 14: COVID-19: Impact on Portfolio
COVID-19: 19 Class A Over 640 Tenants Properties Located 4.6 Years Weighted with Staggered Impact on Portfolio in 12 Different Average Lease Term Lease Expirations Markets We believe the KBS REIT III portfolio is positioned to manage any short-term economic impact from COVID-19 based on our liquidit
Slide 15: COVID-19 Impact: Tenant Industry Exposure
Co-Working, Accommodations & Food and Retail Tenant Exposure COVID-19 Based on Annualized Base Rent1 Industry Comparison1 Impact (cont.) Remaining Sectors 90% Certain industries are experiencing greater economic disruption due to COVID-19 compared to others. Co-Working These industries include the C
Slide 16: COVID-19 Impact: Distribution History
COVID-19 Distribution History: Impact (cont.) Special Dividend Distributions December 2019 $0.80/share While there is some near term impact to Distributions revenues, our exposure to the industries January 1, 2019 – $0.65/share* that are currently most impacted by COVID- December 31, 2019 January 20
Slide 17: Fund and Portfolio Overview
Fund and Portfolio Overview 17
Slide 18: Fund and Portfolio Overview
Fund and Portfolio December 2019 Estimated Value of Current Portfolio of Properties1 $3.2 billion Overview1 June 30, 2020 Value of Investment in units of PRIME US REIT 2 As of June 30, 2020, unless otherwise noted. $225.9 million June 30, 2020 Carrying Value of Loan Receivable 3 $147.6 million Renta
Slide 19: The Current Portfolio of Properties
The Current Portfolio of Properties Building Classification Mass Transit Leased Occupancy Leased Occupancy Property Metro City Class Sq. Ft. (CBD, Urban, Availability at Acquisition at June 30, 20201 ( A,B or C) Suburban) WEST Anchor Centre Phoenix A 333,014 Suburban Metro 78% 94% Salt Lake Hardware
Slide 20: The Current Portfolio of Properties Map
The Current Portfolio of Properties This map shows the markets where the current portfolio of properties is located. The Company’s Properties are: • In prime locations within the markets, via proximity to urban centers, an educated workforce, attractive live/work/play amenities, and/or mass transit.
Slide 21: Statistics for the Current Portfolio: Diversification
Statistics for the Current Portfolio Market Diversification 1 Asset Diversification 1 Invested in Target Markets: Asset Diversification: 50% of value2 in CBRE’s Top 10 Tech Markets Largest asset accounts for just 16% 90% of value2 in CBRE’s Top 25 Tech Markets Park Place Village 3% Nashville 2% Doma
Slide 22: Statistics for the Current Portfolio: Tenants and Lease Expirations
Statistics for the Current Portfolio Over 640 Tenants with Staggered Lease Expirations and Industry Diversification Tenant Industries 1 Lease Expirations 1 Communications Equipment Manufacturing 1% $40000 15.1% 15.6% Scientific Research & Development 1% STEM/TAMI2 Healthcare & Social Assistance 4% 2
Slide 23: Top Tenants Statistics for the Current Portfolio
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 CNA Corporation Management Consulting 3003 Washington 152,414 8.9 4.0% Real Estate and Rental and 201 Spear Street, WeWork3 132,645
Slide 24: Capital Management
1 Capital Management As of June 30, 2020, unless otherwise noted Initial Debt Maturities 1 3 $800,000 $731,966 Total Debt1 $1.5 billion $600,000 $379,245 $400,000 $294,623 $200,000 Loan-to-Value2 42.3% $93,000 $0 $0 $0 Average cost of debt 3.07% per annum Interest Rate Exposure (in millions) Fixed I
Slide 25: Property Updates
Real Estate Investment Trust Ill Property Updates
Slide 26: Hardware Village Sale
Hardware Village Sale A two building multi-family apartment complex SALE PRICE $178.0 million Hardware Village was sold on May 7, 2020 for a gross sale price of $178.0 million. The cost basis at disposition was $128.3 million. In connection with the sale, KBS REIT III provided short-term seller fina
Slide 27: Preston Commons Key Statistics
Key Statistics Preston Commons Current Market Rent/ Weighted-Avg. Lease Term Rentable SF Leased Occupancy1 Dallas, TX In - Place Rent2 (Yrs.) $44.66 NNN / $39.27 NNN 427,799 81.8% 4.8 (13.7% Mark-to-Market) Key Tenants Tenant Sq. Ft. % of Property RSF Recent Leasing JP Morgan Bank 41,906 9.8% Sunflo
Slide 28: 17th Street Key Statistics
201 17th Street Key Statistics Atlanta, GA Current Market Rent/ Weighted-Avg. Lease Term Rentable SF Leased Occupancy1 In - Place Rent (Yrs.) $40.00 / $30.82 355,870 96.4% 6.6 (29.8% Mark-to-Market) Key Tenants Tenant Sq. Ft. % of Property RSF WorldPay US Inc. 130,088 36.5% Nelson Mullins 117,517 33
Slide 29: Strategic Plan Update: NAV Conversion
Strategic Plan Update NAV Conversion 29
Slide 30: NAV Conversion
NAV Conversion Conversion to an NAV REIT fulfills certain key The Company’s Board of Directors finalized objectives of the Company including the current a review of strategic alternatives in an portfolio size and performance, shareholder desire for effort to further enhance shareholder liquidity as
Slide 31: NAV Conversion Update on Timing
The impact of COVID-19 has altered the landscape of the real NAV Conversion estate market in its entirety. The disruption has reduced Update on Timing cashflows and halted leasing activity resulting in reductions of real estate values. Specific to the REIT III portfolio, the Company’s rent collectio
Slide 32: REIT III Goals & Objectives
REIT III Goals & Objectives Distribute operating cash flows to stockholders Efficiently manage the real estate portfolio throughout the COVID-19 crisis in order to maximize the long-term portfolio value to stockholders Carefully evaluate all tenant rent deferral requests to make sure we are providin
Slide 33: Q&A
Q&A For additional questions, contact KBS Capital Markets Group Investor Relations (866) 527-4264 33
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