Kbs Real Estate Invt Tr Iii Inc. · OTC:KBSR
Kbs Real Estate Invt Tr Iii — KBS Real Estate Investment Trust III — Investor Presentation (December 2020)
39 slides from Kbs Real Estate Invt Tr Iii's investor presentation, Dec 15, 2020
Slide 1: Portfolio & NAV Update
Portfolio & NAV Update December 15, 2020 Exhibit 99.2
Slide 2: Important Disclosures
W W W . K B S . C O M 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 th
Slide 3: Important Disclosures (cont.)
W W W . K B S . C O M Important Disclosures (cont.) The Company may fund distributions from any source including, without limitation, from offering proceeds or borrowings. Distributions paid through September 30, 2020 have been funded with cash flow from operating activities, debt financing and proc
Slide 4: About KBS
W W W . K B S . C O M Formed by Peter Bren and Chuck Schreiber in 1992. Over 28 years of investment and management experience with extensive long-term investor relationships. 1 As of September 30, 2020. About KBS 4 Transactional volume in excess of $42.7 billion1, AUM of $8.0 billion1 and 23.1 milli
Slide 5: KBS Offices Regional Focus Map
W W W . K B S . C O M Gateway Target First-tier Target Strong Employment / Growth KBS Offices Regional Focus Map 5
Slide 6: The Impact of COVID-19 on Capital Markets and US Real Estate Investments
W W W . K B S . C O M The Impact of COVID-19 on Capital Markets and US Real Estate Investments 6
Slide 7: COVID-19: The Economy
W W W . K B S . C O M • On Tuesday, November 24, 2020 the Dow eclipsed 30,000 for the first time1, a remarkable record in the midst of a pandemic; a rise stimulated by news of potential vaccines. • Since April, the economy has gained back roughly a million jobs, but that still leaves office-using em
Slide 8: COVID-19: The Economy
W W W . K B S . C O M • According to recent data released by Green Street Advisors, the performance of the S&P 500 suggests that the economy, in a year or two, will be largely unmarked by the pandemic. Treasury yields, extraordinarily low by historic standards (though highest amongst G7 nations), si
Slide 9: COVID-19: The Economy
W W W . K B S . C O M • Positive vaccine test results are a reminder that the darkness may clear soon1 • GDP forecast revised; output to match 4Q19 by the end of next year1 • Economic activity in the U.S. rebounded sharply last quarter. A nationwide surge in coronavirus infections will restrain GDP
Slide 10: Office-using employment recovery
W W W . K B S . C O M • The continued demand for high-tech talent will help drive commercial real estate growth.1 • Office-using employment rebounded quickly in the third quarter of 2020 indicating future demand for physical workspaces. 2 • More than 30% of the private sector office-using jobs lost
Slide 11: COVID-19: What We are Seeing
W W W . K B S . C O M COVID-19: What We are Seeing • We were the first large real estate firm to roll-out the Maptician space planning software to help tenants manage COVID risk. This has been well received. • We have implemented enhanced air-quality filtration and air-cleaning mechanisms to ensure
Slide 12: COVID-19: Rent Collections
W W W . K B S . C O M As illustrated below, rental collection rates for the office sector, as reported by NCREIF, have hovered slightly below or above 90%.1 12 COVID-19: Rent Collections 1 Rent Analysis Report, NCREIF, November 2020 As of November 15, 2020
Slide 13: COVID-19: Rent Collections
W W W . K B S . C O M COVID-19: Rent Collections Since April 1, 2020, a number of tenants have requested rent relief, most in the form of rent deferrals or abatement. Depending upon the duration of the various measures imposed to help control the spread of the virus and the corresponding economic sl
Slide 14: Portfolio positioned to manage COVID-19 impact
W W W . K B S . C O M We believe the KBS REIT III portfolio is positioned to manage any short-term economic impact from COVID-19 based on our liquidity, diversified tenant base, long-term leases, property locations and exposure to high growth industries. The top tenants include tenants such as RBC C
Slide 15: Industry Comparison
W W W . K B S . C O M Certain industries are experiencing greater economic disruption due to COVID-19 compared to others. These industries include the co-working space, accommodation & food and retail. However, the Company expects nominal impact from these industries due to the following: • The majo
Slide 16: Distribution History
W W W . K B S . C O M 16 Distribution History: 1 Decrease in annualized distribution rate per share is due to a special dividend of $0.80/share that was paid to stockholders in December 2019 (the “Special Dividend”). The Special Dividend was paid in the form of cash and stock and the decrease in dis
Slide 17: Fund and Portfolio Overview
Fund and Portfolio Overview 17
Slide 18: Current portfolio of properties
W W W . K B S . C O M 1 Current portfolio of properties as of September 30, 2020. Value based solely on the appraised values as of September 30, 2020 as reflected in the December 2020 estimated share value. The appraised values do not consider estimated disposition costs and fees. 2 December 1, 2020
Slide 19: Property details and leased occupancy
W W W . K B S . C O M 19 1 Includes future leases that had been executed but had not yet commenced as September 30, 2020. Property Metro City Building Class ( A,B or C) Sq. Ft. Classification (CBD, Urban, Suburban) Mass Transit Availability Leased Occupancy at Acquisition Leased Occupancy at Septemb
Slide 20: Statistics for the Current Portfolio: Asset and Market Diversification
W W W . K B S . C O M Nashville Salt Lake City Phoenix Kansas City Atlanta Charlotte Minneapolis Washington D.C. Metro (2 Properties) Austin (2 Buildings) Dallas (3 Properties) 2% 3% 3% 4% 5% 5% 7% 9% 15% San Francisco Bay Area (4 Properties) 30% Chicago (1 Property) 15% Statistics for the Current P
Slide 21: Statistics for the Current Portfolio: Industry Diversification
W W W . K B S . C O M Communications Equipment Manufacturing Scientific Research & Development Transportation & Warehousing Healthcare & Social Assistance Computer Systems Design & Related Services Information Professional, Scientific, & Technical Services Insurance Carriers & Related Activities Man
Slide 22: Top Tenants
W W W . K B S . C O M Top 10 Tenants 1 TOP 10 TENANTS INDUSTRY SECTOR PROPERTY NLA (SQ. FT) WEIGHTED AVERAGE LEASE TERM (YRS) % OF ANNUALIZED BASE RENT 2 CNA Corporation Management Consulting 3003 Washington 152,664 8.7 3.9% WeWork3 Real Estate and Rental and Leasing 201 Spear Street, Legacy Town Ce
Slide 23: Capital Management
W W W . K B S . C O M Capital Management1 As of September 30, 2020, unless otherwise noted Initial Debt Maturities 1 1 Based on total debt as of September 30, 2020. 2 Loan-to-Value equals the total debt as of September 30, 2020 divided by the December 2020 estimated value of the portfolio of propert
Slide 24: Capital Management Update
W W W . K B S . C O M Capital Management Update Recent Transactions Subsequent to September 30, 2020 Debt Maturities as of September 30, 2020 Mortgage Loan Transaction Detail BofA Portfolio Loan • Released Accenture Tower • Extension to 2021 Accenture Tower Loan • Refinanced Accenture Tower as Stand
Slide 25: 2020 Estimated Value per Share
25 2020 Estimated Value per Share
Slide 26: Valuation Information
W W W . K B S . C O M Valuation Information1 1 For more information, see the Valuation 8-K dated December 7, 2020. ▪ KBS REIT III’s estimated value per share was determined in accordance with the Institute for Portfolio Alternatives’ (formerly known as the Investment Program Association) Practice Gu
Slide 27: Valuation Summary
W W W . K B S . C O M Valuation Summary 1 Based on the estimated value of KBS REIT III’s assets less the estimated value of KBS REIT III’s liabilities, divided by the number of shares outstanding, all as of September 30, 2020, except for certain items discussed in the Valuation 8-K for which estimat
Slide 28: Valuation Change Summary
W W W . K B S . C O M Valuation Change Summary On December 7, 2020, KBS REIT III’s Board of Directors approved an estimated value per share of $10.741. The following is a summary of the estimated value per share changes within each asset and liability group. 1 Based on the estimated value of KBS REI
Slide 29: Valuation Change Summary by Region
W W W . K B S . C O M Valuation Change Summary 1 by Region 29 West Central East West Region Valuation Change in Value $1,091,500,000 -0.8% Central Region Valuation Change in Value $1,473,030,000 -0.4% East Region Valuation Change in Value $584,900,000 -0.9% 1 The change in valuation compares the rec
Slide 30: Significant Real Estate Changes
W W W . K B S . C O M Significant Real Estate Changes 30 Accenture Tower The appraised value decreased $19.8 million, or 3.9%, from the prior year appraised value due to the following: ▪ Decreased leasing activity in 2020, coupled with flat rents and lack of rent growth as a result of the pandemic.
Slide 31: Significant Real Estate Changes
W W W . K B S . C O M Significant Real Estate Changes The Almaden 31 Towers II & III at Emeryville The appraised value decreased $10.4 million, or 3.4%, from the prior year appraised value due to the following: ▪ The San Francisco Bay Area, like other major metros, has been disproportionately affect
Slide 32: Significant Real Estate Changes
W W W . K B S . C O M Significant Real Estate Changes 32 Domain Gateway The appraised value increased $16.2 million, or 15.1%, from the prior year appraised value due to the following: ▪ An increase in NOI compared to the prior year analysis primarily due to Indeed’s occupancy fully commencing to 10
Slide 33: C O M • a stockholder would be able to resell his or her
W W W . K B S . C O M • a stockholder would be able to resell his or her shares at KBS REIT III’s estimated value per share; • a stockholder would ultimately realize distributions per share equal to KBS REIT III’s estimated value per share upon liquidation of KBS REIT III’s assets and settlement of
Slide 34: Stockholder Valuation Information
W W W . K B S . C O M 34 KBS REIT III provides its estimated value per share to assist broker dealers that participated in KBS REIT III’s now-terminated initial public offering in meeting their customer account statement reporting obligations. Stockholder Valuation Information Further, the estimated
Slide 35: Strategic Plan Update NAV Conversion
35 Strategic Plan Update NAV Conversion
Slide 36: Potential NAV Conversion: NAV REITs at a Glance
W W W . K B S . C O M 36 Conversion to an NAV REIT fulfills certain key objectives of the Company including balancing shareholder desire for liquidity as well as their desire to stay invested. Potential NAV Conversion NAV REITs at a Glance Perpetual Life Investment Vehicle Potential enhanced liquidi
Slide 37: Proposed NAV REIT Conversion and COVID-19
W W W . K B S . C O M 37 As the global impact of the COVID-19 pandemic continues to evolve, severely impacting global economic activity and causing significant volatility and negative pressure in the financial markets, including the U.S. real estate office market and the industries of our tenants, o
Slide 38: REIT III 2021 Goals & Objectives
W W W . K B S . C O M REIT III 2021 Goals & Objectives 38 Distribute operating cash flows to stockholders Carefully evaluate all tenant rent deferral requests to make sure we are providing rent relief where it is necessary, while being repaid on such deferrals either over time or through a longer te
Slide 39: Q&A
39 Q&A For additional questions, contact KBS Capital Markets Group Investor Relations (866) 527-4264
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