Kbs Real Estate Invt Tr Iii Inc. · OTC:KBSR
Kbs Real Estate Invt Tr Iii — KBS Real Estate Investment Trust III — Corporate Update (August 2019)
36 slides from Kbs Real Estate Invt Tr Iii's corporate update, Aug 23, 2019
Slide 1: KBS Real Estate Investment Trust III Portfolio Update Meeting
KBS Real Estate Investment Trust III Portfolio Update Meeting August 23, 2019
Slide 2: Important Disclosures
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: About KBS
Transactional volume in excess of $39.3 billion1, AUM of $11.4 billion1 and 36.1 million About KBS square feet under management1. Formed by Peter Bren and 8th Largest Office Owner Globally, National Chuck Schreiber in 1992. Real Estate Investor2. Over 26 years of investment Ranked among Top 53 Globa
Slide 4: Regional Focus Map
Regional Focus Map Gateway Target First-tier Target Strong Employment / Growth KBS Offices 4
Slide 5: Office Market Update
Office Market Update The economy and the national real Strong GDP Growth New Jobs / Month estate market continue to do well. The national real estate market is not 2016 1.6% 2016 195,000 / month behaving like a late cycle market. We have a strong economy, robust 2017 2.3% 2017 182,000 / month tenant
Slide 6: Singapore Portfolio Sale
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Slide 7: Introduction: Singapore Portfolio Sale
$147.4 million gain over cost basis ON JULY 18, 2019 11 Properties Sold $1.2 Billion Sale Price The sale represents a $0.09 On July 18, 2019, the Company executed a increase per share in the Introduction strategic sale of 11 of its properties (the “Singapore estimated value of the Portfolio”), at a
Slide 8: The Singapore Portfolio Consists of…
The Singapore Portfolio Consists of… Acq. Cost Basis Portfolio Property Location Sq. Ft. Acq. Price Gain on Sale Date at Sale1 Sale Price Tower 909 Irving, TX 12/21/12 374,251 $ 45,500,000 $ 66,417,130 $ 76,300,000 $ 9,882,870 One Washington Gaithesburg, MD 6/19/13 314,284 84,059,000 94,443,961 102,
Slide 9: The Portfolio Sale Generated Proceeds of $413.0 Million
The Portfolio Sale Generated Proceeds of $413.0 Million Dollars in Thousands Gross Sales Proceeds $ 1,222,150 Seller Credit [1] (10,093) KBS REIT III 31.3% Interest [2] (254,814) Subtotal-Net Sale Price Less KBS REIT III Interest 957,243 Closing Costs, Interest Rate Buydown, Advisor Disposition Fee
Slide 10: 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/ 2019 share speci
Slide 11: Expanded 2019 Share Redemption Program
Expanded 2019 Dollars in Thousands Share Redemption Program On August 8, 2019, the Company expanded the share redemption program for 2019 to its Maximum Allowed for 2019 [2] $101,400 maximum allowed annual limit. See calculation to the right. The expansion of the share redemption program allows the
Slide 12: Special Distribution
Special Option for shareholders to receive their 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 13: 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 14: 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 15: Fund and Portfolio Overview
Fund and Portfolio Overview (Post Singapore Portfolio Sale) 15
Slide 16: Fund and Portfolio Overview
Fund and FUND PORTFOLIO1 Portfolio Overview Primary Offering Broke Escrow December 2018 Estimated Value of May 24, 2011 Current Portfolio As of June 30, 2019, unless $3.1 billion otherwise noted; Primary Offering Closed Portfolio information excludes July 28, 2015 Current Cost Basis2 properties sold
Slide 17: $3.1 Billion Class A Properties
20 Class A 8.2 Million RSF, 4.4 Years Avg. Properties 90.7% Leased2 Lease Term3 1 $3.1 Billion , Urban, Well-Located, Urban, Institutional-Quality Live/Work/Play Diversity by Growth Markets and Prime Locations, Property, Markets, Office Portfolio, with Mass Transit & Tenants Locations Within the Mar
Slide 18: The Current Portfolio
Building Classification Fitness Tenant Outdoor Conference Mass Transit Leased Occupancy Leased Occupancy Property Metro City Class Sq. Ft. (CBD, Urban, Center Lounge Amenity Facilities Availability at Acquisition at June 30 , 20191 ( A,B or C) Sub) WEST Anchor Centre Phoenix A 333,014 ✔ ✔ ✔ ✔ Suburb
Slide 19: 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 20: Statistics for the Current Portfolio
Statistics for the Current Portfolio Market Diversification [1] Asset Diversification [1] Invested in Target Markets: Asset Diversification, 46% of value in CBRE’s Top 10 Tech Markets 2 Largest asset accounts for just 89% of value in CBRE’s Top 25 Tech Markets 2 16% Nashville Hardware Village 2% (Un
Slide 21: Statistics for the Current Portfolio: Top Tenants
Top 10 Tenants [1] Statistics for the WEIGHTED % OF NLA Current Portfolio TOP 10 TENANTS INDUSTRY SECTOR PROPERTY (SQ. FT) AVERAGE LEASE TERM (YRS) ANNUALIZED BASE RENT [2] Management CNA Corporation 3003 Washington 152,414 9.9 4.2% Consulting Accenture will become the 2nd largest tenant based on SF
Slide 22: Statistics for the Current Portfolio: 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 30,
Slide 23: Capital Management
Capital Management1 As of June 30, 2019, unless otherwise noted Initial Debt Maturities1 $1,400,000 $1,024,969 3 Total Debt1 $1.8 billion $1,200,000 $1,000,000 ($000) $800,000 $600,000 $379,245 $200,000 Loan-to-Value2 57% $400,000 $64,730 $93,000 $200,000 $0 $- Average cost of debt 3.89% per annum I
Slide 24: Property Updates
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Slide 25: Accenture Tower (Chicago, IL)
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 84.6% 8.4 (5.0% Mark-to-Market) Key Tenants2 Tenant Sq. Ft. % of Property RSF Accenture 263,718 18.1% Expedia 113,851 7.8% Indu
Slide 26: Domain Gateway (Austin, TX)
Domain Gateway (Austin, TX) Key Statistics Current Market Rent/ Weighted-Avg. Lease Rentable SF Leased Occupancy1 In - Place Rent2 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% Key Highlights
Slide 27: 515 Congress Avenue (Austin, TX)
515 Congress Avenue (Austin, TX) Key Statistics Current Market Rent/ Weighted-Avg. Lease Rentable SF Leased Occupancy1 In - Place Rent2 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 28: Hardware Village Apartments (Salt Lake City, UT)
Hardware Village Apartments (Salt Lake City, UT) Key Statistics Rentable SF Units Leased Occupancy1 478,569 453 43.80%1 Construction Summary Projected development cost $138.8 million Construction is expected to be completed by Sept. 30, 2019. Lease-up is expected to finish by Dec. 2020 based on our
Slide 29: Hardware Village Apartments Development
Hardware Village Apartments Development 29
Slide 30: Stockholder Performance
The December 2018 estimated value per share was performed in accordance with the provisions of and also to comply with the IPA Valuation Guidelines. As with any valuation methodology, the methodologies used are based upon a number of estimates and assumptions that may not be accurate or complete. Di
Slide 31: Distribution History & Yield
Distribution History & Yield Distribution History1: June 24, 2011 – June 30, 2019: $0.65/share 1 Based on distributions declared as of May 14, 2019. on an annualized basis Total distributions paid through June 30, 2019, consisted of 49% paid in cash and 51% reinvested through the dividend reinvestme
Slide 32: Stockholder Hypothetical Performance
Stockholder Hypothetical Performance of Early and Late Investors Hypothetical Assumes all distributions have been taken in cash and stockholder has Performance held shares since the dates below Sum of Estimated Value Per Share as of Cumulative Cash Estimated Value December 3, 2018 and Distributions
Slide 33: Stockholder Performance – June 2019
Stockholder Performance – June 2019 Hypothetical Performance of First and Last Investor $17.18 total value for first cash investor 1, 2 $14.52 total value for last cash investor 1, 2 Breakdown of First Cash Investor Value Breakdown of Last Cash Investor Value $16.85 $17.18 1, 2 $15.91 $14.16 $14.19
Slide 34: Strategic Alternatives
Strategic Alternatives As the Board of Directors evaluates various strategic alternatives, they will be focused on certain key Following the Portfolio Sale, the attributes of the Company including the current Company’s Board of Directors has portfolio size and performance, shareholder desire for ini
Slide 35: REIT III Goals & Objectives
REIT III Goals & Objectives Provide enhanced shareholder liquidity Finalize a review of strategic alternatives, with the goal of further enhancing shareholder liquidity and maximizing shareholder value. Complete major capital projects, such as renovations or amenity enhancements, with the goal of at
Slide 36: Q&A
Q&A For additional questions, contact KBS Capital Markets Group Investor Relations (866) 527-4264 36
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