Kbs Real Estate Invt Tr Iii Inc. · OTC:KBSR
Kbs Real Estate Invt Tr Iii — KBS Real Estate Investment Trust III — Investor Presentation (November 2022)
32 slides from Kbs Real Estate Invt Tr Iii's investor presentation, Nov 18, 2022
Slide 1: Portfolio & NAV Update Webcast
Portfolio & NAV Update Webcast November 18, 2022 Exhibit 99.1
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, 2021 (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, 2022 have been funded with cash flow from operating activities, debt financing and proc
Slide 4: Return to Office Statistics
Return to Office Statistics 4
Slide 5: KBS Return to Office Progress by Region
1 7 55% 45% 40% 35% 25% Apri 30% 50% 60% May June July SeptemberAugust 28% 56% 38% 45% 75% 75% REGION BY STATE 70% 65% 65% KBS Return to Office Progress by Region 1 Colorado/S. California/Utah Illinois/Mid-Atlantic Oregon/N. California/Washington St. Midwest Southeast Texas 5 1 Information provided
Slide 6: Fund and Portfolio Overview
Fund and Portfolio Overview 6
Slide 7: Current portfolio of properties
W W W . K B S . C O M 1 Current portfolio of properties as of September 2022. Value based solely on the appraised values as of July 31, 2022 as reflected in the September 2022 estimated share value. The appraised values do not consider estimated disposition costs and fees. 2 Estimated value of KBS R
Slide 8: Property details by region
W W W . K B S . C O M 8 1 Includes future leases that had been executed but had not yet commenced as September 30, 2022. 2 Weighted Average Lease Expiry is measured across all tenants’ remaining leases in years and is weighted based on the tenant’s leased area. Property Metro City Building Class ( A
Slide 9: Statistics for the Current Portfolio: Asset and Market Diversification
W W W . K B S . C O M Kansas City Other Atlanta Minneapolis Austin Charlotte Washington D.C. Metro (2 Properties) Oakland 5% 4% 5% 6% 6% 8% 10% Dallas (3 Properties)17% San Jose (2 Properties)14% Statistics for the Current Portfolio 1 Based solely on the appraised values as of July 31, 2022 as refle
Slide 10: Statistics for the Current Portfolio: Industry Diversification
W W W . K B S . C O M Communications Healthcare & Social Assistance Information Professional, Scientific, & Technical Services Transportation & Warehousing Insurance Carriers & Related Activities 21% Other3 3% 4% 4% 6% 8% 3% 4% 18% Finance 11% Real Estate9% STEM/TAMI2 25% Statistics for the Current
Slide 11: 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 130,764 11.7 3.9% Accenture Management Consulting Accenture Tower 267,329 14.8 3.9% WeWork R
Slide 12: Capital Management
W W W . K B S . C O M $439 $1,821 $691,878 $653,395 $213,800 $65,000 $0 $200,000 $400,000 $600,000 $800,000 Capital Management1 As of September 30, 2022, unless otherwise noted Initial Debt Maturities 1 1 Based on total debt as of September 30, 2022. 2 Loan-to-Value equals the total debt as of Septe
Slide 13: Share Redemption Program & Historical Liquidity
W W W . K B S . C O M 13 Share Redemption Program & Historical Liquidity 1 Offering closed in 2015 2 Includes redemptions in connection with the self-tender offer 3 Includes proceeds raised inception-to-date through September 30, 2022 including funds received under the dividend reinvestment plan Per
Slide 14: September 2022 Estimated Value per Share
14 September 2022 Estimated Value per Share
Slide 15: Valuation Information
W W W . K B S . C O M Valuation Information1 1 For more information, see the Valuation 8-K. ▪ 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 Guideline 2013-01, Valuat
Slide 16: Valuation Summary
W W W . K B S . C O M Valuation Summary 1 Based on (i) appraisals of KBS REIT III’s 17 real estate properties as of July 31, 2022, the estimated value of KBS REIT III’s investment in units of Prime US REIT (SGX-ST Ticker: OXMU) as of September 20, 2022, and the estimated value of KBS REIT III’s othe
Slide 17: Valuation Change Summary
W W W . K B S . C O M Valuation Change Summary On September 28, 2022, KBS REIT III’s Board of Directors approved an estimated value per share of $9.001. The following is a summary of the estimated value per share changes within each asset and liability group. 1 Based on (i) appraisals of KBS REIT II
Slide 18: 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 19: Stockholder Valuation Information
W W W . K B S . C O M 19 Stockholder Valuation Information Further, the estimated value per share is based on (i) appraisals of the appraised properties as of July 31, 2022, the estimated value of the Company’s investment in units of Prime US REIT (SGX-ST Ticker: OXMU) as of September 20, 2022 and t
Slide 20: Interest Rate Index Movement
W W W . K B S . C O M 09/30/2021 09/30/2022 Change 10 Yr. UST 1.49% 3.83% 1 2.34% 5 Yr. UST 0.97% 4.09% 3.12% One-Month LIBOR 0.08% 3.14% 3.06% 20 Interest Rate Index Movement The period of time between our last portfolio valuation and this current NAV process has been plagued by headlines regarding
Slide 21: Valuation Change Summary by Region
W W W . K B S . C O M Valuation Change Summary 1 by Region 21 West Region Valuation Change in Value $898,850,000 -8.1% Central Region Valuation Change in Value $1,333,980,000 -4.1% East Region Valuation Change in Value $556,360,000 -6.2% 1 The change in valuation compares the recent September 2022 v
Slide 22: Valuation Change Summary
W W W . K B S . C O M 22 Rapidly increasing interest rates coupled with uncertainty rooted by recessionary fears commonly lead to more conservative underwriting assumptions by investors, lenders, appraisers, and the like. This impact was seen across the board during the current NAV process—on averag
Slide 23: Occupancy by property
W W W . K B S . C O M 23 Although real estate valuations have been impacted by various macroeconomic factors over the past year, the portfolio’s economic and leased occupancy rates have remained relatively stable to date. However, the economic uncertainties in the current market environment, combine
Slide 24: Leasing Challenges
W W W . K B S . C O M Leasing Challenges 24 We have some near-term leasing challenges in the portfolio, mostly in certain markets where return to office has been very slow, that will likely put pressure on our occupancy rates in the future and negatively impact the REITs near term operating cash flo
Slide 25: Leasing Successes
W W W . K B S . C O M Leasing Successes 25 Accenture Tower ▪ 78% leased as of 9/2021, now up to 91% leased as of 9/2022. ▪ Nearly 200,000 sf of net absorption across a lengthy list of new and expansion leases. ▪ Benefiting from strength of location as well as recent common area upgrades. McEwen Buil
Slide 26: Leasing Successes
W W W . K B S . C O M 26 Preston Commons ▪ 90% leased a year ago (up from 85% 12/2020), now 97% leased as of 9/2022. ▪ Tremendous amount of new, renewal, and expansion activity in one of Dallas’ most active micro-markets. ▪ Benefiting from large-scale common area and amenity improvements completed i
Slide 27: Stockholder Hypothetical Performance
W W W . K B S . C O M 2731 Stockholder Hypothetical Performance Estimated Value Per Share as of September 2022 Cumulative Cash Distributions and Stock Dividends Received Per Share as of October 20221 Sum of Estimated Value Per Share, Cumulative Cash Distributions and Stock Dividends Received Per Sha
Slide 28: Stockholder Hypothetical Performance (notes)
W W W . K B S . C O M 1 The total value would change to $17.48 and $14.77 for a first and last investor, respectively, who fully participated in KBS REIT III’s dividend reinvestment plan for the life of the investment and did not make any redemptions. 2 Total value equals the September 2022 estimate
Slide 29: Strategic Plan Update
Real Estate Investment Trust Ill Strategic Plan Update
Slide 30: Assessment of Strategic Alternatives
W W W . K B S . C O M 30 Assessment of Strategic Alternatives We continue to evaluate strategic alternatives for the REIT; however, the current environment in the capital and real estate markets is very difficult with headwinds caused by inflation and rising interest rates. As a result, at this time
Slide 31: REIT III 2023 Goals & Objectives
W W W . K B S . C O M REIT III 2023 Goals & Objectives 31 Distribute operating cash flows to stockholders Maintain a substantial amount of liquidity in the REIT in order to continue to enhance asset values and provide stockholder liquidity. Extend and refinance certain maturing loans in the portfoli
Slide 32: Q&A
32 Q&A For additional questions, contact KBS Capital Markets Group Investor Relations (866) 527-4264
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