Kbs Real Estate Invt Tr Iii Inc. · OTC:KBSR
Kbs Real Estate Invt Tr Iii — KBS Real Estate Investment Trust III — Corporate Update (July 2023)
29 slides from Kbs Real Estate Invt Tr Iii's corporate update, Jul 21, 2023
Slide 1: Portfolio Update July 2023
Portfolio Update July 2023 60 South Sixth Minneapolis, MN Exhibit 99.1
Slide 2: Important Disclosures
KBS.COM 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”, “KBS REIT III”, ”we” or “our”) Annual Report on Form 10-K for the year ended December 31, 2022 (the “Annual Report”), and in the
Slide 3: Important Disclosures (cont.) Forward-Looking Statements
KBS.COM Important Disclosures (cont.) Our significant investment in the equity securities of Prime US REIT (the “SREIT”), a traded Singapore real estate investment trust, is subject to the risks associated with real estate investments as well as the risks inherent in investing in traded securities,
Slide 4: Fund and Portfolio Overview
Fund and Portfolio Overview 4 171 17th Street Atlanta, GA
Slide 5: The Current Portfolio of Properties
KBS.COM The Current Portfolio of Properties 5 1 Includes future leases that had been executed but had not yet commenced as March 31, 2023. 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
Slide 6: Statistics for the Current Portfolio: Market and Asset Diversification
KBS.COM Salt Lake City 3% Other 4% Atlanta 5% Austin 5% Charlotte 5% San Francisco 6% Kansas City 6% Washington D.C. Metro (2 properties) 9% Oakland 11% 18% Chicago 14% Dallas (3 properties) 14% San Jose (2 properties) Statistics for the Current Portfolio 1 Annualized base rent represents annualized
Slide 7: Statistics for the Current Portfolio: Industry Diversification
KBS.COM Professional, Scientific, & Technical Services 5% STEM/TAMI2 21% Statistics for the Current Portfolio § Industry diversification provides downside protection from any single industry. No one industry represents over 18% of the total portfolio. § STEM/TAMI2, represents 21% of the total portfo
Slide 8: Capital Management
KBS.COM $1,376 $752,378 $653,395 $213,800 $65,000 $0 $200,000 $400,000 $600,000 $800,000 2023 2024 2025 2026 Thereaf… Capital Management1 As of March 31, 2023, unless otherwise noted Initial Debt Maturities3 1 Based on total debt as of March 31, 2023. 2 Average cost of debt includes the impact of in
Slide 9: Real Estate Update
Real Estate Update 9 Accenture Tower Chicago, IL
Slide 10: CBRE Market Outlook: Historical Cap Rates and Forecast
KBS.COM 10 Rents tend to keep pace with inflation over the long term, making commercial real estate relatively attractive in times of high inflation. However, real estate asset values fall when interest rates rise, as tighter financial conditions inhibit economic activity and real estate demand. Sin
Slide 11: KBS REIT III Leasing Trends
KBS.COM 70% 75% 80% 85% 90% 95% 100% KBS REIT III Leased %s Total Portfolio Bay Area and Min Total Portfolio Excl Bay Area and Min 11 KBS REIT III Leasing Trends Despite ongoing concerns for demand in U.S. office space, much of the KBS REIT III portfolio performed well throughout the pandemic and th
Slide 12: San Francisco Bay Area
KBS.COM San Francisco Bay Area § The Bay Area markets are facing severe leasing challenges due to the slower-than-expected return-to-office and ongoing crime and homelessness. This has led to a reduction in office footprints as tech companies have been scaling down their occupancy. § The demand for
Slide 13: 201 Spear Street, San Francisco, CA
KBS.COM 13 201 Spear Street, San Francisco, CA REIT III’s investment in 201 Spear is uniquely challenged not only due to leasing and overall capital market conditions in that region, but also due to a combination of its current tenant mix coupled with a near-term loan maturity. Tenancy Despite maint
Slide 14: Minneapolis, MN
KBS.COM 14 Minneapolis, MN Downtown Minneapolis has struggled considerably due to a lack of return-to-office by the many large employers (Target HQ, US Bank HQ, Thrivent HQ, numerous large law firms, Ameriprise HQ, Wells Fargo’s sizable presence, etc.) that occupy a majority of the central business
Slide 15: Sterling Plaza, Dallas, TX
KBS.COM 15 Sterling Plaza, Dallas, TX The asset recently completed a multimillion-dollar amenity expansion project, which included the addition of a tenant lounge, conference center, breakout areas, and the expansion and renovation of the fitness center. This upgrade has led to a significant improve
Slide 16: Leasing Successes: Accenture Tower, Chicago, IL
KBS.COM Leasing Successes 16 Accenture Tower, Chicago, IL In light of the soaring vacancy rates in Chicago since the beginning of the pandemic, employers are capitalizing on this situation by enhancing their existing office spaces to create top-notch working environments with excellent amenities, pa
Slide 17: Leasing Activity Year to Date 6/30/2023
KBS.COM Leasing Activity Year to Date 1 6/30/2023 17 . 1 Excludes leases with terms less than 12 months. 2 Weighted Average Lease Expiry is measured by leases in years and is weighted based on the tenant’s leased area Property SF Wale (years) % of Asset New/Expansions Accenture Tower 46,655 5.6 3% L
Slide 18: Investment in PRIME US REIT
KBS.COM Investment in PRIME US REIT 18 Units Owned Percentage Interest Owned Current Value at closing on 6/30/2023 215,841,899 18.2% $45.3 million Our remaining investment in stock of the Singapore REIT has been significantly impacted by the market sentiment for stock with significant investment in
Slide 19: Debt and Swap Update
Preston Commons Dallas, TX 19 Debt and Swap Update
Slide 20: Debt Market Update
KBS.COM Debt Market Update 20 The Federal Reserve continues to indicate there may still be multiple interest rate hikes coming. Any additional hikes will continue to put pressure on real estate valuations and have an impact on the REIT’s ongoing cashflows and liquidity, though the majority of our ou
Slide 21: Recent Swap Activity
KBS.COM Swap Amount Trade Date Swap Rate Commencement Maturity Term (Years) 50,000,000 7/1/2022 2.4940% 11/1/2023 2/1/2026 2.25 50,000,000 7/1/2022 2.5400% 11/1/2023 2/1/2026 2.25 50,000,000 7/1/2022 2.5180% 11/1/2023 2/1/2026 2.25 50,000,000 7/22/2022 2.4900% 11/1/2023 2/1/2026 2.25 100,000,000 7/2
Slide 22: Interest Rate Exposure
KBS.COM 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% Ju n- 20 Se p- 20 De c- 20 M ar -2 1 Ju n- 21 Se p- 21 De c- 21 M ar -2 2 Ju n- 22 Se p- 22 De c- 22 M ar -2 3 Ju n- 23 Se p- 23 De c- 23 M ar -2 4 Ju n- 24 Se p- 24 De c- 24 M ar -2 5 Ju n- 25 Se p- 25 De c- 25 LIBOR/SOFR vs KBS REIT III Floating/He
Slide 23: Upcoming Loan Maturities and Status
KBS.COM Upcoming Loan Maturities and Status 23 .The REIT has a significant number of loan maturities in the next 12 months (including the two largest loans in the portfolio), though all but one of them has additional extension options. However, with those extension options there are various debt ser
Slide 24: Liquidity Update
Park Place Village Leawood, KS 24 Liquidity Update
Slide 25: Share Redemption Plan and Ongoing Dividends
KBS.COM Share Redemption Plan and Ongoing Dividends 25 From inception to date the REIT has fulfilled more than $783 million of redemption and repurchase requests or approximately 36% of the total equity raised to date (including equity from the dividend reinvestment plan). We have always been focuse
Slide 26: Future Strategy
Future Strategy 26 515 Congress Austin, TX
Slide 27: Future Strategy
KBS.COM 27 Future Strategy In the current market environment, a strategic transaction involving a nearly 100% office portfolio is very difficult if not impossible to achieve. The valuation of any kind of transaction would come at a significant discount. While we continue to believe our portfolio is
Slide 28: REIT III 2023 Goals & Objectives
KBS.COM REIT III 2023 Goals & Objectives 28 Manage liquidity in the REIT in order to continue to enhance asset values Extend and refinance certain maturing loans in the portfolio Efficiently manage the real estate portfolio through the economic downturn in order to maximize the long-term portfolio v
Slide 29: Q&A
29 Q&A For additional questions, contact KBS Capital Markets Group Investor Relations (866) 527-4264 3001 Washington Arlington, VA
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