KBS Real Estate Investment Trust III, Inc. (KBSR) amended two property loans, extending the Accenture Tower Loan maturity to December 17, 2026, and the 3001 & 3003 Washington Mortgage Loan maturity to January 20, 2027. The Accenture loan has an option, subject to satisfaction of certain terms and conditions, to extend to November 2, 2027; exercising it requires a $0.4 million fee. Effective November 2, 2026, the loan bears interest at one-month Term SOFR plus 325 basis points; upon effectiveness of the option, the rate is plus 300 basis points. As of October 30, 2026, outstanding principal was $317.4 million, with $4.6 million of new funding available for future disbursement subject to loan-document terms.
The Washington loan has no further extension options; its outstanding principal was $137.8 million as of October 30, 2026, and its borrowers paid a $0.1 million extension fee. Its lender may declare a default and accelerate before maturity if it reasonably determines refinancing is unlikely to be completed by maturity on the required terms. KBSR is pursuing refinancing of both loans but says there can be no assurance about its certainty or timing. Management says its plans may not alleviate substantial doubt about KBSR’s ability to continue as a going concern for at least a year from August 13, 2026.
KBS Real Estate Investment Trust III, Inc. (KBSR) renewed its advisory agreement with KBS Capital Advisors LLC on September 27, 2026, extending the agreement, as amended, through September 27, 2027.
The agreement may be renewed for successive one-year periods by mutual consent. Either party may terminate it on 60 days’ written notice without cause or penalty, with KBSR acting through its Conflicts Committee. KBSR may also terminate immediately for cause or if the Advisor becomes bankrupt. Other than the one-year extension, the renewal made no changes to the agreement’s terms.
KBS Real Estate Investment Trust III, Inc. (KBSR) is asking stockholders to elect five directors for one-year terms and to ratify Ernst & Young LLP as independent auditor for the year ending December 31, 2026, at its December 17, 2026 annual meeting.
The proxy describes a highly challenging financial situation. Management states that, because of upcoming loan maturities and required principal paydowns, a difficult commercial real estate lending environment, low U.S. office transaction volume and general market instability, management’s plans "do not alleviate substantial doubt" about the company’s ability to continue as a going concern for at least a year from August 13, 2026.
The company highlights significant covenant pressure: several loan agreements require asset sales, principal paydowns and other actions that are not fully within its control, include cross-default provisions, equity pledges in subsidiaries and cash sweeps that restrict access to property cash flows. Failure to comply could lead lenders to accelerate debt or foreclose on collateral, and the company may consider further refinancings, asset sales, relinquishing properties to lenders, or even seeking bankruptcy protection to implement a restructuring plan.
The filing also details board structure and governance, noting that three of five directors are independent under the charter and New York Stock Exchange standards, and outlines extensive related-party arrangements with its advisor, including $29.1 million of asset management fees incurred from January 1, 2025 through August 31, 2026, deferred fee structures, and the company’s 16.5% stake in a Singapore REIT.
KBS Real Estate Investment Trust III, Inc. reported weaker results for the six months ended June 30, 2026 while highlighting significant liquidity pressure. Total revenues were $114.4 million and the company recorded a net loss of $51.5 million (basic and diluted loss per share of $0.35). Results were affected by lower rental income, $28.4 million of non-cash impairment charges on two office properties, and $49.4 million of interest expense.
At June 30, 2026, KBS REIT III had total assets of $1.48 billion, including 11 office properties (77.0% occupied) and a $38.2 million equity stake in Prime US REIT, funded largely by $1.25 billion of notes payable. Stockholders’ equity declined to $126.3 million, as cumulative distributions have exceeded net income.
Management disclosed that approximately $1.2 billion of notes payable maturities and required principal paydowns fall within 12 months of issuance of these financial statements. Given elevated interest rates, required asset sales in a challenged U.S. office market, and reliance on lender extensions and refinancings, the company stated that there is substantial doubt about its ability to continue as a going concern, despite current compliance with debt covenants and positive operating cash flow of $16.9 million year-to-date.
KBS Real Estate Investment Trust III reported a quarterly net loss of $12.0 million, or $0.08 per share, for the three months ended March 31, 2026. Total revenues fell to $58.4 million from $64.4 million as rental income declined, reflecting a challenged U.S. office market. Results included a $10.6 million non-cash impairment on one office property and a $6.2 million unrealized loss on its Prime US REIT investment, partly offset by a $22.8 million gain on the sale of an office property.
Operating cash flow improved to $16.7 million from a use of $5.7 million a year earlier, helped by the $50.0 million asset sale. At quarter-end, the company held 11 office properties totaling about 5.4 million square feet, 77.0% occupied, and owned SREIT units valued at $40.6 million.
The balance sheet remains highly leveraged, with $1.25 billion of notes payable outstanding and total assets of $1.52 billion. A disclosed $917.9 million of principal and maturities come due between April 1 and December 31, 2026, and management states that these obligations, combined with weak office and lending conditions, raise substantial doubt about the company’s ability to continue as a going concern. Management is relying on asset sales, loan paydowns, and extensions, but acknowledges key elements of these plans are outside its control.
KBS Real Estate Investment Trust III sold its Gateway Tech Center for $50.0 million, generating $48.1 million in net proceeds. It used $47.5 million to pay down its Modified Portfolio Revolving Loan Facility and added $0.6 million to the loan’s cash management account.
After the sale and subsequent drawdowns, the outstanding principal on the facility was $160.4 million. A Fifth Modification Agreement extended the loan’s maturity to December 15, 2026, with a possible extension to March 31, 2027, removed scheduled principal amortization, and tightened cash controls through a dedicated cash management and real estate tax escrow structure.
The agreement also defers REIT-level expenses and asset management fees tied to the remaining properties, which are now the sole collateral. The company discloses that, given upcoming loan maturities, required paydowns and a weak office market, substantial doubt exists about its ability to continue as a going concern, and it may need further restructurings, asset sales, or even court protection.
KBS Real Estate Investment Trust III files its annual report describing severe financial pressure and substantial doubt about its ability to continue as a going concern. The non-traded REIT owns 12 U.S. office properties and a major stake in Singapore-listed Prime US REIT.
Debt is the central issue: about $1.3 billion of obligations outstanding at December 31, 2025, with most maturing or requiring paydowns within roughly a year and many loans subject to cash sweeps that divert excess property cash flow to lenders. Cross-default provisions and pledged equity in key property-owning subsidiaries heighten foreclosure and acceleration risk.
The board cut the estimated value per share from $3.89 to $2.70 within a year, reflecting weak office markets and declining values, and the company has paid no distributions since June 2023. Loan covenants block dividends and redemptions until certain debts are repaid or refinanced, and the share redemption program was terminated in March 2024, leaving investors with highly illiquid shares.
KBS Real Estate Investment Trust III entered into a fourth modification of its Portfolio Revolving Loan Facility, which had an outstanding principal balance of $205.5 million as of January 27, 2026. The agreement conditionally extends the loan’s maturity from March 1, 2026 to March 25, 2026, with a possible further extension to April 15, 2026 if additional conditions are met.
Some of these conditions are not within KBS REIT III’s sole control, and failure to meet certain requirements after March 1, 2026 can trigger an immediate event of default within two business days. The company also agreed to defer 10% of asset management fees and a portion of disposition fees related to the secured properties until the facility is fully repaid.
The filing reiterates that, due to upcoming loan maturities, required principal paydowns, a challenging commercial real estate lending environment and weak U.S. office market conditions, management’s plans do not alleviate substantial doubt about KBS REIT III’s ability to continue as a going concern for at least a year from November 14, 2025.
KBS Real Estate Investment Trust III, Inc. furnished an investor presentation as a corporate update. On January 30, 2026, the company made available a presentation discussing its real estate portfolio and its estimated value per share. The presentation is attached as Exhibit 99.1 to this report and is also accessible on the company’s website under the KBS Real Estate Investment Trust III, Inc. presentation section. The materials are furnished under Regulation FD and are not deemed filed or incorporated by reference into other securities law filings.
KBS Real Estate Investment Trust III set a new estimated value of $2.70 per share as of December 18, 2025. This figure is based on net asset value, primarily Kroll’s appraisals of 12 office properties, the valuation of its Prime US REIT units, and advisor estimates of cash, other assets, and debt. The new estimate is down from $3.89 per share approved in December 2024, with the drop driven mainly by lower office property values in a weak U.S. office market and capital spending on the portfolio.
The REIT’s properties were purchased and improved for about $2.4 billion, versus a current appraised value of $1.6 billion, implying a significant write-down. Management highlights heavy exposure to challenged office markets, cash sweep requirements on several loans, and upcoming maturities that may require asset sales, paydowns or restructurings. Due to refinancing pressures, restrictive loan covenants and difficult market conditions, the company states there is substantial doubt about its ability to continue as a going concern for at least one year from November 14, 2025.