KBS Real Estate amends, extends loan facility to April 15

By Wendy Van Sickle

Columbus, Ohio, Feb. 15 – KBS Real Estate Investment Trust III, Inc. extended the loan agreement, initially signed Oct. 17, 2018 with U.S. Bank, NA as administrative agent, on Feb. 9, according to an 8-K filing with the Securities and Exchange Commission.

The maturity date is now April 15, 2024, with a provision for an additional extension to March 2, 2026, subject to some conditions.

At closing of the amendment, the borrowing capacity under the loan facility was $249.2 million, of which $124.6 million was term debt and $124.6 million was revolving debt, all of which was outstanding.

The interest rate was also reset to term SOFR plus 300 basis points.

Further, the revolving debt was converted into non-revolving debt, and the accordion option was eliminated, as was the revolving portion of the modified portfolio revolving loan facility.

Under the modification agreement, in the event of the closing of the sale of the McEwen Building, one of the properties securing the debt, the borrowers will pay the agent an amount equal to the greater of $45 million or the net sales proceeds generated by the sale of the McEwen Building, which amount will be applied to reduce the outstanding principal amount of the revolving loan.

The modification agreement also allows KBS REIT III to draw back a portion of the amount of the loan paydown from the McEwen Building sale proceeds through holdbacks.

The REIT is based in Newport Beach, Calif.

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