KBS Real Estate gets $215 million three-year term loan and revolver

By Sarah Lizee

Olympia, Wash., Oct. 23 – KBS Real Estate Investment Trust III, Inc. entered into a $215 million three-year loan facility on Oct. 17, of which $107.5 million is term debt and $107.5 million is revolving debt.

The loan facility matures on Nov. 1, 2021, with two one-year extension options, according to an 8-K filing with the Securities and Exchange Commission.

Borrowings bear interest at one-month Libor plus 150 basis points.

The company has an option to increase the committed amount of the loan facility up to four times with each increase of the committed amount to be at least $15 million but no greater than an additional $170 million in total so that the committed amount will not exceed $385 million, of which 50% would be non-revolving debt and 50% would be revolving debt, with the addition of one or more properties to secure the loan.

At closing, $200 million was available for funding under the loan facility with an additional $15 million available upon satisfaction of some conditions.

Also at closing, $107.5 million of the term debt and $92.5 million of revolving debt was funded, of which about $69.8 million was used to pay off the 515 Congress Mortgage Loan and about $104 million was used to pay down one of the company’s existing portfolio loan facilities. The remaining amount was used to pay origination fees and accrued interest, with excess proceeds held by the company for liquidity management.

The loan facility may be used for working capital, capital expenditures, real property acquisitions and other corporate purposes.

U.S. Bank, NA is the administrative agent.

The REIT is based in Newport Beach, Calif.

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