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KBS REIT III Hauls in $1 Billion

Largest Loan in its History Refinances Eight Properties
November 13, 2017
RBC Tower in Minneapolis is one of eight properties refinanced.


KBS REIT III has secured a three-year $1.01 billion financing commitment, the largest financing facility in Newport Beach-based nontraded REIT's history.

The three-year $1.01- billion financing commitment consists of a $757.5 million term loan that was funded at close and a $252.5 million revolving loan of which $222.5 million remains unfunded.

KBS REIT III holds 29 properties are valued in excess of $3.5 billion and this loan encumbers eight of them.

Proceeds from the term debt were used to pay off and address the upcoming 2018 loan maturities for the existing Town Center, RBC Plaza, National Office Portfolio, 500 West Madison, Ten Almaden and Towers at Emeryville mortgage loans.

The loan facility may also be used for tenant improvements, leasing commissions and capital improvements.

During the term of the loan, the company has an option to increase the aggregate loan amount by up to an additional $400 million in increments of $25 million.

The loan facility matures in November 2020, with two 12-month extension options. The loan bears interest at a floating rate of 180 basis points over one-month LIBOR and monthly payments are interest only.

"We believe leveraging a lower cost of capital to ensure that these Class-A buildings remain attractive and competitive to tenants will serve our investors well in the long-term," said KBS CEO Chuck Schreiber

Bank of America is serving as joint lead arranger and administrative agent for a group also including joint lead arrangers Wells Fargo and U.S. Bank.

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