KBS REIT III Closes on $1.01 Billion Financing Facility
November 9, 2017 | James Sprow | Blue Vault
KBS Real Estate Investment Trust III (“KBS REIT III”), a non-traded real estate investment trust announced November 7 that it has closed on the largest financing facility in KBS’ 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.
Proceeds from the new loan facility will be used to replace existing debt agreements and for other KBS REIT III liquidity needs including capital improvement and capital expenditures on office properties held by KBS REIT III.
“This new financing facility, the largest single financing transaction in KBS history, allows us to take advantage of favorable conditions in the debt markets, while providing new capital to further enhance the properties in the portfolio,” said KBS CEO Chuck Schreiber. “The 29 properties held by KBS REIT III are valued in excess of $3.5 billion and this loan encumbers 8 of the 29 properties. 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.”
“The overwhelmingly positive interest in this financing facility and the large capital commitments from our banking relationships reflect the excellent reputation and asset management prowess of the KBS team,” said Robert Durand, executive vice president, financing at KBS. “Very few real estate fund sponsors have the ability or the lending relationships to coordinate and successfully execute a facility of this size and scope, and we are grateful for the confidence and trust that our lenders have placed with KBS.”
Bank of America is acting as joint lead arranger and administrative agent for a group of financial institutions providing the debt – including joint lead arrangers Wells Fargo and U.S. Bank.
KBS Capital Advisors is the external advisor to KBS Real Estate Investment Trusts (REITs), and is an affiliate of KBS Realty Advisors, a private equity real estate company and SEC-registered investment adviser founded in 1992 by Peter Bren and Charles Schreiber. Since its inception, KBS-affiliated companies have completed transactional activity totaling more than $35 billion and financing activity in excess of $14 billion on behalf of 15 separate accounts, six institutional commingled funds, five sovereign wealth funds and seven non-traded REITs. For information, visit www.kbs.com.
Learn more about KBS Capital Markets Group on the Blue Vault Sponsor Focus page.
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