Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________________________________

FORM 10-Q

______________________________________________________

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 000-54687

______________________________________________________

KBS REAL ESTATE INVESTMENT TRUST III, INC.

(Exact Name of Registrant as Specified in Its Charter)

______________________________________________________

Maryland		27-1627696
(State or Other Jurisdiction of<br>Incorporation or Organization)		(I.R.S. Employer<br>Identification No.)
800 Newport Center Drive, Suite 700
Newport Beach,	California	92660
(Address of Principal Executive Offices)		(Zip Code)

(949) 417-6500

(Registrant’s Telephone Number, Including Area Code)

_______________________________________

Securities registered pursuant to Section 12(b) of the Act:Title of Each ClassName of Each Exchange on Which RegisteredNoneNone

Trading Symbol(s)

____________________________________________________

None

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☐	Accelerated Filer	☐
Non-Accelerated Filer	☒	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 10, 2024, there were 148,516,246 outstanding shares of common stock of KBS Real Estate Investment Trust III, Inc.

Table of Contents

KBS REAL ESTATE INVESTMENT TRUST III, INC.

FORM 10-Q

March 31, 2024

INDEX

PART I.	FINANCIAL INFORMATION		2
	Item 1.	Financial Statements	2
		Consolidated Balance Sheets as of March 31, 2024 (unaudited) and December 31, 2023	2
		Consolidated Statements of Operations (unaudited) for the Three Months Ended March 31, 2024 and 2023	3
		Consolidated Statements of Equity (unaudited) for the Three Months Ended March 31, 2024 and 2023	4
		Consolidated Statements of Cash Flows (unaudited) for the Three Months Ended March 31, 2024 and 2023	5
		Condensed Notes to Consolidated Financial Statements as of March 31, 2024 (unaudited)	6
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	47
	Item 4.	Controls and Procedures	48
PART II.	OTHER INFORMATION		49
	Item 1.	Legal Proceedings	49
	Item 1A.	Risk Factors	49
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	49
	Item 3.	Defaults upon Senior Securities	49
	Item 4.	Mine Safety Disclosures	49
	Item 5.	Other Information	49
	Item 6.	Exhibits	49
SIGNATURES			51

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

KBS REAL ESTATE INVESTMENT TRUST III, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

	March 31, 2024		December 31, 2023
	(unaudited)
Assets
Real estate:
Land	$	244,243	$	268,715
Buildings and improvements	2,171,343		2,209,503
Tenant origination and absorption costs	33,030		34,574
Total real estate held for investment, cost	2,448,616		2,512,792
Less accumulated depreciation and amortization	(723,331)		(701,661)
Total real estate held for investment, net	1,725,285		1,811,131
Real estate held for sale, net	—		28,347
Total real estate, net	1,725,285		1,839,478
Real estate equity securities	32,290		51,802
Total real estate and real estate-related investments, net	1,757,575		1,891,280
Cash and cash equivalents	34,200		36,836
Restricted cash	13,659		14,086
Rents and other receivables, net	101,081		96,056
Above-market leases, net	171		189
Assets related to real estate held for sale, net	—		4,635
Prepaid expenses and other assets	101,215		96,303
Total assets	$	2,007,901	$	2,139,385
Liabilities and equity
Notes payable:
Notes payable, net	$	1,573,286	$	1,689,719
Notes payable related to real estate held for sale, net	—		46,177
Notes payable, net	1,573,286		1,735,896
Accounts payable and accrued liabilities	43,953		49,646
Due to affiliate	18,708		17,408
Below-market leases, net	891		1,069
Liabilities related to real estate held for sale, net	—		515
Other liabilities	66,079		67,439
Total liabilities	1,702,917		1,871,973
Commitments and contingencies (Note 12)
Redeemable common stock	—		—
Stockholders’ equity:
Preferred stock, $.01 par value per share; 10,000,000 shares authorized, no shares issued and outstanding	—		—
Common stock, $.01 par value per share; 1,000,000,000 shares authorized, 148,516,246 and 148,516,246 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively	1,485		1,485
Additional paid-in capital	1,313,297		1,313,299
Cumulative distributions in excess of net income	(1,009,798)		(1,047,372)
Total stockholders’ equity	304,984		267,412
Total liabilities and equity	$	2,007,901	$	2,139,385

See accompanying condensed notes to consolidated financial statements.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS REAL ESTATE INVESTMENT TRUST III, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(in thousands, except share and per share amounts)


	2024		2023
Revenues:
Rental income	$	65,357	$	69,297
Dividend income from real estate equity securities	540		6,540
Other operating income	4,331		4,352
Total revenues	70,228		80,189
Expenses:
Operating, maintenance and management	17,403		17,651
Real estate taxes and insurance	12,954		14,719
Asset management fees to affiliate	4,943		5,089
General and administrative expenses	5,491		1,591
Depreciation and amortization	27,534		28,497
Interest expense	32,452		26,730
Net (gain) loss on derivative instruments	(16,152)		7,038
Impairment charges on real estate	—		26,988
Total expenses	84,625		128,303
Other income (loss):
Unrealized loss on real estate equity securities	(19,512)		(18,347)
Gain from extinguishment of debt	56,372		—
Gain on sale of real estate, net	14,781		—
Other interest income	330		42
Total other income (loss), net	51,971		(18,305)
Net income (loss)	$	37,574	$	(66,419)
Net income (loss) per common share, basic and diluted	$	0.25	$	(0.45)
Weighted-average number of common shares outstanding, basic and diluted	148,516,246		148,445,004

See accompanying condensed notes to consolidated financial statements.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS REAL ESTATE INVESTMENT TRUST III, INC.

CONSOLIDATED STATEMENTS OF EQUITY

For the Three Months Ended March 31, 2024 and 2023 (unaudited)

(dollars in thousands)

	Common Stock			Additional Paid-in Capital		Cumulative Distributions in Excess of <br>Net Income		Total Stockholders’ Equity
	Shares	Amounts
Balance, December 31, 2023	148,516,246	$	1,485	$	1,313,299	$	(1,047,372)	$	267,412
Net income	—	—		—		37,574		37,574
Other offering costs	—	—		(2)		—		(2)
Balance, March 31, 2024	148,516,246	$	1,485	$	1,313,297	$	(1,009,798)	$	304,984
	Common Stock			Additional Paid-in Capital		Cumulative Distributions in Excess of<br>Net Income		Total Stockholders’ Equity
---	---	---	---	---	---	---	---	---	---
	Shares	Amounts
Balance, December 31, 2022	147,964,954	$	1,480	$	1,275,833	$	(855,645)	$	421,668
Net loss	—	—		—		(66,419)		(66,419)
Issuance of common stock	871,027	8		7,440		—		7,448
Transfers to redeemable common stock	—	—		(4,527)		—		(4,527)
Redemptions of common stock	(324,985)	(3)		(2,922)		—		(2,925)
Distributions declared	—	—		—		(17,073)		(17,073)
Other offering costs	—	—		(6)		—		(6)
Balance, March 31, 2023	148,510,996	$	1,485	$	1,275,818	$	(939,137)	$	338,166

See accompanying condensed notes to consolidated financial statements.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS REAL ESTATE INVESTMENT TRUST III, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

	Three Months Ended March 31,
	2024		2023
Cash Flows from Operating Activities:
Net income (loss)	$	37,574	$	(66,419)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	27,534		28,497
Impairment charges on real estate	—		26,988
Unrealized loss on real estate equity securities	19,512		18,347
Deferred rents	(3,488)		(4,234)
Amortization of above- and below-market leases, net	(160)		(200)
Amortization of deferred financing costs	2,482		1,039
Unrealized (gain) loss on derivative instruments	(8,904)		13,674
Gains related to swap terminations	(178)		—
Interest rate swap settlement for early terminated swaps	6,552		—
Gain from extinguishment of debt	(56,372)		—
Gain on sale of real estate	(14,781)		—
Interest rate swap settlements for off-market swap instruments	—		(1,636)
Changes in operating assets and liabilities:
Rents and other receivables	(3,395)		(1,915)
Due from affiliate	—		8
Prepaid expenses and other assets	(8,090)		(9,688)
Accounts payable and accrued liabilities	326		(4,216)
Due to affiliate	1,300		1,619
Other liabilities	1,965		3,328
Net cash provided by operating activities	1,877		5,192
Cash Flows from Investing Activities:
Improvements to real estate	(9,887)		(23,010)
Purchase of interest rate cap	—		(25)
Proceeds from sale of real estate, net	46,929		—
Net cash provided by (used in) investing activities	37,042		(23,035)
Cash Flows from Financing Activities:
Proceeds from notes payable	10,000		15,000
Principal payments on notes payable	(46,910)		(445)
Payments of deferred financing costs	(3,184)		(530)
Interest rate swap settlements for off-market swap instruments	—		1,505
Restricted cash surrendered from deed-in-lieu of foreclosure	(1,886)		—
Payments to redeem common stock	—		(2,925)
Payments of other offering costs	(2)		(6)
Distributions paid to common stockholders	—		(11,303)
Net cash (used in) provided by financing activities	(41,982)		1,296
Net decrease in cash, cash equivalents and restricted cash	(3,063)		(16,547)
Cash, cash equivalents and restricted cash, beginning of period	50,922		53,837
Cash, cash equivalents and restricted cash, end of period	$	47,859	$	37,290
Supplemental Disclosure of Cash Flow Information:
Interest paid	$	22,082	$	19,867
Supplemental Disclosure of Noncash Investing and Financing Activities:
Mortgage loan extinguished in connection with deed-in-lieu of foreclosure	$	125,000	$	—
Real estate transferred in connection with deed-in-lieu of foreclosure	$	69,028	$	—
Net liabilities transferred in connection with deed-in-lieu of foreclosure	$	2,286	$	—
Distributions payable	$	—	$	5,696
Distributions paid to common stockholders through common stock issuances pursuant to the dividend reinvestment plan	$	—	$	7,448
Accrued improvements to real estate	$	12,276	$	18,770
Accrued interest rate swap settlements related to off-market swap instruments	$	—	$	(846)

See accompanying condensed notes to consolidated financial statements.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS REAL ESTATE INVESTMENT TRUST III, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

(unaudited)

1. ORGANIZATION

KBS Real Estate Investment Trust III, Inc. (the “Company”) was formed on December 22, 2009 as a Maryland corporation that elected to be taxed as a real estate investment trust (“REIT”) beginning with the taxable year ended December 31, 2011 and it intends to continue to operate in such manner. Substantially all of the Company’s business is conducted through KBS Limited Partnership III (the “Operating Partnership”), a Delaware limited partnership. The Company is the sole general partner of and owns a 0.1% partnership interest in the Operating Partnership. KBS REIT Holdings III LLC (“REIT Holdings III”), the limited partner of the Operating Partnership, owns the remaining 99.9% interest in the Operating Partnership and is its sole limited partner. The Company is the sole member and manager of REIT Holdings III.

Subject to certain restrictions and limitations, the business of the Company is externally managed by KBS Capital Advisors LLC (the “Advisor”), an affiliate of the Company, pursuant to an advisory agreement the Company entered into with the Advisor (the “Advisory Agreement”). On January 26, 2010, the Company issued 20,000 shares of its common stock to the Advisor at a purchase price of $10.00 per share. As of March 31, 2024, the Advisor owned 20,857 shares of the Company’s common stock.

The Company owns a diverse portfolio of real estate investments. As of March 31, 2024, the Company owned 14 office properties, one mixed-use office/retail property and an investment in the equity securities of Prime US REIT, a Singapore real estate investment trust (the “SREIT”).

The Company commenced its initial public offering (the “Offering”) on October 26, 2010. Upon commencing the Offering, the Company retained KBS Capital Markets Group LLC (the “Dealer Manager”), an affiliate of the Company, to serve as the dealer manager of the Offering pursuant to a dealer manager agreement, as amended and restated (the “Dealer Manager Agreement”). The Company ceased offering shares of common stock in the primary Offering on May 29, 2015 and terminated the primary Offering on July 28, 2015.

The Company sold 169,006,162 shares of common stock in the primary Offering for gross proceeds of $1.7 billion. The Company sold 46,154,757 shares of common stock under its dividend reinvestment plan for gross offering proceeds of $471.3 million. The Company has redeemed or repurchased 74,644,349 shares sold in the Offering for $789.2 million. On March 15, 2024, the Company terminated its dividend reinvestment plan and its share redemption program.

Additionally, on October 3, 2014, the Company issued 258,462 shares of common stock for $2.4 million in private transactions exempt from the registration requirements pursuant to Section 4(a)(2) of the Securities Act of 1933.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS REAL ESTATE INVESTMENT TRUST III, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

March 31, 2024

(unaudited)

2. GOING CONCERN

The Company generally finances its real estate investments using notes payable that are typically structured as non-recourse secured mortgages with maturities of approximately three to five years, with short-term extension options available upon the Company meeting certain debt covenants. Each reporting period, management evaluates the Company’s ability to continue as a going concern by evaluating conditions and events, including assessing the Company’s liquidity needs in order to satisfy upcoming debt obligations and the Company’s ability to satisfy debt covenant requirements. Through the normal course of operations, the Company has $1.2 billion of notes payable maturing during the 12-month period from the issuance of these financial statements. In addition, the loan modification and extension agreement with the lenders under the Amended and Restated Portfolio Facility requires that the Company raise not less than $100.0 million in new equity, debt or a combination of both on or prior to July 15, 2024 and the failure to do so constitutes an immediate default under the facility. Considering the current commercial real estate lending environment, this raises substantial doubt as to the Company’s ability to continue as a going concern for at least a year from the date of issuance of these financial statements. In order to refinance, restructure or extend the Company’s maturing debt obligations, the Company has been required to reduce the loan commitments and/or make paydowns on certain loans, and the Company anticipates it may be required to make additional reductions to loan commitments and paydowns on the loans maturing during the next 12 months in order to refinance, restructure or extend those loans. As a result of reductions in loan commitments and paydowns and the ongoing liquidity needs in the Company’s real estate portfolio, in addition to raising capital through new equity or debt, the Company may consider selling assets into a challenged real estate market in an effort to manage its liquidity needs. Selling real estate assets in the current market would likely adversely impact the ultimate sale price. The Company also may defer noncontractual expenditures. However, there can be no assurances as to the certainty or timing of management’s plans to be effectively implemented within one year from the date the financial statements are issued, as certain elements of management’s plans are outside the control of the Company, including its ability to successfully refinance, restructure or extend certain of its debt instruments, raise capital or sell assets. As a result of the Company’s upcoming loan maturities, reductions in loan commitments and loan paydowns, the challenging commercial real estate lending environment, the current interest rate environment, leasing challenges in certain markets where the Company owns properties, reduction in the Company’s cash flows and the lack of transaction volume in the U.S. office market as well as general market instability, management’s plans cannot be considered probable and thus do not alleviate substantial doubt about the Company’s ability to continue as a going concern. See Note 8, “Notes Payable” for further information regarding the Company’s notes payable.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

There have been no significant changes to the Company’s accounting policies since it filed its audited financial statements in its Annual Report on Form 10-K for the year ended December 31, 2023. For further information about the Company’s accounting policies, refer to the Company’s consolidated financial statements and notes thereto for the year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”).

Principles of Consolidation and Basis of Presentation

The accompanying unaudited consolidated financial statements and condensed notes thereto have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and the rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for audited financial statements. In the opinion of management, the financial statements for the unaudited interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair and consistent presentation of the results for such periods. Operating results for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS REAL ESTATE INVESTMENT TRUST III, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

March 31, 2024

(unaudited)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The consolidated financial statements include the accounts of the Company, REIT Holdings III, the Operating Partnership and their direct and indirect wholly owned subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation.

Use of Estimates

The preparation of the consolidated financial statements and condensed notes thereto in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and condensed notes. Actual results could materially differ from those estimates.

Reclassifications

Certain amounts in the Company’s prior period consolidated financial statements have been reclassified to conform to the current period presentation. These reclassifications have not changed the results of operations of prior periods.

During the three months ended March 31, 2024, the Company sold an office property. As a result, certain assets and liabilities related to this property were reclassified to held for sale on the consolidated balance sheets for all periods presented.

Derivative Instruments

Cash Flow Classification of Derivative Settlements

The Company classifies proceeds received or amounts paid related to early terminations or settlements of its derivative instruments not designated as hedges for accounting purposes in cash flows from operating activities in the statement of cash flows. During the three months ended March 31, 2024, the Company terminated two interest rate swap agreements and received aggregate settlement proceeds of $6.6 million which was included in net cash flow provided by operating activities in the accompanying consolidated statement of cash flows.

Per Share Data

Basic net income (loss) per share of common stock is calculated by dividing net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock issued and outstanding during such period. Diluted net income (loss) per share of common stock equals basic net income (loss) per share of common stock as there were no potentially dilutive securities outstanding during the three months ended March 31, 2024 and 2023, respectively.

Distributions declared per common share were $0.115 in the aggregate for the three months ended March 31, 2023. Distributions declared per common share assumes each share was issued and outstanding each day that was a record date for distributions and were based on a monthly record date for each month during the period commencing January 2023 through March 2023. For each monthly record date for distributions during the period from January 1, 2023 through March 31, 2023, distributions were calculated at a rate of $0.03833333 per share. No distributions were declared for the three months ended March 31, 2024.

Segments

The Company has invested in core real estate properties and real estate-related investments with the goal of acquiring a portfolio of income-producing investments. The Company’s real estate properties exhibit similar long-term financial performance and have similar economic characteristics to each other. Accordingly, the Company aggregated its investments in real estate properties into one reportable business segment.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS REAL ESTATE INVESTMENT TRUST III, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

March 31, 2024

(unaudited)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Square Footage, Occupancy and Other Measures

Square footage, occupancy, number of tenants and other measures, including annualized base rent and annualized base rent per square foot, used to describe real estate investments included in these condensed notes to the consolidated financial statements are unaudited and outside the scope of the Company’s independent registered public accounting firm’s review of the Company’s financial statements in accordance with the standards of the United States Public Company Accounting Oversight Board.

4. REAL ESTATE

Real Estate Held for Investment

As of March 31, 2024, the Company’s real estate portfolio was composed of 14 office properties and one mixed-use office/retail property encompassing in the aggregate approximately 6.9 million rentable square feet. As of March 31, 2024, the Company’s real estate portfolio was collectively 82.8% occupied. The following table summarizes the Company’s investments in real estate as of March 31, 2024 (in thousands):

Property	Date Acquired	City	State	Property Type	Total Real Estate, at Cost (1)		Accumulated Depreciation and Amortization (1)		Total Real Estate, Net (1)
Town Center	03/27/2012	Plano	TX	Office	$	141,958	$	(53,763)	$	88,195
Gateway Tech Center	05/09/2012	Salt Lake City	UT	Office	36,550		(12,717)		23,833
60 South Sixth	01/31/2013	Minneapolis	MN	Office	185,621		(59,700)		125,921
Preston Commons	06/19/2013	Dallas	TX	Office	145,358		(43,122)		102,236
Sterling Plaza	06/19/2013	Dallas	TX	Office	96,078		(31,689)		64,389
Accenture Tower	12/16/2013	Chicago	IL	Office	574,136		(169,864)		404,272
Ten Almaden	12/05/2014	San Jose	CA	Office	131,462		(41,828)		89,634
Towers at Emeryville	12/23/2014	Emeryville	CA	Office	223,242		(67,706)		155,536
3003 Washington Boulevard	12/30/2014	Arlington	VA	Office	154,985		(47,306)		107,679
Park Place Village	06/18/2015	Leawood	KS	Office/Retail	87,613		(14,418)		73,195
201 17th Street	06/23/2015	Atlanta	GA	Office	105,512		(34,669)		70,843
515 Congress	08/31/2015	Austin	TX	Office	137,127		(36,896)		100,231
The Almaden	09/23/2015	San Jose	CA	Office	192,751		(50,746)		142,005
3001 Washington Boulevard	11/06/2015	Arlington	VA	Office	60,992		(15,204)		45,788
Carillon	01/15/2016	Charlotte	NC	Office	175,231		(43,703)		131,528
					$	2,448,616	$	(723,331)	$	1,725,285

_____________________

(1) Amounts presented are net of impairment charges and write-offs of fully depreciated/amortized assets.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS REAL ESTATE INVESTMENT TRUST III, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

March 31, 2024

(unaudited)

4. REAL ESTATE (CONTINUED)

As of March 31, 2024, the following property represented more than 10% of the Company’s total assets:

Property	Location	Rentable Square Feet	Total Real Estate, Net<br>(in thousands)		Percentage of Total Assets		Annualized Base Rent<br><br>(in thousands) (1)		Average Annualized Base Rent per sq. ft.		Occupancy
Accenture Tower	Chicago, IL	1,457,724	$	404,272	20.1	%	$	38,193	$	27.86	94.0	%

___________________

(1) Annualized base rent represents annualized contractual base rental income as of March 31, 2024, adjusted to straight-line any contractual tenant concessions (including free rent), rent increases and rent decreases from the lease’s inception through the balance of the lease term.

Operating Leases

The Company’s office and office/retail properties are leased to tenants under operating leases for which the terms and expirations vary. As of March 31, 2024, the leases, including leases that have been executed but not yet commenced, had remaining terms, excluding options to extend, of up to 15.3 years with a weighted-average remaining term of 5.7 years. Some of the leases have provisions to extend the term of the leases, options for early termination for all or a part of the leased premises after paying a specified penalty, and other terms and conditions as negotiated. The Company retains substantially all of the risks and benefits of ownership of the real estate assets leased to tenants. Generally, upon the execution of a lease, the Company requires a security deposit from the tenant in the form of a cash deposit and/or a letter of credit. The amount required as a security deposit varies depending upon the terms of the respective lease and the creditworthiness of the tenant, but generally is not a significant amount. Therefore, exposure to credit risk exists to the extent that a receivable from a tenant exceeds the amount of its security deposit. Security deposits received in cash related to tenant leases are included in other liabilities in the accompanying consolidated balance sheets and totaled $9.2 million and $10.0 million as of March 31, 2024 and December 31, 2023, respectively.

During the three months ended March 31, 2024 and 2023, the Company recognized deferred rent from tenants of $3.5 million and $4.2 million, respectively. As of March 31, 2024 and December 31, 2023, the cumulative deferred rent balance was $96.5 million and $91.8 million, respectively, and is included in rents and other receivables on the accompanying balance sheets. The cumulative deferred rent balance included $18.7 million and $16.0 million of unamortized lease incentives as of March 31, 2024 and December 31, 2023, respectively.

As of March 31, 2024, the future minimum rental income from the Company’s properties under its non-cancelable operating leases was as follows (in thousands):

April 1, 2024 through December 31, 2024	$	138,343
2025	178,256
2026	165,217
2027	142,410
2028	123,167
Thereafter	458,135
	$	1,205,528

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS REAL ESTATE INVESTMENT TRUST III, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

March 31, 2024

(unaudited)

4. REAL ESTATE (CONTINUED)

As of March 31, 2024, the Company’s office and office/retail properties were leased to approximately 520 tenants over a diverse range of industries and geographic areas. The Company’s highest tenant industry concentrations (greater than 10% of annualized base rent) were as follows:

Industry	Number of Tenants	Annualized Base Rent (1)<br><br>(in thousands)		Percentage of <br>Annualized Base Rent
Finance	106	$	35,809	18.6	%
Legal Services	54	24,980		13.0	%
		$	60,789	31.6	%

_____________________

As of March 31, 2024, no other tenant industries accounted for more than 10% of annualized base rent and no tenant accounted for more than 10% of annualized base rent.

Geographic Concentration Risk

As of March 31, 2024, the Company’s net investments in real estate in Illinois, California and Texas represented 20.1%, 19.3% and 17.7% of the Company’s total assets, respectively. As a result, the geographic concentration of the Company’s portfolio makes it particularly susceptible to adverse economic developments in the Illinois, California and Texas real estate markets. Any adverse economic or real estate developments in these markets, such as business layoffs or downsizing, industry slowdowns, relocations of businesses, changing demographics and other factors, or any decrease in demand for office space resulting from the local business climate, could adversely affect the Company’s operating results.

Impairment of Real Estate

The Company did not record any non-cash impairment charges during the three months ended March 31, 2024.

During the three months ended March 31, 2023, the Company recorded non-cash impairment charges of $27.0 million to write down the carrying value of 201 Spear Street (located in San Francisco, California) to its estimated fair value as a result of continued market uncertainty due to rising interest rates, increased vacancy rates as a result of slow return to office in San Francisco, additional projected vacancy due to anticipated tenant turnover and further declining values of comparable sales in the market, all of which impacted ongoing cash flow estimates and leasing projections, which resulted in the future estimated undiscounted cash flows being lower than the net carrying value of the property. As a result, 201 Spear Street was valued at substantially less than the outstanding mortgage debt. During the year ended December 31, 2023, the borrower under the 201 Spear Street Mortgage Loan (the “Spear Street Borrower”) entered into a deed-in-lieu of foreclosure transaction (the “Deed-in-Lieu Transaction”) with the lender of the 201 Spear Street Mortgage Loan (the “Spear Street Lender”). On January 9, 2024, the Spear Street Lender transferred the title of the 201 Spear Street property to a third-party buyer of the 201 Spear Street Mortgage Loan. See below, “— Disposition Through Deed-in-Lieu of Foreclosure Transaction.”

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS REAL ESTATE INVESTMENT TRUST III, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

March 31, 2024

(unaudited)

4. REAL ESTATE (CONTINUED)

Disposition Through Deed-in-Lieu of Foreclosure Transaction

During the three months ended March 31, 2024, the Company disposed of the 201 Spear Street property in connection with the Deed-in-Lieu Transaction. As of December 31, 2023, the 201 Spear Street property was held for non-sale disposition. The results of operations for 201 Spear Street are included in continuing operations on the Company’s consolidated statements of operations. The following table summarizes the revenue and expenses related to 201 Spear Street for the three months ended March 31, 2024 and 2023, respectively (in thousands).


	2024		2023
Revenues
Rental income	$	197	$	4,152
Other operating income	9		118
Total revenues	$	206	$	4,270
Expenses
Operating, maintenance, and management	$	52	$	888
Real estate taxes and insurance	69		749
Asset management fees to affiliate	26		288
General and administrative expenses	22		40
Depreciation and amortization	—		1,255
Interest expense	419		1,932
Impairment charge	—		26,988
Total expenses	$	588	$	32,140

The following table summarizes the assets and liabilities related to 201 Spear Street, which was held for non-sale disposition as of December 31, 2023 (in thousands):

	December 31, 2023
Assets related to real estate held for non-sale disposition
Total real estate, at cost and net of impairment charges	$	70,571
Accumulated depreciation and amortization	(1,543)
Real estate held for non-sale disposition, net	69,028
Restricted cash	3,103
Rent and other receivables, net	1,142
Prepaid expenses and other assets	1,421
Total assets	$	74,694
Liabilities related to real estate held for non-sale disposition
Notes payable, net	$	125,000
Accounts payable and accrued liabilities	3,927
Due to affiliate	16
Other liabilities	1,816
Total liabilities	$	130,759

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS REAL ESTATE INVESTMENT TRUST III, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

March 31, 2024

(unaudited)

5. REAL ESTATE DISPOSITIONS

During the three months ended March 31, 2024, the Company sold one office property to a purchaser unaffiliated with the Company or the Advisor for $48.8 million, before third-party closing costs and disposition fees payable to the Advisor.

As of March 31, 2024, the Company did not have any real estate properties held for sale.

The results of operations for the office property sold during the three months ended March 31, 2024 are included in continuing operations on the Company’s consolidated statements of operations. The following table summarizes certain revenues and expenses related to the office property sold for the three months ended March 31, 2024 and 2023, respectively (in thousands).


	2024		2023
Revenues
Rental income	$	864	$	1,334
Other operating income	6		16
Total revenues	$	870	$	1,350
Expenses
Operating, maintenance, and management	$	334	$	314
Real estate taxes and insurance	90		154
Asset management fees to affiliate	48		83
Depreciation and amortization	—		399
Total expenses	$	472	$	950

The following summary presents the major components of assets and liabilities to real estate held for sale as of December 31, 2023 (in thousands).

	December 31, 2023
Real estate held for sale, net:
Total real estate, at cost	$	40,187
Accumulated depreciation and amortization	(11,840)
Real estate held for sale, net	28,347
Other assets	4,635
Total assets related to real estate held for sale	$	32,982
Liabilities related to real estate held for sale:
Notes payable related to real estate held for sale, net	$	46,177
Other liabilities	515
Total liabilities related to real estate held for sale	$	46,692

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS REAL ESTATE INVESTMENT TRUST III, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

March 31, 2024

(unaudited)

6. TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-

MARKET LEASE LIABILITIES

As of March 31, 2024 and December 31, 2023, the Company’s tenant origination and absorption costs, above-market lease assets and below-market lease liabilities (excluding fully amortized assets and liabilities and accumulated amortization) were as follows (in thousands):

	Tenant Origination and<br>Absorption Costs				Above-Market<br>Lease Assets				Below-Market<br>Lease Liabilities
	March 31, 2024		December 31, 2023		March 31, 2024		December 31, 2023		March 31, 2024		December 31, 2023
Cost	$	33,030	$	34,574	$	873	$	904	$	(5,049)	$	(7,216)
Accumulated Amortization	(24,695)		(25,450)		(702)		(715)		4,158		6,147
Net Amount	$	8,335	$	9,124	$	171	$	189	$	(891)	$	(1,069)

Increases (decreases) in net income as a result of amortization of the Company’s tenant origination and absorption costs, above-market lease assets and below-market lease liabilities for the three months ended March 31, 2024 and 2023 were as follows (in thousands):

	Tenant Origination and<br>Absorption Costs				Above-Market<br>Lease Assets				Below-Market<br>Lease Liabilities
	For the Three Months Ended<br>March 31,				For the Three Months Ended<br>March 31,				For the Three Months Ended<br>March 31,
	2024		2023		2024		2023		2024		2023
Amortization	$	(789)	$	(1,037)	$	(18)	$	(19)	$	178	$	219

7. REAL ESTATE EQUITY SECURITIES

Investment in Prime US REIT

In connection with the Company’s sale of 11 properties to the SREIT on July 18, 2019 (the “Singapore Portfolio”), on July 19, 2019, the Company, through an indirect wholly owned subsidiary (“REIT Properties III”), acquired 307,953,999 units in the SREIT at a price of $271.0 million, or $0.88 per unit, representing a 33.3% ownership interest in the SREIT (such transactions, the “Singapore Transaction”). On August 21, 2019, REIT Properties III sold 18,392,100 of its units in the SREIT for $16.2 million pursuant to an over-allotment option granted to the underwriters of the SREIT’s offering, reducing REIT Properties III’s ownership in the SREIT to 31.3% of the outstanding units of the SREIT as of that date. On November 9, 2021, REIT Properties III sold 73,720,000 of its units in the SREIT for $58.9 million, net of fees and costs, reducing REIT Properties III’s ownership in the SREIT to 18.5% of the outstanding units of the SREIT as of that date. On March 28, 2024, the SREIT issued an additional unit for every 10 existing units held by its unitholders as of March 4, 2024, increasing REIT Properties III’s investment in the units of the SREIT to 237,426,088 units. As of March 31, 2024, REIT Properties III held 237,426,088 units of the SREIT which represented 18.2% of the outstanding units of the SREIT. As of March 31, 2024, the aggregate book value and fair value of the Company’s investment in the units of the SREIT was $32.3 million, which was based on the closing price of the SREIT units on the SGX-ST of $0.136 per unit as of March 31, 2024.

During the three months ended March 31, 2024 and 2023, the Company recognized $0.5 million and $6.5 million of dividend income from its investment in the SREIT, respectively. During the three months ended March 31, 2024 and 2023, the Company recorded an unrealized loss on real estate equity securities of $19.5 million and $18.3 million, respectively.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS REAL ESTATE INVESTMENT TRUST III, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

March 31, 2024

(unaudited)

8. NOTES PAYABLE

As of March 31, 2024 and December 31, 2023, the Company’s notes payable, including notes payable related to real estate held for sale, consisted of the following (dollars in thousands):

	Book Value as of<br><br>March 31, 2024		Book Value as of<br><br>December 31, 2023		Contractual Interest Rate as of<br><br>March 31, 2024 (1)	Effective Interest Rate as of<br><br>March 31, 2024 (1)	Payment Type	Maturity Date (2)
The Almaden Mortgage Loan (3)	$	119,610	$	119,870	7.45%	7.45%	Principal & Interest	02/01/2026
201 Spear Street Mortgage Loan (4)	—		125,000		(4)	(4)	(4)	(4)
Carillon Mortgage Loan (5)	94,400		94,400		One-month Term SOFR +1.50%	6.83%	Interest Only	04/11/2024
Modified Portfolio Revolving Loan Facility (6)	202,968		249,145		One-month Term SOFR + 3.00%	8.33%	Principal & Interest	03/01/2026
3001 & 3003 Washington Mortgage Loan	139,937		140,410		One-month Term SOFR + 0.10% + 1.45%	6.88%	Principal & Interest	06/01/2024
Accenture Tower Revolving Loan (7)	306,000		306,000		One-month Term SOFR + 2.35%	7.68%	Interest Only	11/02/2024
Credit Facility (8)	47,500		37,500		One-month Term SOFR + 2.20%	7.53%	Interest Only	07/30/2024
Amended and Restated Portfolio Loan Facility (9)	601,288		601,288		One-month BSBY (10)<br><br>+1.80%	7.15%	Interest Only	08/06/2024
Park Place Village Mortgage Loan (11)	65,000		65,000		One-month Term SOFR + 1.95%	7.28%	Interest Only	08/31/2025
Total notes payable principal outstanding	$	1,576,703	$	1,738,613
Deferred financing costs, net	(3,417)		(2,717)
Total Notes Payable, net	$	1,573,286	$	1,735,896

_____________________

(1) Contractual interest rate represents the interest rate in effect under the loan as of March 31, 2024. Effective interest rate is calculated as the actual interest rate in effect as of March 31, 2024, consisting of the contractual interest rate and using interest rate indices as of March 31, 2024, where applicable. For information regarding the Company’s derivative instruments, see Note 9, “Derivative Instruments.”

(2) Represents the maturity date as of March 31, 2024; subject to certain conditions, the maturity dates of certain loans may be extended beyond the dates shown. See below.

(3) Beginning January 1, 2024, The Almaden Borrower is required to make a monthly principal payment in the amount of $130,000.

(4) The Spear Street Borrower defaulted on the 201 Spear Street Mortgage Loan as a result of failure to pay in full the entire November 2023 monthly interest payment, resulting in an event of default on the loan on November 14, 2023. On December 29, 2023, the Spear Street Borrower and the Spear Street Lender entered a deed-in-lieu of foreclosure transaction and the Spear Street Lender transferred the title of the 201 Spear Street property to a third-party buyer of the 201 Spear Street Mortgage Loan on January 9, 2024.

(5) As of March 31, 2024, the borrowing capacity under the Carillon Mortgage Loan was $111.0 million, of which $88.8 million was term debt and $22.2 million was revolving debt. As of March 31, 2024, the outstanding balance under the loan consisted of $88.8 million of term debt and $5.6 million of revolving debt. As of March 31, 2024, $16.6 million of revolving debt remained available for future disbursements, subject to certain terms and conditions set forth in the loan documents. As of March 31, 2024, the Carillon Mortgage Loan has one 24-month extension option, subject to certain terms and conditions contained in the loan documents. Subsequent to March 31, 2024, the borrower under the Carillon Mortgage Loan entered into a loan modification agreement (the “Carillon Second Modification Agreement”) with the lender and extended the maturity date of the Carillon Mortgage Loan to June 10, 2024. The one 24-month extension option pursuant to the loan agreement remained available from the original maturity date of April 11, 2024, subject to certain terms and conditions contained in the loan documents. In connection with the Carillon Second Modification Agreement, the borrowing capacity under the Carillon Mortgage Loan was reduced to $94.4 million. The revolving debt outstanding was converted to term debt and the remaining unadvanced portion of the commitment of $16.6 million was permanently cancelled pursuant to the Carillon Second Modification Agreement.

(6) See below, “– Recent Financing Transactions – Modified Portfolio Revolving Loan Facility.”

(7) As of March 31, 2024, the outstanding balance under the Accenture Tower Revolving Loan consisted of $229.5 million of term debt and $76.5 million of revolving debt. As of March 31, 2024, the Accenture Tower Revolving Loan has one 12-month extension option, subject to certain terms and conditions contained in the loan documents.

(8) As of March 31, 2024, the borrowing capacity under the Credit Facility was $75.0 million, of which $37.5 million is term debt and $37.5 million is revolving debt. As of March 31, 2024, the outstanding balance under the Credit Facility consisted of $37.5 million of term debt and $10.0 million of revolving debt. As of March 31, 2024, an additional $27.5 million of revolving debt remained available for future disbursements, subject to certain terms and conditions contained in the loan documents. See Note 13, “Subsequent Events – Second Modification of Credit Facility.”

(9) See below, “– Recent Financing Transactions – Amended and Restated Portfolio Loan Facility.”

(10) Bloomberg Short-Term Bank Yield Index (“BSBY”).

(11) As of March 31, 2024, the Park Place Village Mortgage Loan has two 12-month extension options, subject to certain terms, conditions and fees as described in the loan documents. Monthly payments are interest only during the initial term and the first extension option. During the second extension option, certain future monthly payments due under the Park Place Village Mortgage Loan also include amortizing principal payments.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS REAL ESTATE INVESTMENT TRUST III, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

March 31, 2024

(unaudited)

8. NOTES PAYABLE (CONTINUED)

Through the normal course of operations, the Company has $1.2 billion of notes payable maturing over the 12-month period from the issuance of these financial statements. Considering the current commercial real estate lending environment, this raises substantial doubt as to the Company’s ability to continue as a going concern for at least a year from the date of the issuance of these financial statements. In order to refinance, restructure or extend the Company’s maturing debt obligations, the Company has been required to reduce the loan commitments and/or make paydowns on certain loans, and the Company anticipates it may be required to make additional reductions to loan commitments and paydowns on the loans maturing during the next 12 months in order to refinance, restructure or extend those loans. As a result of reductions in loan commitments and paydowns and the ongoing liquidity needs in the Company’s real estate portfolio, in addition to raising capital through new equity or debt, the Company may consider selling assets into a challenged real estate market in an effort to manage its liquidity needs. Selling real estate assets in the current market would likely adversely impact the ultimate sale price. The Company also may defer noncontractual expenditures. Additionally, continued increases in interest rates, reductions in real estate values and future tenant turnover in the portfolio will have a further impact on the Company’s ability to meet loan compliance tests and may further reduce the available liquidity under the Company’s loan agreements. See also, Note 2, “Going Concern.”

During the three months ended March 31, 2024 and 2023, the Company’s interest expense related to notes payable was $32.5 million and $26.7 million, respectively, which excludes the impact of interest rate swaps and caps put in place to mitigate the Company’s exposure to rising interest rates on its variable rate notes payable. See Note 9, “Derivative Instruments.” Included in interest expense was the amortization of deferred financing costs of $2.5 million and $1.0 million for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024 and December 31, 2023, $10.0 million and $9.9 million of interest expense were payable, respectively.

The following is a schedule of maturities, including principal amortization payments, for all notes payable outstanding as of March 31, 2024 (in thousands):

April 1, 2024 through December 31, 2024	$	1,192,938
2025	70,083
2026	313,682
2027	—
2028	—
Thereafter	—
	$	1,576,703

The Company’s notes payable contain financial debt covenants. As of March 31, 2024, the Company believes it was in compliance with these debt covenants. The Company’s loan agreements contain cross default provisions, including that the failure of one or more of the Company’s subsidiaries to pay debt as it matures under one debt facility may trigger the acceleration of the Company’s indebtedness under other debt facilities. As of March 31, 2024, the Almaden Mortgage Loan, the Modified Portfolio Revolving Loan Facility and the Amended and Restated Portfolio Loan Facility are subject to cash sweep arrangements, whereby each month the excess cash flow from the properties securing the loan is deposited into a cash management account held for the benefit of the Company’s lenders. Generally, excess cash flow means an amount equal to (a) gross revenues from the properties securing the facility less (b) an amount equal to principal and interest paid with respect to the associated debt facility, operating expenses of the properties securing the facility and in certain cases a limited amount of REIT-level expenses. In certain cases, the Company may request disbursements from the cash management accounts. Amounts held in the cash management accounts at each reporting period are included in restricted cash in the accompanying consolidated balance sheets.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS REAL ESTATE INVESTMENT TRUST III, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

March 31, 2024

(unaudited)

8. NOTES PAYABLE (CONTINUED)

Recent Financing Transactions

Amended and Restated Portfolio Loan Facility

On November 3, 2021, certain of the Company’s indirect wholly owned subsidiaries (the “Amended and Restated Portfolio Loan Facility Borrowers”), entered into a two-year loan agreement with Bank of America, N.A., as administrative agent (the “Agent”); BofA Securities, Inc., Wells Fargo Securities, LLC and Capital One, National Association as joint lead arrangers and joint book runners; Wells Fargo Bank, N.A., as syndication agent; and each of the financial institutions signatory thereto as lenders (as subsequently modified and amended, the “Amended and Restated Portfolio Loan Facility”). The current lenders under the Amended and Restated Portfolio Loan Facility are Bank of America, N.A.; Wells Fargo Bank, National Association; U.S. Bank, National Association; Capital One, National Association; PNC Bank, National Association; Regions Bank; and Zions Bankcorporation, N.A., DBA California Bank & Trust (together, the “Portfolio Loan Lenders”). The Amended and Restated Portfolio Loan Facility is secured by 60 South Sixth, Preston Commons, Sterling Plaza, Towers at Emeryville, Ten Almaden and Town Center (the “Portfolio Loan Properties”).

On February 6, 2024, the Amended and Restated Portfolio Loan Facility Borrowers entered into a fourth loan modification and extension agreement with the Agent and the Portfolio Loan Lenders (the “Fourth Extension Agreement”). Pursuant to the Fourth Extension Agreement, the Agent and Portfolio Loan Lenders agreed to extend the maturity of the Amended and Restated Portfolio Loan Facility to August 6, 2024.

Under the Fourth Extension Agreement, the Agent and the Portfolio Loan Lenders waived the requirement for the Portfolio Loan Properties to satisfy the minimum required ongoing debt service coverage ratio as of the December 31, 2023, March 31, 2024 and June 30, 2024 test dates and waived the requirement for REIT Properties III as guarantor to satisfy a net worth covenant for the period between February 6, 2024 and August 6, 2024.

The Fourth Extension Agreement also includes, among other requirements, a requirement for the Company to raise not less than $100,000,000 in new equity, debt or a combination of both on or prior to July 15, 2024.

The Fourth Extension Agreement provides that 100% of excess cash flow from the Portfolio Loan Properties continues to be deposited monthly into a cash collateral account (the “Cash Sweep Collateral Account”). Funds may not be withdrawn from the Cash Sweep Collateral Account without the prior written consent of the Agent, and upon certain events, the Agent has the right to withdraw funds from the Cash Sweep Collateral Account.

The Fourth Extension Agreement provides that, subject to the requirements contained therein, the Amended and Restated Portfolio Loan Facility Borrowers will be permitted to withdraw funds from the Cash Sweep Collateral Account to pay or reimburse the Amended and Restated Portfolio Loan Facility Borrowers for approved tenant improvements, leasing commissions and capital improvements and for operating shortfalls related to the Portfolio Loan Properties to the extent they occur in any month.

Additionally, the Fourth Extension Agreement provides a default will occur under the Amended and Restated Portfolio Loan Facility if a written demand for payment following a default under the following loans is delivered by U.S. Bank, National Association under (a) the Company’s Credit Facility, (b) the payment guaranty agreement of the Company’s Modified Portfolio Revolving Loan Facility or (c) any other indebtedness of REIT Properties III where the demand made or amount guaranteed is greater than $5.0 million.

The Amended and Restated Portfolio Loan Facility Borrowers also agreed to pay the Portfolio Loan Lenders a non-refundable fee in the amount of $0.9 million, to deposit $5.0 million into the Cash Sweep Collateral Account (which will generally be used to fund capital expenditures and operating cash flow needs of the Portfolio Loan Properties), and to pay the Portfolio Loan Lenders an exit fee in the amount of $1.0 million, which is due on the earliest to occur of the maturity date, the repayment of the loan in full and the occurrence of a default under the loan.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS REAL ESTATE INVESTMENT TRUST III, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

March 31, 2024

(unaudited)

8. NOTES PAYABLE (CONTINUED)

Modified Portfolio Revolving Loan Facility

On October 17, 2018, certain of the Company’s indirect wholly owned subsidiaries (the “Modified Portfolio Revolving Loan Borrowers”) entered into a loan facility (as subsequently modified and amended, the “Modified Portfolio Revolving Loan Facility”) with U.S. Bank National Association, as administrative agent (the “Modified Portfolio Revolving Loan Agent”). The current lenders under the Modified Portfolio Revolving Loan Facility are U.S. Bank National Association, Regions Bank, Citizens Bank, City National Bank and Associated Bank, National Association (the “Modified Portfolio Revolving Loan Lenders”).

On February 21, 2024, in connection with the disposition of the McEwen Building and pursuant to the Third Modification Agreement (defined below), the Modified Portfolio Revolving Loan Borrowers paid the Modified Portfolio Revolving Loan Agent the net sales proceeds from the sale of the McEwen Building (“Required McEwen Payment”) of $46.2 million, which amount was applied to reduce the outstanding principal amount of the Modified Portfolio Revolving Loan Facility to $203.0 million, and the McEwen Building was released as security for the Modified Portfolio Revolving Loan Facility. Notwithstanding the Required McEwen Payment, the Third Modification Agreement allows the Company to draw back a portion of the loan payment through the holdbacks described below, providing additional liquidity to the Company to fund capital needs in the portfolio. Following the release of the McEwen Building, the Modified Portfolio Revolving Loan Facility is secured by 515 Congress, Gateway Tech Center and 201 17th Street (the “Modified Portfolio Revolving Loan Properties”).

On February 9, 2024, the Company, through the Modified Portfolio Revolving Loan Borrowers, entered into an additional advance and third modification agreement (the “Third Modification Agreement”) with the Modified Portfolio Revolving Loan Agent and the Modified Portfolio Revolving Loan Lenders. In connection with the Required McEwen Payment and the release of the McEwen Building, the Third Modification Agreement provides that the following terms apply to the Modified Portfolio Revolving Loan Facility:

(i) the maturity date is extended to March 1, 2026,

(ii) the interest rate resets to one-month Term SOFR plus 300 basis points and the loan requires quarterly payments of principal in the amount of $880,900,

(iii) the revolving portion of the facility is converted into non-revolving debt, the accordion option is eliminated (whereby the Modified Portfolio Revolving Loan Borrowers previously had the ability to request that the commitment be increased subject to the Modified Portfolio Revolving Loan Lenders’ consent and certain additional conditions), and the revolving portion of the Modified Portfolio Revolving Loan Facility and the rights of the Modified Portfolio Revolving Loan Borrowers to reborrow debt under the loan once it has been paid is eliminated,

(iv) holdbacks of a portion of the Modified Portfolio Revolving Loan Facility are established, which holdbacks may be disbursed subject to the satisfaction of certain terms and conditions, as described below,

(v) the Company is restricted from paying dividends or distributions to its stockholders or redeeming shares of its stock without the Modified Portfolio Revolving Loan Agent’s prior written consent, except for any amounts that the Company is required to distribute to its stockholders to qualify as a REIT under the Internal Revenue Code of 1986, as amended, and

(vi) certain cash management sweeps are established, as described below.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS REAL ESTATE INVESTMENT TRUST III, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

March 31, 2024

(unaudited)

8. NOTES PAYABLE (CONTINUED)

As a result of the release of the McEwen Building, the Third Modification Agreement allows the Company to draw back a portion of the amount of the loan paydown from the McEwen Building sale proceeds through holdbacks on the Modified Portfolio Revolving Loan Facility, consisting of (i) a holdback for the payment of, or reimbursement of the Modified Portfolio Revolving Loan Borrowers’ payment of, tenant improvements, leasing commissions and capital expenditures related to the Modified Portfolio Revolving Loan Properties equal to $10.0 million and (ii) a holdback for the payment of, or reimbursement of REIT Properties III’s (the “Guarantor”) and/or its subsidiaries’ payment of, tenant improvements, leasing commissions and capital expenditures for real property and related improvements owned directly or indirectly by the Guarantor in an amount equal to $6.2 million. Disbursements of the holdback amounts are subject to the conditions of the Third Modification Agreement. In the event of disbursements of the holdback amounts, such advances by the Modified Portfolio Revolving Loan Lenders will increase the aggregate principal commitment under the Modified Portfolio Revolving Loan Facility.

Also as a result of the release of the McEwen Building, the Third Modification Agreement provides that excess cash flow from the Modified Portfolio Revolving Loan Properties be deposited monthly into an interest-bearing account held by the Modified Portfolio Revolving Loan Agent for the benefit of the Modified Portfolio Revolving Loan Lenders (“Cash Management Account”). So long as no default exists under the Modified Portfolio Revolving Loan Facility and subject to the terms and conditions in the Third Modification Agreement, the Modified Portfolio Revolving Loan Borrowers may request disbursement from the Cash Management Account for the payment of debt service payments (including the quarterly principal payments) and other payments due under the loan, for tenant improvements, leasing commissions, capital expenditures and other operating shortfalls and for certain REIT-level expenses. The Modified Portfolio Revolving Loan Agent has the sole right to make withdrawals from the Cash Management Account.

In connection with the Third Modification Agreement, the Guarantor and the Modified Portfolio Revolving Loan Lenders also agreed to amendments to the Guarantor’s financial covenants (increasing the allowed leverage ratio and reducing the required earnings to fixed charges ratios). The Third Modification Agreement provides that disbursements of the holdback amounts and withdrawals from the Cash Management Account are subject to compliance with the above referenced amended Guarantor financial covenants and other covenants that require the Modified Portfolio Revolving Loan Properties to satisfy certain leverage and debt service coverage ratios and that the Modified Portfolio Revolving Loan Agent may demand a pay down of the outstanding principal balance of the loan to the extent of noncompliance with such covenants.

9. DERIVATIVE INSTRUMENTS

The Company enters into derivative instruments for risk management purposes to hedge its exposure to cash flow variability caused by changing interest rates. The primary goal of the Company’s risk management practices related to interest rate risk is to prevent changes in interest rates from adversely impacting the Company’s ability to achieve its investment return objectives. The Company does not enter into derivatives for speculative purposes.

The Company enters into interest rate swaps as a fixed rate payer to mitigate its exposure to rising interest rates on its variable rate notes payable. The value of interest rate swaps is primarily impacted by interest rates, market expectations about interest rates, and the remaining life of the instrument. In general, increases in interest rates, or anticipated increases in interest rates, will increase the value of the fixed rate payer position and decrease the value of the variable rate payer position. As the remaining life of the interest rate swap decreases, the value of both positions will generally move towards zero.

The Company enters into interest rate caps to mitigate its exposure to rising interest rates on its variable rate notes payable. The values of interest rate caps are primarily impacted by interest rates, market expectations about interest rates, and the remaining life of the instrument. In general, increases in interest rates, or anticipated increases in interest rates, will increase the value of interest rate caps. As the remaining life of an interest rate cap decreases, the value of the instrument will generally decrease towards zero.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS REAL ESTATE INVESTMENT TRUST III, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

March 31, 2024

(unaudited)

9. DERIVATIVE INSTRUMENTS (CONTINUED)

As of March 31, 2024, the Company has entered into 14 interest rate swaps, which were not designated as hedging instruments. The following table summarizes the notional amount and other information related to the Company’s interest rate swaps as of March 31, 2024 and December 31, 2023. The notional amount is an indication of the extent of the Company’s involvement in each instrument at that time, but does not represent exposure to credit, interest rate or market risks (dollars in thousands):

	March 31, 2024			December 31, 2023				Weighted-Average Fix Pay Rate	Weighted-Average Remaining Term in Years
Derivative Instruments	Number of Instruments	Notional Amount		Number of Instruments	Notional Amount		Reference Rate as of March 31, 2024
Derivative instruments not designated as hedging instruments
Interest rate swaps (1)	14	$	1,100,000	16	$	1,300,000	Fallback SOFR (2)/<br><br>Fixed at 1.08% - 1.28%<br><br>One-month Term SOFR/<br><br>Fixed at 2.38% - 3.92%	3.1%	2.1
Interest rate cap (3)	—	$	—	1	$	125,000	(3)	(3)	(3)

_____________________

(1) In February 2024, the Company terminated two interest rate swap agreements and received aggregate settlement payments of $6.6 million.

(2) Upon cessation of one-month LIBOR on June 30, 2023, eight of the Company’s interest rate swaps which bore interest at one-month LIBOR were automatically converted to a fallback rate (“Fallback SOFR”) plus a 11.448 basis point adjustment. As of March 31, 2024, the Company had two interest rate swaps which had been converted to Fallback SOFR, all with a maturity date of January 1, 2025.

(3) The interest rate cap expired in January 2024.

The following table sets forth the fair value of the Company’s derivative instruments as well as their classification on the consolidated balance sheets as of March 31, 2024 and December 31, 2023 (dollars in thousands):

		March 31, 2024			December 31, 2023
Derivative Instruments	Balance Sheet Location	Number of Instruments	Fair Value		Number of Instruments	Fair Value
Derivative instruments not designated as hedging instruments
Interest rate swaps	Prepaid expenses and other assets, at fair value	14	$	26,246	15	$	23,891
Interest rate swaps	Other liabilities, at fair value	—	$	—	1	$	(175)
Interest rate cap	Prepaid expenses and other assets, at fair value	—	$	—	1	$	—

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS REAL ESTATE INVESTMENT TRUST III, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

March 31, 2024

(unaudited)

9. DERIVATIVE INSTRUMENTS (CONTINUED)

The following table summarizes the effects of derivative instruments on the Company’s consolidated statements of operations (in thousands):


	2024		2023
Derivatives not designated as hedging instruments
Realized gain recognized on interest rate swaps	$	(7,070)	$	(6,636)
Unrealized (gain) loss on interest rate swaps (1)	(8,904)		13,650
Gains related to swap terminations	(178)		—
Unrealized loss on interest rate cap	—		24
Net (gain) loss on derivative instruments	$	(16,152)	$	7,038

_____________________

(1) For the three months ended March 31, 2023, unrealized (gain) loss on interest rate swaps included a $2.5 million unrealized loss related to the change in fair value of two off-market interest rate swaps (which expired on November 2, 2023) determined to be hybrid financial instruments for which the Company elected to apply the fair value option.

10. FAIR VALUE DISCLOSURES

Under GAAP, the Company is required to measure certain financial instruments at fair value on a recurring basis. In addition, the Company is required to measure other non-financial and financial assets at fair value on a non-recurring basis (e.g., carrying value of impaired real estate loans receivable and long-lived assets). Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The GAAP fair value framework uses a three-tiered approach. Fair value measurements are classified and disclosed in one of the following three categories:

•Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities;

•Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and

•Level 3: prices or valuation techniques where little or no market data is available that requires inputs that are both significant to the fair value measurement and unobservable.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS REAL ESTATE INVESTMENT TRUST III, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

March 31, 2024

(unaudited)

10. FAIR VALUE DISCLOSURES (CONTINUED)

The fair value for certain financial instruments is derived using a combination of market quotes, pricing models and other valuation techniques that involve significant management judgment. The price transparency of financial instruments is a key determinant of the degree of judgment involved in determining the fair value of the Company’s financial instruments. Financial instruments for which actively quoted prices or pricing parameters are available and for which markets contain orderly transactions will generally have a higher degree of price transparency than financial instruments for which markets are inactive or consist of non-orderly trades. The Company evaluates several factors when determining if a market is inactive or when market transactions are not orderly. The following is a summary of the methods and assumptions used by management in estimating the fair value of each class of assets and liabilities for which it is practicable to estimate the fair value:

Cash and cash equivalents, restricted cash, rent and other receivables, and accounts payable and accrued liabilities: These balances approximate their fair values due to the short maturities of these items.

Real estate equity securities: At March 31, 2024, the Company’s investment in the units of the SREIT was presented at fair value on the accompanying consolidated balance sheet. The fair value of the units of the SREIT was based on a quoted price in an active market on a major stock exchange. The Company classifies these inputs as Level 1 inputs.

Derivative instruments: The Company’s derivative instruments are presented at fair value on the accompanying consolidated balance sheets. The valuation of these instruments is determined using a proprietary model that utilizes observable inputs. As such, the Company classifies these inputs as Level 2 inputs. The proprietary model uses the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including interest rate curves and volatility. The fair values of interest rate swaps are estimated using the market standard methodology of netting the discounted fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on an expectation of interest rates (forward curves) derived from observable market interest rate curves. In addition, credit valuation adjustments, which consider the impact of any credit risks to the contracts, are incorporated in the fair values to account for potential nonperformance risk.

Notes payable: The fair values of the Company’s notes payable are estimated using a discounted cash flow analysis based on management’s estimates of current market interest rates for instruments with similar characteristics, including remaining loan term, loan-to-value ratio, type of collateral and other credit enhancements. Additionally, when determining the fair value of a liability in circumstances in which a quoted price in an active market for an identical liability is not available, the Company measures fair value using (i) a valuation technique that uses the quoted price of the identical liability when traded as an asset or quoted prices for similar liabilities when traded as assets or (ii) another valuation technique that is consistent with the principles of fair value measurement, such as the income approach or the market approach. The Company classifies these inputs as Level 3 inputs.

The following were the face values, carrying amounts and fair values of the Company’s notes payable as of March 31, 2024 and December 31, 2023, which carrying amounts generally do not approximate the fair values (in thousands):

	March 31, 2024						December 31, 2023
	Face Value		Carrying Amount		Fair Value		Face Value		Carrying Amount		Fair Value
Financial liabilities:
Notes payable	$	1,576,703	$	1,573,286	$	1,570,332	$	1,738,613	$	1,735,896	$	1,679,259

Disclosure of the fair values of financial instruments is based on pertinent information available to the Company as of the period end and requires a significant amount of judgment. Low levels of transaction volume for certain financial instruments have made the estimation of fair values difficult and, therefore, both the actual results and the Company’s estimate of value at a future date could be materially different.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS REAL ESTATE INVESTMENT TRUST III, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

March 31, 2024

(unaudited)

10. FAIR VALUE DISCLOSURES (CONTINUED)

As of March 31, 2024, the Company measured the following assets and liabilities at fair value (in thousands):

			Fair Value Measurements Using
	Total		Quoted Prices in <br>Active Markets <br>for Identical Assets<br>(Level 1)		Significant Other <br>Observable Inputs<br>(Level 2)		Significant<br>Unobservable Inputs<br>(Level 3)
Recurring Basis:
Real estate equity securities	$	32,290	$	32,290	$	—	$	—
Asset derivatives - interest rate swaps	$	26,246	$	—	$	26,246	$	—

11. RELATED PARTY TRANSACTIONS

The Company has entered into the Advisory Agreement with the Advisor. The Company’s Dealer Manager Agreement with the Dealer Manager terminated on March 15, 2024 upon termination of the Company’s dividend reinvestment plan. These agreements entitled the Advisor and/or the Dealer Manager to specified fees upon the provision of certain services with regard to the Offering and reimbursement of organization and offering costs incurred by the Advisor and the Dealer Manager on behalf of the Company and entitle the Advisor to specified fees upon the provision of certain services with regard to the investment of funds in real estate investments, the management of those investments, among other services, and the disposition of investments, and entitle the Advisor to reimbursement of certain costs incurred by the Advisor in providing services to the Company. In addition, the Advisor is entitled to certain other fees, including an incentive fee upon achieving certain performance goals, as detailed in the Advisory Agreement. The Company has also entered into a fee reimbursement agreement with the Dealer Manager pursuant to which the Company agreed to reimburse the Dealer Manager for certain fees and expenses it incurs for administering the Company’s participation in the DTCC Alternative Investment Product Platform with respect to certain accounts of the Company’s investors serviced through the platform. The Advisor and Dealer Manager also serve or served as the advisor and dealer manager, respectively, for KBS Real Estate Investment Trust II, Inc. (“KBS REIT II”) (liquidated May 2023) and KBS Growth & Income REIT, Inc. (“KBS Growth & Income REIT”).

As of January 1, 2023, the Company, together with KBS Growth & Income REIT, the Dealer Manager, the Advisor and other KBS-affiliated entities, had entered into an errors and omissions and directors and officers liability insurance program where the lower tiers of such insurance coverage were shared. The cost of these lower tiers is allocated by the Advisor and its insurance broker among each of the various entities covered by the program, and is billed directly to each entity. In June 2023, the Company renewed its participation in the program, and the program is effective through June 30, 2024. At renewal on June 30, 2023, due to its liquidation, KBS Growth & Income REIT elected to cease participation in the program and obtained separate insurance coverage.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS REAL ESTATE INVESTMENT TRUST III, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

March 31, 2024

(unaudited)

11. RELATED PARTY TRANSACTIONS (CONTINUED)

Pursuant to the terms of these agreements, summarized below are the related-party costs incurred by the Company for the three months ended March 31, 2024 and 2023, respectively, and any related amounts payable as of March 31, 2024 and December 31, 2023 (in thousands):

	Incurred
	Three Months Ended March 31,					March 31,	December 31,
		2024		2023			2024		2023
Expensed
Asset management fees (1)		$	4,943	$	5,089		$	18,652	$	16,992
Reimbursement of operating expenses (2)		118		79			56		416
Disposition fees (3)		414		—			—		—
		$	5,475	$	5,168		$	18,708	$	17,408

_____________________

(1) See “Asset Management Fees” below.

(2) Reimbursable operating expenses primarily consists of internal audit personnel costs, accounting software costs and cybersecurity related expenses incurred by the Advisor under the Advisory Agreement. The Company has reimbursed the Advisor for the Company’s allocable portion of the salaries, benefits and overhead of internal audit department personnel providing services to the Company. These amounts totaled $25,000 and $25,000 for the three months ended March 31, 2024 and 2023, respectively, and were the only type of employee costs reimbursed under the Advisory Agreement for the three months ended March 31, 2024 and 2023, respectively. The Company currently does not reimburse for employee costs in connection with services for which the Advisor earns acquisition or origination fees or disposition fees (other than reimbursement of travel and communication expenses), and other than future payments pursuant to the Bonus Retention Fund (see below, “–Asset Management Fees”), the Company does not reimburse the Advisor for the salaries or benefits the Advisor or its affiliates may pay to the Company’s executive officers and affiliated directors. In addition to the amounts above, the Company reimburses the Advisor for certain of the Company’s direct costs incurred from third parties that were initially paid by the Advisor on behalf of the Company.

(3) Disposition fees with respect to real estate sold are included in the gain on sale of real estate, net, in the accompanying consolidated statements of operations.

In connection with the Offering, Messrs. Bren, Hall, McMillan and Schreiber agreed to provide additional indemnification to one of the participating broker-dealers. The Company agreed to add supplemental coverage to its directors’ and officers’ insurance coverage to insure Messrs. Bren, Hall, McMillan and Schreiber’s obligations under this indemnification agreement in exchange for reimbursement by Messrs. Bren, Hall, McMillan and Schreiber to the Company for all costs, expenses and premiums related to this supplemental coverage. During the three months ended March 31, 2024 and 2023, the Advisor did not incur any costs of the supplemental coverage obtained by the Company.

Asset Management Fees

For asset management services, the Company pays the Advisor a monthly fee. With respect to investments in real property, the asset management fee is a monthly fee equal to one-twelfth of 0.75% of the amount paid or allocated to acquire the investment, plus the cost of any subsequent development, construction or improvements to the property. This amount includes any portion of the investment that was debt financed and is inclusive of acquisition expenses related thereto (but excludes acquisition fees paid to the Advisor). In the case of investments made through joint ventures, the asset management fee is determined based on the Company’s proportionate share of the underlying investment (but excluding acquisition fees paid to the Advisor). With respect to investments in loans and any investments other than real property, the asset management fee is a monthly fee calculated, each month, as one-twelfth of 0.75% of the lesser of (i) the amount actually paid or allocated to acquire or fund the loan or other investment (which amount includes any portion of the investment that was debt financed and is inclusive of acquisition or origination expenses related thereto, but is exclusive of acquisition or origination fees paid to the Advisor) and (ii) the outstanding principal amount of such loan or other investment, plus the acquisition or origination expenses related to the acquisition or funding of such investment (excluding acquisition or origination fees paid to the Advisor), as of the time of calculation. The Company currently does not pay any asset management fees in connection with the Company’s investment in the equity securities of the SREIT.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS REAL ESTATE INVESTMENT TRUST III, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

March 31, 2024

(unaudited)

11. RELATED PARTY TRANSACTIONS (CONTINUED)

Notwithstanding the foregoing, on November 8, 2022, the Company and the Advisor amended the advisory agreement and commencing with asset management fees accruing from October 1, 2022, the Company paid $1.15 million of the monthly asset management fee to the Advisor in cash and the Company deposited the remainder of the monthly asset management fee into an interest bearing account in the Company’s name, which amounts will be paid to the Advisor from such account solely as reimbursement for payments made by the Advisor pursuant to the Advisor’s employee retention program (such account, the “Bonus Retention Fund”). The Bonus Retention Fund was established in order to incentivize and retain key employees of the Advisor. The Bonus Retention Fund was fully funded in December 2023 when the Company had deposited $8.5 million in cash into such account. Following such time, the monthly asset management fee became fully payable in cash to the Advisor. The Advisor has acknowledged and agreed that payments by the Advisor to employees under the Advisor’s employee retention program that are reimbursed by the Company from the Bonus Retention Fund will be conditioned on (a) the Company’s liquidation and dissolution; (b) a transaction involving the acquisition, merger, conversion or consolidation, either directly or indirectly, of the Company in which (i) the Company is not the surviving entity and (ii) the Advisor is no longer serving as an advisor or asset manager to the surviving entity in such transaction; (c) the sale or other disposition of all or substantially all of the Company’s assets; (d) the non-renewal or termination of the Advisory Agreement without cause; or (e) the termination of the employee without cause. To the extent the Bonus Retention Fund is not fully paid out to employees as set forth above, the Advisory Agreement provides that the residual amount will be deemed additional Deferred Asset Management Fees (defined below) and be treated in accordance with the provisions for payment of Deferred Asset Management Fees. Two of the Company’s executive officers, Jeff Waldvogel and Stacie Yamane, and one of the Company’s directors, Marc DeLuca, participate in and have been allocated awards under the Advisor’s employee retention program, which awards would only be paid as set forth above. As of March 31, 2024, the Company had deposited $8.5 million of restricted cash into the Bonus Retention Fund and the Company had not made any payments to the Advisor from the Bonus Retention Fund.

Prior to amending the Advisory Agreement in November 2022, the prior advisory agreement had provided that with respect to asset management fees accruing from March 1, 2014, the Advisor would defer, without interest, the Company’s obligation to pay asset management fees for any month in which the Company’s modified funds from operations (“MFFO”) for such month, as such term is defined in the practice guideline issued by the Institute for Portfolio Alternatives (“IPA”) in November 2010 and interpreted by the Company, excluding asset management fees, did not exceed the amount of distributions declared by the Company for record dates of that month. The Company remained obligated to pay the Advisor an asset management fee in any month in which the Company’s MFFO, excluding asset management fees, for such month exceeded the amount of distributions declared for the record dates of that month (such excess amount, an “MFFO Surplus”); however, any amount of such asset management fee in excess of the MFFO Surplus was deferred under the prior advisory agreement. If the MFFO Surplus for any month exceeded the amount of the asset management fee payable for such month, any remaining MFFO Surplus was applied to pay any asset management fee amounts previously deferred in accordance with the prior advisory agreement.

Pursuant to the current Advisory Agreement, asset management fees accruing from October 1, 2022 are no longer subject to the deferral provision described above. Asset management fees that remained deferred as of September 30, 2022 are “Deferred Asset Management Fees.” As of September 30, 2022, Deferred Asset Management Fees totaled $8.5 million and the Company had not made any payments to the Advisor related to the Deferred Asset Management Fees for the period from October 1, 2022 to March 31, 2024. The Advisory Agreement also provides that the Company remains obligated to pay the Advisor outstanding Deferred Asset Management Fees in any month to the extent that MFFO for such month exceeds the amount of distributions declared for the record dates of that month (such excess amount, a “RMFFO Surplus”); provided however, that any amount of outstanding Deferred Asset Management Fees in excess of the RMFFO Surplus will continue to be deferred.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS REAL ESTATE INVESTMENT TRUST III, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

March 31, 2024

(unaudited)

11. RELATED PARTY TRANSACTIONS (CONTINUED)

As of March 31, 2024 and December 31, 2023, the Company had accrued $18.7 million and $17.0 million of asset management fees, respectively, of which $8.5 million were Deferred Asset Management Fees as of March 31, 2024 and December 31, 2023, and $8.5 million were related to asset management fees that were restricted for payment and deposited in the Bonus Retention Fund as of March 31, 2024 and December 31, 2023.

Consistent with the prior advisory agreement, the current Advisory Agreement provides that notwithstanding the foregoing, any and all Deferred Asset Management Fees that are unpaid will become immediately due and payable at such time as the Company’s stockholders have received, together as a collective group, aggregate distributions (including distributions that may constitute a return of capital for federal income tax purposes) sufficient to provide (i) an 8.0% per year cumulative, noncompounded return on such net invested capital (the “Stockholders’ 8% Return”) and (ii) a return of their net invested capital, or the amount calculated by multiplying the total number of shares purchased by stockholders by the issue price, reduced by any amounts to repurchase shares pursuant to the Company’s share redemption program. The Stockholders’ 8% Return is not based on the return provided to any individual stockholder. Accordingly, it is not necessary for each of the Company’s stockholders to have received any minimum return in order for the Advisor to receive Deferred Asset Management Fees.

In addition, the current Advisory Agreement provides that any and all Deferred Asset Management Fees that are unpaid will also be immediately due and payable upon the earlier of:

(i) a listing of the Company’s shares of common stock on a national securities exchange;

(ii) the Company’s liquidation and dissolution;

(iii) a transaction involving the acquisition, merger, conversion or consolidation, either directly or indirectly, of the Company in which (y) the Company is not the surviving entity and (z) the Advisor is no longer serving as an advisor or asset manager to the surviving entity in such transaction; and

(iv) the sale or other disposition of all or substantially all of the Company’s assets.

The Advisory Agreement has a term expiring on September 27, 2024 but may be renewed for an unlimited number of successive one-year periods upon the mutual consent of the Company and the Advisor. The Advisory Agreement may be terminated (i) upon 60 days written notice without cause or penalty by either the Company (acting through the conflicts committee) or the Advisor or (ii) immediately by the Company for cause or upon the bankruptcy of the Advisor. If the Advisory Agreement is terminated without cause, then the Advisor will be entitled to receive from the Company any residual amount of the Bonus Retention Fund deemed to be additional Deferred Asset Management Fees, provided that upon such non-renewal or termination the Company does not retain an advisor in which the Advisor or its affiliates have a majority interest. Upon termination of the Advisory Agreement, all unpaid Deferred Asset Management Fees will automatically be forfeited by the Advisor, and if the Advisory Agreement is terminated for cause, any residual amount of the Bonus Retention Fund deemed to be additional Deferred Asset Management Fees will also automatically be forfeited by the Advisor.

Lease to Affiliate

On May 29, 2015, the indirect wholly owned subsidiary (the “Lessor”) of the Company that owns 3003 Washington Boulevard entered into a lease with an affiliate of the Advisor (the “Lessee”) for 5,046 rentable square feet, or approximately 2.4% of the total rentable square feet, at 3003 Washington Boulevard. The lease commenced on October 1, 2015 and was amended on March 14, 2019 (the “Amended Lease”) to extend the lease period commencing on September 1, 2019 and terminating on August 31, 2024 and set the annual base rent during the extension period. The annualized base rent from the commencement of the Amended Lease is approximately $0.3 million, and the average annual rental rate (net of rental abatements) over the term of the Amended Lease through its termination is $62.55 per square foot.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS REAL ESTATE INVESTMENT TRUST III, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

March 31, 2024

(unaudited)

11. RELATED PARTY TRANSACTIONS (CONTINUED)

During the three months ended March 31, 2024 and 2023, the Company recognized $83,000 and $83,000 of revenue related to this lease, respectively.

Prior to their approval of the lease and the Amended Lease, the Company’s conflicts committee and board of directors determined the lease to be fair and reasonable to the Company.

Portfolio Sale

On July 18, 2019, the Company sold the Singapore Portfolio to the SREIT, which is affiliated with Charles J. Schreiber, Jr., a director and executive officer of the Company. See Note 7, “Real Estate Equity Securities” for information related to the Company’s investment in the SREIT. The SREIT is externally managed by an entity (the “Manager”) in which Charles J. Schreiber, Jr. currently holds an indirect ownership interest. Mr. Schreiber is also a former director of the Manager. The SREIT pays the Manager an annual base fee of 10% of annual distributable income and an annual performance fee of 25% of the increase in distributions per unit of the SREIT from the preceding year. For acquisitions other than the Singapore Portfolio, the SREIT pays the Manager an acquisition fee of 1% of the acquisition price. The SREIT will also pay the Manager a divestment fee of 0.5% of the sale price of any real estate sold and a development management fee of 3% of the total project costs incurred for development projects. A portion of the fees paid to the Manager are paid to KBS Realty Advisors LLC, an entity controlled by Mr. Schreiber, for sub-advisory services. The Schreiber Trust, a trust whose beneficiaries are Charles J. Schreiber, Jr. and his family members, and the Linda Bren 2017 Trust also acquired units in the SREIT. The Schreiber Trust agreed it will not sell any portion of its units in the SREIT unless it has received the consent of the Company’s conflicts committee. The Linda Bren 2017 Trust has agreed it will not sell $5.0 million of its investment in the SREIT unless it has received the consent of the Company’s conflicts committee.

During the three months ended March 31, 2024 and 2023, no other business transactions occurred between the Company and KBS REIT II, KBS Growth & Income REIT, the Advisor, the Dealer Manager or other KBS-affiliated entities.

12. COMMITMENTS AND CONTINGENCIES

Economic Dependency

The Company is dependent on the Advisor for certain services that are essential to the Company, including the disposition of investments; management of the daily operations of the Company’s investment portfolio; and other general and administrative responsibilities. In the event that the Advisor is unable to provide the respective services, the Company will be required to obtain such services from other sources.

Legal Matters

From time to time, the Company may be party to legal proceedings that arise in the ordinary course of its business. Management is not aware of any legal proceedings of which the outcome is probable or reasonably possible to have a material adverse effect on the Company’s results of operations or financial condition, which would require accrual or disclosure of the contingency and possible range of loss. Additionally, the Company has not recorded any loss contingencies related to legal proceedings in which the potential loss is deemed to be remote.

Environmental

As an owner of real estate, the Company is subject to various environmental laws of federal, state and local governments. Compliance with existing environmental laws is not expected to have a material adverse effect on the Company’s financial condition and results of operations as of March 31, 2024.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS REAL ESTATE INVESTMENT TRUST III, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

March 31, 2024

(unaudited)

13. SUBSEQUENT EVENTS

The Company evaluates subsequent events up until the date the consolidated financial statements are issued.

Second Modification of Credit Facility

On July 30, 2021, REIT Properties III, the Company’s indirect wholly owned subsidiary, entered into an unsecured credit facility (as subsequently modified and amended, the “Credit Facility”) with U.S. Bank National Association, as administrative agent (the “Credit Facility Agent”). The current lenders under the Credit Facility are U.S. Bank National Association and Bank of America, N.A. (the “Credit Facility Lenders”). The Credit Facility had a maturity date of July 30, 2024.

On May 10, 2024, REIT Properties III entered into the second modification of credit agreement (the “Second Modification Agreement”) with the Credit Facility Agent and Lenders.

The Second Modification Agreement permanently reduced the aggregate commitment under the Credit Facility to $62.9 million, of which $57.3 million was outstanding at closing and $5.6 million remains available for future disbursement solely for the purpose of remargining the Carillon Mortgage Loan and subject to the terms and conditions contained in the loan documents (the “Remaining Availability”). The Second Modification Agreement also eliminates the revolving portion of the facility and converts the facility to a non-revolving term loan, such that no amounts may be repaid and subsequently reborrowed.

Pursuant to the Second Modification Agreement, the Credit Facility Agent and Lenders waived the requirement for REIT Properties III to comply with the maximum leverage ratio, minimum consolidated net worth requirement, minimum fixed charges coverage ratio and minimum liquidity requirement from December 31, 2023 through and including the maturity date.

The Second Modification Agreement provides that:

(i) if the Carillon Mortgage Loan is modified such that additional funds in excess of the current outstanding loan balance are available for disbursement for general corporate purposes, then REIT Properties III shall use the additional funds to paydown up to $8.9 million of the principal outstanding under the Credit Facility; and

(ii) if the Carillon Mortgage Loan is modified such that there is no remargin requirement to extend the Carillon Mortgage Loan or the remargin requirement is less than $5.6 million, the Remaining Availability under the Credit Facility will be reduced for the amount, if any, actually required to remargin the Carillon Mortgage Loan.

In addition, the Second Modification Agreement provides that REIT Properties III, which indirectly owns all of the Company’s properties and holds the Company’s investment in units of the SREIT, will not make any distributions, dividends or redemptions without the consent of the Credit Facility Lenders, except for (i) amounts necessary for the Company to maintain its REIT status under the Internal Revenue Code of 1986, as amended, and to avoid liability for federal and state income or excise taxes, (ii) certain REIT-level general and administrative expenses and (iii) asset management fees allocated to the Company’s properties.

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PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS REAL ESTATE INVESTMENT TRUST III, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

March 31, 2024

(unaudited)

13. SUBSEQUENT EVENTS (CONTINUED)

The Second Modification Agreement also amends the maturity date of the loan to the earliest to occur of (i) July 31, 2024, (ii) the date on which the Company raises new equity, debt or a combination both in an amount equal to or not less than $100.0 million and (iii) the date on which the aggregate commitment under the facility is reduced to zero or is otherwise terminated.

Additionally, the Second Modification Agreement provides that an event of default will occur under the Credit Facility upon the occurrence of an event of default under any credit facility for which REIT Properties III is a guarantor (other than non-recourse carveouts).

Finally, the Second Modification Agreement required the Company to cause the equity interests of the Company’s subsidiaries that own 515 Congress, 201 17th Street and Gateway Tech Center to be pledged to the Credit Facility Lenders as security for REIT Properties III’s obligations with respect to the following advances under the Credit Facility: $19.8 million that had been advanced under the Credit Facility as of the closing of the Second Modification Agreement and any of the Remaining Availability advanced in the future.

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PART I. FINANCIAL INFORMATION (CONTINUED)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the accompanying financial statements of KBS Real Estate Investment Trust III, Inc. and the notes thereto. As used herein, the terms “Company,” “we,” “our” and “us” refer to KBS Real Estate Investment Trust III, Inc., a Maryland corporation, and, as required by context, KBS Limited Partnership III, a Delaware limited partnership, which we refer to as the “Operating Partnership,” and to their subsidiaries.

Forward-Looking Statements

Certain statements included in this Quarterly Report on Form 10-Q are forward-looking statements. Those statements include statements regarding the intent, belief or current expectations of KBS Real Estate Investment Trust III, Inc. and members of our management team, as well as the assumptions on which such statements are based, and generally are identified by the use of words such as “may,” “will,” “seeks,” “anticipates,” “believes,” “estimates,” “expects,” “plans,” “intends,” “should” or similar expressions. These include statements about our plans, strategies and prospects and these statements are subject to known and unknown risks and uncertainties. Readers are cautioned not to place undue reliance on these forward-looking statements. Actual results may differ materially from those contemplated by such forward-looking statements. Further, forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, unless required by law. Moreover, you should interpret many of the risks identified in this report, as well as the risks set forth below, as being heightened as a result of the continued disruptions in the financial markets impacting the U.S. commercial real estate industry, especially as it pertains to commercial office buildings.

The following are some of the risks and uncertainties, although not all of the risks and uncertainties, that could cause our actual results to differ materially from those presented in our forward-looking statements:

•The ongoing challenges affecting the U.S. commercial real estate industry, especially as it pertains to commercial office buildings, continues to be one of the most significant risks and uncertainties we face. The combination of the continued economic slowdown, high interest rates and persistent inflation (or the perception that any of these events may continue), as well as a lack of lending activity in the debt markets, have contributed to considerable weakness in the commercial real estate markets. The usage and leasing activity of our assets in several markets remains lower than pre-pandemic levels in those markets. Upcoming and recent tenant lease expirations and leasing challenges in certain markets amidst the aforementioned headwinds coupled with slower than expected return-to-office, most notably in the greater San Francisco Bay Area where we own several assets, have had direct and material impacts to property appraisal values used by our lenders and have impacted our ability to access certain credit facilities and our ongoing cash flow.

•As of May 14, 2024, we have $1.2 billion of loan maturities in the next 12 months. Considering the current commercial real estate lending environment, this raises substantial doubt as to our ability to continue as a going concern for at least a year from the date of the issuance of our financial statements. In order to refinance, restructure or extend our maturing debt obligations, we have been required to reduce the loan commitments and/or make paydowns on certain loans, and we anticipate we may be required to make additional reductions to loan commitments and paydowns on the loans maturing during the next 12 months in order to refinance, restructure or extend those loans. As a result of reductions in loan commitments and paydowns and the ongoing liquidity needs in our real estate portfolio, in addition to raising capital through new equity or debt, we may consider selling assets into a challenged real estate market in an effort to manage our liquidity needs. Selling real estate assets in the current market would likely adversely impact the ultimate sale price. We also may defer noncontractual expenditures. Moreover, our loan agreements contain cross default provisions, including that the failure of one or more of our subsidiaries to pay debt as it matures under one debt facility may trigger the acceleration of our indebtedness under other debt facilities. If we are unable to successfully refinance or restructure certain of our debt instruments, we may seek the protection of the bankruptcy court to implement a restructuring plan, which would constitute an event of default under other indebtedness of our subsidiaries. As a result of our upcoming loan maturities, reductions in loan commitments and loan paydowns, the challenging commercial real estate lending environment, the current interest rate environment, leasing challenges in certain markets where we own properties, reduction in our cash flows and the lack of transaction volume in the U.S. office market as well as general market instability, management’s plans cannot be considered probable and thus do not alleviate substantial doubt about our ability to continue as a going concern.

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PART I. FINANCIAL INFORMATION (CONTINUED)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

•On February 6, 2024, we entered into a loan modification and extension agreement with the lenders under the Amended and Restated Portfolio Facility, the outstanding principal balance of which is approximately $601.3 million. Among other requirements, the extension agreement requires that we raise not less than $100.0 million in new equity, debt or a combination of both on or prior to July 15, 2024 and the failure to do so constitutes an immediate default under the facility. There can be no assurances as to our ability to raise such funds on a timely basis, if at all.

•Continued disruptions in the financial markets and economic uncertainty could further impact our ability to implement our business strategy and continue as a going concern. Overall, there remains significant uncertainty regarding the timing and duration of the economic recovery, which precludes any prediction as to the ultimate adverse impact the current disruptions in the markets may have on our business. Potential long-term changes in customer behavior, such as continued work-from-home arrangements, could materially and negatively impact the future demand for office space, further adversely impacting our operations.

•We are unable to predict when or if we will be in a position to pay distributions to our stockholders. Due to certain restrictions and covenants included in one of our loan agreements, we do not expect to pay any dividends or distributions on our common stock during the term of the loan agreement, which matures on March 1, 2026. We have not declared any distributions since June 2023. If and when we pay distributions, we may fund distributions from sources other than cash flow from operations, including, without limitation, the sale of assets, borrowings, return of capital or offering proceeds. We have no limits on the amounts we may pay from such sources.

•Stockholders may have to hold their shares an indefinite period of time. We can provide no assurance that we will be able to provide additional liquidity to stockholders. Due to certain restrictions and covenants included in one of our loan agreements, we do not expect to redeem any shares of our common stock during the term of the loan agreement, which matures on March 1, 2026. As a result, we terminated our share redemption program on March 15, 2024.

•Our charter does not require us to liquidate our assets and dissolve by a specified date, nor does our charter require our directors to list our shares for trading by a specified date. No public market currently exists for our shares of common stock. There are limits on the ownership and transferability of our shares. Our shares cannot be readily sold and, if our stockholders are able to sell their shares, they would likely have to sell them at a substantial discount.

•We are dependent on KBS Capital Advisors LLC (“KBS Capital Advisors”), our advisor, to conduct our operations.

•All of our executive officers, our affiliated directors and other key professionals are also officers, affiliated directors, managers, key professionals and/or holders of a direct or indirect controlling interest in our advisor and/or its affiliates. These individuals, our advisor and its affiliates face conflicts of interest, including conflicts created by our advisor’s and its affiliates’ compensation arrangements with us and other programs and investors and conflicts in allocating time among us and other programs and investors. These conflicts could result in action or inaction that is not in the best interests of our stakeholders.

•Our advisor and its affiliates currently receive fees in connection with transactions involving the management and disposition of our investments. Asset management fees are based on the cost of the investment, and not based on the quality of the investment or the quality of the services rendered to us. We may also pay significant fees during our listing/liquidation stage. Although most of the fees payable during our listing/liquidation stage are contingent on our stockholders first enjoying agreed-upon investment returns, the investment return thresholds may be reduced subject to approval by our conflicts committee and our charter limitations. These payments increase the risk of loss to our stakeholders.

•We may incur debt until our total liabilities would exceed 75% of the cost of our tangible assets (before deducting depreciation and other non-cash reserves), and we may exceed this limit with the approval of the conflicts committee of our board of directors. High debt levels would impact our net revenues and could cause our financial condition to suffer.

•We depend on tenants for the revenue generated by our real estate investments. Revenues from our properties could decrease due to a reduction in occupancy (caused by factors including, but not limited to, tenant defaults, tenant insolvency, early termination of tenant leases and non-renewal of existing tenant leases), rent deferrals or abatements, tenants becoming unable to pay their rent, lower rental rates and/or potential changes in customer behavior, such as continued work from home arrangements, making it more difficult for us to meet our debt service obligations and causing our operations to suffer.

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PART I. FINANCIAL INFORMATION (CONTINUED)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

•Our significant investment in the equity securities of Prime US REIT (the “SREIT”), a traded Singapore real estate investment trust, is subject to the risks associated with real estate investments as well as the risks inherent in investing in traded securities, including, in this instance, risks related to the quantity of units held by us relative to the trading volume of the units. Due to the disruptions in the financial markets, the trading price of the common units of the SREIT has experienced substantial volatility and has been significantly impacted by the market sentiment for stock with significant investment in U.S. office buildings. The SREIT also has a significant amount of debt maturing in 2024, which creates additional uncertainty around the value of the units.

All forward-looking statements should be read in light of the risks identified in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the Securities and Exchange Commission (the “SEC”).

Overview

We were formed on December 22, 2009 as a Maryland corporation that elected to be taxed as a real estate investment trust (“REIT”) beginning with the taxable year ended December 31, 2011 and we intend to continue to operate in such a manner. We conduct our business primarily through our Operating Partnership, of which we are the sole general partner. Subject to certain restrictions and limitations, our business is managed by our advisor pursuant to an advisory agreement and our advisor conducts our operations and manages our portfolio of real estate investments. Our advisor owns 20,857 shares of our common stock. We have no paid employees.

We have invested in a diverse portfolio of real estate investments. As of March 31, 2024, we owned 14 office properties, one mixed-use office/retail property and an investment in the equity securities of the SREIT.

On February 4, 2010, we filed a registration statement on Form S-11 with the SEC to offer a minimum of 250,000 shares and a maximum of up to 280,000,000 shares, or up to $2,760,000,000 of shares, of common stock for sale to the public, of which up to 200,000,000 shares, or up to $2,000,000,000 of shares, were registered in our primary offering and up to 80,000,000 shares, or up to $760,000,000 of shares, were registered under our dividend reinvestment plan. We ceased offering shares of common stock in our primary offering on May 29, 2015 and terminated the primary offering on July 28, 2015.

We sold 169,006,162 shares of common stock in our now-terminated primary initial public offering for gross offering proceeds of $1.7 billion. We sold 46,154,757 shares of common stock under our dividend reinvestment plan for gross offering proceeds of $471.3 million. We have redeemed or repurchased 74,644,349 shares for $789.2 million. On March 15, 2024, we terminated our dividend reinvestment plan and our share redemption program.

Additionally, on October 3, 2014, we issued 258,462 shares of common stock, for $2.4 million, in private transactions exempt from the registration requirements pursuant to Section 4(a)(2) of the Securities Act of 1933.

Section 5.11 of our charter requires that we seek stockholder approval of our liquidation if our shares of common stock are not listed on a national securities exchange by September 30, 2020, unless a majority of the conflicts committee of our board of directors, composed solely of all of our independent directors, determines that liquidation is not then in the best interest of our stockholders. Pursuant to our charter requirement, the conflicts committee considered the ongoing challenges affecting the U.S. commercial real estate industry, especially as it pertains to commercial office properties, the challenging interest rate environment and lack of activity in the debt markets, the limited availability in the debt markets for commercial real estate transactions, and the lack of transaction volume in the U.S. office market, and on August 10, 2023, our conflicts committee unanimously determined to postpone approval of our liquidation. Section 5.11 of our charter requires that the conflicts committee revisit the issue of liquidation at least annually.

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PART I. FINANCIAL INFORMATION (CONTINUED)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Going Concern Considerations

The accompanying consolidated financial statements and condensed notes in this Quarterly Report have been prepared assuming we will continue as a going concern. The ongoing challenges affecting the U.S. commercial real estate industry, especially as it pertains to commercial office buildings, continues to be one of the most significant risks and uncertainties we face. The combination of the continued economic slowdown, high interest rates and persistent inflation (or the perception that any of these events may continue), as well as a lack of lending activity in the debt markets, have contributed to considerable weakness in the commercial real estate markets. The usage and leasing activity of our assets in several markets remains lower than pre-pandemic levels, and we cannot predict when economic activity and demand for office space will return to pre-pandemic levels in those markets. Both upcoming and recent tenant lease expirations and leasing challenges in certain markets amidst the aforementioned headwinds coupled with slower than expected return-to-office, most notably in the greater San Francisco Bay Area where we own several assets, have had direct and material impacts to property appraisal values used by our lenders and have impacted our ability to access certain credit facilities and our ongoing cash flow, which, in large part, provide liquidity for capital expenditures needed to manage our real estate assets.

Due to disruptions in the financial markets, it is difficult to refinance maturing debt obligations as lenders are hesitant to make new loans in the current market environment with so many uncertainties surrounding asset valuations, especially in the office real estate market. As of May 14, 2024, we have $1.2 billion of loan maturities in the next 12 months. Considering the current commercial real estate lending environment, this raises substantial doubt as to our ability to continue as a going concern for at least a year from the date of the issuance of our financial statements.

On February 12, 2024, after running an interview process with several investment banks, we engaged Moelis & Company LLC, a global investment bank with expertise in real estate, capital raising and restructuring, to assist us in developing, evaluating and pursuing a comprehensive plan to maximize the value of our assets in a manner that would be beneficial to all of our stakeholders.

We are proactively and productively engaged in discussions with our lenders for the modification and extension of our maturing debt obligations, including the Amended and Restated Portfolio Loan Facility with an outstanding principal balance of $601.3 million as of May 14, 2024. On February 6, 2024, we entered a six-month extension and modification agreement for this facility. Among other requirements, the extension agreement requires that we raise not less than $100.0 million in new equity, debt or a combination of both on or prior to July 15, 2024 and the failure to do so constitutes an immediate default under the facility. The extension agreement also provides a default will occur under the Amended and Restated Portfolio Loan Facility if a written demand for payment is delivered by U.S. Bank, National Association following a default under the following loans (a) our Credit Facility, (b) the payment guaranty agreement of our Modified Portfolio Revolving Loan Facility or (c) any other indebtedness of KBS REIT Properties III LLC, our indirect wholly owned subsidiary, where the demand made or amount guaranteed is greater than $5.0 million.

In order to refinance, restructure or extend our maturing debt obligations, we have been required to reduce the loan commitments and/or make paydowns on certain loans, and anticipate we may be required to make additional reductions to loan commitments and paydowns on the loans maturing during the next 12 months in order to refinance, restructure or extend those loans. As a result of reductions in loan commitments and paydowns and the ongoing liquidity needs in our real estate portfolio, in addition to raising capital through new equity or debt, we may consider selling assets into a challenged real estate market in an effort to manage our liquidity needs. Selling real estate assets in the current market would likely adversely impact the ultimate sale price. We also may defer noncontractual expenditures.

There can be no assurances as to the certainty or timing of management’s plans in regards to the matters above, as certain elements of management’s plans are outside our control, including our ability to successfully refinance, restructure or extend certain of our debt instruments, our ability to raise new equity or debt and our ability to sell assets. Moreover, our loan agreements contain cross default provisions, including that the failure of one or more of our subsidiaries to pay debt as it matures under one debt facility may trigger the acceleration of our indebtedness under other debt facilities. If we are unable to successfully refinance or restructure certain of our debt instruments, we may seek the protection of the bankruptcy court to implement a restructuring plan, which would constitute an event of default under other indebtedness of our subsidiaries. As a result of our upcoming loan maturities, reductions in loan commitments and loan paydowns, the challenging commercial real estate lending environment, the current interest rate environment, leasing challenges in certain markets where we own properties, reduction in our cash flows and the lack of transaction volume in the U.S. office market as well as general market instability, management’s plans cannot be considered probable and thus do not alleviate substantial doubt about our ability to continue as a going concern.

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PART I. FINANCIAL INFORMATION (CONTINUED)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Continued disruptions in the financial markets and economic uncertainty could further impact our ability to implement our business strategy and continue as a going concern. Overall, there remains significant uncertainty regarding the timing and duration of the economic recovery, which precludes any prediction as to the ultimate adverse impact the current disruptions in the markets may have on our business. Potential long-term changes in customer behavior, such as continued work-from-home arrangements, which increased as a result of the COVID-19 pandemic, could materially and negatively impact the future demand for office space, further adversely impacting our operations.

Market Outlook – Real Estate and Real Estate Finance Markets

Volatility in global financial markets and changing political environments can cause fluctuations in the performance of the U.S. commercial real estate markets. Declines in rental rates, slower or potentially negative net absorption of leased space, increased rental concessions, including free rent to renew tenants early, to retain tenants who are up for renewal or to attract new tenants, may result in decreases in cash flows from investment properties. Further, revenues from our properties have decreased and could continue to decrease due to a reduction in occupancy (caused by factors including, but not limited to, tenant defaults, tenant insolvency, early termination of tenant leases and non-renewal of existing tenant leases), increased rent deferrals or abatements, tenants being unable to pay their rent and/or lower rental rates. Increases in the cost of financing due to higher interest rates and higher market interest rate spreads has prevented us from refinancing debt obligations at terms as favorable as the terms of existing indebtedness and we expect this to continue with upcoming loan maturities. Further, increases in interest rates increase the amount of our debt payments on our variable rate debt to the extent the interest rates on such debt are not fixed through interest rate swap agreements or limited by interest rate caps. Market conditions can change quickly, potentially negatively impacting the value of real estate investments. The current challenging interest rate environment, and lack of financing available in the current environment, has had a downward impact on real estate values, especially for commercial office buildings, and has significantly impacted the amount of transaction activity in the commercial real estate market and made valuing such assets increasingly difficult. Management continuously reviews our investment and debt financing strategies to optimize our portfolio and the cost of our debt exposure in this challenging environment.

Liquidity and Capital Resources

As described above under “—Going Concern Considerations,” our management determined that substantial doubt exists about our ability to continue as a going concern for at least a year from the date of the issuance of our financial statements. Our principal demands for funds during the short and long-term are and will be for payments (including maturity payments) under debt obligations and operating expenses, capital expenditures and general and administrative expenses. As discussed below, due to certain restrictions and covenants on distributions and redemptions included in one of our loan agreements, we do not expect to pay any dividends or distributions or redeem any shares of our common stock during the term of the loan agreement, which matures on March 1, 2026. Our primary sources of capital for meeting our cash requirements are as follows:

•Cash flow generated by our real estate and real estate-related investments;

•Debt financings (including any amounts currently available under existing loan facilities); and

•Proceeds from the sale of our real estate properties and real estate-related investments.

Our real estate properties generate cash flow in the form of rental revenues and tenant reimbursements, which are reduced by operating expenditures, capital expenditures, debt service payments, the payment of asset management fees and corporate general and administrative expenses. Cash flow from operations from our real estate properties is primarily dependent upon the occupancy level of our portfolio, the net effective rental rates on our leases, the collectability of rent and operating recoveries from our tenants and how well we manage our expenditures. Due to uncertainties in the U.S. office real estate market, most notably in the greater San Francisco Bay Area where we own certain assets, our cash flows have been and we anticipate that our future cash flows from operations may be impacted due to lease rollover and reduced demand for office space.

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PART I. FINANCIAL INFORMATION (CONTINUED)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

We have also made a significant investment in the common units of the SREIT. Our investment in the equity securities of the SREIT generates cash flow in the form of dividend income, and dividends are typically declared and paid on a semi-annual basis, though dividends are not guaranteed. As of March 31, 2024, we held 237,426,088 units of the SREIT which represented 18.2% of the outstanding units of the SREIT as of that date. Due to the disruptions in the financial markets discussed above, since early March 2020, the trading price of the common units of the SREIT has experienced substantial volatility. The trading price of the common units of the SREIT has been significantly impacted by the market sentiment for stock with significant investment in U.S. commercial office buildings. The SREIT also has a significant amount of debt maturing in 2024, which creates additional uncertainty around the value of the units. As of May 14, 2024, the aggregate value of our investment in the units of the SREIT was $26.1 million, which was based solely on the closing price of the units on the SGX-ST of $0.110 per unit as of May 14, 2024, and did not take into account any potential discount for the holding period risk due to the quantity of units we hold. This is a decrease of $0.770 per unit from our initial acquisition of the SREIT units at $0.880 per unit on July 19, 2019.

As of March 31, 2024, we had mortgage debt obligations in the aggregate principal amount of $1.6 billion, with a weighted-average remaining term of 0.7 years. As of March 31, 2024, we had $1.2 billion of notes payable maturing during the 12 months ending March 31, 2025. Considering the current commercial real estate lending environment, this raises substantial doubt as to our ability to continue as a going concern for at least a year from the date of issuance of these financial statements. As of March 31, 2024, our debt obligations consisted of $119.6 million of fixed rate notes payable and $1.5 billion of variable rate notes payable. As of March 31, 2024, the interest rates on $1.1 billion of our variable rate notes payable were effectively fixed through interest rate swap agreements.

In order to refinance, restructure or extend our maturing debt obligations, we have been required to reduce the loan commitments and/or make paydowns on certain loans, and we anticipate we may be required to make additional reductions to loan commitments and paydowns on the loans maturing during the next 12 months in order to refinance, restructure or extend those loans. As a result of reductions in loan commitments and paydowns and the ongoing liquidity needs in our real estate portfolio, in addition to raising capital through new equity or debt, we may consider selling assets into a challenged real estate market in an effort to manage our liquidity needs. Selling real estate assets in the current market would likely adversely impact the ultimate sale price. We also may defer noncontractual expenditures.

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PART I. FINANCIAL INFORMATION (CONTINUED)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

In addition, three of our debt facilities (representing $0.9 billion of our borrowings and 10 of our properties) are subject to cash sweep arrangements, whereby each month the excess cash flow from the properties securing the loan is deposited into a cash management account held for the benefit of our lenders. Generally, excess cash flow means an amount equal to (a) gross revenues from the properties securing the facility less (b) an amount equal to principal and interest paid with respect to the associated debt facility, operating expenses of the properties securing the facility and in certain cases a limited amount of REIT-level expenses. In certain cases, we may request disbursements from the cash management accounts. However, such cash management accounts decrease our operating flexibility.

As a result of the current interest rate environment, the recent extensions and refinancings of certain of our loans have reduced our available liquidity and we anticipate that future loan refinancings may further impact our liquidity position due to potential required loan paydowns at extension and increased interest rate spreads. Additionally, we have entered into various interest rate swap agreements that are currently below market and as those swaps expire, our interest expense will increase and further impact our liquidity position and ongoing cash flows.

We expect that our debt financing and other liabilities will be between 45% and 65% of the cost of our tangible assets (before deducting depreciation and other non-cash reserves). There is no limitation on the amount we may borrow for the purchase of any single asset. We limit our total liabilities to 75% of the cost of our tangible assets (before deducting depreciation and other non-cash reserves), meaning that our borrowings and other liabilities may exceed our maximum target leverage of 65% of the cost of our tangible assets without violating these borrowing restrictions. We may exceed the 75% limit only if a majority of the conflicts committee approves each borrowing in excess of this limitation and we disclose such borrowings to our stockholders in our next quarterly report with an explanation from the conflicts committee of the justification for the excess borrowing. To the extent financing in excess of this limit is available on attractive terms, our conflicts committee may approve debt in excess of this limit. From time to time, our total liabilities could also be below 45% of the cost of our tangible assets due to the lack of availability of debt financing. As of March 31, 2024, our borrowings and other liabilities were approximately 57% of the cost (before deducting depreciation and other noncash reserves) and 60% of the book value (before deducting depreciation) of our tangible assets, respectively. This leverage limitation is based on cost and not fair value, and our leverage may exceed 75% of the fair value of our tangible assets.

We have not declared any distributions since June 2023. We have experienced a reduction in our net cash flows from operations in recent periods primarily due to higher interest expense. We are unable to predict when or if we will be in a position to pay distributions to our stockholders. Due to certain restrictions and covenants included in one of our loan agreements, we do not expect to pay any dividends or distributions on our common stock during the term of the loan agreement, which matures on March 1, 2026. As a result, on March 15, 2024, we terminated our dividend reinvestment plan. See “—Going Concern Considerations” and “—Market Outlook—Real Estate and Real Estate Finance Markets” herein and Part I, Item 1A, “Risk Factors” and Part II, Item 5, “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities – Distribution Information” in our Annual Report on Form 10-K for the year ended December 31, 2023 as filed with the SEC.

We did not redeem any shares of our common stock during the three months ended March 31, 2024. Due to certain restrictions and covenants included in one of our loan agreements, we do not expect to redeem any shares of our common stock during the term of the loan agreement, which matures on March 1, 2026. As a result, we terminated our share redemption program on March 15, 2024.

Under our charter, we are required to limit our total operating expenses to the greater of 2% of our average invested assets or 25% of our net income for the four most recently completed fiscal quarters, as these terms are defined in our charter, unless the conflicts committee has determined that such excess expenses were justified based on unusual and non-recurring factors. Operating expenses for the four fiscal quarters ended March 31, 2024 did not exceed the charter-imposed limitation.

Cash Flows from Operating Activities

During the three months ended March 31, 2024 and 2023, net cash provided by operating activities was $1.9 million and $5.2 million, respectively. Net cash provided by operating activities was lower during the three months ended March 31, 2024 primarily as a result of higher interest expense, a decrease in dividend income received from the SREIT and an increase in legal fees and financial and advisory consulting fees related to our development and pursuit of our capital raising and debt restructuring plan.

Cash Flows from Investing Activities

Net cash provided by investing activities was $37.0 million for the three months ended March 31, 2024 due to $46.9 million of net proceeds from the sale of the McEwen Building, offset by $9.9 million used in improvements to real estate.

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PART I. FINANCIAL INFORMATION (CONTINUED)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Cash Flows from Financing Activities

During the three months ended March 31, 2024, net cash used in financing activities was $42.0 million and primarily consisted of the following:

•$40.1 million of net cash used in debt financing as a result of principal payments on notes payable of $46.9 million and payments of deferred financing costs of $3.2 million, partially offset by proceeds from notes payable of $10.0 million; and

•$1.9 million of restricted cash surrendered in connection with the deed-in-lieu of foreclosure transaction related to 201 Spear Street.

We also expect to use our capital resources to make certain payments to our advisor. We currently make payments to our advisor in connection with the management of our investments and costs incurred by our advisor in providing services to us. We also pay fees to our advisor in connection with the disposition of investments. We reimburse our advisor and dealer manager for certain stockholder services. In addition, our advisor is entitled to an incentive fee upon achieving certain performance goals.

Among the fees payable to our advisor is an asset management fee. With respect to investments in real property, the asset management fee is a monthly fee equal to one-twelfth of 0.75% of the amount paid or allocated to acquire the investment, plus the cost of any subsequent development, construction or improvements to the property. This amount includes any portion of the investment that was debt financed and is inclusive of acquisition expenses related thereto (but excludes acquisition fees paid to our advisor). In the case of investments made through joint ventures, the asset management fee is determined based on our proportionate share of the underlying investment (but excluding acquisition fees paid to our advisor). With respect to investments in loans and any investments other than real property, the asset management fee is a monthly fee calculated, each month, as one-twelfth of 0.75% of the lesser of (i) the amount actually paid or allocated to acquire or fund the loan or other investment (which amount includes any portion of the investment that was debt financed and is inclusive of acquisition or origination expenses related thereto but is exclusive of acquisition or origination fees paid to our advisor) and (ii) the outstanding principal amount of such loan or other investment, plus the acquisition or origination expenses related to the acquisition or funding of such investment (excluding acquisition or origination fees paid to our advisor), as of the time of calculation. We currently do not pay asset management fees to our advisor on our investment in units of the SREIT.

Notwithstanding the foregoing, on November 8, 2022, we and our advisor amended the advisory agreement and commencing with asset management fees accruing from October 1, 2022, we paid $1.15 million of the monthly asset management fee to our advisor in cash and we deposited the remainder of the monthly asset management fee into an interest bearing account in our name, which amounts will be paid to our advisor from such account solely as reimbursement for payments made by our advisor pursuant to our advisor’s employee retention program (such account, the “Bonus Retention Fund”). The Bonus Retention Fund was established in order to incentivize and retain key employees of our advisor. The Bonus Retention Fund was fully funded in December 2023, when we had deposited $8.5 million in cash into such account. Following such time the monthly asset management fee became fully payable in cash to our advisor. Our advisor has acknowledged and agreed that payments by our advisor to employees under our advisor’s employee retention program that are reimbursed by us from the Bonus Retention Fund will be conditioned on (a) our liquidation and dissolution; (b) a transaction involving the acquisition, merger, conversion or consolidation, either directly or indirectly, of us in which (i) we are not the surviving entity and (ii) our advisor is no longer serving as an advisor or asset manager to the surviving entity in such transaction; (c) the sale or other disposition of all or substantially all of our assets; (d) the non-renewal or termination of the advisory agreement without cause; or (e) the termination of the employee without cause. To the extent the Bonus Retention Fund is not fully paid out to employees as set forth above, the advisory agreement provides that the residual amount will be deemed additional Deferred Asset Management Fees (defined below) and be treated in accordance with the provisions for payment of Deferred Asset Management Fees. Two of our executive officers, Mr. Waldvogel and Ms. Yamane, and one of our directors, Mr. DeLuca, participate in and have been allocated awards under our advisor’s employee retention program, which awards would only be paid as set forth above.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Prior to amending the advisory agreement in November 2022, the prior advisory agreement had provided that with respect to asset management fees accruing from March 1, 2014, our advisor would defer, without interest, our obligation to pay asset management fees for any month in which our modified funds from operations (“MFFO”) for such month, as such term is defined in the practice guideline issued by the Institute for Portfolio Alternatives (“IPA”) in November 2010 and interpreted by us, excluding asset management fees, did not exceed the amount of distributions declared by us for record dates of that month. We remained obligated to pay our advisor an asset management fee in any month in which our MFFO, excluding asset management fees, for such month exceeded the amount of distributions declared for the record dates of that month (such excess amount, an “MFFO Surplus”); however, any amount of such asset management fee in excess of the MFFO Surplus was deferred under the prior advisory agreement. If the MFFO Surplus for any month exceeded the amount of the asset management fee payable for such month, any remaining MFFO Surplus was applied to pay any asset management fee amounts previously deferred in accordance with the prior advisory agreement.

Pursuant to the current advisory agreement, asset management fees accruing from October 1, 2022 are no longer subject to the deferral provision described above. Asset management fees that remained deferred as of September 30, 2022 are “Deferred Asset Management Fees.” As of September 30, 2022, Deferred Asset Management Fees totaled $8.5 million. The advisory agreement also provides that we remain obligated to pay our advisor outstanding Deferred Asset Management Fees in any month to the extent that MFFO for such month exceeds the amount of distributions declared for the record dates of that month (such excess amount, a “RMFFO Surplus”); provided however, that any amount of outstanding Deferred Asset Management Fees in excess of the RMFFO Surplus will continue to be deferred. We have not made any payments to our advisor related to the Deferred Asset Management Fees for the period from October 1, 2022 to March 31, 2024.

Consistent with the prior advisory agreement, the current advisory agreement provides that notwithstanding the foregoing, any and all Deferred Asset Management Fees that are unpaid will become immediately due and payable at such time as our stockholders have received, together as a collective group, aggregate distributions (including distributions that may constitute a return of capital for federal income tax purposes) sufficient to provide (i) an 8.0% per year cumulative, noncompounded return on such net invested capital (the “Stockholders’ 8% Return”) and (ii) a return of their net invested capital, or the amount calculated by multiplying the total number of shares purchased by stockholders by the issue price, reduced by any amounts to repurchase shares pursuant to our share redemption program. The Stockholders’ 8% Return is not based on the return provided to any individual stockholder. Accordingly, it is not necessary for each of our stockholders to have received any minimum return in order for our advisor to receive Deferred Asset Management Fees.

In addition, the current advisory agreement provides that any and all Deferred Asset Management Fees that are unpaid will also be immediately due and payable upon the earlier of:

(i) a listing of our shares of common stock on a national securities exchange;

(ii) our liquidation and dissolution;

(iii) a transaction involving the acquisition, merger, conversion or consolidation, either directly or indirectly, of us in which (y) we are not the surviving entity and (z) our advisor is no longer serving as an advisor or asset manager to the surviving entity in such transaction; and

(iv) the sale or other disposition of all or substantially all of our assets.

The advisory agreement may be terminated (i) upon 60 days written notice without cause or penalty by either us (acting through the conflicts committee) or our advisor or (ii) immediately by us for cause or upon the bankruptcy of our advisor. If the advisory agreement is terminated without cause, then our advisor will be entitled to receive from us any residual amount of the Bonus Retention Fund deemed to be additional Deferred Asset Management Fees, provided that upon such non-renewal or termination we do not retain an advisor in which our advisor or its affiliates have a majority interest. Upon termination of the advisory agreement, all unpaid Deferred Asset Management Fees will automatically be forfeited by our advisor, and if the advisory agreement is terminated for cause, any residual amount of the Bonus Retention Fund deemed to be additional Deferred Asset Management Fees will also automatically be forfeited by our advisor.

As of March 31, 2024, we had accrued $18.7 million of asset management fees, of which $8.5 million were Deferred Asset Management Fees. Also, included in accrued asset management fees as of March 31, 2024 is $8.5 million of restricted cash deposited into the Bonus Retention Fund. We had not made any payments to our advisor from the Bonus Retention Fund as of March 31, 2024.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Debt Obligations

The following is a summary of our debt obligations as of March 31, 2024 (in thousands):

			Payments Due During the Years Ended December 31,
Debt Obligations	Total		Remainder of 2024		2025-2026		2027-2028		Thereafter
Outstanding debt obligations (1)	$	1,576,703	$	1,192,938	$	383,765	$	—	$	—
Interest payments on outstanding debt obligations (2)	86,758		54,806		31,952		—		—
Interest payments on interest rate swaps (3) (4)	—		—		—		—		—

_____________________

(1) Amounts include principal payments only based on maturity dates as of March 31, 2024. The maturity dates of certain loans may be extended beyond their current maturity dates; however, the extension options are subject to certain terms and conditions contained in the loan documents some of which are more stringent than our current loan compliance tests. In order to refinance, restructure or extend our maturing debt obligations, we have been required to reduce the loan commitments and/or make paydowns on certain loans, and we anticipate we may be required to make additional reductions to loan commitments and paydowns on the loans maturing during the next 12 months in order to refinance, restructure or extend those loans. See the above discussion under “—Liquidity and Capital Resources” and “—Going Concern Considerations.”

(2) Projected interest payments are based on the outstanding principal amounts, maturity dates and interest rates in effect as of March 31, 2024 (consisting of the contractual interest rate and using interest rate indices as of March 31, 2024, where applicable). We incurred interest expense related to notes payable of $30.0 million, excluding amortization of deferred financing costs totaling $2.5 million, during the three months ended March 31, 2024. We have continued to have discussions with our lenders regarding potential modifications to certain debt obligations, including the Amended and Restated Portfolio Loan Facility, Carillon Mortgage Loan, 3001 & 3003 Washington Mortgage Loan and Accenture Tower Revolving Loan. Given the challenges affecting the U.S. commercial real estate industry and the challenging interest rate environment, in order to refinance or extend loans, we expect lenders to demand higher interest rate spreads compared to the existing terms in our current loan agreements as was the case with the modification of the Modified Portfolio Revolving Loan Facility executed during the three months ended March 31, 2024.

(3) Projected interest payments on interest rate swaps are calculated based on the notional amount, effective term of the swap contract, and fixed rate net of the swapped floating rate in effect as of March 31, 2024. In the case where the swapped floating rate (Fallback SOFR or one-month Term SOFR) at March 31, 2024 is higher than the fixed rate in the swap agreement, interest payments on interest rate swaps in the above debt obligations table would reflect zero as we would not be obligated to make any interest payments on those swaps and instead expect to receive payments from our swap counter-parties.

(5) We incurred net realized gains related to interest rate swaps of $7.1 million, excluding unrealized gains on derivative instruments of $8.9 million and gains related to swap terminations of $0.2 million, during the three months ended March 31, 2024.

For additional information regarding our debt obligations and loan maturities, see “—Going Concern Considerations,” “—Market Outlook—Real Estate and Real Estate Finance Markets” and “—Liquidity and Capital Resources.”

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Results of Operations

Overview

As of March 31, 2023, we owned 16 office properties, one mixed-use office/retail property and an investment in the equity securities of the SREIT. Subsequent to March 31, 2023, we disposed of an office property in connection with a deed-in-lieu of foreclosure transaction and sold one office property. As a result, as of March 31, 2024, we owned 14 office properties, one mixed-use office/retail property and an investment in the equity securities of the SREIT. Therefore, the results of operations presented for the three months ended March 31, 2024 and 2023 are not directly comparable. The following table provides summary information about our results of operations for the three months ended March 31, 2024 and 2023 (dollar amounts in thousands):

Comparison of the three months ended March 31, 2024 versus the three months ended March 31, 2023

	Three Months Ended <br>March 31,				Increase<br>(Decrease)		Percentage Change		Changes Due to Dispositions of Properties (1)	Change Due to Properties HeldThroughout Both Periods (2)
	2024		2023
Rental income	$	65,357	$	69,297	$	(3,940)	(6)	%
Dividend income from real estate equity securities	540		6,540		(6,000)		(92)	%	—	(6,000)
Other operating income	4,331		4,352		(21)		—	%	(119)	98
Operating, maintenance and management	17,403		17,651		(248)		(1)	%	(816)	568
Real estate taxes and insurance	12,954		14,719		(1,765)		(12)	%	(744)	(1,021)
Asset management fees to affiliate	4,943		5,089		(146)		(3)	%	(297)	151
General and administrative expenses	5,491		1,591		3,900		245	%	n/a	n/a
Depreciation and amortization	27,534		28,497		(963)		(3)	%	(1,654)	691
Interest expense	32,452		26,730		5,722		21	%	(1,513)	7,235
Net (gain) loss on derivative instruments	(16,152)		7,038		(23,190)		(329)	%	—	(23,190)
Impairment charges on real estate	—		26,988		(26,988)		(100)	%	(26,988)	—
Unrealized loss on real estate equity securities	(19,512)		(18,347)		(1,165)		6	%	—	(1,165)
Gain from extinguishment of debt	56,372		—		56,372		100	%	56,372	—
Gain on sale of real estate, net	14,781		—		14,781		100	%	14,781	—
Other interest income	330		42		288		686	%	n/a	n/a

All values are in US Dollars.

_____________________

(1) Represents the dollar amount increase (decrease) for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 related to the dispositions of properties after January 1, 2023.

(2) Represents the dollar amount increase (decrease) for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 related to real estate investments owned by us throughout both periods presented.

Rental income from our real estate properties decreased from $69.3 million for the three months ended March 31, 2023 to $65.4 million for the three months ended March 31, 2024, primarily due to the disposition of an office property in connection with a deed-in-lieu of foreclosure transaction in January 2024 and the sale of a real property in February 2024. We expect rental income to decrease in future periods as a result of the disposition of these two properties and to the extent we dispose of additional properties, to vary based on occupancy rates and rental rates of our real estate investments and to the extent of continued uncertainty in the real estate and financial markets and to increase due to tenant reimbursements related to operating expenses to the extent physical occupancy increases as employees return to the office. See “—Going Concern Considerations,” “—Market Outlook – Real Estate and Real Estate Finance Markets” and “—Liquidity and Capital Resources.”

Dividend income from our real estate equity securities decreased from $6.5 million for the three months ended March 31, 2023 to $0.5 million for the three months ended March 31, 2024 due to a decrease in the dividend rate per unit declared by the SREIT. We expect dividend income for our real estate equity securities to vary in future periods based on the occupancy and rental rates of the SREIT’s portfolio, movements in interest rates and the underlying liquidity needs of the SREIT.

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PART I. FINANCIAL INFORMATION (CONTINUED)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Other operating income decreased slightly from $4.4 million for the three months ended March 31, 2023 to $4.3 million for the three months ended March 31, 2024, primarily due to the disposition of an office property in connection with a deed-in-lieu of foreclosure transaction in January 2024 and the sale of a real property in February 2024, offset by an increase in parking revenues at properties held throughout both periods as employees return to the office. We expect other operating income to vary in future periods based on occupancy rates and parking rates at our real estate properties and to the extent of continued uncertainty in the real estate and financial markets and to decrease to the extent we dispose of properties.

Operating, maintenance and management costs decreased from $17.7 million for the three months ended March 31, 2023 to $17.4 million for the three months ended March 31, 2024, primarily due to the disposition of an office property in connection with a deed-in-lieu of foreclosure transaction in January 2024 and the sale of a real property in February 2024, offset by an overall increase in repairs and maintenance costs and operating costs, including janitorial and utilities, as a result of general inflation and an increase in physical occupancy at properties held throughout both periods. We expect operating, maintenance and management costs to increase in future periods as a result of general inflation and to the extent physical occupancy increases as employees return to the office and to decrease to the extent we dispose of properties.

Real estate taxes and insurance decreased from $14.7 million for the three months ended March 31, 2023 to $13.0 million for the three months ended March 31, 2024, primarily due to the disposition of an office property in connection with a deed-in-lieu of foreclosure transaction in January 2024 and the sale of a real property in February 2024, a decrease in real estate taxes as a result of a property tax appeal for a real estate property held throughout both periods and a reduction in the property tax estimate as a result of the lower assessed property values related to our real estate properties held throughout both periods. We expect real estate taxes and insurance to vary based on future property tax reassessments for properties that we continue to own and to decrease to the extent we dispose of properties.

Asset management fees decreased from $5.1 million for the three months ended March 31, 2023 to $4.9 million for the three months ended March 31, 2024, primarily due to the disposition of an office property in connection with a deed-in-lieu of foreclosure transaction in January 2024 and the sale of a real property in February 2024, offset by an increase due to capital improvements at our real estate properties. We expect asset management fees to increase in future periods as a result of any improvements we make to our properties and to decrease to the extent we dispose of properties. As of March 31, 2024, there were $18.7 million of accrued asset management fees, of which $8.5 million were Deferred Asset Management Fees and $8.5 million was restricted cash deposited into the Bonus Retention Fund. For a discussion of Deferred Asset Management Fees and the Bonus Retention Fund, see “— Liquidity and Capital Resources” herein.

General and administrative expenses increased from $1.6 million for the three months ended March 31, 2023 to $5.5 million for the three months ended March 31, 2024, primarily due to legal fees and financial and advisory consulting fees related to our development and pursuit of our capital raising and debt restructuring plan. General and administrative costs consisted primarily of portfolio legal fees, board of directors fees, third party transfer agent fees, financial and advisory consulting fees and audit costs. We expect general and administrative expenses to remain elevated in the future due to higher portfolio legal fees and consulting fees we expect to incur in 2024.

Depreciation and amortization decreased from $28.5 million for the three months ended March 31, 2023 to $27.5 million for the three months ended March 31, 2024, primarily due to the disposition of an office property in connection with a deed-in-lieu of foreclosure transaction in January 2024 and the sale of a real property in February 2024, offset by an increase in capital improvements as a result of lease commencements at a property. We expect depreciation and amortization to increase in future periods as a result of additional capital improvements, offset by a decrease in amortization related to fully amortized tenant origination and absorption costs and to the extent we dispose of properties.

Interest expense increased from $26.7 million for the three months ended March 31, 2023 to $32.5 million for the three months ended March 31, 2024. Included in interest expense was (i) $25.7 million and $30.0 million of interest expense payments for the three months ended March 31, 2023 and 2024, respectively, and (ii) the amortization of deferred financing costs of $1.0 million and $2.5 million for the three months ended March 31, 2023 and 2024, respectively. The increase in interest expense was primarily due to higher one-month BSBY and one-month Term SOFR during the three months ended March 31, 2024 and the impact on interest expense related to our variable rate debt and debt refinancings. In general, we expect interest expense to vary based on fluctuations in interest rates (for our variable rate debt) and the amount of future borrowings and to increase if interest rate spreads are higher when we refinance our existing loans.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

We recognized net gain on derivative instruments of $16.2 million for the three months ended March 31, 2024. Included in net gain on derivative instruments was (i) realized gain on interest rate swaps of $7.1 million, (ii) unrealized gain on interest rate swaps of $8.9 million, and (iii) gains related to swap terminations of $0.2 million for the three months ended March 31, 2024. We recognized net loss on derivative instruments of $7.0 million for the three months ended March 31, 2023. Included in net loss on derivative instruments was (i) unrealized loss on interest rate swaps of $13.7 million, (ii) fair value loss on interest rate cap of $24,000, offset by (iii) realized gain on interest rate swaps of $6.6 million for the three months ended March 31, 2023. The change in net (gain) loss on derivative instruments was primarily due to changes in fair values with respect to our interest rate swaps that are not accounted for as cash flow hedges during the three months ended March 31, 2024. In general, we expect net gains or losses on derivative instruments to vary based on fair value changes with respect to our interest rate swaps that are not accounted for as cash flow hedges.

During the three months ended March 31, 2023, we recorded non-cash impairment charges of $27.0 million to write down the carrying value of 201 Spear Street (located in San Francisco, California) to its estimated fair value as a result of continued market uncertainty due to rising interest rates, increased vacancy rates as a result of slow return to office in San Francisco, additional projected vacancy due to anticipated tenant turnover and further declining values of comparable sales in the market, all of which impacted ongoing cash flow estimates and leasing projections, which resulted in the future estimated undiscounted cash flows being lower than the net carrying value of the property. As a result, 201 Spear Street was valued at substantially less than the outstanding mortgage debt. Subsequent to March 31, 2023, the borrower under the 201 Spear Street Mortgage Loan (the “Spear Street Borrower”) entered into a deed-in-lieu of foreclosure transaction with the lender of the 201 Spear Street Mortgage Loan (the “Spear Street Lender”). On January 9, 2024, the Spear Street Lender transferred the title of the 201 Spear Street property to a third-party buyer of the 201 Spear Street Mortgage Loan. We did not record any non-cash impairment charges during the three months ended March 31, 2024.

During the three months ended March 31, 2024 and 2023, we recorded unrealized losses on real estate equity securities of $19.5 million and $18.3 million, respectively, as a result of the decrease in the closing price of the units of the SREIT on the SGX-ST.

During the three months ended March 31, 2024, we recognized a gain on extinguishment of debt of $56.4 million in connection with the deed-in-lieu of foreclosure transaction related to the 201 Spear Street Mortgage Loan. The gain on extinguishment of debt related to the 201 Spear Street Mortgage Loan represents the difference between the carrying amount of the outstanding debt and other liabilities of approximately $128.7 million and the carrying value of the real estate property and other assets of approximately $72.3 million, at the time of the transfer of the 201 Spear Street property and other assets in satisfaction of the loan.

We recognized a gain on sale of real estate of $14.8 million during the three months ended March 31, 2024 related to the disposition of the McEwen Building in February 2024. We did not dispose of any real estate during the three months ended March 31, 2023.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Funds from Operations and Modified Funds from Operations

We believe that funds from operations (“FFO”) is a beneficial indicator of the performance of an equity REIT. We compute FFO in accordance with the current National Association of Real Estate Investment Trusts (“NAREIT”) definition. FFO represents net income, excluding gains and losses from sales of operating real estate assets (which can vary among owners of identical assets in similar conditions based on historical cost accounting and useful-life estimates), gains and losses from change in control, impairment losses on real estate assets, depreciation and amortization of real estate assets, and adjustments for unconsolidated partnerships and joint ventures. In addition, we elected the option to exclude mark-to-market changes in value recognized on real estate equity securities in the calculation of FFO. We believe FFO facilitates comparisons of operating performance between periods and among other REITs. However, our computation of FFO may not be comparable to other REITs that do not define FFO in accordance with the NAREIT definition or that interpret the current NAREIT definition differently than we do. Our management believes that historical cost accounting for real estate assets in accordance with U.S. generally accepted accounting principles (“GAAP”) implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered the presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. As a result, we believe that the use of FFO, together with the required GAAP presentations, provides a more complete understanding of our performance relative to our competitors and provides a more informed and appropriate basis on which to make decisions involving operating, financing, and investing activities.

Changes in accounting rules have resulted in a substantial increase in the number of non-operating and non-cash items included in the calculation of FFO. As a result, our management also uses MFFO as an indicator of our ongoing performance. MFFO excludes from FFO: acquisition fees and expenses (to the extent that such fees and expenses have been recorded as operating expenses); adjustments related to contingent purchase price obligations; amounts relating to straight-line rents and amortization of above and below market intangible lease assets and liabilities; accretion of discounts and amortization of premiums on debt investments; amortization of closing costs relating to debt investments; impairments of real estate-related investments; mark-to-market adjustments included in net income; and gains or losses included in net income for the extinguishment or sale of debt or hedges. We compute MFFO in accordance with the definition of MFFO included in the practice guideline issued by the IPA in November 2010 as interpreted by management. Our computation of MFFO may not be comparable to other REITs that do not compute MFFO in accordance with the current IPA definition or that interpret the current IPA definition differently than we do.

We believe that MFFO is helpful as a measure of ongoing operating performance because it excludes other non-operating items included in FFO. MFFO excludes non-cash items such as straight-line rental revenue. Additionally, we believe that MFFO provides investors with supplemental performance information that is consistent with the performance indicators and analysis used by management, in addition to net income and cash flows from operating activities as defined by GAAP, to evaluate the sustainability of our operating performance. MFFO provides comparability in evaluating the operating performance of our portfolio with other non-traded REITs. MFFO, or an equivalent measure, is routinely reported by non-traded REITs, and we believe often used by analysts and investors for comparison purposes.

FFO and MFFO are non-GAAP financial measures and do not represent net income as defined by GAAP. Net income as defined by GAAP is the most relevant measure in determining our operating performance because FFO and MFFO include adjustments that investors may deem subjective, such as adding back expenses such as depreciation and amortization and the other items described above. Accordingly, FFO and MFFO should not be considered as alternatives to net income as an indicator of our current and historical operating performance. In addition, FFO and MFFO do not represent cash flows from operating activities determined in accordance with GAAP and should not be considered an indication of our liquidity. We believe FFO and MFFO, in addition to net income and cash flows from operating activities as defined by GAAP, are meaningful supplemental performance measures. See also “—Going Concern Considerations,” “—Market Outlook—Real Estate and Real Estate Finance Markets” and “—Liquidity and Capital Resources.”

During periods of significant disposition activity, FFO and MFFO are much more limited measures of future performance as neither FFO nor MFFO reflects adjustments for the operations of properties sold or under contract to sale during the periods presented.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Although MFFO includes other adjustments, the exclusion of adjustments for straight-line rent, the amortization of above- and below-market leases, gain from extinguishment of debt, unrealized losses (gains) on derivative instruments and gains related to swap terminations are the most significant adjustments for the periods presented. We have excluded these items based on the following economic considerations:

•Adjustments for straight-line rent. These are adjustments to rental revenue as required by GAAP to recognize contractual lease payments on a straight-line basis over the life of the respective lease. We have excluded these adjustments in our calculation of MFFO to more appropriately reflect the current economic impact of our in-place leases, while also providing investors with a useful supplemental metric that addresses core operating performance by removing rent we expect to receive in a future period or rent that was received in a prior period;

•Amortization of above- and below-market leases. Similar to depreciation and amortization of real estate assets and lease related costs that are excluded from FFO, GAAP implicitly assumes that the value of intangible lease assets and liabilities diminishes predictably over time and requires that these charges be recognized currently in revenue. Since market lease rates in the aggregate have historically risen or fallen with local market conditions, management believes that by excluding these charges, MFFO provides useful supplemental information on the realized economics of the real estate;

•Gain from extinguishment of debt. A gain from extinguishment of debt represents the difference between the carrying value of any consideration transferred to the lender in return for the extinguishment of a debt and the net carrying value of the debt at the time of settlement. We have excluded the gain from extinguishment of debt in our calculation of MFFO because these gains do not impact the current operating performance of our investments and do not provide an indication of future operating performance;

•Unrealized loss (gain) on derivative instruments. These adjustments include unrealized losses (gains) from mark-to-market adjustments on interest rate swaps and the interest rate cap. The change in fair value of interest rate swaps and the interest rate cap not designated as a hedge are non-cash adjustments recognized directly in earnings and are included in interest expense. We have excluded these adjustments in our calculation of MFFO to more appropriately reflect the economic impact of our interest rate swap agreements and interest rate cap; and

•Gains related to swap terminations. Gains related to swap terminations represent the difference between the settlement fees received and the value of interest rate swaps terminated, which are included in net (gain) loss on derivative instruments. Although these amounts increase net income, we exclude them from MFFO to more appropriately reflect the ongoing impact of our interest rate swap agreements.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Our calculation of FFO, which we believe is consistent with the calculation of FFO as defined by NAREIT, is presented in the following table, along with our calculation of MFFO, for the three months ended March 31, 2024 and 2023 (in thousands). No conclusions or comparisons should be made from the presentation of these periods.


	2024		2023
Net income (loss)	$	37,574	$	(66,419)
Depreciation of real estate assets	23,496		24,047
Amortization of lease-related costs	4,038		4,450
Impairment charges on real estate	—		26,988
Unrealized loss on real estate equity securities	19,512		18,347
Gain on sale of real estate, net	(14,781)		—
FFO	69,839		7,413
Straight-line rent and amortization of above- and below-market leases, net	(3,648)		(4,434)
Gain from extinguishment of debt	(56,372)		—
Unrealized (gain) loss on derivative instruments	(8,904)		13,674
Gains related to swap terminations	(178)		—
MFFO	$	737	$	16,653

FFO and MFFO may also be used to fund all or a portion of certain capitalizable items that are excluded from FFO and MFFO, such as tenant improvements, building improvements and deferred leasing costs.

Critical Accounting Policies and Estimates

Our consolidated interim financial statements have been prepared in accordance with GAAP and in conjunction with the rules and regulations of the SEC. The preparation of our financial statements requires significant management judgments, assumptions and estimates about matters that are inherently uncertain. These judgments affect the reported amounts of assets and liabilities and our disclosure of contingent assets and liabilities as of the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. With different estimates or assumptions, materially different amounts could be reported in our financial statements. Additionally, other companies may utilize different estimates that may impact the comparability of our results of operations to those of companies in similar businesses. A discussion of the accounting policies that management considers critical in that they involve significant management judgments, assumptions and estimates is included in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC. There have been no significant changes to our policies during 2024.

Subsequent Events

We evaluate subsequent events up until the date the consolidated financial statements are issued.

Second Modification of Credit Facility

On July 30, 2021, REIT Properties III, our indirect wholly owned subsidiary, entered into an unsecured credit facility (as subsequently modified and amended, the “Credit Facility”) with U.S. Bank National Association, as administrative agent (the “Credit Facility Agent”). The current lenders under the Credit Facility are U.S. Bank National Association and Bank of America, N.A. (the “Credit Facility Lenders”). The Credit Facility had a maturity date of July 30, 2024.

On May 10, 2024, REIT Properties III entered into the second modification of credit agreement (the “Second Modification Agreement”) with the Credit Facility Agent and Lenders.

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PART I. FINANCIAL INFORMATION (CONTINUED)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

The Second Modification Agreement provides that:

In addition, the Second Modification Agreement provides that REIT Properties III, which indirectly owns all of our properties and holds our investment in units of the SREIT, will not make any distributions, dividends or redemptions without the consent of the Credit Facility Lenders, except for (i) amounts necessary for us to maintain our REIT status under the Internal Revenue Code of 1986, as amended, and to avoid liability for federal and state income or excise taxes, (ii) certain REIT-level general and administrative expenses and (iii) asset management fees allocated to our properties.

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PART I. FINANCIAL INFORMATION (CONTINUED)

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are exposed to the effects of interest rate changes as a result of borrowings used to maintain liquidity and to fund property improvements, repairs and tenant build-outs to properties, to pay for other capital needs, to refinance existing indebtedness and to provide working capital. We have also funded distributions to stockholders and redemptions of common stock with borrowings. Our profitability and the value of our real estate investment portfolio may be adversely affected during any period as a result of interest rate changes. Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings, prepayment penalties and cash flows and to lower overall borrowing costs. We may manage interest rate risk by utilizing a variety of financial instruments, including interest rate caps, floors, and swap agreements, in order to limit the effects of changes in interest rates on our operations. When we use these types of derivatives to hedge the risk of interest-earning assets or interest-bearing liabilities, we may be subject to certain risks, including the risk that losses on a hedge position will reduce the funds available for other capital needs and that the losses may exceed the amount we invested in the instruments.

We borrow funds at a combination of fixed and variable rates. Interest rate fluctuations will generally not affect our future earnings or cash flows on our fixed rate debt, unless such instruments mature or are otherwise terminated. However, interest rate changes will affect the fair value of our fixed rate instruments. As of March 31, 2024, the fair value of our fixed rate debt was $119.6 million and the outstanding principal balance of our fixed rate debt was $119.6 million. The fair value estimate of our fixed rate debt is calculated using a discounted cash flow analysis utilizing rates we would expect to pay for debt of a similar type and remaining maturity if the loan was originated as of March 31, 2024. As we expect to hold our fixed rate instruments to maturity (unless the property securing the debt is sold and the loan is repaid) and the amounts due under such instruments would be limited to the outstanding principal balance and any accrued and unpaid interest, we do not expect that fluctuations in interest rates, and the resulting change in fair value of our fixed rate instruments, would have a significant impact on our operations.

Conversely, movements in interest rates on our variable rate debt would change our future earnings and cash flows, but not significantly affect the fair value of those instruments. However, changes in required risk premiums would result in changes in the fair value of variable rate instruments. As of March 31, 2024, we were exposed to market risks related to fluctuations in interest rates on $357.1 million of variable rate debt outstanding after giving consideration to the impact of interest rate swap agreements on approximately $1.1 billion of our variable rate debt. Based on interest rates as of March 31, 2024, if interest rates were 100 basis points higher or lower during the 12 months ending March 31, 2025, interest expense on our variable rate debt would increase or decrease by $3.6 million.

The interest rate and weighted-average effective interest rate of our fixed rate debt and variable rate debt as of March 31, 2024 were 7.5% and 5.7%, respectively. The weighted-average effective interest rate represents the actual interest rate in effect as of March 31, 2024 (consisting of the contractual interest rate and the effect of interest rate swaps, if applicable), using interest rate indices as of March 31, 2024 where applicable.

We continue to have discussions with our lenders regarding potential modifications to certain debt obligations, including the Amended and Restated Portfolio Loan Facility, Carillon Mortgage Loan, 3001 & 3003 Washington Mortgage Loan and Accenture Tower Revolving Loan. Given the challenges affecting the U.S. commercial real estate industry and the challenging interest rate environment, in order to refinance or extend loans, we expect lenders to demand higher interest rate spreads compared to the existing terms in our current loan agreements as was the case with the modification of the Modified Portfolio Revolving Loan Facility executed during the three months ended March 31, 2024. We utilize interest rate swaps to manage interest rate risk, and in particular fluctuations in the variable rate, namely SOFR, but these interest rate swaps will not mitigate any risk related to higher interest rate spreads. As a result, we expect interest expense and our weighted-average effective interest rate to increase in the future as a result of recent extensions and as we continue to refinance our maturing debt. For a discussion of the interest rate risks related to the current capital and credit markets, see Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Market Outlook – Real Estate and Real Estate Finance Markets” and the risks discussed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC.

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PART I. FINANCIAL INFORMATION (CONTINUED)

Item 3. Quantitative and Qualitative Disclosures about Market Risk (continued)

We are exposed to financial market risk with respect to our investment in the SREIT (SGX-ST Ticker: OXMU). Financial market risk is the risk that we will incur economic losses due to adverse changes in our investment’s security price. Our exposure to changes in security prices is a result of our investment in these types of securities. Market prices are subject to fluctuation and, therefore, the amount realized in the subsequent sale of an investment may significantly differ from our carrying value. Fluctuation in the market prices of a security may result from any number of factors, including perceived changes in the underlying fundamental characteristics of the issuer, the relative price of alternative investments, interest rates, default rates and general market conditions. The SREIT’s units were first listed for trading on the SGX-ST on July 19, 2019. If an active trading market for the units does not develop or is not sustained, it may be difficult to sell our units. The market for Singapore REITs may trade a small number of securities and may be unable to respond effectively to increases in trading volume, potentially making prompt liquidation of our investment in the SREIT difficult. Even if an active trading market develops or we are able to negotiate block trades, if we or other significant investors sell or are perceived as intending to sell a substantial amount of units in a short period of time, the market price of our remaining units could be adversely affected. In addition, as a foreign equity investment, the trading price of units of the SREIT may be affected by political, economic, financial and social factors in the Singapore and Asian markets, including changes in government, economic and fiscal policies. Furthermore, we may be limited in our ability to sell our investment in the SREIT if our advisor and/or its affiliates are deemed to have material, non-public information regarding the SREIT. Charles J. Schreiber, Jr., our Chief Executive Officer, our President and our affiliated director, is a former director of the external manager of the SREIT, and Mr. Schreiber currently holds an indirect ownership interest in the external manager of the SREIT. An affiliate of our advisor serves as the U.S. asset manager to the SREIT. We do not currently engage in derivative or other hedging transactions to manage our investment’s security price risk.

As of March 31, 2024, we held 237,426,088 units of the SREIT which represented 18.2% of the outstanding units of the SREIT as of that date. As of March 31, 2024, the aggregate value of our investment in the units of the SREIT was $32.3 million, which was based solely on the closing price of the SREIT units on the SGX-ST of $0.136 per unit as of March 31, 2024, and did not take into account any potential discount for the holding period risk due to the quantity of units held by us relative to the normal level of trading volume in the units. This is a decrease of $0.744 per unit from our initial acquisition of the SREIT units at $0.880 per unit on July 19, 2019. Due to the disruptions in the financial markets, since early March 2020, the trading price of the common units of the SREIT has experienced substantial volatility. The trading price of the common units of the SREIT has been significantly impacted by the market sentiment for stock with significant investment in U.S. commercial office buildings. The SREIT also has a significant amount of debt maturing in 2024, which adds additional uncertainty around the value of the units. Based solely on the closing price per unit of the SREIT units as of March 31, 2024, if prices were to increase or decrease by 10%, our net income would increase or decrease by approximately $3.2 million.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

As of the end of the period covered by this report, management, including our principal executive officer and principal financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based upon, and as of the date of, the evaluation, our principal executive officer and principal financial officer concluded that the disclosure controls and procedures were effective as of the end of the period covered by this report to ensure that information required to be disclosed in the reports we file and submit under the Exchange Act is recorded, processed, summarized and reported as and when required. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file and submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the quarter ended March 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

Please see the risks discussed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023 as filed with the SEC.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

a).During the period covered by this Form 10-Q, we did not sell any equity securities that were not registered under the Securities Act of 1933.

b).Not applicable.

c).Due to certain restrictions and covenants included in one of our credit facilities, we do not expect to redeem any shares of our common stock during the term of the loan agreement, which has a maturity date of March 1, 2026. As a result, on March 15, 2024, our board of directors terminated our share redemption program. We did not redeem or repurchase any shares of our common stock during the three months ended March 31, 2024.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

None.

Item 6. Exhibits

Ex.	Description
3.1	Second Articles of Amendment and Restatement, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed January 25, 2011
3.2	Fo u rth Amended and Restated Bylaws, incorporated by reference to Exhibit 3.1 to the Company’s Cur r ent Report on Form 8-K , filed December 14, 2023
4.1	Statement regarding restrictions on transferability of shares of common stock (to appear on stock certificate or to be sent upon request and without charge to stockholders issued shares without certificates), incorporated by reference to Exhibit 4.2 to Pre-Effective Amendment No. 2 to the Company’s Registration Statement on Form S-11, Commission File No. 333-164703, filed August 20, 2010
10.1	Fourth Loan Modification and Extension Agreement, by and among KBSIII 60 South Sixth Street, LLC, KBSIII Preston Commons, LLC, KBSIII Sterling Plaza, LLC, KBSIII Towers at Emeryville, LLC, KBSIII Ten Almaden, LLC, and KBSIII Legacy Town Center, LLC, KBS REIT Properties III, LLC, Bank of America, N.A. and the Lenders, effective as of February 6, 2024
10.2	Additional Advance and Third Modification Agreement by and among KBSIII 1550 West McEwen Drive, LLC, KBSIII 155 North 400 West, LLC, KBSIII 515 Congress, LLC, and KBSIII 201 17th Street, LLC, U.S. Bank National Association, and Lenders dated as of February 9, 2024

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PART II. OTHER INFORMATION (CONTINUED)

Item 6. Exhibits (continued)

Ex.	Description
10.3	Modification of Guaranty and Consent and Reaffirmation of Guarantor by KBS REIT Properties III, LLC dated as of February 9, 2024
10.4	Additional Advance and Third Modification Agreement (Short Form – 515 Congress Senior Loan) by and between KBSIII 515 Congress, LLC and U.S. Bank National Association, dated as of February 9, 2024
10.5	Additional Advance and Third Modification Agreement (Short Form – 515 Congress Junior Loan) by and between KBSIII 515 Congress, LLC and U.S. Bank National Association, dated as of February 9, 2024
10.6	Additional Advance and Third Modification Agreement (Short Form – McEwen) by and between KBSIII 1550 West McEwen Drive, LLC and U.S. Bank National Association, dated as of February 9, 2024
10.7	Additional Advance and Third Modification Agreement (Short Form – Gateway Tech Project) by and between KBSIII 155 North 400 West, LLC and U.S. Bank National Association, dated as of February 9, 2024
10.8	Third Modification Agreement (Short Form – 201 17th Street Project) by and between KBSIII 201 17th Street, LLC and U.S. Bank National Association, dated as of February 9, 2024
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	Inline XBRL Instance Document
101.SCH	Inline XBRL Taxonomy Extension Schema
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		KBS REAL ESTATE INVESTMENT TRUST III, INC.
Date:	May 14, 2024	By:	/S/ CHARLES J. SCHREIBER, JR.
			Charles J. Schreiber, Jr.
			Chief Executive Officer, President and Director
			(principal executive officer)
Date:	May 14, 2024	By:	/S/ JEFFREY K. WALDVOGEL
			Jeffrey K. Waldvogel
			Chief Financial Officer, Treasurer and Secretary
			(principal financial officer)

Document

Exhibit 10.1

FOURTH LOAN MODIFICATION AND EXTENSION AGREEMENT

THIS FOURTH LOAN MODIFICATION AND EXTENSION AGREEMENT (this “Agreement”) is effective as of February 6, 2024 (the “Effective Date”), by and among KBSIII 60 SOUTH SIXTH STREET, LLC, a Delaware limited liability company (“RBC Plaza Borrower”), KBSIII PRESTON COMMONS, LLC, a Delaware limited liability company (“Preston Commons Borrower”), KBSIII STERLING PLAZA, LLC, a Delaware limited liability company (“Sterling Plaza Borrower”), KBSIII TOWERS AT EMERYVILLE, LLC, a Delaware limited liability company (“Towers at Emeryville Borrower”), KBSIII TEN ALMADEN, LLC, a Delaware limited liability company (“Ten Almaden Borrower”), and KBSIII LEGACY TOWN CENTER, LLC, a Delaware limited liability company (“Legacy Town Center Borrower”; RBC Plaza Borrower, Preston Common Borrower, Sterling Plaza Borrower, Towers at Emeryville Borrower, Ten Almaden Borrower, and Legacy Town Center Borrower shall be hereinafter referred to, individually, as a “Borrower” and, collectively, jointly and severally, as “Borrowers”), KBS REIT PROPERTIES III, LLC, a Delaware limited liability company (the “Guarantor,” and together with the Borrowers, the “Obligors”), and BANK OF AMERICA, N.A., a national banking association, as Administrative Agent for the Lenders (as hereinafter defined) (the “Administrative Agent”), and each “Lender” set forth on the signature pages to this Agreement.

RECITALS:

WHEREAS, pursuant to the terms and conditions of that certain Amended and Restated Loan Agreement dated as of November 3, 2021, as amended by that certain Loan Modification and Extension Agreement dated as of November 8, 2023 and made effective as of November 3, 2023, as amended by that certain Second Loan Modification and Extension Agreement made effective as of November 17, 2023, and as amended by that certain Third Loan Modification and Extension Agreement (the “Third Modification”) executed as of December 29, 2023 and made effective as of December 22, 2023 (as amended, modified, supplemented or restated from time to time, the “Loan Agreement), by and among Administrative Agent, each of the lenders from time to time party thereto (each, a “Lender” and collectively, “Lenders”), and Borrowers, Lenders made a loan (the “Loan”) to Borrowers in the original maximum principal amount of $613,200,000;

WHEREAS, the Loan is evidenced by, among other things, one or more promissory notes executed by Borrowers and payable to the order of each Lender in the amount of each Lender’s Commitment and collectively in the maximum principal amount of the Loan (such promissory notes, as increased, extended, consolidated, amended, restated, replaced, substituted, supplemented or otherwise modified from time to time, collectively, the “Note”);

WHEREAS, pursuant to the terms of the Loan Agreement, the Loan matures on February 6, 2024;

WHEREAS, Borrowers’ obligations under the Loan Agreement, the Note and the other Loan Documents (as hereinafter defined) are secured by, among other things, the Security Instruments covering certain real property and improvements thereon, more particularly described in the Security Instruments (collectively, the “Property”);

WHEREAS, Borrowers’ obligations under the Loan Agreement, the Note and the other Loan Documents are guaranteed by Guarantor pursuant to an Amended and Restated Guaranty Agreement dated November 3, 2021 (as amended, supplemented, modified, restated or renewed from time to time, the “Guaranty”); and

WHEREAS, Borrowers’ obligations under the Loan Agreement, the Note and the other Loan Documents are hereinafter collectively called the “Obligations;” the Note, the Security Instruments, the Loan Agreement, the Guaranty, and all other documents previously, now or hereafter executed and delivered to

evidence, secure, guarantee, or in connection with, the Obligations, as the same may from time to time be renewed, extended, amended, supplemented or restated, are hereinafter collectively called the “Loan Documents;” and all liens, security interests, assignments, superior titles, rights, remedies, powers, equities and priorities securing the Note or providing recourse to Administrative Agent and/or Lenders with respect thereto are hereinafter collectively called the “Liens.”

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Borrowers, Administrative Agent and Lenders now agree to extend the maturity date of the Loan, and to make certain other modifications to the Loan Documents, all as more specifically set forth below.

1.Recitals. The parties hereto acknowledge and agree that the recitals set forth above are true and correct and are incorporated herein by this reference; provided, however, that such recitals shall not be deemed to modify the express provisions hereinafter set forth. Capitalized terms used herein but not defined shall have the meanings given to them in the Loan Agreement.

2.Maturity Date. All of the Obligations, including (without limitation) all outstanding principal, accrued and unpaid interest, outstanding late charges, unpaid fees, and all other amounts outstanding under the Note and the other Loan Documents, shall be due and payable in full on August 6, 2024 (the “Maturity Date”). Any reference to “Maturity Date” in the Loan Agreement and other Loan Documents shall be deemed to mean August 6, 2024. Borrowers have no further options to extend the Maturity Date (and any prior extension options have been terminated).

3.Exit Fee. Borrowers shall pay to Administrative Agent, for the benefit of Lenders, an exit fee in the amount of $1,000,000 (the “Exit Fee”), which Exit Fee shall be earned on the date hereof but shall be due on the earliest to occur of (a) the Maturity Date, (b) the occurrence of a Default or (c) repayment of the Loan in full.

4.Income from Property. The second sentence of Section 4.19 of the Loan Agreement is hereby deleted and replaced with the following:

“No income derived from any Property, including any income from the Leases, shall be distributed or paid to any member, partner, shareholder or, if a Borrower is a trust, to any beneficiary or trustee. For avoidance of doubt, provided a Default has not occurred which is continuing, payment of Permitted REIT Expenses and Permitted Asset Management Fees as and when otherwise permitted by the Loan Documents shall not constitute a violation of the foregoing.”

5.No Distributions. The following is hereby added to the Loan Agreement as a new Section 5.8:

“5.8 Distributions and Redemptions. Without limiting the terms of Section 4.19, no Borrower shall declare or pay any dividends or distributions with respect to, or redeem or agree to redeem any, ownership interest in any Borrower.”

6.No Releases or Reconveyances of Properties. Notwithstanding anything to the contrary in the Loan Documents, no release or reconveyance of any Property pursuant to Section 9.31 of the Loan Agreement shall be permitted on or prior to the Maturity Date, unless approved in writing by all Lenders, in each Lender’s sole and absolute discretion.

7.Waiver of Financial Covenants; Reporting. Administrative Agent and Lenders hereby waive (i) the requirement for the Properties to maintain an Ongoing Debt Service Coverage Ratio of not less than the Minimum Required Debt Service Coverage Ratio pursuant to Section 4.22 of the Loan Agreement as of the

December 31, 2023, March 31, 2024 and June 30, 2024 Test Dates only, and (ii) the requirement for Guarantor to satisfy the Net Worth covenant in Section 18 of the Guaranty for the period between the Effective Date and August 6, 2024. Notwithstanding the foregoing, Borrowers shall continue to provide quarterly compliance certificates as and when required by Section 4.8(f) of the Loan Agreement and Guarantor shall continue to provide Guarantor Covenant Compliance Certificates as and when required by Section 4.8(b) of the Loan Agreement; provided, however, the form of such compliance certificates may be modified to take into account the waivers provided for in this Section.

8.Milestone Dates.

(a)On or prior to February 29, 2024 (the “REIT III Plan Deadline”), Borrowers shall deliver to Administrative Agent a reasonably comprehensive restructuring plan (the “Restructuring Plan”) for KBS Real Estate Investment Trust III, Inc., a Maryland corporation (“REIT III”), which Restructuring Plan shall include, without limitation, a comprehensive cash flow analysis and plan for repayment of all indebtedness (including the Loan) of REIT III and its direct and indirect subsidiaries.

(b)On or prior to March 29, 2024 (the “REIT III Engagement Deadline”), REIT III shall have engaged an investment bank for purposes of raising not less than $100,000,000 in new equity, debt or a combination of both for purposes of recapitalizing REIT III and Borrower shall have provided evidence of such engagement to Administrative Agent.

(c)On or prior to July 15, 2024 (the “REIT III Contribution Deadline”), not less than $100,000,000 in new equity, debt or a combination of both, shall have been raised by REIT III.

(d)If a Default then exists due to Borrowers’ failure to satisfy the milestone in subsection (c) above on or before the REIT III Contribution Deadline, then on or prior to July 22, 2024 (the “REIT III In-Court Implementation Deadline”), Borrowers shall deliver to Administrative Agent (i) draft documents (i.e., a plan, disclosure statement, confirmation order and other applicable ancillary documents) for the implementation of the Restructuring Plan by means of a prepackaged or otherwise consensual proceeding under chapter 11 of the United States Bankruptcy Code, and (ii) a request (including a cash flow budget for the anticipated duration of such proceeding and other applicable information) for a proposal for the Administrative Agent and the Lenders to provide debtor-in-possession financing in support of such proceeding.

(e)Failure to satisfy the applicable milestones in subsections (a), (b), (c) or (d) on or prior to the REIT III Plan Deadline, REIT III Engagement Deadline, REIT III Contribution Deadline and/or REIT III In-Court Implementation Deadline, as applicable, shall constitute an immediate Default under the Loan Agreement, without any requirement of notice or opportunity to cure. Without limiting the foregoing, if Borrowers deliver to Administrative Agent a written request for confirmation that the milestones in subsection (a), (b), (c) or (d) above have been satisfied, then within seven (7) Business Days of Administrative Agent’s receipt of such written request, Administrative Agent will confirm in a written response to Borrowers whether or not the applicable milestone has been satisfied.

(f)Administrative Agent shall promptly following its receipt thereof deliver to each Lender a copy of the Restructuring Plan.

9.Permitted REIT Expenses and Permitted Asset Management Fees. Provided a Default has not occurred which is continuing, Borrowers will be permitted to pay (a) REIT-level general and administrative costs and expenses reasonably allocated to the Properties, in an amount not to exceed $1.60 per square foot per annum, and (b) asset management fees in an amount not to exceed 0.75% of the cost basis of the Properties per annum; however, if a Default has occurred which is continuing, Borrowers shall not be

permitted to, and shall not, pay (x) any REIT-level general and administrative costs or expenses or (y) asset management fees.

10.Cash Sweep – Definition of Excess Cash Flow.

(a)For avoidance of doubt, Borrowers shall continue to deliver to Administrative Agent 100% of Excess Cash Flow on the twentieth (20th) day of each month in accordance with Section 4 of the Third Modification.

(b)The definition of “Excess Cash Flow” in Section 4(d) of the Third Modification is hereby amended and restated in its entirety as follows:

“Excess Cash Flow” means, for any calendar month, an amount equal to: (a) actual gross revenues of Borrowers for such calendar month attributable to the Properties (including, without limitation, all rentals, service and other fees or charges, license fees, parking fees and other revenues and cash payments of any kind received by the Borrowers), plus (b) all amounts paid by the applicable counterparty bank to KBS REIT Properties III, LLC, a Delaware limited liability company under the Pledged Swaps, less (c) an amount equal to (i) actual operating expenses paid by Borrowers during such calendar month and attributable to the Properties, as reasonably approved by Administrative Agent (provided, that such calculation shall exclude depreciation, amortization, other non-cash items and any amounts payable to affiliates of Borrowers (other than any Permitted REIT Expenses and Permitted Asset Management Fees (as such terms are defined below)), plus (ii) principal and interest paid with respect to the Loan for such calendar month, plus (iii) so long as no Default shall have occurred which is continuing, any REIT-level general and administrative costs and expenses reasonably allocated to the Properties, in an amount not to exceed $1.60 per square foot per annum (collectively, “Permitted REIT Expenses”), plus (iv) so long as no Default shall have occurred which is continuing, asset management fees in an amount not to exceed 0.75% of the cost basis of the Properties per annum (“Permitted Asset Management Fees”), plus (v) any payments required to be made under any permitted interest rate protection agreements entered into by Borrowers.

11.Cash Sweep Collateral Account – Disbursements.

(a)Subject to satisfaction of the following requirements, Borrowers will be permitted to withdraw funds from the Cash Sweep Collateral Account (each a “Cash Sweep Disbursement”) to pay or reimburse Borrowers for (i) Approved TILC Costs, (ii) Approved Capex Costs and (iii) the Monthly Shortfall Amount:

(i)All representations and warranties in the Loan Documents remain true and correct in all material respects (except for those representations and warranties that are qualified by materiality, which representations and warranties shall be true and correct in all respects, and excepting any changes in circumstances which would not constitute a Default);

(ii)No Default exists under the Loan Documents;

(iii)Administrative Agent shall have approved a written draw request delivered by Borrowers to Administrative Agent for the requested Cash Sweep Disbursement, which draw request shall specify the amount and purposes of such Cash Sweep Disbursement requested. Such draw requests may not be delivered more than one time per month;

(iv)Each draw request for a Monthly Shortfall Amount shall include a calculation of the Monthly Shortfall Amount in detail reasonably acceptable to Administrative Agent;

(v)Each draw request shall include Borrowers’ confirmation that (A) all representations and warranties in the Loan Documents remain true and correct in all material respects (except for these representations and warranties that are qualified by materiality, which representations and warranties shall be true and correct in all respects, and excepting any changes in circumstances which would not constitute a Default), (B) to Borrower’s actual knowledge, no Default exists under the Loan Documents, (C) to Borrower’s actual knowledge, all conditions to the applicable Cash Sweep Disbursement from the Cash Sweep Collateral Account, are satisfied and (D) each Cash Sweep Disbursement will be applied for payment of, or reimbursements of Borrowers for, the Approved TILC Costs, Approved Capex Costs and/or Monthly Shortfall Amount for which such Cash Sweep Disbursement has been requested;

(vi)Each draw request for Approved TILC Costs that are Leasing Commissions shall be accompanied by evidence reasonably satisfactory to Administrative Agent that such Leasing Commissions are then due and payable or have been properly paid, including, if required by Administrative Agent, receipts, lien waivers and/or releases from the party or parties entitled to all or any portion of such Leasing Commissions;

(vii)Each draw request for Approved TILC Costs that are Tenant Improvements or Capital Improvements shall, if required by Administrative Agent and to the extent applicable, be set forth on AIA Forms G702 and G703 or another form reasonably approved by Administrative Agent, and shall be accompanied by (A) invoices, receipts or other evidence reasonably satisfactory to Administrative Agent verifying the costs for which funds are being requested, and (B) if required by Administrative Agent, affidavits, lien waivers and/or releases from all parties who furnished materials and/or services in connection with the requested payment. At Borrowers’ election, Cash Sweep Disbursement for Approved TILC Costs under a specified Lease or Capital Improvements may be made periodically as construction progresses, subject to such retainage requirements as Administrative Agent in its reasonable judgment may impose (provided, that Administrative Agent agrees that no retainage will be required with respect to contracts that are less than $100,000). Administrative Agent may require an inspection of the applicable Property in order to verify completion of Tenant Improvements or Capital Improvements as a condition to any such Cash Sweep Disbursement. Administrative Agent shall not be obligated to allow the final Cash Sweep Disbursement for Tenant Improvements under a given Lease or the final Cash Sweep Disbursement for any Capital Improvements unless the following conditions shall have been satisfied, to the extent required by Administrative Agent:

A.Administrative Agent shall have received such evidence as Administrative Agent may reasonably require that construction has been completed in a good and workmanlike manner, in accordance with applicable requirements of all Governmental Authorities and substantially in

accordance with plans and specifications reasonably satisfactory to Administrative Agent;

A.To the extent required by applicable Governmental Authorities for the use and occupancy of the applicable improvements, certificates of occupancy and other applicable permits and releases shall have been issued with respect thereto and copies thereof shall have been furnished to Administrative Agent to the extent requested by Administrative Agent;

B.A valid notice of completion shall have been recorded if required under the laws of the applicable jurisdiction; and

C.With respect to Tenant Improvements, if (i) required by the terms of the applicable Lease or (ii) if requested by Administrative Agent, Administrative Agent shall have received, from the tenant accepting the work, a tenant estoppel certificate confirming acceptance of the work; provided, however, that Administrative Agent shall not withhold funding any Cash Sweep Disbursement for Tenant Improvements if Administrative Agent has requested a tenant estoppel certificate that is not required under the terms of the applicable Lease and the applicable Borrower uses its commercially reasonable efforts to obtain such tenant estoppel but the applicable tenant fails to execute and deliver the same within thirty (30) days following said Borrower’s written request.

All conditions precedent to the Cash Sweep Disbursements are imposed hereby solely for the benefit of Administrative Agent and Lenders, and no other Person may require satisfaction of any such condition precedent or be entitled to assume that Administrative Agent will not permit Cash Sweep Disbursements in the absence of strict compliance with such conditions precedent. No Cash Sweep Disbursements shall constitute a waiver of any condition precedent to any further Cash Sweep Disbursement. No waiver by Administrative Agent or Lenders of any condition precedent or obligation shall preclude Administrative Agent from requiring such condition or obligation to be met prior to any other Cash Sweep Disbursement.

The unavailability of funds on deposit in the Cash Sweep Collateral Account shall not relieve Borrowers from their obligations to pay any amounts for which Borrowers are otherwise obligated under the Loan Documents or Leases.

For the purposes hereof, the following terms shall have the meanings indicated, unless the context otherwise requires:

“Approved Capex Costs” means (i) costs for Capital Improvements required under any Leases approved by Administrative Agent or Required Lenders in accordance with the terms of the Loan Documents, (ii) costs for Capital Improvements reasonably approved by Administrative Agent under Leases that are deemed approved in accordance with the terms of the Loan Documents, (iii) costs for Capital Improvements approved by Administrative Agent, in its sole and absolute discretion; provided, however, that Administrative Agent shall not withhold its consent unreasonably with respect to any costs for Capital Improvements referenced in this clause (iii) if such Capital Improvements are required under applicable Law or are reasonably required for health or safety purposes and (iv) costs for Specified Capital Improvements.

“Approved TILC Costs” means (a) Tenant Improvements and Leasing Commissions under Leases approved by Administrative Agent or Required Lenders in accordance with the terms of the Loan

Documents, (b) Tenant Improvements and Leasing Commissions contemplated in the Specified Leases; provided that (i) the applicable Borrower enters into such Specified Lease and (ii) upon execution thereof, the terms of such Specified Lease are consistent with the terms identified in Exhibit “Q”, and (c) Tenant Improvements and Leasing Commissions reasonably approved by Administrative Agent under Leases that are deemed approved in accordance with the terms of the Loan Documents.

“Capital Improvements” means improvements undertaken by a Borrower with respect to a Property that are required to be capitalized under GAAP and do not constitute Tenant Improvements.

“Monthly Shortfall Amount” means, for any applicable month, the amount, if any, by which Excess Cash Flow is negative.

“Specified Capital Improvements” means the Capital Improvements set forth in Exhibit “R”.

“Specified Leases” means the Leases set forth in Exhibit “Q”.

12.Capital Improvements and Tenant Improvements.

(a)Compliance with Laws; Plans and Specifications; Correction of Construction Work. Borrowers shall use commercially reasonable efforts to ensure that all of the Capital Improvements and Tenant Improvements, as applicable, are constructed in accordance with all applicable (whether present or future) Laws. Upon written request of Administrative Agent, Borrowers shall deliver to Administrative Agent copies of all plans and specifications for any Capital Improvements and Tenant Improvements, as applicable, to the extent available to Borrowers. Prior to commencing any construction of any Capital Improvements or Tenant Improvements, as applicable, the applicable plans and specifications shall be approved by all applicable Governmental Authorities and any tenant whose approval is required. Promptly following any written demand by Administrative Agent, Borrowers shall correct or cause the correction of any work that fails to comply with the requirements of this Section and any material departures or deviations from the applicable improvement plans and specifications not approved by Administrative Agent. Administrative Agent and its representatives shall have access to the Properties at all reasonable times and upon no less than twenty-four (24) hours prior notice, and shall have the right to enter the Properties and to conduct such inspections thereof at their sole cost and expense, and subject to the rights of tenants under their Leases, as they shall deem necessary or desirable for the protection of the interests of Administrative Agent and Lenders.

(b)Building Permits; Other Permits. All building, construction and other permits necessary or required in connection with the construction of any Tenant Improvements and Capital Improvements must be issued prior to the commencement of construction of any of the same. Borrowers shall pay, or cause to be paid, all required fees in connection with such permits.

13.Definitions. The following definitions are hereby added to Exhibit B of the Loan Agreement in appropriate alphabetical order:

“Pledged Swaps” means the following interest rate protection agreements:

Party	Counterparty	Trade Date	Notional Amount	Commencement	Maturity	Strike
KBS REIT Properties III, LLC	Bank of America, N.A.	11/10/22	$100,000,000	11/1/23	7/1/26	3.637%
KBS REIT Properties III, LLC	Bank of America, N.A.	12/1/22	$100,000,000	2/1/23	7/1/26	3.684%
---	---	---	---	---	---	---
KBS REIT Properties III, LLC	Bank of America, N.A.	7/1/22	$50,000,000	11/1/23	2/1/26	2.540%

14.Exhibit “B” – Definitions. The following defined terms are hereby added to the Exhibit B to the Loan Agreement in appropriate alphabetical order:

(a)“Fourth Modification” means the Fourth Loan Modification and Extension Agreement, dated February 6, 2024, by and among Borrowers, Guarantor, Administrative Agent and Lenders.

(b)“Permitted REIT Expenses” has the meaning given to such term in the Fourth Modification.

(c)“Permitted Asset Management Fees” has the meaning given to such term in the Fourth Modification.

15.Defaults. The following are hereby added to the Loan Agreement as new Sections 7.1(q), (r), (s) and (t) of the Loan Agreement:

“(q) Borrowers fail to deposit “Excess Cash Flow” with Administrative Agent as and when required by the Fourth Amendment; provided, that the first time during any twelve-month period that Borrower fails to deposit “Excess Cash Flow” with Administrative Agent as and when required by the Fourth Amendment, such failure will not constitute a Default unless such failure continues for five (5) days after Borrowers’ receipt of written notice of such failure from Administrative Agent.

(r) Any Borrower (i) violates the terms of the second sentence of Sections 4.19 of the Loan Agreement, (ii) violates the terms of Section 5.8 of the Loan Agreement or (iii) pays REIT-level general and administrative costs and expenses or asset management fees (A) in an amount in excess of the amount permitted in the Fourth Amendment or (B) at a time when such payments are precluded by the Fourth Amendment.

(s) A written demand for payment following default is delivered to Guarantor by U.S. Bank National Association, a national banking association (“U.S. Bank”) under the terms and conditions of (i) that certain Credit Agreement, dated as of July 30, 2021 (as amended), by and among Guarantor, U.S. Bank, as administrative agent, the lenders party there to, and Bank of America, N.A., a national banking association, as joint lead arranger and syndication agent, (ii) that certain Payment Guaranty Agreement, dated as of October 17, 2018 (as amended), executed by Guarantor for the benefit of U.S. Bank, as administrative agent for itself and as a “Lender” or (iii) any other indebtedness of Guarantor where the demand made or amount guarantied is greater than $5,000,000.

(t) Borrowers fail to comply with any of their obligations under Section 8 of the Fourth Modification.”

16.Exhibit “Q” – Approved Leases. A new Exhibit “Q” is hereby added to the Loan Agreement in the form attached hereto as Exhibit “Q”.

17.Exhibit “R” – Capital Improvement. A new Exhibit “R” is hereby added to the Loan Agreement in the form attached hereto as Exhibit “R”.

18.Conditions Precedent to Closing. The obligation of Administrative Agent and Lenders to enter into this Agreement is subject to the satisfaction of the following conditions precedent:

(a)Administrative Agent’s receipt of (i) this Agreement duly executed by Borrowers and Guarantor, and (ii) an Assignment of Interest Rate Protection Agreements with respect to the Pledged Swaps naming Bank of America, N.A., as the counterparty, duly executed by KBS REIT Properties III, LLC, and consented to by such counterparty;

(b)Borrowers shall have paid Administrative Agent, for the ratable benefit of the Lenders, a non-refundable extension fee in the amount of $901,932;

(c)Borrowers shall have deposited, or caused to have been deposited, $5,000,000 into the Cash Sweep Collateral Account, which amount shall be funded with additional equity from Guarantor; and

(d)Borrowers shall have paid Administrative Agent all fees, commissions, costs, charges, taxes and other expenses incurred by Administrative Agent and its counsel in connection with this Agreement (including, but not limited to, reasonable fees and expenses of Administrative Agent’s counsel and all recording fees, taxes and charges) for which Administrative Agent has requested payment in writing (including by email) on or prior to the date hereof.

19.Balance. As of the Effective Date, the aggregate outstanding principal balance of the Note is $601,288,000.00.

20.Borrowers’ Representations and Warranties. Each Borrower hereby reaffirms all of the representations and warranties set forth in the Loan Documents to be true, accurate and correct in all material respects as of the date of this Agreement to the extent such representations and warranties are not matters which, by their nature, can no longer be true and correct as a result of the passage of time, and except for changes in circumstances arising from actions or events occurring after the date of the Loan Agreement that do not otherwise constitute a Default thereunder, including, without limitation, the execution of new Leases or new contracts that are not prohibited by the terms of the Loan Agreement or any other Loan Document. Each Borrower further represents and warrants that as of the Effective Date (a) the information included in the Beneficial Ownership Certification, if applicable, is true and correct in all respects; (b) to each Borrower’s knowledge, no Default or Potential Default has occurred and is continuing; (c) each Borrower is a limited liability company which is duly organized and validly existing under the laws of the State of Delaware; (d) there have been no material changes in formation documents of any Borrower since the inception of the Loan; (e) the execution and delivery of this Agreement do not contravene, result in a breach of, or constitute a default under, any mortgage, loan agreement, indenture or other contract or agreement to which any Borrower is a party or by which any Borrower or any of its properties may be bound (nor would such execution and delivery constitute such a default with the passage of time or the giving of notice or both), and do not violate or contravene any law, order, decree, rule, regulation or restriction to which any Borrower or any Property is subject; (f) this Agreement constitutes the legal, valid and binding obligations of each Borrower enforceable in accordance with its terms; (g) the execution and delivery of, and performance under, this Agreement are within each Borrower’s power and authority without the joinder or consent of any other party and have been duly authorized by all requisite action, and are not in contravention of any law, or of any Borrower’s articles of organization or operating

agreement or of any indenture, agreement or undertaking to which any Borrower is a party or by which it is bound.

21.Release.

(a)Borrowers and Guarantor, for themselves and for each of their respective heirs, personal representatives, successors and assigns, hereby release and waive all claims and/or defenses they now may have against Administrative Agent, Lenders and their respective successors and assigns (collectively, the “Released Parties”) on account of any occurrence relating to the Loan, the Loan Documents and/or the property encumbered by the Security Instruments which accrued prior to the date hereof, including, but not limited to, any claim that Administrative Agent or any Lender (i) breached any obligation to Borrowers and/or Guarantor in connection with the Loan, (ii) was or is in any way involved with Borrowers and/or Guarantor as a partner, joint venturer, or in any other capacity whatsoever other than as a lender, (iii) failed to fund any portion of the Loan or any other sums as required under any document or agreement in reference thereto, or (iv) failed to timely respond to any offers to cure any defaults under any document or agreement executed by Borrowers, Guarantor or any third party or parties in favor of Administrative Agent or any Lender (collectively, the “Released Claims”). This release and waiver shall be effective as of the date of this Agreement and shall be binding upon Borrowers and Guarantor and each of their respective heirs, personal representatives, successors and assigns, and shall inure to the benefit of Administrative Agent, Lenders and their respective successors and assigns. The term “Released Parties” as used herein shall include, but shall not be limited to, the present and former officers, directors, employees, agents and attorneys of Administrative Agent and each Lender.

(b)Borrowers and Guarantor each agree and acknowledge that it may hereafter discover facts different from or in addition to those now known or believed to be true regarding the Released Claims and agree that the foregoing releases shall remain in full force and effect, notwithstanding the existence or nature of any such different or additional facts.

(c)Borrowers and Guarantor, each having consulted with counsel, is aware of the contents of Section 1542 of the Civil Code of the State of California. Section 1542 reads as follows:

Section 1542. (General Release – Claims Extinguished.) A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.

Borrowers and Guarantor each expressly waive and relinquish all rights and benefits under that section and any law or legal principle of similar effect in any jurisdiction, with respect to the Released Claims. Borrowers and Guarantor have executed this Agreement voluntarily, with full knowledge of its significance, and with the express intention of effecting the legal consequences provided by a waiver of California Civil Code Section 1542.

22.Course of Dealing. Administrative Agent, Lenders and Borrowers hereby acknowledge and agree that at no time shall any prior or subsequent course of conduct by Borrowers, Administrative Agent or any Lender directly or indirectly limit, impair or otherwise adversely affect any of Administrative Agent’s or any Lender’s rights, interests or remedies in connection with the Loan and the Loan Documents or obligate Administrative Agent or any Lender to agree to, or to negotiate or consider an agreement to, any waiver of any obligation or default by Borrowers under any Loan Document or any amendment to any term or condition of any Loan Document. Without limiting the generality of the preceding sentence, the Obligors acknowledge and agree that the existence of the Cash Sweep Collateral Account and Borrower’s obligation

to deposit funds therein at a time or at times after the Maturity Date shall not imply that the term of the Loan is or will be extended beyond the Maturity Date. Administrative Agent and Lenders have no obligation to, and may not, extend the term of the Loan beyond the Maturity Date. The Obligors will not take any action or decline to or forbear from taking any action in reliance on an extension or modification of the Maturity Date that may not occur.

23.Renewal; Lien Continuation; No Novation. Borrowers hereby reaffirm the Obligations and promise to pay and perform all Obligations in accordance with the Loan Documents (as expressly modified by this Agreement). The Liens are hereby ratified and confirmed as valid, subsisting and continuing to secure the Obligations. Nothing herein shall in any manner diminish, impair, waive or extinguish the Note, the Loan Documents, the Obligations or the Liens. The execution and delivery of this Agreement shall not constitute a novation of the debt evidenced and secured by the Loan Documents.

24.Default. A default under this Agreement shall constitute a default under the Note and other Loan Documents, subject to any applicable notice and cure or grace period expressly set forth in the Loan Documents. For avoidance of doubt, this Agreement is a Loan Document.

25.Miscellaneous. To the extent of any conflict between the Loan Documents and this Agreement, this Agreement shall control. Unless specifically modified hereby, all terms of the Loan Documents shall remain in full force and effect. This Agreement (a) shall bind and benefit the parties hereto and their respective heirs, beneficiaries, administrators, executors, receivers, trustees, successors and assigns; (b) shall be governed by the laws of the State of California and United States federal law; and (c) may be executed in several counterparts, and by the parties hereto on separate counterparts, and each counterpart, when executed and delivered, shall constitute an original agreement enforceable against all who signed it without production of or accounting for any other counterpart, and all separate counterparts shall constitute the same agreement.

26.Reaffirmation of Guaranty; Maturity.

(a)Guarantor, by signature below as such, for valuable consideration, the receipt and adequacy of which are hereby acknowledged, hereby consents to and joins in this Agreement and hereby declares to and agrees with Administrative Agent and Lenders that the Guaranty is and shall continue in full force and effect for the benefit of Administrative Agent and Lenders with respect to the Obligations, as amended by this Agreement, that there are no offsets, claims, counterclaims, cross-claims or defenses of Guarantor with respect to the Guaranty nor, to Guarantor’s knowledge, with respect to the Obligations, that the Guaranty is not released, diminished or impaired in any way by this Agreement or the transactions contemplated hereby, and that the Guaranty is hereby ratified and confirmed in all respects. Guarantor hereby reaffirms all of the representations and warranties set forth in the Guaranty, except to the extent such representations and warranties are matters which, by their nature, can no longer be true and correct as a result of the passage of time, and except for changes in circumstances arising from actions or events occurring after the date of the Guaranty that do not otherwise constitute a Default thereunder. Guarantor acknowledges that without this consent and reaffirmation, Administrative Agent and Lenders would not execute this Agreement or otherwise consent to its terms.

(b)Agent and Lenders hereby acknowledge and agree that any default that may have occurred under the Loan or under any Loan Document by virtue of the Loan not being repaid on the initial Maturity Date of November 3, 2023 and the extended Maturity Date of December 22, 2023 and hereby reaffirm Agent’s and Lenders’ prior waiver of such defaults. The foregoing default waiver is being done as an accommodation only on a one-time basis, and Administrative Agent and Lenders have no obligation to agree to any future or additional waivers of any defaults (and may, for example, exercise all rights and remedies under the Loan Documents if the Loan is not fully paid on or before the Maturity Date).

27.Electronic Signatures. This Agreement may be in the form of an Electronic Record and may be executed using Electronic Signatures (including, without limitation, facsimile and .pdf) and shall be considered an original, and shall have the same legal effect, validity and enforceability as a paper record. For purposes hereof, “Electronic Record” and “Electronic Signature” shall have the meanings assigned to them, respectively, by 15 USC §7006, as it may be amended from time to time. Borrowers and Guarantor hereby agree that as soon as reasonably possible, Borrowers and Guarantor will provide an original of this Agreement to Administrative Agent that will include the wet signatures of Borrowers and Guarantor next to any Electronic Signatures.

28.Limited Recourse Provision. Neither Administrative Agent nor any Lender shall have any recourse against, nor shall there be any personal liability to, the members, shareholders, partners, beneficial interest holders or any other entity or person in the ownership (directly or indirectly) of any Borrower with respect to the obligations of any Borrower and Guarantor under the Loan. For purposes of clarification, in no event shall the above language limit, reduce or otherwise affect any Borrower’s liability or obligations under the Loan Documents, Guarantor’s liability or obligations under the Guaranty, or Administrative Agent’s and each Lender’s right to exercise any rights or remedies against any collateral securing the Loan.

[Remainder of page intentionally left blank.]

IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have executed this Agreement as of the day and year first hereinabove written.

ADMINISTRATIVE AGENT:

BANK OF AMERICA, N.A.,

a national banking association,

as Administrative Agent

By: /s/ Paul Kim

Paul Kim

Senior Vice President

Signature Page – Fourth Loan Modification and Extension Agreement

BORROWERS:

KBSIII 60 SOUTH SIXTH STREET, LLC,

a Delaware limited liability company

By: KBSIII REIT ACQUISITION VII, LLC,

a Delaware limited liability company,

its sole member

By: KBS REIT PROPERTIES III, LLC,

a Delaware limited liability company,

its sole member

By: KBS LIMITED PARTNERSHIP III,

a Delaware limited partnership,

its sole member

By: KBS REAL ESTATE INVESTMENT TRUST III, INC.,

a Maryland corporation,

its general partner

By: /s/ Charles J. Schreiber, Jr.

Charles J. Schreiber, Jr.,

Chief Executive Officer

Signature Page – Fourth Loan Modification and Extension Agreement

KBSIII PRESTON COMMONS, LLC,

a Delaware limited liability company

By: KBSIII REIT ACQUISITION IX, LLC,

a Delaware limited liability company,

its sole member

By: KBS REIT PROPERTIES III, LLC,

a Delaware limited liability company,

its sole member

By: KBS LIMITED PARTNERSHIP III,

a Delaware limited partnership,

its sole member

By: KBS REAL ESTATE INVESTMENT TRUST III, INC.,

a Maryland corporation,

its general partner

By: /s/ Charles J. Schreiber, Jr.

Charles J. Schreiber, Jr.,

Chief Executive Officer

Signature Page – Fourth Loan Modification and Extension Agreement

KBSIII STERLING PLAZA, LLC,

a Delaware limited liability company

By: KBSIII REIT ACQUISITION VIII, LLC,

a Delaware limited liability company,

its sole member

By: KBS REIT PROPERTIES III, LLC,

a Delaware limited liability company,

its sole member

By: KBS LIMITED PARTNERSHIP III,

a Delaware limited partnership,

its sole member

By: KBS REAL ESTATE INVESTMENT TRUST III, INC.,

a Maryland corporation,

its general partner

By: /s/ Charles J. Schreiber, Jr.

Charles J. Schreiber, Jr.,

Chief Executive Officer

Signature Page – Fourth Loan Modification and Extension Agreement

KBSIII TOWERS AT EMERYVILLE, LLC,

a Delaware limited liability company

By: KBSIII REIT ACQUISITION XXI, LLC,

a Delaware limited liability company,

its sole member

By: KBS REIT PROPERTIES III, LLC,

a Delaware limited liability company,

its sole member

By: KBS LIMITED PARTNERSHIP III,

a Delaware limited partnership,

its sole member

By: KBS REAL ESTATE INVESTMENT TRUST III, INC.,

a Maryland corporation,

its general partner

By: /s/ Charles J. Schreiber, Jr.

Charles J. Schreiber, Jr.,

Chief Executive Officer

Signature Page – Fourth Loan Modification and Extension Agreement

KBSIII TEN ALMADEN, LLC,

a Delaware limited liability company

By: KBSIII REIT ACQUISITION XIX, LLC,

a Delaware limited liability company,

its sole member

By: KBS REIT PROPERTIES III, LLC,

a Delaware limited liability company,

its sole member

By: KBS LIMITED PARTNERSHIP III,

a Delaware limited partnership,

its sole member

By: KBS REAL ESTATE INVESTMENT TRUST III, INC.,

a Maryland corporation,

its general partner

By: /s/ Charles J. Schreiber, Jr.

Charles J. Schreiber, Jr.,

Chief Executive Officer

Signature Page – Fourth Loan Modification and Extension Agreement

KBSIII LEGACY TOWN CENTER, LLC,

a Delaware limited liability company

By: KBSIII REIT ACQUISITION III, LLC,

a Delaware limited liability company,

its sole member

By: KBS REIT PROPERTIES III, LLC,

a Delaware limited liability company,

its sole member

By: KBS LIMITED PARTNERSHIP III,

a Delaware limited partnership,

its sole member

By: KBS REAL ESTATE INVESTMENT TRUST III, INC.,

a Maryland corporation,

its general partner

By: /s/ Charles J. Schreiber, Jr.

Charles J. Schreiber, Jr.,

Chief Executive Officer

Signature Page – Fourth Loan Modification and Extension Agreement

GUARANTOR:

KBS REIT PROPERTIES III, LLC,

a Delaware limited liability company,

By: KBS LIMITED PARTNERSHIP III,

a Delaware limited partnership,

its sole member

By: KBS REAL ESTATE INVESTMENT TRUST III, INC.,

a Maryland corporation,

its general partner

By: /s/ Charles J. Schreiber, Jr.

Charles J. Schreiber, Jr.,

Chief Executive Officer

Signature Page – Fourth Loan Modification and Extension Agreement

LENDER(S):

BANK OF AMERICA, N.A.,

a national banking association

By: /s/ Paul Kim

Name: Paul Kim

Title: Senior Vice President

Signature Page – Fourth Loan Modification and Extension Agreement

WELLS FARGO BANK, NATIONAL ASSOCIATION

By: /s/ Joshua Brinkenhoff

Name: Joshua Brinkenhoff

Title: Senior Credit Resolution Specialist

Signature Page – Fourth Loan Modification and Extension Agreement

U.S. BANK, NATIONAL ASSOCIATION,

A national banking association

By: /s/ Chris Coburn

Name: Chris Coburn

Title: Senior Vice President

Signature Page – Fourth Loan Modification and Extension Agreement

CAPITAL ONE, NATIONAL ASSOCIATION,

a national banking association

By: /s/ Howard M. Guidry

Name: Howard M. Guidry

Title: Senior Vice President

Signature Page – Fourth Loan Modification and Extension Agreement

PNC BANK, NATIONAL ASSOCIATION,

a national banking association

By: /s/ Damon Smith

Name: Damon Smith

Title: Senior Vice President

Signature Page – Fourth Loan Modification and Extension Agreement

REGIONS BANK,

an Alabama banking corporation

By: /s/ Mark A Mushinski

Name: Mark A. Mushinski

Title: Senior Vice President

Signature Page – Fourth Loan Modification and Extension Agreement

ZIONS BANCORPORATION, N.A.,

DBA CALIFORNIA BANK & TRUST

By: /s/ Sean Reilly

Name: Sean Reilly

Title: Vice President

Signature Page – Fourth Loan Modification and Extension Agreement

EXHIBIT “Q”

Specified Leases

[See Attached]

Schedule Q
Unsigned Leases (as of 1.31.24)
Property	Tenant Name	Suite #	Lease<br>Start Date	Lease End Date	Sq Ft.	Months of<br>Free Rent	Starting Rent	NNN/FSG	Rent Bumps	TI Allowance<br>(psf)		Leasing<br>Commission
Legacy Town Center	Susser Bank	LTC II-620	5/1/2024	9/30/2030	4,879	5	$33.00	NNN	$0.75	$	75.00	$	96,470
Towers at Emeryville	Wiss Janey (early renewal)	1650/1625/1655	4/25/2025	10/31/2029	17,378	6	$52.80	FSG	3.00%	$	25.00	$	325,838
Legacy Town Center	Helen of Troy	400	7/1/2024	4/30/2035	13,771	10	$29.00	NNN	$0.75	$	64.72	$	427,520
Legacy Town Center	Beacon	608	7/1/2024	10/31/2031	3,296	4	$32.00	NNN	$0.75	$	80.00	$	74,160
Preston	SWCF	550	8/1/2024	10/31/2029	3,038	3	$31.00	NNN	3.00%	$	45.00	$	53,861
Sterling	Armstrong Law (Renewal)	835	6/1/2027	1/31/2035	3,054	0	$37.30	NNN	2.50%	$	30.00	$	95,942
Sterling	Armstrong Law (Expansion)	825	9/1/2024	1/31/2035	2,470	5	$35.50	NNN	2.50%	$	90.00	$	96,616

EXHIBIT “R”

Specified Capital Improvements

[See Attached]

Property	Type	Tenant Name	Suite #	Lease<br>Start Date	Lease End Date	Sq Ft.	Months of<br>Free Rent	Starting Rent	NNN/FSG	Rent Bumps		Total
Legacy Town Center	TI	Autodesk	600	1/1/2024	4/30/2029	3,159	4	$31.00	NNN	2.00%	85.17	$	269,054
Legacy Town Center	TI	Metroplex	675	2/1/2024	3/31/2029	4,944	2	$33.50	NNN	3.00%	50.00	$	247,200
Legacy Town Center	TI	Freeman Mathis & Gary	625	7/15/2023	11/30/2031	10,598	4	$32.00	NNN	0.75	9.15	$	97,016
Legacy Town Center	TI	GoodLeap	200	9/1/2023	10/31/2025	9,197	2	$28.00	NNN	1.00	10.00	$	91,970
Legacy Town Center	TI	Synopsys Inc.	500	5/1/2022	9/30/2027	6,773	5	$29.50	NNN	0.75	11.25	$	76,196
Legacy Town Center	TI	Buttry & Brown	150	10/1/2025	3/31/2026	4,097	—	$31.25	NNN	N/A	8.59	$	35,185
Legacy Town Center	TI	American Family Life Assurance Company	250	10/1/2020	4/30/2028	4,938	7	$29.00	NNN	0.75	6.54	$	32,305
Legacy Town Center	TI	Buttry & Brown	150	8/1/2023	9/30/2025	4,097	2	$30.50	NNN	0.75	7.63	$	31,265
Legacy Town Center	TI	SchlegelDunn	230	2/1/2024	6/30/2029	2,153	5	$30.50	NNN	0.75	9.50	$	20,454
Legacy Town Center	TI	Versity Investments	325/335	7/15/2021	8/31/2024	7,121	1	$29.50	NNN	3.00%	0.85	$	6,058
Preston	TI	SAO Preston, LLC	150	7/11/2023	2/28/2035	9,948	5	$43.50	NNN	2.00%	195.00	$	1,939,860
Preston	TI	Bodwell Vasek Wells Desimone LLP	682	8/1/2024	2/29/2032	4,196	7	$38.00	NNN	3.00%	64.80	$	271,899
Preston	TI	Stifel, Nicolaus & Company	650/670/680	4/1/2024	6/30/2029	6,840	3	$38.50	NNN	3.00%	31.62	$	216,276
Preston	TI	Apogee Medical Group	800	8/1/2023	2/28/2031	13,817	7	$35.50	NNN	0.75	12.21	$	168,743
Preston	TI	Tubular Synergy Group, LP	600	7/1/2024	8/31/2027	5,974	2	$37.00	NNN	3.00%	9.92	$	59,234
Preston	TI	Dr. Maureen Jamieson and DallasBack	160	9/1/2023	10/31/2028	908	2	$38.50	NNN	3.00%	41.94	$	38,077
Preston	TI	Center for Renewed Health	160	5/1/2024	8/31/2031	1,395	4	$38.00	NNN	3.00%	25.00	$	34,875
Preston	TI	The Pickens Company	800	5/1/2023	10/31/2028	3,775	6	$30.00	NNN	0.75	8.37	$	31,612
Preston	TI	KAD Group	430A	5/1/2024	5/31/2027	466	1	$31.00	NNN	3.00%	7.00	$	3,262
Preston	TI	Justin Moseley	150	3/1/2023	6/30/2030	2,022	4	$34.50	NNN	0.75	0.56	$	1,129
RBC	TI	Best & Flanagan	2700	6/1/2026	10/31/2031	28,250	5	$22.50	NNN	0.50	19.70	$	556,460
RBC	TI	Growth Operators Advisors	1150	6/1/2024	8/31/2029	5,336	3	$23.00	NNN	0.50	20.00	$	106,720
RBC	TI	Best & Flanagan Expansion #2670	2670	6/1/2024	10/31/2031	1,597	5	$21.50	NNN	1.00	50.00	$	79,850
RBC	TI	MJG International, LLC	3625	11/1/2022	3/31/2028	2,316	6	$21.00	NNN	0.50	5.16	$	11,940
RBC	TI	Hedquist Restaurant Company	295	8/1/2022	7/31/2027	1,257	—	$48.00	FSG	0.50	2.27	$	2,856
RBC	TI	Prudential Insurance Co	3710	6/1/2023	1/31/2031	4,516	7	$21.50	NNN	0.50	0.49	$	2,218
Sterling	TI	Sterling Family Partners	1850	3/1/2024	12/31/2034	7,554	10	$34.50	NNN	0.75	76.92	$	581,037
Sterling	TI	Maynard Nexsen PC	1200	11/1/2023	3/31/2031	7,023	5	$33.00	NNN	0.75	38.02	$	267,024
Sterling	TI	Bosley	1150	6/1/2024	10/31/2029	6,239	5	$34.50	NNN	3.00%	30.00	$	187,170
Sterling	TI	Collins Psychiatry PLLC	970	3/1/2024	8/31/2031	1,781	3	$34.00	NNN	3.00%	62.61	$	111,507
Sterling	TI	Sovereign Resources	1675	3/1/2024	5/31/2027	3,037	3	$34.50	NNN	3.00%	10.00	$	30,370
Sterling	TI	Southside Bank	1055	11/1/2023	12/31/2028	2,237	4	$35.00	NNN	3.00%	9.86	$	22,058
Sterling	TI	Blue Race Midstream, LLC – remaining TIA	1700	11/1/2019	6/30/2030	30,447	3	$29.00	NNN	0.75	0.11	$	3,404
Sterling	TI	Miller Phelps	1147	3/1/2023	5/31/2026	1,147	3	$33.00	NNN	0.75	2.50	$	2,868
Sterling	TI	Wedbush	1475	1/1/2024	2/28/2027	3,785	2	$35.00	NNN	2.50%	0.49	$	1,865
Ten Almaden	TI	Market Ready Floors 14–15	1400/1500	Spec Suite.	Spec Suite	42,610	Spec Suite	Spec Suit	Spec Suite	Spec Suite	1.45	$	61,609
Towers at Emeryville	TI	T – OnPoint Analytics	850/860	11/1/2023	2/28/2030	6,983	5	$52.80	FSG	3.00%	25.00	$	174,575
Towers at Emeryville	TI	T3 – SS 200	200	Spec Suite.	Spec Suite	14,062	Spec Suite	Spec Suite	Spec Suite	Spec Suite	9.92	$	139,523
Towers at Emeryville	TI	T2 – XOMA (310)	310	8/1/2023	12/31/2028	1,620	5	$55.80	FSG	3.00%	57.66	$	93,408
Towers at Emeryville	TI	T2 – LHB Pacific Law	950	4/1/2022	8/31/2027	4,986	5	$56.40	FSG	3.00%	13.36	$	66,591
Towers at Emeryville	TI	T3 – Principle Power	950	10/1/2023	2/28/2029	3,095	5	$55.80	FSG	3.00%	20.80	$	64,387
Towers at Emeryville	TI	T3 – Summit Bank	115	11/1/2023	3/31/2029	2,213	5	$55.80	FSG	3.00%	20.00	$	44,260
Towers at Emeryville	TI	T2 – SS 210/220	220	Spec Suite.	Spec Suite	10,273	Spec Suite	Spec Suite	Spec Suite	Spec Suite	2.18	$	22,357
Towers at Emeryville	TI	T3 – Devon Self Storage 1250	1250	5/20/2022	6/30/2025	836	—	$48.00	FSG	3.00%	6.98	$	5,834
Towers at Emeryville	TI	T3 – Alzheimer’s Association	520	11/6/2023	3/31/2029	3,355	4	$55.80	FSG	3.00%	1.42	$	4,764
Preston	LC	SAO Preston LLC	150	7/11/2023	2/28/2035	9,948	5	$43.50	NNN	2.00%		$	153,997
Preston	LC	KAD Group	430A	5/1/2024	5/31/2027	466	1	$31.00	NNN	3.00%		$	2,108
Preston	LC	Salvino Family Interests	425	11/13/2023	12/31/2025	276	1	$31.00	NNN	3.00%		$	1,227
RBC	LC	Growth Operators Advisors	1150	6/1/2024	8/31/2029	5,336	3	$23.00	NNN	0.50		$	50,684
RBC	LC	Pennington Capital	2560	5/1/2024	11/30/2025	2,360	1	$21.50	NNN	n/a		$	7,965
Sterling	LC	Washburn Commercial/Blue Racer 2nd LC	1700	11/1/2019	6/30/2030	5,758	3	$29.00	NNN	0.75		$	139,593
Sterling	LC	Bosley	1150	6/1/2024	10/31/2029	6,239	5	$34.50	NNN	3.00%		$	112,842
Sterling	LC	Washburn Commercial/Blue Racer 2nd LC	1600	4/1/2020	6/30/2030	5,758	3	$29.00	NNN	0.75		$	38,773
Sterling	LC	Sovereign Resources	1675	3/1/2024	5/31/2027	3,037	3	$34.50	NNN	3.00%		$	32,988
Sterling	LC	Washburn Commercial/Blue Racer 2nd LC	1615	11/1/2019	6/30/2030	5,758	3	$29.00	NNN	0.75		$	27,352
Towers at Emeryville	LC	Sutter Health	1000	1/1/2024	9/30/2031	34,766	8	$54.00	FSG	3.00%		$	86,915
Towers at Emeryville	LC	Principle Power	950	10/01/2023	10/1/2023	3,095	5	$55.80	FSG	3.00%		$	29,016
Preston	BI	Fire Panel Replacement										$	5,300
RBC	BI	Elevator Cab Renovation										$	73,537
RBC	BI	38th Flr Stair Infill										$	25,598
RBC	BI	Fitness Center										$	6,375
RBC	BI	1st Flr & Skyway Tenant Sign Panels										$	3,368
RBC	BI	Atrium Pendant Lights										$	3,064
RBC	BI	Exterior Entrance Lights										$	472
Sterling	BI	Bull Nose Cleanup Project										$	33,600

All values are in US Dollars.

Document

Exhibit 10.2

ADDITIONAL ADVANCE AND THIRD MODIFICATION AGREEMENT (Long Form)

This ADDITIONAL ADVANCE AND THIRD MODIFICATION AGREEMENT (Long Form) (this “Agreement”) is dated as of February 9, 2024, by and among (i) KBSIII 1550 WEST MCEWEN DRIVE, LLC (“McEwen Borrower”), KBSIII 155 NORTH 400 WEST, LLC (“400 W Borrower”), KBSIII 515 CONGRESS, LLC (“515 Congress Borrower”), and KBSIII 201 17TH STREET, LLC (“17th Street Borrower”), each a Delaware limited liability company (McEwen Borrower, 400 W Borrower, 515 Congress Borrower and 17th Street Borrower are referred to herein individually or collectively as the context may require, as “Borrower” or “Borrowers”), (ii) U.S. BANK NATIONAL ASSOCIATION, a national banking association, as agent (in such capacity, referred to herein as “Agent” or “Administrative Agent”), and (iii) each lender party hereto (individually, a “Lender” and collectively with any lender that becomes a party to the Loan Agreement (defined below) in the future, the “Lenders”).

RECITALS

A. Under that certain Term Loan Agreement dated as of October 17, 2018 (the “Original Loan Agreement”) by and among McEwen Borrower, 400 W Borrower, 515 Congress Borrower and KBSIII Domain Gateway, LLC, a Delaware limited liability company (“Domain Gateway Borrower”; Domain Gateway Borrower, together with McEwen Borrower, 400 W Borrower, 515 Congress Borrower are referred to herein collectively as “Original Borrowers”), Agent and the Lenders, as such Original Loan Agreement was amended by that (i) that certain (1) First Modification and Additional Advance Agreement (Long Form) dated as of January 23, 2020 by and among Borrower, Domain Gateway Borrower, Agent and the Lenders (the “First Modification (Long Form)”), (2) First Modification and Additional Advance Agreement (Short Form – McEwen) dated as of January 23, 2020 by and between Agent and McEwen Borrower, and recorded at Book 7876, Pages 282-293 in the Official Records of Williamson County, Tennessee on January 28, 2020 (the “First Modification (Short Form) (McEwen)”), (3) First Modification and Additional Advance Agreement (Short Form – Gateway Tech Project) dated as of January 23, 2020 by and between Agent and 400 W Borrower, and recorded as Instrument No. 13177045 in the Official Records of Salt Lake County, Utah on January 24, 2020 (the “First Modification (Short Form) (400 W), (4) First Modification and Additional Advance Agreement (Short Form – 515 Congress) dated as of January 23, 2020 by and between Agent and 515 Congress Borrower, and recorded as Instrument No. 2020011688 in the Official Records of Travis County, Texas on January 24, 2020 (the “First Modification (Short Form) (515 Congress)”) and (5) First Modification and Additional Advance Agreement (Short Form – Domain Gateway) dated as of January 23, 2020 by and between Agent and Domain Gateway Borrower, and recorded as Instrument No. 2020011684 in the Official Records of Travis County, Texas on January 24, 2020 (the “First Modification (Short Form) (Domain Gateway)”; the First Modification (Short Form) (Domain Gateway), together with the First Modification (Short Form) (McEwen), the First Modification (Short Form) (400 W) and the First Modification (Short Form) (515 Congress) are referred to herein collectively as the “First Modification (Short Form)”) and (ii) that certain (1) Second Modification Agreement (Long Form) dated as of February 28, 2023 by and among Borrower, Agent and the Lenders (the “Second Modification (Long Form)”), (2) Second Modification Agreement (Short Form –

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McEwen) dated as of February 28, 2023 by and between Agent and McEwen Borrower, and recorded at Book 9203, Pages 836-847 in the Official Records of Williamson County, Tennessee on March 1, 2023 (the “Second Modification (Short Form) (McEwen)”), (3) Second Modification Agreement (Short Form – Gateway Tech Project) dated as of February 28, 2023 by and between Agent and 400 W Borrower, and recorded as Instrument No. 14077002 in the Official Records of Salt Lake County, Utah on March 1, 2023 (the “Second Modification (Short Form) (400 W), (4) Second Modification Agreement (Short Form – 515 Congress) dated as of February 28, 2023 by and between Agent and 515 Congress Borrower, and recorded as Instrument No. 2023020596 in the Official Records of Travis County, Texas on March 1, 2023 (the “Second Modification (Short Form) (515 Congress - Senior)”), (5) Second Modification Agreement (Short Form – 515 Congress) dated as of February 28, 2023 by and between Agent and 515 Congress Borrower, and recorded as Instrument No. 2023020597 in the Official Records of Travis County, Texas on March 1, 2023 (the “Second Modification (Short Form) (515 Congress – Junior)”) and (6) Second Modification Agreement (Short Form – 201 17th Street Project) dated as of February 28, 2023 by and between Agent and 17th Street Borrower, and recorded as Instrument No. 2023-0068395 in the Official Records of Fulton County, Georgia on March 1, 2023 (the “Second Modification (Short Form) (17th Street)”; the Second Modification (Short Form) (17th Street), together with the Second Modification (Short Form) (McEwen), the Second Modification (Short Form) (400 W), the Second Modification (Short Form) (515 Congress - Senior) and the Second Modification (Short Form) (515 Congress - Junior) are referred to herein collectively as the “Second Modification (Short Form)”); the First Modification (Long Form), the First Modification (Short Form), the Second Modification (Long Form) and the Second Modification (Short Form) are referred to herein collectively as the “Prior Modification Documents”; the Original Loan Agreement, as amended by the Prior Modification Documents, as the same may be further amended or modified from time to time, is referred to herein as the “Loan Agreement”), Lenders agreed to make a term loan of up to $215,000,000.00 to Borrower consisting of a Revolving Portion and a Non-Revolving Portion (as such terms are defined in the Loan Agreement), which loan amount was subsequently increased to up to $325,000,000.00 (consisting of a Revolving Portion and a Non-Revolving Portion) (as the same may be further amended hereby, the “Loan”) pursuant to the First Modification (Long Form) and the First Modification Agreement (Short Form).

B. Borrower’s obligations under the Loan are evidenced by those certain:

(i) Promissory Note dated January 23, 2020, in the original principal amount of $65,000,000.00, made by Borrowers in favor of Citizens Bank, a national banking association (the “Citizens Bank Note”);

(ii) Amended and Restated Promissory Note dated January 23, 2020, in the original principal amount of $40,000,000.00, made by Borrowers in favor of Associated Bank, a National Association (the “Associated Bank Note”);

(iii) Amended and Restated Promissory Note dated January 23, 2020, in the original principal amount of $65,000,000.00, made by Borrowers in favor of Regions Bank (the “Regions Bank Note”);

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(iv) Amended and Restated Promissory Note dated January 23, 2020, in the original principal amount of $60,000,000.00, made by Borrowers in favor of City National Bank, a national banking association (the “City National Bank Note”); and

(v) Second Amended and Restated Promissory Note dated January 23, 2020, in the original principal amount of $95,000,000.00, made by Borrowers in favor of U.S. Bank National Association, a national banking association (the “US Bank Note” and collectively with the Citizens Bank Note, Associated Bank Note, Regions Bank Note and City National Bank Note, the “Notes”).

C. The Notes are secured by those certain:

(i) Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing (McEwen Project) recorded at Book 7494, Pages 1-36 in the Official Records of Williamson County, Tennessee on October 30, 2018 (as the same was amended pursuant to the Prior Modification Documents, as the same may be further amended or modified from time to time (including hereby), the “McEwen Deed of Trust”);

(ii) Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing (Gateway Tech Project) recorded as Instrument No. 12869683 in the Official Records of Salt Lake County, Utah on October 17, 2018 (as the same was amended pursuant to the Prior Modification Documents, as the same may be further amended or modified from time to time (including hereby), the “155 North 400 West Deed of Trust”);

(iii) Deed of Trust, Assignment of Leases and Rents, Security Agreement, Fixture Filing and Financing Statement (515 Congress Project) recorded as Instrument No. 2018164110 in the Official Records of Travis County, Texas on October 18, 2018 (as the same was amended pursuant to the Prior Modification Documents, as the same may be further amended or modified from time to time (including hereby), the “515 Congress Senior Deed of Trust”);

(iv) Junior Deed of Trust, Assignment of Leases and Rents, Security Agreement, Fixture Filing and Financing Statement (515 Congress Project) recorded as Instrument No. 2020011689 in the Official Records of Travis County, Texas on January 24, 2020 (as the same was amended pursuant to the Prior Modification Documents, as the same may be further amended or modified from time to time (including hereby), the “515 Congress Junior Deed of Trust”); and

(v) Deed to Secure Debt, Assignment of Leases and Rents, Security Agreement and Fixture Filing (201 17th Street Project) recorded as Instrument No 2020-0014900 in the Official Records of Fulton County, Georgia on January 27, 2020 (as the same was amended pursuant to the Prior Modification Documents, as the same may be further amended or modified from time to time (including hereby), the “17th Street Deed of Trust”; the 17th Street Deed of Trust, together with the McEwen Deed of Trust, the 155 North 400 West Deed of Trust, the 515 Congress Senior Deed of Trust, the 515 Congress Junior Deed of Trust, each individually may be referred to herein as a “Deed of Trust” and collectively as the “Deeds of Trust”).

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D. In connection with the Loan, the Original Borrowers executed in favor of Agent and the Lenders that certain Environmental Indemnification Agreement dated as of October 17, 2018 (the “Environmental Indemnity”), which 17th Street Borrower subsequently joined pursuant to that certain Assumption and Joinder Agreement dated as of January 23, 2020 and executed by 17th Street Borrower, the Original Borrowers, Agent and the Lenders.

E. In connection with the Loan, KBS REIT Properties III, LLC, a Delaware limited liability company (“Guarantor”), executed in favor of Agent: (i) that certain Payment Guaranty Agreement dated as of October 17, 2018 (the “Payment Guaranty”) and (ii) that certain Recourse Carve-Out Guaranty Agreement dated as of October 17, 2018 (the “Recourse Carve-Out Guaranty” and collectively with the Payment Guaranty, the “Guaranty”).

F. As of the date of this Agreement and prior to the effectiveness of this Agreement, the Aggregate Commitment is $249,145,000.00, the outstanding principal balance of the Loan is $249,145,000.00, the Revolving Portion is $124,572,500.00 (of which $124,572,500.00 of principal is outstanding (the “Revolving Debt”)), and the Non-Revolving Portion is $124,572,500.00 (of which $124,572,500.00 of principal is outstanding).

G. Borrowers, Agent and Lenders have agreed to, among other things, amend the Loan Documents to (A) provide for the automatic extension of the current Maturity Date from March 1, 2024 to April 15, 2024, (B) in the event that Borrowers cause the release of the 1550 West McEwen Drive Project (the “McEwen Project”) from the McEwen Deed of Trust in accordance with the terms of the Loan Agreement (as modified hereby) (the “McEwen Release”), (i) convert the Revolving Debt into debt under the Non-Revolving Portion (such that it may not be reborrowed once repaid) and eliminate the Revolving Portion (and the rights of Borrower to borrow Loan proceeds on a revolving basis thereunder) under the Loan Documents, (ii) eliminate the Accordion Option, (iii) provide for a holdback of a portion of the Loan (consisting of the Tenant Improvement Allocation and the General Use Allocation (as such terms are defined below) (collectively or individually, the “Holdback”)) to be disbursed subject to the satisfaction of certain terms and conditions, (iv) provide for an additional extension of the Maturity Date from April 15, 2024 to March 1, 2026 upon the satisfaction of certain terms and conditions set forth in Section 2(a) below, (v) provide for certain cash management mechanisms, and (vi) modify certain terms and provision related to the interest rate, and (C) amend certain other terms and conditions described herein, in each case subject to the terms and conditions of this Agreement.

H. Concurrently herewith, Borrower, Agent and/or the Lenders, as applicable, are executing the following documents:

(i) That certain Additional Advance and Third Modification Agreement (Short Form) (515 Congress Project - Senior) dated as of the date hereof by and between 515 Congress Borrower and Agent (for itself and the Lenders) to be recorded in the Official Records of Travis County, Texas (the “515 Congress Senior Short Form”);

(ii) That certain Additional Advance and Third Modification Agreement (Short Form) (515 Congress Project - Junior) dated as of the date hereof by and

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between 515 Congress Borrower and Agent (for itself and the Lenders) to be recorded in the Official Records of Travis County, Texas (the “515 Congress Junior Short Form”);

(iii) That certain Third Modification Agreement (Short Form) (17th Street Project) dated as of the date hereof by and between 17th Steet Borrower and Agent (for itself and the Lenders) to be recorded in the Official Records of Fulton County, Georgia (the “17th Street Short Form”);

(iv) That certain Additional Advance and Third Modification Agreement (Short Form) (McEwen Project) dated as of the date hereof by and between McEwen Borrower and Agent (for itself and the Lenders) to be recorded in the Register’s Office for Williamson County, Tennessee (the “McEwen Short Form”); and

(v) That certain Additional Advance and Third Modification Agreement (Short Form) (Gateway Tech Project) dated as of the date hereof by and between 400 W Borrower and Agent (for itself and the Lenders) to be recorded in the Official Records of Salt Lake County, Utah (the “155 North 400 West Short Form”; the 155 North 400 West Short Form, together with the 515 Congress Junior Short Form, the 515 Congress Senior Short Form, the 17th Street Short Form and the McEwen Short Form are referred to herein, individually and collectively as the context may require as, the “Short Form Agreement”).

I. Concurrently herewith, Guarantor is executing that certain Modification of Guaranty and Consent and Reaffirmation of Guarantor dated as of the date hereof and attached hereto (the “Consent”):

J. As used herein, the term “Loan Documents” shall mean the Loan Agreement, each of the Notes, the Guaranty, the Deeds of Trust, the Environmental Indemnity and the other “Loan Documents” as such term is defined in the Loan Agreement. This Agreement (including the Consent) and each Short Form Agreement also shall constitute Loan Documents. Capitalized terms used herein without definition have the meanings ascribed to them in the Loan Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants, agreements and conditions set forth below and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.Recitals; Representations; Reaffirmation of Loan. The foregoing recitals are true and correct and are incorporated herein by this reference. As of the Effective Date (as defined in Section 6 below), each Borrower hereby represents and warrants to Agent and the Lenders that, no Event of Default has occurred and is continuing and to such Borrower’s knowledge, no condition has occurred and is continuing that, with notice or the passage of time or both, would constitute an Event of Default, except for facts and circumstances of which Administrative Agent has actual knowledge as of the date of this Agreement. Each Borrower hereby reaffirms all of its obligations under the Loan Documents and relating to any Lender-Provided Swap Transactions, and acknowledges that it has no claims, offsets or defenses with respect to the payment of sums due under the Loan Agreement, the Notes or under any Lender-

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Provided Swap Transactions. Without limiting the foregoing, each Borrower reaffirms Agent’s right, following the occurrence and during the continuance of any Event of Default, to apply any and all payments made by a Borrower or otherwise received by Agent or the Lenders with respect to the Loan and any Lender-Provided Swap Transaction, including without limitation all proceeds received from the sale or liquidation of any collateral, to the obligations owing by a Borrower under the Loan Documents and Lender-Provided Swap Transactions in such order and manner deemed appropriate by Agent in Agent’s sole discretion, and each Borrower acknowledges that it shall have no right to direct Agent as to such application or designate the portion of the obligation to be satisfied.

2.Amendments to the Loan Documents. In addition to any other amendments provided for herein, the Loan Documents are hereby modified as follows (which modifications shall automatically become effective as of (but not before) the date of the satisfaction of the McEwen Release Conditions (defined below) (the “McEwen Release Effective Date”) without further action needed by any party (or shall be effective as of the Effective Date to the extent so expressly noted or if not conditioned upon the occurrence of the McEwen Release Effective Date, such as with respect to the extension of the Maturity Date to the Extended First Extended Maturity Date):

(a)Extension of Maturity Date. Borrower previously exercised its rights under Section 2.8 of the Loan Agreement (First Extension of Maturity Date) to extend the term of the Loan from the Initial Maturity Date to the First Extended Maturity Date (i.e., March 1, 2024). As a result, as of the date hereof but prior to effectiveness of this Agreement, the Maturity Date of the Loan is March 1, 2024 and Borrower has the option to extend the term of the Loan to the “Second Option Maturity Date” (i.e., March 1, 2025) subject to the satisfaction of the applicable extension conditions. Notwithstanding the foregoing, the First Extended Maturity Date (and thereby, the Maturity Date) is hereby extended to April 15, 2024 (the “Extended First Extended Maturity Date”). Notwithstanding the foregoing or any terms or conditions to the contrary in the Loan Documents, upon Borrower’s satisfaction of the McEwen Release Conditions, Borrower’s option to extend the term of the Loan to the “Second Option Maturity Date” is hereby cancelled and of no further force or effect. In lieu of the foregoing, Administrative Agent and Lenders have agreed that the Maturity Date shall be automatically extended to March 1, 2026 (the “Extended Maturity Date”) upon Administrative Agent’s determination that (1) no Default or Event of Default exists and (2) Borrower has satisfied the McEwen Release Conditions and consummated the sale of the McEwen Project to a third party purchaser pursuant to an arm’s-length transaction (provided, for the avoidance of doubt, if Borrower fails to satisfy the requirements of clauses (1) and (2) of this sentence, unless Administrative Agent and Lenders otherwise agree in writing, the term of the Loan shall not be extended to the Extended Maturity Date and the Maturity Date shall remain the Extended First Extended Maturity Date; provided, however, for the avoidance of doubt, if Borrower fails to cause the Maturity Date to be extended to the Extended Maturity Date in accordance with the terms of this paragraph, Borrower shall retain its rights to extend the term of the Loan to the “Second Option Maturity Date” (i.e., March 1, 2025) subject to its satisfaction of the terms and conditions of Section 2.9 (Second Extension of Maturity Date) of the Loan Agreement so long as such option is successfully exercised on or prior to the Extended First Extended Maturity Date. If Borrower successfully extends the Maturity Date to the Extended Maturity Date, the “Maturity Date” under the Loan Documents shall mean the Extended Maturity Date. Further,

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notwithstanding anything to the contrary set forth herein or in any other Loan Documents, Borrower shall have no further options to extend the Maturity Date except as specifically set forth herein. Following the sale of the McEwen Project, Administrative Agent agrees, at the written request of Borrower, to confirm in writing that the Maturity Date has been extended to the Extended Maturity Date.

(b)Conversion of the Facility to a Non-Revolving Facility; Remargin Requirement. As of the McEwen Release Effective Date, the facility will automatically convert to a non-revolving term facility, such that such Revolving Debt is combined with the Non-Revolving Debt, availability under the Revolving Portion is reduced to zero, and amounts borrowed under the Loan Documents may not be reborrowed once repaid. Further, from and after the McEwen Release Effective Date, Borrower shall have no further rights or options to borrow Loan proceeds under the Revolving Portion, and any and all of Borrower’s rights relating to the Revolving Portion are hereby removed under the Loan Documents. For the avoidance of doubt, from and after the McEwen Release Effective Date, Borrower shall have no right or option to borrow any proceeds which may remain available under the Loan following the conversion described in this paragraph except as otherwise set forth in Section 2(h) of this Agreement below.

(c)Applicable Margin. On the McEwen Release Effective Date, but effective as of March 1, 2024 (even if retroactive), the definition of Applicable Margin set forth in Section 1.1 of the Loan Agreement is amended and restated in its entirety as follows:

“Applicable Margin”: Means, with respect to Advances at the Term SOFR Based Rate or the Base Rate, if applicable, three hundred (300) basis points.

For purposes of clarification, until the date set forth above, interest shall continue to accrue under the Notes at the applicable interest rate(s) in effect under the existing Loan Documents.

(d)Quarterly Amortization Payments. From and after the McEwen Release Effective Date hereof, Borrower shall pay to Agent, for the account of the Lenders, in addition to monthly installments of interest at the Loan Rate in accordance with the Loan Documents (and without limiting Borrower’s obligations to make any other payments under the Loan Documents), quarterly payments of principal in the amount of $880,900.00 (each a “Quarterly Principal Payment”). Borrower shall make a Quarterly Principal Payment on each March 1st, June 1st, September 1st and December 1st while the Loan is outstanding, commencing with the first such Quarterly Principal Payment due on June 1, 2024, and continuing on each applicable date going forward. Any amounts repaid in connection with a Quarterly Principal Payment may not be reborrowed.

(e)Elimination of Accordion Option. From and after the McEwen Release Effective Date, Borrower shall have no further rights or options to increase the Aggregate Commitment, and any and all related rights to do so shall be eliminated from the Loan and the Loan Documents (under Section 10.29 or otherwise). In connection therewith, from and after the McEwen Release Effective Date, Section 10.29 of the Loan Agreement is hereby amended and restated and replaced with the following:

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Section 10.29 Reserved.

(f)Restrictions on Upper Tier Distributions. From and after the McEwen Release Effective Date, Borrower shall not permit KBS Real Estate Investment Trust III, Inc. (“KBS REIT III”) to make distributions, redemptions or dividends (collectively, “Distributions”) without Administrative Agent’s prior written consent, other than any amounts that KBS REIT III is required to distribute to its shareholders in order for KBS REIT III (or any subsidiaries of KBS REIT III classified as a REIT) to maintain its REIT status pursuant to applicable law. Failure to comply with the foregoing covenant shall result in an immediate Event of Default; provided, however, notwithstanding anything to the contrary set forth herein, in no event shall Borrower make any Distributions of proceeds from the McEwen Release (and any such Distribution shall constitute an Event of Default hereunder).

(g)McEwen Project Release.

(i)Elimination of General Project Release Option. Effective as of the McEwen Release Effective Date, Section 10.31 (Release of Projects) of the Loan Agreement is hereby amended and restated in its entirety as follows:

Section 10.31 Reserved.

(ii) McEwen Project Release Conditions. Effective as of the McEwen Release Effective Date (so that the existing provisions set forth in the Loan Agreement as of the date hereof (i.e., prior to the effectiveness of this Agreement) will remain in effect if the McEwen Release Conditions are not satisfied), except as expressly set forth below, and notwithstanding anything to the contrary in the Loan Documents, Administrative Agent shall have no obligation to release any of the Projects (or portions thereof) until the Loan and all other Obligations have been paid in full and all obligations of Administrative Agent and Lenders under this Agreement and the other Loan Documents have terminated. Borrower shall only be entitled to obtain the release of the Project encumbered by the McEwen Deed of Trust (the “McEwen Project”) from the lien of the Loan Documents, provided that all of the following conditions are satisfied (the “McEwen Release Conditions”):

(a) Concurrently with the closing of the sale of the McEwen Project, Borrower shall have paid (or caused to be paid) to Administrative Agent an amount equal to the greater of (x) $45,000,000.00 or (y) the Net Sales Proceeds (the “Required McEwen Payment”). As used herein, “Net Sales Proceeds” means the gross sales price generated by the sale of the McEwen Project to a third-party purchaser (the “Buyer”), less an amount equal to all prorated amounts credited towards the “Purchase Price” as set forth on a settlement statement prepared by the escrow company handling the closing and approved by Agent (which approval shall not be withheld or delayed unreasonably) (“Settlement Statement”), and less the actual commissions and closing costs paid to third parties (i.e., not affiliates of any Borrower or Guarantor) as set forth on the Settlement Statement, and less the Extension Fee (to the extent the same has actually been paid to Administrative Agent). Additionally, Borrowers shall be required to deposit into the Cash Management Account any payments relating to the McEwen Project

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received in connection with the final adjustment or final prorations under the applicable purchase and sale agreement; provided, however, to the extent Borrower has actually deposited Net Sales Proceeds into the Cash Management Account, Borrower shall have the right to, thereafter, make withdrawals up to the amount of any such deposited Net Sales Proceeds (and not in excess of the same) from the Cash Management Account to the extent necessary to pay any additional post-closing prorations (if any) then due and payable under such purchase and sale agreement. Additionally, the Required McEwen Payment will be applied in the manner set forth in Section 2(h) below.

(b) Borrower shall have submitted to Administrative Agent a written request for such release at least twenty (20) days prior to the proposed release date, together with (x) copies of any documents which Borrower requests Administrative Agent to execute in connection with such proposed release and (y) copies of any documents reasonably required by Agent with respect to the disposition of the McEwen Project (including, without limitation, the applicable purchase and sale agreement and any modifications or extensions thereof). Borrower and Agent hereby acknowledge that, as of the date hereof, Borrower has submitted the above described release request to Agent within the required time frame and the conditions in this clause (b) have been satisfied.

(c) Such release shall apply to the entirety of the McEwen Project (i.e., Borrower shall not be entitled to request a release of a portion of the McEwen Project).

(d) No Event of Default shall have occurred and be continuing, and no event shall have occurred and be continuing that with the giving of notice and/or the lapse of time would constitute an Event of Default.

(e) In addition to the amount set forth in subsection (i) above, Borrower shall have paid to Administrative Agent, for application to the principal balance of the Loan, an amount equal to the amount, if any, by which the outstanding principal balance of the Loan exceeds the then current Maximum Support Threshold. In calculating the Maximum Support Threshold, the Maximum Supported Amount shall be determined based only on the Projects remaining after the proposed release (i.e., without regard to the McEwen Project).

(f) Borrower shall have delivered to Administrative Agent (1) a pro forma covenant compliance certificate demonstrating the continuing compliance with the Maximum Supported Amount and financial covenants on a pro forma basis based on the most recently available financial statements adjusted to reflect the proposed release of the McEwen Project and (2) such certifications from the Guarantor that, after giving effect to the proposed release, Guarantor shall be in compliance with its financial covenants under the Guaranty (as amended hereby).

(g) Borrower shall provide to Administrative Agent at Borrower’s sole cost and expense such title insurance endorsements to the Title Policies for the remaining Deeds of Trust as Administrative Agent shall reasonably request (including, without limitation, CLTA Form 111 Endorsements (or its equivalent), to the extent available and

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in form and substance reasonably satisfactory to Administrative Agent, which shall insure that after such release, each remaining Security Instrument shall continue as a valid first position lien against the Project encumbered thereby, subject only to such new title exceptions as Administrative Agent shall approve in writing.

(h) Borrower shall pay, or caused to be paid, to Administrative Agent all reasonable costs and expenses incurred in connection with such release, including without limitation all breakage fees, recording fees, transfer and other taxes, trustee’s fees, reasonable attorneys’ fees, appraisal fees, escrow fees, and fees for title insurance and similar charges.

(i) Following the release of the McEwen Project the McEwen Project shall no longer be included in the definition of “Project” except with respect to any indemnities and other provisions of the Loan Documents that expressly survive repayment of the Loan. For the avoidance of doubt, notwithstanding any other term or condition to the contrary set forth in any of the Loan Documents, Borrower shall not be entitled to a release of any Project or Borrower other than the McEwen Project and the McEwen Borrower in accordance with the terms hereof (unless agreed to by Agent and the Lenders in Agent’s and the Lenders’ sole and absolute discretion).

(h)Conditional Additional Advance Following McEwen Release. If and when received, the entirety of the Required McEwen Payment shall be applied to the outstanding principal amount of the Loan and the provisions of this Section will automatically be implemented without further authorization or consent of the parties. Concurrently therewith, Administrative Agent shall establish each Holdback, consisting of (i) a holdback for the payment of, or reimbursement of the Borrower’s payment of, Tenant Improvements, Leasing Commissions and Capital Expenditures at the Improvements equal to $10,000,000.00 (the “Tenant Improvement Allocation”) and (ii) a holdback for the payment of, or reimbursement of the Borrower’s payment of, tenant improvements, leasing commissions and capital expenditures for real property and related improvements wholly-owned (directly or indirectly) by Guarantor (each a “Guarantor Portfolio Property” and collectively the “Guarantor Portfolio Properties”) in a to-be-determined amount equal to the lesser of (a) $7,000,000.00 and (b) an amount equal to the Required McEwen Payment minus $40,000,000.00 (the “General Use Allocation”); provided, in any event, Borrower may only request and apply disbursements of the General Use Allocation for tenant improvements, leasing commissions and capital expenditures at Guarantor Portfolio Properties to the extent such costs and expenses were incurred (or invoiced to the extent timely billed) after payment of the Required McEwen Payment in accordance with the terms hereof). In connection with the foregoing, Lenders agree to provide Borrowers, and Borrowers shall be deemed to have accepted (if and when disbursed), an additional advance in the principal sum equal to the sum of the Tenant Improvement Allocation and the General Use Allocation (such amount, as and when disbursed, if at all, shall be hereinafter referred to as the “Additional Advance”). The Additional Advance, together with the then existing principal amount of the Loan (collectively, the “Increased Aggregate Commitment”), shall be evidenced by the Notes, and shall be secured by the Deeds of Trust (subject to the limitations on the maximum amount of principal indebtedness secured by each Deed of Trust, if any, set forth therein) and the other applicable Loan Documents (except those Loan Documents specifically excluded or otherwise stated to be unsecured). The Loan shall be

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deemed consolidated with the Additional Advance to form a single indebtedness in the principal amount of the Increased Aggregate Commitment. At no time during the term of the Loan shall the outstanding amounts owing under the Loan exceed the applicable Aggregate Commitment. If applicable, the Additional Advance shall be disbursed in accordance with the terms and conditions for disbursements set forth in this Agreement; provided if the McEwen Release Conditions are not satisfied, and the Required McEwen Payment is not received by Administrative Agent, the Holdbacks will not be created and there will be no Tenant Improvement Allocation and General Use Allocation, and Lenders will have no further obligation to fund any Advances in connection with the Holdbacks.

(i)Holdbacks (Tenant Improvement Allocation and the General Use Allocation. For the purposes of the below provisions, the following capitalized terms shall be defined as set forth in this paragraph (and shall apply to the Tenant Improvement Allocation only): (1) “Capital Expenditures” means replacements and/or alterations to any Project, the expenditures for which are required to be capitalized according to GAAP and set forth in the most recent Operating Budget and Business Plan for the applicable Project or otherwise approved by Administrative Agent in its reasonable discretion; (2) “Leasing Commissions” means market rate brokerage commissions paid by Borrower pursuant to an Approved Lease (as defined below); provided, however, that, unless otherwise approved in writing by Administrative Agent in its discretion, the amount of the Loan advanced by the Lenders for such Leasing Commissions may not exceed the amounts set forth in Schedule 1 attached hereto; (3) “Tenant Improvements” means all bona fide costs incurred for construction and related work to tenant spaces within the Improvements required by Approved Leases, including costs for demolition, permitting, design, construction, moving and related expenses; provided, however, that, unless otherwise approved in writing by Administrative Agent in its reasonable discretion, the amount of the Loan advanced by the Lenders for such tenant improvements may not exceed the amounts set forth in Schedule 1 attached hereto; and (4) “Approved Lease”: Means (x) any lease entered into by Borrower prior to the Effective Date with respect to a Project, to the extent such lease was entered into in accordance with the terms and conditions of Section 6.29 of the Loan Agreement at the time such lease was entered into and disclosed to Agent in writing and (y) any other lease entered into by Borrower with respect to a Project subject to and in accordance with the terms of Section 6.29 of the Loan Agreement or otherwise approved by Administrative Agent in writing and, in any event, satisfying the thresholds and standards set forth in the Leasing Criteria Schedule attached hereto as Schedule 1 (the “Leasing Criteria Schedule”).

Additionally, the definition of “Approved Lease” set forth in the Loan Agreement shall be amended and restated in its entirety with the definition of “Approved Lease” set forth in the foregoing paragraph.

Further, for purposes of clarification, if the McEwen Release Conditions are not satisfied, and the Required McEwen Payment is not received by Administrative Agent, the Holdbacks will not be created and there will be no Tenant Improvement Allocation and General Use Allocation, and Lenders will have no further obligation to fund any Advances in connection with the Holdbacks. Additionally, if Administrative Agent determines in its reasonable discretion that any modifications or amendments to the Loan Documents (including the Deeds of Trust or otherwise) are necessary or advisable to address the foregoing (and any other revisions conditioned upon the occurrence of the McEwen Release Effective Date), Borrowers and

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Guarantor hereby covenant and agree to cooperate with Administrative Agent and Lenders to timely effectuate any such modifications or amendments and to take appropriate actions with respect thereto.

(i)Conditions Precedent to Disbursements from the Tenant Improvement Allocation. In addition to all of the conditions and requirements set forth in the Loan Agreement and in any of the other Loan Documents (including, without limitation, Section 3.4 of the Loan Agreement), with respect to each Advance of Loan proceeds from the Tenant Improvement Allocation, such Advances shall be subject to satisfaction of the additional conditions set forth below (or deemed satisfaction or waiver as provided in Article II of the Loan Agreement):

(a) Borrower shall submit a request for disbursement no less than ten (10) Business Days prior to the proposed funding date. Upon receipt of a request for a disbursement, Administrative Agent will send a copy thereof to each other Lender and will otherwise notify each Lender of the proposed disbursement and the proposed date of funding. Each Lender will make available to Administrative Agent (or the funding bank designated by Administrative Agent) the amount of such Lender's Pro Rata Share of such disbursement by wire transfer in immediately available funds by 11:00 a.m. Pacific time on the proposed date of funding. Additionally, all funds advanced under this Agreement to date from the Tenant Improvement Allocation have been utilized exclusively to pay (or to reimburse Borrower for payment of) Tenant Improvements, Leasing Commissions or Capital Expenditures (collectively, “Leasing Costs”) incurred for or in connection with the Improvements, and no part of the Loan proceeds have been paid for labor, materials, equipment, work, services or supplies incorporated into or employed in connection with any project other than the Project or any other Lease other than for Approved Leases.

(b) Each disbursement for Leasing Costs may be made in reimbursement for expenses paid by Borrower, or, at Borrower’s option (unless an uncured Event of Default then exists for which Administrative Agent has sent notice to Borrower, in which case it shall be at Administrative Agent’s election to the extent Lenders have agreed to fund notwithstanding such Event of Default), to pay for said expenses directly and, in either case, Borrower shall provide invoices or other evidence reasonably satisfactory to Administrative Agent of the applicable Leasing Costs to be reimbursed or paid, as applicable. If an uncured Event of Default then exists for which Administrative Agent has sent notice to Borrower, Administrative Agent, at its option and without further direction from Borrower, may (but is under no obligation to) disburse any portion of the Loan funds to any Person to whom payment is due or through an escrow satisfactory to Administrative Agent (and for purposes of clarification, as between Administrative Agent and Lenders, such disbursements shall remain subject to the applicable provisions of the Loan Agreement). All funds allocated to the Tenant Improvement Allocation shall solely be available in connection with Leasing Costs, and Administrative Agent shall not be obligated to disburse funds in excess of (x) the amounts allocated under the applicable Approved Leases with respect to the Tenant Improvements and Leasing Commissions, as applicable and (y) the applicable Operating Budget and Business Plan, with respect to Capital Expenditures. Administrative Agent hereby acknowledges that it has received and approved the 2024 Operating Budget and Business Plan.

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(c) Borrower shall not use any portion of any advance from the Tenant Improvement Allocation for payment or reimbursement of any other cost except as specifically set forth in a request for advance approved by Administrative Agent in writing.

(d) Borrower has obtained all permits and licenses which are required under applicable law for the construction of such Tenant Improvements and Capital Expenditures, as applicable.

(e) As to any completed Tenant Improvements and Capital Expenditures for which advances from the Tenant Improvement Allocation have been made under this Agreement, if requested by Administrative Agent in writing and if reasonably determined to be necessary by Administrative Agent, Borrower shall have furnished Administrative Agent with (A) unconditional lien waivers or releases from all contractors and materialmen employed in furnishing labor or materials in connection with the construction of such Tenant Improvements, and (B) a true and correct copy of the final and unconditional certificate of occupancy for the space (or such other evidence reasonable acceptable to Administrative Agent that the space can be occupied under applicable law), issued without restriction by the appropriate Governmental Authority having jurisdiction over the Project.

(f) With respect to the final disbursement for the space under any Approved Lease being improved, the tenant under the lease shall have accepted the leased premises and be paying rent under such Approved Lease (or is under a free rent period thereunder), without offset, credit or defense, and, in any event, no event of default (beyond any applicable notice and cure periods) shall be ongoing under such Approved Lease.

(g) Disbursements of Loan proceeds from the Tenant Improvements Allocation that are allocated to Leasing Commissions shall be made to pay, or reimburse Borrower for payment of, Leasing Commissions relating to applicable Approved Leases in accordance with written leasing commission agreements in effect as of the date of this Agreement or otherwise, on market terms and such commission is due and payable under the applicable leasing commission agreement.

(h) Taking into account the proposed Advance, Borrower will be in pro forma compliance with the financial covenants hereunder (including Maximum Supported Amount).

For avoidance of doubt, the amount of the Tenant Improvement Allocation shall be reduced, in each case, on a dollar-for-dollar basis, as Borrower continues to draw on the same, in connection with any Tenant Improvements, Leasing Commissions or Capital Expenditures and such draws shall reduce the remaining available Tenant Improvement Allocation.

(ii)Conditions Precedent to Disbursements from the General Use Allocation. In addition to all of the conditions and requirements set forth in the Loan Agreement and in any of the other Loan Documents (including, without limitation, Section 3.4 thereof), with respect to each Advance of Loan proceeds from the General Use Allocation, such Advances shall be subject to satisfaction of the additional

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conditions set forth below (or deemed satisfaction or waiver as provided in Article II of the Loan Agreement):

(a) Borrower shall submit a request for disbursement no less than ten (10) Business Days prior to the proposed funding date. Upon receipt of a request for a disbursement, Administrative Agent will send a copy thereof to each other Lender and will otherwise notify each Lender of the proposed disbursement and the proposed date of funding. Each Lender will make available to Administrative Agent (or the funding bank designated by Administrative Agent) the amount of such Lender's Pro Rata Share of such disbursement by wire transfer in immediately available funds by 11:00 a.m. Pacific time on the proposed date of funding. All funds advanced under this Agreement to date from the General Use Allocation have been utilized exclusively to pay (or to reimburse Guarantor or its wholly-owned subsidiary for payment of) tenant improvements, leasing commissions or capital expenditures (collectively, “Guarantor Property Costs”) incurred for or in connection with the Guarantor Portfolio Properties (or any of them), and no part of the Loan proceeds have been paid for labor, materials, equipment, work, services or supplies incorporated into or employed in connection with any project other than Guarantor Portfolio Properties.

(b) Each disbursement for Guarantor Property Costs may be made in reimbursement for expenses paid by Guarantor or its wholly-owned subsidiary (directly or indirectly), or, at Guarantor’s option (unless an uncured Event of Default then exists for which Administrative Agent has sent notice to Borrower or Guarantor, in which case it shall be at Administrative Agent’s election to the extent Lenders have agreed to fund notwithstanding such Event of Default), to pay for said expenses directly and, in either case, Borrower or Guarantor shall provide invoices or other evidence reasonably satisfactory to Administrative Agent of the applicable Leasing Costs to be reimbursed or paid, as applicable. All funds allocated to the General Use Allocation shall solely be available in connection with Guarantor Property Costs, and, Administrative Agent shall not be obligated to disburse funds in excess of the applicable amounts allocated under the applicable leases in effect at the Guarantor Portfolio Properties with respect to the tenant improvements and leasing commissions, as applicable or in excess of amounts that are permitted (or otherwise approved by the applicable lender) under any financing documents applicable to the Guarantor Portfolio Property (and the draw request for such Guarantor Property Costs shall contain a certification confirming same).

(c) Borrower shall not, and shall not permit Guarantor to, use any portion of any advance from the General Use Allocation for payment or reimbursement of any cost not permitted under the terms of this Agreement except as specifically set forth in a request for advance approved by Administrative Agent and Lenders in writing (and, in any event, advances from the General Use Allocation shall not be used (x) to make any amortization payments due under this Loan or (y) to repay the debts of Guarantor or its Affiliates (except to the extent the same are applied to the repayment of the Loan in accordance with the Loan Documents).

(d) Guarantor or the applicable property owner of the applicable Guarantor Portfolio Property has obtained all permits and licenses which are required under applicable law for the construction of the applicable tenant improvements and capital expenditures, as applicable.

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(e) Guarantor shall provide to Agent (x) such information and documentation as to the Guarantor Property Costs Guarantor intends to fund with any applicable requested advance from the General Use Allocation and (y) such evidence and documentation as to costs of such Guarantor Property Costs, in either case, as Agent may, in each case, reasonably require.

(f) Taking into account the proposed Advance, Borrower will be in pro forma compliance with the financial covenants hereunder (including the Maximum Supported Amount).

For avoidance of doubt, the amount of the remaining General Use Allocation shall be reduced, in each case, on a dollar-for-dollar basis, as Borrower continues to draw on the same, in connection with applicable uses permitted hereunder and such draws shall reduce the remaining General Use Allocation.

(j)Cash Management Account. The following provisions will automatically take effect as of the McEwen Release Effective Date (but shall have no force and effect unless and until the McEwen Release Effective Date occurs):

(i)Cash Management Provisions. Terms used and not otherwise defined in the Loan Documents will have the meanings set forth at the end of this Section.

(a) Within twenty (20) days following the McEwen Release Effective Date and thereafter (and in all events prior to the date required for the first deposit), during the term of the Loan, Borrower must establish and maintain one segregated interest-bearing account (with the interest to accrue for the benefit of Borrower unless an Event of Default exists) (the “Cash Management Account”) to be held by Administrative Agent for the benefit of Lenders, which Cash Management Account will be under the sole dominion and control of Administrative Agent. The Cash Management Account must be entitled using the following paradigm: “KBSIII 515 CONGRESS, LLC, as Borrower and U.S. Bank National Association, as Administrative Agent, pursuant to KBSIII 515 CONGRESS, LLC - Cash Management Account.” Borrower may not in any way alter or modify the Cash Management Account. Administrative Agent will have the sole right to make withdrawals from the Cash Management Account, and all costs and expenses for establishing and maintaining the Cash Management Account will be paid by Borrower. All monies now or hereafter deposited into the Cash Management Account will be deemed additional security for the Obligations, and except as expressly provided in this Section, Administrative Agent is not obligated to make any funds in the Cash Management Account available to Borrower or for the Projects. Once established the Cash Management Account will remain in effect until the Loan has been repaid in full.

(b) The insufficiency of funds on deposit in the Cash Management Account will not relieve Borrower from the obligation to make any payments, as and when due pursuant to this Agreement and the other Loan Documents, and such obligations will be separate and independent, and not conditioned on any event or circumstance whatsoever. All funds on deposit in the Cash Management Account following the occurrence and during the

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continuance of an Event of Default may be applied by Administrative Agent in such order and priority as Administrative Agent determines.

(c) Until the Loan is repaid in full (and the Lenders have no further obligations to advance any Loan proceeds), Borrower shall deposit all Excess Cash Flow generated each month into the Cash Management Account on or prior to the twentieth (20th) day of the following month; provided Borrower shall commence making such deposits on the first full calendar month that follows the McEwen Release Effective Date (i.e., the first such deposit shall occur on or prior to April 20, 2024) and shall continue making such deposits each month thereafter. Additionally, Borrower must, concurrently with Borrower’s deposit of Excess Cash Flow, deliver to Administrative Agent the Excess Cash Flow Certificate related to such Excess Cash Flow deposit.

(d) So long as no Default or Event of Default exists for which Administrative Agent has sent notice to Borrower and provided Borrower has expended all cash on hand, any Borrower may request disbursements from the Cash Management Account for the payment of the debt service payments (including, without limitation, the amortization payments referenced in Section 2(d) above) and other payments then due and payable under the Loan as well as Tenant Improvements, Leasing Commissions and Capital Expenditures, any extension fees, and any operating shortfalls relating to any of the Projects, provided that any such disbursement from the Cash Management Account for Tenant Improvements, Leasing Commissions and/or Capital Expenditures shall be subject to the same conditions as an Advance of Loan proceeds as set forth in Section 3.4 of the Loan Agreement as if such disbursement were an Advance of Loan proceeds (other than Section 3.4(a)(ii) which shall not apply; provided, however, that in connection with any request for disbursement from the Cash Management Account, Agent shall have the right to request updated title reports (at Borrower’s expense) for the Projects and, to the extent any such title report reveals any liens or other matters, which in Agent's good faith reasonable judgment jeopardize or otherwise impair its security interest (and/or the first priority thereof) in any Project, Agent shall have no further obligation to make disbursement from the Cash Management Account until such liens or other matters have been waived by Agent or satisfied in a manner reasonably acceptable to Agent, and following Agent’s written demand, Borrower shall promptly cause any such liens or other matters to be satisfied or released, of record, or bonded around and removed from the Project encumbered thereby or affirmatively insured over by the Title Company to Agent's reasonable satisfaction (or addressed the same in a manner that is consistent with the terms of the Loan Documents), or shall make other arrangements with respect to the discharge thereof and the releases thereof from the Project encumbered thereby as are acceptable to Agent, in its reasonable discretion). Notwithstanding anything to the contrary contained herein, funds on deposit in the Cash Management Account may, at Borrower’s option, be disbursed prior to available Loan proceeds for the payment of Tenant Improvements, Leasing Commissions and/or Capital Expenditures.

(e) So long as no Default or Event of Default exists for which Administrative Agent has sent notice to Borrower, Borrower may request disbursements from the Cash Management Account for the payment of REIT Level Expenses, provided that any such disbursement from the Cash Management Account shall be subject to the following conditions precedent: (i) all outstanding costs and expenses related to Tenant Improvements, Leasing Commissions and/or Capital Expenditures (for which Borrower has received invoices) then due

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and payable shall have been paid in full (or there shall exist no such costs or expenses); and (ii) Borrower shall have complied with the requirements set forth in Section 3.4 of the Loan Agreement as if such disbursement were an Advance of Loan proceeds (other than Section 3.4(a)(ii) which shall not apply).

(f) Borrower shall submit a request for disbursement from the Cash Management Account no less than ten (10) Business Days prior to the proposed disbursement date. Upon receipt of a request for a disbursement, Administrative Agent will send a copy thereof to each other Lender and will otherwise notify each Lender of the proposed disbursement and the proposed date of funding. Borrower may request a disbursement of funds on deposit in the Cash Management Account no more than twice per month. Notwithstanding any term or condition to the contrary set forth herein, Administrative Agent shall have no obligation to disburse proceeds from the Cash Management Account for REIT Level Expenses in excess of the CMA Account Disbursement Limit (as defined below).

For the purposes of the above provisions, the following terms will have the ascribed meanings:

“Excess Cash Flow”: Means, for each calendar month, the amount by which (a) the Gross Revenue received by each Borrower during such month exceeds (b) the sum of (i) debt service payments and reserve deposits actually made by such Borrower pursuant to the terms of the Loan Documents, (ii) Operating Expenses (Cash Management) incurred with respect to the Projects in accordance with historical managerial practices provided such management fee (other than the management fees under the existing Property Management Agreements) may not exceed (x) provided, no Event of Default has occurred and is continuing, the actual fees under the applicable Property Management Agreements and (y) if an Event of Default has occurred and is continuing for which Administrative Agent has sent notice to Borrower, the lesser of the actual fees under the applicable Property Management Agreements or market rate fees as reasonably determined by Administrative Agent, and (iii) provided no Event of Default has occurred and is continuing for which Administrative Agent has sent notice to Borrower, REIT Level Expenses allocated to the Projects (not to exceed (x) the Monthly CMA Allocation per month and (y) in any event, $3,250,000 in any 12-month period) (the “CMA Account Disbursement Limit”)); provided, for purposes of clarification, if an Event of Default has occurred and is continuing for which Administrative Agent has sent notice to Borrower, Borrower is not permitted to pay REIT Level Expenses without the prior written consent of Agent and Required Lenders in their sole discretion and Borrower shall not be permitted to deduct REIT Level Expenses from its Gross Revenue in calculating Excess Cash Flow. Operating Expenses (Cash Management) excludes replacement reserves, tenant improvements, leasing commissions and non-recurring capital expenditures. For the avoidance of doubt, Excess Cash Flow shall be calculated with respect to each Project individually and aggregated (so that Excess Cash Flow attributable to each Project is identifiable on the Excess Cash Flow Certificate and/or information provided in connection therewith). Additionally, notwithstanding the foregoing or anything to the contrary set forth herein, for purposes of identifying Excess Cash Flow, except as expressly set forth above, Excess Cash Flow shall not be reduced by costs and expenses that are not directly related to the Projects or the operation thereof or any distributions or fees paid to any direct or indirect interest holders in, or managers of, any of the Borrowers or Guarantor or KBS REIT III (regardless of whether such fees are required pursuant to the organizational documents of such entities or otherwise).

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“Excess Cash Flow Certificate”: Means a certification and calculation of Excess Cash Flow for the preceding calendar month reasonably acceptable to Administrative Agent in all respects (and, in any event, presenting certifications and calculations with respect to each Project, individually), including a statement of Gross Revenues, Operating Expenses (Cash Management), required debt service and amortization payments with respect to the Loan and other payments required under the Loan Documents, together with such other supporting documentation therefor as reasonably requested by Administrative Agent.

“Gross Revenue”: Means, the actual cash revenue received for the applicable period from the Projects.

“Monthly CMA Allocation”: Means $270,833.33 plus any Monthly CMA Allocation Rollover then available.

“Monthly CMA Allocation Rollover”: Means, the aggregate amount of Monthly CMA Allocation Savings less any prior disbursements of Monthly CMA Allocation Savings (for purposes of illustration, if there existed $60,000 in Monthly CMA Allocation Savings in the aggregate, and Borrower elected to receive a Monthly CMA Allocation in the amount of $280,833.33 in a given month, in the following month, the Monthly CMA Allocation Rollover would be $50,000.00 in the aggregate).

“Monthly CMA Allocation Savings”: Means, for any given month, the positive difference (if any) in subtracting the actual amount disbursed from the Cash Management Account during such month from $270,833.33.

“Operating Expenses (Cash Management)”: Shall mean any and all costs and expenses incurred in connection with the Projects then remaining encumbered by the Security Instruments during the applicable time period in question, including without limitation (a) taxes and assessments imposed upon the Projects payable by Borrower which are reasonably allocable to such time period, (b) bond assessments which are reasonably allocable to such time period, (c) insurance premiums for casualty insurance and liability insurance carried in connection with the Projects which are reasonably allocable to such time period, and (d) operating expenses incurred by Borrower for the management, operation, cleaning, leasing, maintenance and repair of the Projects which are reasonably allocable to such time period. Operating Expenses (Cash Management) shall not include any interest, principal, loan fees, extension fees or other payments actually made on the Loan or capital expenditures (such as building improvements, tenant improvements or leasing costs).

“REIT Level Expenses”: Means any REIT-level general and administrative costs and expenses reasonably allocated to (x) real property wholly-owned (directly or indirectly by Guarantor) and (y) REIT-level asset management fees, which amounts described in clauses (x) and (y), in the aggregate, shall not exceed the CMA Account Disbursement Limit.

(ii)Security Agreement for Required Accounts.

(a) The following term is hereby added to Section 1.1 of the Loan Agreement:

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“Required Accounts”: Means, collectively, the Operating Account and the Cash Management Account.

(b) Section 7.3 of the Loan Agreement is hereby amended and restated in its entirety as follows:

Section 7.3 Security Agreement for Required Accounts. Borrowers will open and maintain at Administrative Agent the Required Accounts under the terms and conditions set forth above and in the other Loan Documents. Each Borrower hereby grants to Administrative Agent, for the benefit of itself and the Lenders, a first lien security interest in each of the Required Accounts, whether now existing or hereafter established, and all funds from time to time on deposit therein. Each Borrower will maintain each Required Account free and clear of any claim, lien or other encumbrance other than the security interest granted to Administrative Agent hereunder. Upon the occurrence and during the continuance, of an Event of Default, Administrative Agent may, to the maximum extent permissible by law, apply any or all of the funds in the Required Accounts, including accrued interest on such funds, if any, toward the unpaid balance of the Loan and/or to any other amounts which may be due and owing under the Loan Documents. The parties acknowledge and agree that each of the Required Accounts is a “deposit account” within the meaning of Section 9104 of the UCC. The parties further acknowledge and agree that California constitutes the “Administrative Agent’s jurisdiction” with respect to the perfection, the effect of perfection or non-perfection, and the priority of a security interest in a deposit account maintained at a bank under Section 9304(b)(1) of the UCC. Administrative Agent will at all times have “control” of the Required Accounts and all assets now or hereafter credited thereto within the meaning of Section 9106 of the UCC or Section 9104(a) of the UCC for purposes of maintaining its first and prior perfected security interest therein.

(k)Deeds of Trust. Each of the Deeds of Trust is being amended upon the Effective Date pursuant to the applicable Short Form Agreements, each of which is incorporated herein.

(l)Deleted Terms (Elimination of Revolving Portion and Borrowing Base Availability). Effective as of the McEwen Release Effective Date, the following definitions are hereby deleted from Section 1.1 of the Loan Agreement and all references in the Loan Documents thereto are hereby deleted in their entirety and are of no further force or effect: “Availability Amount”; “Borrowing Base Amount”; “Borrowing Base Loan Constant”; “Borrowing Base Value”; “Non-Revolving Portion”; and “Revolving Portion”.

(m)New and Amended Defined Terms (relating to Project Maximum Support Threshold). As of the McEwen Release Effective Date, the following terms are hereby added, or amend and restate existing definitions, as applicable, in Section 1.1 of the Loan Agreement:

“Aggregate Appraised Project Value”: Shall mean the aggregate value of the Projects securing the Loan as of the date of calculation, which value shall be the then current “as-is” appraised value of the Projects based on the most recent appraisals for such Projects, subject to the adjustments set forth below in this definition. Borrower may request (in its sole discretion)

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that Administrative Agent reappraise any Project and in connection therewith order new Appraisals from time to time (but in no event more than once in any six-month period). Borrower shall pay the costs of any and all such Appraisals within ten (10) days of written demand by Administrative Agent. In addition to any of the rights of Administrative Agent or Lenders hereunder to order Appraisals (including under Section 6.22), Administrative Agent may at any time and from time to time order new Appraisals of the Projects during the existence of an Event of Default, and Borrower shall pay the costs of any and all such Appraisals within ten days of written demand by Administrative Agent, provided, however, that such appraised values shall not be used for the purposes of the calculation of the Aggregate Appraised Project Value.

“Aggregate Commitment”: Means, as of any date of determination, the aggregate Commitments of all the Lenders as required under the terms of this Agreement.

“Annualized Net Operating Income”: Means annualized Net Operating Income before payment of debt service from the Projects securing the Loan as of the date of calculation, calculated by annualizing the Net Operating Income for the immediately preceding prior two calendar quarters; provided that if the quarterly reporting from the prior calendar quarter has not yet been delivered and if the Debt Service Coverage Ratio is being calculated within 60 days after the end of a calendar quarter, the Net Operating Income shall be calculated by looking at the Net Operating Income during the two calendar quarters preceding the immediately prior calendar quarter; e.g., if the most recent calendar quarter end reporting is not yet delivered to Administrative Agent and the Debt Service Coverage Ratio is being calculated on January 10, 2024, the six-month period (if that is the relevant calculation period under the following provisions of this definition) would be the period commencing on April 1, 2023 and ending on September 30, 2023, and if the Debt Service Coverage Ratio is being calculated on March 20, 2024, the six-month period would be the period commencing on July 1, 2023, and ending on December 31, 2023).

“Commitment”: Means, for each Lender, the obligation of such Lender to make disbursements of a portion of the Loan (including, if applicable, the Holdback (or any portion thereof)) to Borrowers, in an amount not exceeding the amount set forth in Schedule 1, as such commitment may be (a) reduced by any principal payments made by or on behalf of Borrower in accordance with Section 2.4 and any principal reductions or expiration of an unfunded commitment amount otherwise required under and pursuant to the Loan Documents, and (b) modified from time to time as a result of an assignment that has become effective pursuant to Section 10.10 or otherwise pursuant to the terms hereof.

“Debt Service Coverage Ratio”: Shall mean a fraction, the numerator of which is the Annualized Net Operating Income, and the denominator of which is the product obtained by multiplying (a) the outstanding principal balance of the Loan as of the date of calculation plus the amount of any unfunded draw requests at the time of determination by (b) the Maximum Support Loan Constant, provided if calculated in connection with any request for an Advance, the Debt Service Coverage Ratio shall be adjusted to take into account the funds which may be advanced (subject to the terms and conditions of the Loan Documents).

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“Gross Operating Income”: Shall mean the sum of any and all (A) Rental Income in the applicable period of time in question (using the time periods outlined in the definition of Annualized Net Operating Income unless otherwise specified) (the “Calculation Period”), excluding (a) any income from any lease if the tenant under such lease is in monetary or other material default (after expiration of any applicable notice and cure periods), (b) any income from any lease if the tenant under such lease is in bankruptcy (unless such tenant has affirmed and assumed its lease obligations in the bankruptcy proceeding), (c) any income from any lease if the tenant under such lease has given notice of termination or otherwise exercised any termination right under the lease (and such lease termination shall be effective within six (6) months from the applicable test date), but including, without duplication, the annualized rental income for any newly executed leases for such space, and/or (d) Rental Income generated from tenants who have leases maturing within three (3) months of the applicable testing date who have not given notice that they are extending (except to the extent such leases have actually been extended by the time information is required to be reported under the Loan Documents), and (B) without duplication, other normal and recurring (but not extraordinary) cash income accrued during the Calculation Period, whether paid during such Calculation Period or another period of time, from the ownership, use and operation of the Projects that continue to then be encumbered by the Security Instrument and contribute to the Maximum Supported Amount. In calculating Gross Operating Income, Administrative Agent shall include in Rental Income the base rent payable under any lease which is in a free rent period during the Calculation Period, subject to the following conditions: (i) the tenant under such lease is not in default, (ii) Administrative Agent has approved the terms of the lease in its reasonable discretion or the lease is otherwise an Approved Lease, (iii) as of the end of the Calculation Period the number of months remaining prior to the date rent commences under such lease does not exceed six (6) months, or such other time frame exceeding six (6) months as approved by Administrative Agent in its sole discretion, and (iv) Administrative Agent shall make a positive adjustment to Rental Income so long as rent commences under such lease within six months of the Calculation Period (with no adjustment if rent does not commence within that six month period) equal to the product of (a) the number of months during the Calculation Period multiplied by (b) the anticipated full monthly Rental Income for such lease upon rent commencement. The preceding sentence shall not be deemed to modify Section 6.29 hereof and shall provide Administrative Agent with approval rights only with respect to including rent payable under leases in a "free rent" period in the calculation of Net Operating Income.

“Holdback”: Means, collectively, the Tenant Improvement Allocation and the General Use Allocation, as each term is defined in that certain Third Modification Agreement (Long Form) dated as of February 9, 2024 and executed by Administrative Agent, Lenders and Borrower.

“Maximum Supported Leverage Ratio”: Means seventy-three and one-half percent (73.5%).

“Maximum Support Threshold”: Means an amount equal to the lesser of (a) the Aggregate Commitment and (b) the Maximum Supported Amount.”

“Maximum Supported Amount”: Means the lesser of (a) the product obtained by multiplying the Maximum Supported Leverage Ratio by the Aggregate Appraised Project Value

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and (b) the Loan balance resulting in a Debt Service Coverage Ratio equal to the applicable Minimum Supported DSCR, calculated by dividing (i) Annualized Net Operating Income for the Projects then securing the Loan by (ii) the product obtained by multiplying (A) the Minimum Supported DSCR by (B) the Maximum Support Loan Constant.”

“Maximum Support Loan Constant”: Shall mean the greater of (i) a loan constant of 0.0798 (which is based on an interest rate of seven percent (7.00%) per annum and principal amortization based on a 30-year amortization schedule), and (ii) a loan constant, expressed as a decimal, based on an interest rate of two and one quarter percent (2.25%) per annum in excess of the Treasury Rate as of the date of calculation, and principal amortization based on a 30-year amortization schedule, as reasonably determined by Administrative Agent.

“Minimum Supported DSCR”: Means 1.20 to 1, increasing to 1.25 to 1.00 on March 1, 2025.

"Net Operating Income": Shall mean the amount of (a) Gross Operating Income for the applicable period of time in question, less (b) the amount of Operating Expenses for such period of time, less (c) a replacement reserve equal to $0.25 per square foot for all of the Improvements consisting of office buildings and $0.10 per square foot for all Improvements consisting of industrial buildings.

(n)Prepayment. As of the McEwen Release Effective Date, the phrase “(in the case of a paydown of the Non-Revolving Portion)” in Section 2.4 of the Loan Agreement is hereby deleted in its entirety.

(o)Advances. As of the McEwen Release Effective Date, Section 3.1 of the Loan Agreement is hereby amended and restated in its entirety as follows:

“Section 3.1 No Obligation to Close or Advance. No Lender is required to make any Advance until all of the requirements and conditions set forth in this Article III have been completed and fulfilled to the satisfaction of Administrative Agent in its discretion, at Borrowers’ sole cost and expense. At any time from and after the Closing Date through and including the day that is thirty (30) days prior to the Maturity Date, subject to satisfaction of all the terms and conditions set forth in this Article III (or have otherwise been waived in writing by Administrative Agent), Borrowers shall have the right to request and receive, from time to time, an additional Advance of the Loan in connection with each Holdback (subject to the applicable allocations in each such Holdback), provided that when added to the existing outstanding principal balance of the Loan, such Advance does not exceed the then existing Maximum Support Threshold.”

(p)Advances Generally. As of the McEwen Release Effective Date, Section 4.1(e) of the Loan Agreement is hereby amended and restated in its entirety as follows:

“(e) In no event shall Administrative Agent and the Lenders have any obligation to make any Advance if the requested Advance, plus the sum of all outstanding previous Advances, would exceed the then existing Maximum Support Threshold.”

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(q)Remargin Requirement. As of the McEwen Release Effective Date, Section 4.5 of the Loan Agreement is hereby amended and restated in its entirety as follows:

“Section 4.5 Remargin Obligation. Notwithstanding any provision of this Agreement to the contrary, Borrowers will at all times cause the outstanding principal balance of the Loan not to exceed the Maximum Support Threshold, and the Lenders will have no obligation to make any Advance of Loan proceeds if after giving effect to the requested Advance the outstanding principal amount of the Loan would exceed the Maximum Support Threshold. If, as of the end of any calendar quarter, as determined by the quarterly reporting provided by Borrower pursuant to the terms of Section 6.15, the outstanding principal balance of the Loan exceeds the Maximum Support Threshold, Borrower shall pay down the Loan in compliance with Section 6.32.

(r)Required Minimum Non-Revolving Portion Funded Amount. As of the McEwen Release Effective Date, Section 6.10 of the Loan Agreement is hereby amended and restated in its entirety as follows:

“Section 6.10 Reserved.”

(s)Reporting Requirement (Support). As of the McEwen Release Effective Date, Section 6.15(a)(2) of the Loan Agreement is hereby amended and restated in its entirety as follows:

2. Borrowers	Quarterly calculation of the Maximum Support Threshold and the Maximum Supported Amount.	Within sixty (60) days of the end of each calendar quarter during the term of the Loan

(t)Leasing Approval Rights (Qualifying Leases). As of the McEwen Release Effective Date, Romanette (ii) of the second paragraph of Section 6.29 of the Loan Agreement is hereby amended and restated in its entirety to read as follows: “(ii) the net effective rent payable under such lease is equal to the greater of (x) greater than 90% market rents at the time the lease is executed (as reasonably determined by Administrative Agent) and (y) the applicable “Minimum Rents” rate set forth on the Leasing Criteria Schedule appended to the that certain Additional Advance and Third Modification Agreement (Long Form) dated as of February 9, 2024 by and among Borrower, Administrative Agent and the Lenders;”.

(u)Mandatory Principal Payments. As of the McEwen Release Effective Date, Section 6.32 of the Loan Agreement is hereby amended and restated in its entirety as follows:

“Section 6.32 Mandatory Principal Payments. If, as of the end of any calendar quarter, as determined by the quarterly reporting provided by Borrower pursuant to the terms of Section 6.15 above, the outstanding principal balance of the Loan exceeds the Maximum Support Threshold, Borrower shall, within thirty (30) days of written demand by Administrative Agent, pay down the outstanding principal of the loan by an amount (as reasonably determined

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by Administrative Agent, but without paying any prepayment or exit fees other than and amounts and sums owing under Section 2.13, and Swap Transaction fees or breakage amounts) sufficient to cause the outstanding principal balance of the Loan to not exceed the Maximum Support Threshold. The calculation of the Maximum Supported Amount shall, as to the component of such calculation pertaining to operating income, be based upon Net Operating Income based on the financial information received from Borrower in accordance with Section 6.15 or, if Borrower has failed to deliver such information as and when required by Section 6.15 (or if Administrative Agent reasonably and in good faith believes such information to be inaccurate), such other information as Administrative Agent reasonably and in good faith deems appropriate.”

(v)Collateral Documents. As of the McEwen Release Effective Date, Section 10.32 of the Loan Agreement is hereby amended and restated in its entirety as follows:

“Section 10.32 Collateral Documents. If any Security Instrument shall for any reason (other than pursuant to the terms thereof) cease to create a valid lien and security interest in the collateral purported to be covered thereby or such lien or security interest shall for any reason cease to be a perfected and first priority lien and security interest subject only to Permitted Encumbrances, and any such defect or infirmity is not cured to Administrative Agent’s reasonable satisfaction within ninety (90) days of demand by Administrative Agent, the Project encumbered by such Security Instrument shall immediately (following the expiration of such ninety (90) day cure period) cease to be included in the calculation of Aggregate Appraised Project Value and Maximum Supported Amount, and Borrower shall repay to Administrative Agent for the ratable benefit of Lenders, within ten (10) days of demand by Administrative Agent, any amounts by which the total outstanding Obligations exceed the Maximum Support Threshold.”

(w)No Additional Project Collateral. From and after the McEwen Release Effective Date, and notwithstanding anything to the contrary set forth in the Loan Documents, Borrower shall have no further option to add new projects to secure the Loan. In connection with the foregoing, the Loan Agreement is hereby amended as follows:

(i)No Additional Project Collateral. From and after the McEwen Release Effective Date, Section 10.30 (Additional Project Collateral) of the Loan Agreement is hereby amended and restated in its entirety as follows:

“Section 10.30 Reserved.”

(ii)Amended Deleted Defined (No Additional Project Collateral). From and after the McEwen Release Effective Date, the defined term “Borrower” set forth in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety as follows:

“Borrower” or “Borrowers”: Has the meaning set forth in the introductory paragraph of that certain Additional Advance and Third Modification Agreement (Long Form) dated as of February 9, 2024 by and among Borrower, Administrative Agent and the Lenders.

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(iii)Deleted Defined Terms (No Additional Project Collateral). From and after the McEwen Release Effective Date, the following definitions are hereby deleted from Section 1.1 of the Loan Agreement and all references in the Loan Documents thereto are hereby deleted in their entirety and are of no further force or effect: “Additional Projects”; “Leasehold Project”; “New Borrower”; and “Joinder”.

(iv)Deleted Exhibits (No Additional Project Collateral). From and after the McEwen Release Effective Date, Exhibit K of the Loan Agreement is hereby amended and restated in its entirety with Exhibit K attached hereto.

(x)General Amendments. For purposes of clarification, the general amendments listed below shall immediately be in full force and effect (whether or not the McEwen Release Effective Date occurs).

(i)The word “and” at the end of Section 10.12(c) of the Loan Agreement is hereby deleted.

(ii)Section 10.12(d) is hereby amended and restated in its entirety as follows:

“(d) except as otherwise provided in Section 9.16 or otherwise expressly set forth in the Loan Agreement (such as cash management provisions), without the consent of all of the Lenders, release all or any material portion of the Collateral; and”

(iii)The following new Section 10.12(e) is hereby added to the Loan Agreement as follows:

“(e) without the consent of all of the Lenders, (i) amend (or waive) any financial covenants of the Guarantor, (ii) amend the definition of ‘Maximum Support Threshold” or any defined terms related thereto, (iii) amend (or waive) any material covenants of Borrower.’”

(y)Amendment of Guaranty. Effective as of the Effective Date, each of the Payment Guaranty and the Recourse Carve-Out Guaranty is hereby amended as more particularly set forth in the Consent appended hereto (which shall be effective whether or not the McEwen Release Effective Date occurs).

(z)Waiver of Maximum Borrowing Base Leverage Ratio. Effective as of the Effective Date, Administrative Agent and Lenders hereby agree, on a one-time basis, to waive any requirements under the Loan Documents relating to the calculation of the Maximum Borrowing Base Leverage Ratio for the testing period ending on September 30, 2023 solely for the purpose of calculating the Borrowing Base Value as of such date (and for no other purposes, including the calculation made as of December 31, 2023 or going forward if applicable). Such waiver is a one-time accommodation, and Administrative Agent and Lenders have no further obligation to waive any requirements of the Loan Documents, all of which remain in full force and effect (subject to the terms and condition of this Agreement). For purposes of clarification, on and after the McEwen Release Effective Date (if applicable), the calculations for the December 31, 2023 testing period shall be tested and calculated in accordance with the updated Loan Document provisions that would go into effect as of such McEwen Release Effective Date.

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3.Security Documents. The Deeds of Trust and all other Loan Documents which secure Borrowers’ indebtedness and obligations under the Loan shall secure, in addition to all other indebtedness and obligations secured thereby, the payment and performance of all other present and future indebtedness and obligations of Borrowers under (A) this Agreement, (B) the Notes and all other Loan Documents, as amended by this Agreement, (C) all present and future Lender-Provided Swap Transactions, and (D) any and all amendments, modifications, renewals and/or extensions of this Agreement or the Notes, regardless of whether any such amendment, modification, renewal or extension is evidenced by a new or additional instrument, document or agreement. All references in the Deeds of Trust and all other references in the Loan Documents to the “Loan” shall mean the Loan, as amended by this Agreement and the Short Form Agreements.

4.Definitions. Except as provided in this Agreement, all references in the Loan Agreement, in each Deed of Trust and in each of the other Loan Documents: (i) to the Loan Agreement shall mean the Loan Agreement as amended by this Agreement, (ii) to a Deed of Trust shall mean such Deed of Trust as amended hereby and by the respective Short Form Agreement, (iii) to the Notes shall mean the Notes (as defined herein), (iv) to the Loan Documents shall mean the Loan Documents as such term is defined in this Agreement, and (v) to any particular Loan Document shall mean such Loan Document as modified by this Agreement, and all prior amendments, or any document executed pursuant thereto or hereto.

5.No Other Modifications. Except as expressly set forth above, the Loan Documents shall be and remain unmodified and in full force and effect.

6.Conditions Precedent. This Agreement shall not be effective, and neither Agent nor Lenders shall have any obligations hereunder, unless all of the following conditions are satisfied in a manner acceptable to Agent in Agent’s sole judgment, provided, however, that, notwithstanding the foregoing, the extension of the Maturity Date to the Extended First Extended Maturity Date shall automatically become effective concurrently with the execution and delivery of this Agreement by Agent and Lenders. The following conditions shall be deemed satisfied on the date (the “Effective Date”) that Agent causes the Short Form Agreements (as defined below) to be recorded in the Official Records (provided that, if for any reason any of the following conditions are not satisfied, or waived in writing by Agent, on or before the Effective Date, they shall continue as covenants of each party hereto to Agent and the Lenders to the extent reserved in writing by Agent prior to the Effective Date):

(a)Modification Documents. Agent shall have received and approved the executed originals of (i) this Agreement, including the Consent attached hereto and (ii) each Short Form Agreement (the documents described in clauses (i) through (ii) of this paragraph are referred to herein collectively as, the “Modification Documents”).

(b)Recordation. The Short Form Agreements shall have been recorded in the official records of the county and state as set forth above, all in accordance with Agent’s instructions to the Title Company.

(c)Status of Title. Borrowers shall cause Title Company to issue at Borrowers’ expense such endorsements (including, without limitation, ALTA 11.2-06 (Mortgage

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Modification with Additional Amount of Insurance), or their local equivalents) to each Title Policy as Agent shall require insuring that fee title to the Properties is vested in the applicable Borrower and insuring the continuing validity and first-position lien priority of each of the Deeds of Trust, in light of this Agreement (to the extent such endorsements and continuations are available).

(d)Formation Documents. Each Borrower shall have delivered to Agent all documents evidencing the formation, organization, good standing and valid existence of such Borrower and Guarantor (to the extent such documents have been amended or modified since the original Closing Date).

(e)Payment of Agent’s Expenses. Borrowers shall have paid all costs and expenses incurred by Agent in connection with this Agreement, including attorneys’ fees and costs, title insurance premiums, recording charges and the costs of any lien searches undertaken by Agent in connection with this Agreement.

(f)Payment of Fee. Borrowers shall have paid to Agent the fees required under that certain Second Amended and Restated Fee Letter of even date herewith by and between Borrower and U.S. Bank.

(g)Default. No Event of Default has occurred and is continuing, and no event has occurred and is continuing which, with notice or the passage of time or both, would be an Event of Default.

(h)Opinion of Counsel. Borrowers shall have delivered to Agent one or more opinion(s) of counsel reasonably acceptable to Agent covering, without limitation, the enforceability of this Agreement, as well as the existence, good standing, authority and execution of each Borrower, Guarantor and their constituent entities.

(i)Know Your Customer. Borrower shall have provided to Agent the documentation and other information (including a Beneficial Ownership Certification as to Borrower) reasonably requested by Agent in connection with applicable “know your customer” and anti-money-laundering rules and regulations, including the USA Patriot Act, in each case in form and substance reasonably satisfactory to Agent.

7.Affirmation of Obligations Under Loan Documents; Swap Contracts. Each Borrower acknowledges, confirms, stipulates, agrees, represents and warrants that it has no defense, claim, credit, offset or counterclaim to any of its obligations under any of the Loan Documents. Each Borrower further acknowledges the validity and enforceability of the respective Deed of Trust as a first-priority lien on the applicable Property, all improvements located thereon and all of the “Property” described in such Deed of Trust. Unless otherwise agreed to in writing by Lenders, the parties hereby agree that any Lender-Provided Swap Transactions (to the extent entered into by a Borrower and secured by the Property, and expressly excluding any Lender-Provided Swap Transactions that are both (i) entered into by an affiliate of a Borrower where such affiliate is not a Borrower under the Loan, and (ii) not secured by the Property) entered into with respect to the Loan shall include all Lenders under the Loan

SMRH:4869-6734-5045.18	-27-
		0YWK-279636

Agreement and shall be entered into on a pari-passu basis in accordance with each Lender’s Commitment Percentage.

8.Incorporation by Reference. Section 10.33 of the Loan Agreement (Limited Recourse Provision) and Section 10.13 (Joint Borrower Provisions) of the Loan Agreement are by this reference hereby incorporated in their entirety.

[Remainder of Page Intentionally Left Blank]

SMRH:4869-6734-5045.18	-28-
		0YWK-279636

9.Miscellaneous.

(a)Entire Agreement. The Loan Documents, including this Agreement (i) integrate all the terms and conditions mentioned in or incidental to the Loan Documents; (ii) supersede all oral negotiations and prior and other writings with respect to their subject matter; and (iii) are intended by the parties as the final expression of the agreement with respect to the terms and conditions set forth in those documents and as the complete and exclusive statement of the terms agreed to by the parties. If there is any conflict between the terms, conditions and provisions of this Agreement and those of any other agreement or instrument, including any of the other Loan Documents, the terms, conditions and provisions of this Agreement shall prevail. By executing this Agreement and initialing below, each Borrower expressly represents and warrants that it did not rely on any representation, assurance or agreement, oral or written, not expressly set forth in this Agreement or any of the other Loan Documents in reaching its decision to enter into this Agreement or any of the other Loan Documents and that no promises or other representations have been made to Borrowers which conflict with the written terms of the Loan Documents. Each Borrower represents to Agent and Lenders that (w) it has read and understands the terms and conditions contained in this Agreement and the other Loan Documents executed in connection with this Agreement, (x) its legal counsel has carefully reviewed all of the Loan Documents and it has received legal advice from counsel of its choice regarding the meaning and legal significance of this Agreement and all other Loan Documents, (y) it is satisfied with its legal counsel and the advice received from it, and (z) it has relied only on its review of the Loan Documents and its own legal counsel’s advice and representations (and it has not relied on any advice or representations from Agent, any Lender or Agent’s or any Lender’s officers, employees, agents or attorneys). The Loan Documents may not be modified, amended or terminated except by a written agreement signed by each of the parties hereto.

/s/CJS /s/CJS /s/CJS /s/CJS

Borrowers’ Initials

[Remainder of Page Intentionally Left Blank]

SMRH:4869-6734-5045.18	Section 10(a)
		0YWK-279636

(b)Definition of Loan Documents. Each of the Loan Documents is hereby modified to the extent necessary so that the term “Loan Documents,” as such term may be used therein, shall be deemed to include this Agreement and all other Modification Documents.

(c)Further Assurances. Borrowers shall, upon the request of Agent or the Lenders, execute, acknowledge and deliver, or cause to be executed, acknowledged or delivered, such further documents, instruments or agreements, and perform such other acts, as may be necessary, desirable or proper for carrying out the intention or facilitating the performance of the terms of this Agreement, or for assuring the validity of, perfecting or preserving the lien of each Deed of Trust or any other Loan Documents.

(d)No Third Parties Benefitted. This Agreement is entered into for the sole benefit of the parties hereto and no third party beneficiary rights shall be created hereby.

(e)Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the heirs, successors and assigns of the parties hereto.

(f)Assignment. This Agreement shall not be assignable by any Borrower and any purported assignment shall be void. This Agreement is assignable by Agent and any Lender in accordance with the terms of the Loan Agreement.

(g)Construction of this Agreement. The headings used in this Agreement are for convenience only and shall be disregarded in interpreting the substantive provisions of this Agreement. Time is of the essence of each term of the Loan Documents, including this Agreement. As used herein, the term “including” means “including, but not limited to,” and the term “include(s)” means “include(s), without limitation.” This Agreement has been drafted by all the parties hereto collectively. Therefore, each party to this Agreement agrees that any statute or rule of construction providing that ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement.

(h)Survival of Representations, Warranties and Covenants. Each and all provisions of this Agreement shall survive and remain in full force and effect until all obligations of Borrowers under the Loan Documents are paid and performed in full. All releases herein shall survive repayment and performance of such obligations and/or any foreclosure under or reconveyance of each Deed of Trust.

(i)Governing Law; Waiver of Jury Trial. This Agreement, the rights of the parties hereunder and the interpretation hereof shall be governed by, and construed in accordance with, the laws of the State of California in all respects. To the maximum extent permitted by applicable law, each Borrower hereby waives any right to a trial by jury in any action relating to the Loan and/or the Loan Documents.

(j)Severability. In the event of any invalidity or unenforceability of any provision of this Agreement, the remainder of this Agreement shall remain in full force and effect.

(k)Reservation of Rights. Nothing contained in this Agreement shall prevent or in any way diminish or interfere with any rights or remedies, including the right to

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		0YWK-279636

contribution, which Agent and/or Lenders may have against any party hereto under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (codified at Title 42 U.S.C. 9601 et seq.), as it may be amended from time to time, any successor statute thereto or any other applicable federal, state or local laws, all such rights being hereby expressly reserved.

(l)Reliance. Neither Agent nor Lenders would have consented to the transactions specified herein without Borrowers entering into this Agreement. Accordingly, each of such parties intentionally and unconditionally enters into the covenants and agreements as set forth above and understands that, in reliance upon and in consideration of such covenants and agreements, Agent and Lenders have consented to the transactions contemplated herein and, as part and parcel thereof, specific monetary and other obligations have been, are being and shall be entered into which would not take place but for such reliance.

10.Same Indebtedness; Priority of Liens Not Affected. This Agreement and the execution of other documents contemplated hereby do not constitute the extinguishment of any debt evidenced by the Loan Documents, nor will they in any way affect or impair the liens and security interests created by the Loan Documents, which each Borrower acknowledges to be valid and existing liens on and security interests in the Property. Each Borrower agrees that the liens and security interests created by the Deeds of Trust continue to be in full force and effect, unaffected and unimpaired by this Agreement or by the transactions contemplated herein and that said liens and security interests shall so continue in their perfection and priority until the debt secured by the Loan Documents is fully discharged. Borrower acknowledges and agrees that neither this Agreement, nor the Short Form shall constitute a novation of the indebtedness evidenced by the Notes and/or any of the other Loan Documents, and further that the terms and provisions of the Deed of Trust and all of the other Loan Documents shall remain valid and in full force and effect except as may be hereinabove modified and amended.

11.Counterparts. This Agreement may be executed by the parties hereto in one or more separate counterparts, and counterpart original signature pages may be assembled into one original document.

[Remainder of Page Left Intentionally Blank]

SMRH:4869-6734-5045.18	-31-
		0YWK-279636

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

BORROWERS:

KBSIII 515 CONGRESS, LLC,

a Delaware limited liability company

By: KBSIII REIT ACQUISITION XXVII, LLC,

a Delaware limited liability company,

its sole member

By: KBS REIT PROPERTIES III, LLC,

a Delaware limited liability company,

its sole member

By: KBS LIMITED PARTNERSHIP III,

a Delaware limited partnership,

its sole member

By: KBS REAL ESTATE INVESTMENT TRUST III, INC.,

a Maryland corporation,

its general partner

By: /s/Charles J. Schreiber, Jr.

Charles J. Schreiber, Jr.

Chief Executive Officer

[Signatures continue on next page.]

SMRH:4862-5257-8109.2
[Signature Page to Additional Advance and Third Modification (Long Form)]

KBSIII 155 NORTH 400 WEST, LLC,

a Delaware limited liability company

By: KBSIII REIT ACQUISITION V, LLC,

a Delaware limited liability company,

its sole member

By: KBS REIT PROPERTIES III, LLC,

a Delaware limited liability company,

its sole member

By: KBS LIMITED PARTNERSHIP III,

a Delaware limited partnership,

its sole member

By: KBS REAL ESTATE INVESTMENT TRUST III, INC.,

a Maryland corporation,

its general partner

By: /s/Charles J. Schreiber, Jr.

Charles J. Schreiber, Jr.

Chief Executive Officer

[Signatures continue on next page.]

SMRH:4862-5257-8109.2
[Signature Page to Additional Advance and Third Modification (Long Form)]

KBSIII 1550 WEST MCEWEN DRIVE, LLC,

a Delaware limited liability company

By: KBSIII REIT ACQUISITION IV, LLC,

a Delaware limited liability company,

its sole member

By: KBS REIT PROPERTIES III, LLC,

a Delaware limited liability company,

its sole member

By: KBS LIMITED PARTNERSHIP III,

a Delaware limited partnership,

its sole member

By: KBS REAL ESTATE INVESTMENT TRUST III, INC.,

a Maryland corporation,

its general partner

By: /s/Charles J. Schreiber, Jr.

Charles J. Schreiber, Jr.

Chief Executive Officer

[Signatures continue on next page.]

SMRH:4862-5257-8109.2
[Signature Page to Additional Advance and Third Modification (Long Form)]

KBSIII 201 17TH STREET, LLC,

a Delaware limited liability company

By: KBSIII REIT ACQUISITION XXV, LLC,

a Delaware limited liability company,

its sole member

By: KBS REIT PROPERTIES III, LLC,

a Delaware limited liability company,

its sole member

By: KBS LIMITED PARTNERSHIP III,

a Delaware limited partnership,

its sole member

By: KBS REAL ESTATE INVESTMENT TRUST III, INC.,

a Maryland corporation,

its general partner

By: /s/Charles J. Schreiber, Jr.

Charles J. Schreiber, Jr.

Chief Executive Officer

[Signatures continue on next page.]

SMRH:4862-5257-8109.2
[Signature Page to Additional Advance and Third Modification (Long Form)]

AGENT:

U.S. BANK NATIONAL ASSOCIATION,

a national banking association,

as Administrative Agent

By: /s/Christopher Coburn

Name: Christopher Coburn

Title: SVP

LENDERS:

U.S. BANK NATIONAL ASSOCIATION,

a national banking association,

By: /s/Christopher Coburn

Name: Christopher Coburn

Title: SVP

[Signatures continue on next page.]

SMRH:4867-6056-4302
[Signature Page to Additional Advance and Third Modification (Long Form)]

ASSOCIATED BANK NATIONAL ASSOCIATION,

By: /s/Mitchell Vega

Name: Mitchell Vega

Title: Senior Vice President

[Signatures continue on next page.]

SMRH:4867-6056-4302
[Signature Page to Additional Advance and Third Modification (Long Form)]

CITY NATIONAL BANK

By: /s/Carolyne Garcia

Name: Carolyne Garcia

Title: Vice President

[Signatures continue on next page.]

SMRH:4867-6056-4302
[Signature Page to Additional Advance and Third Modification (Long Form)]

REGIONS BANK

By: /s/Mark A. Mushinski

Name: MARK A. MUSHINSKI

Title: SENIOR VICE PRESIDENT

[Signatures continue on next page.]

SMRH:4867-6056-4302
[Signature Page to Additional Advance and Third Modification (Long Form)]

CITIZENS BANK

By: /s/Ryan P. Carroll

Name: Ryan P. Carroll

Title: SVP

SMRH:4867-6056-4302
[Signature Page to Additional Advance and Third Modification (Long Form)]

Document

Exhibit 10.3

MODIFICATION OF GUARANTY AND CONSENT AND REAFFIRMATION OF GUARANTOR

This Modification of Guaranty and Consent and Reaffirmation of Guarantor (this “Consent”) is attached to that certain Additional Advance and Third Modification Agreement (Long Form) (the “Modification Agreement”) dated as of February 9, 2024 by and among (i) KBSIII 1550 WEST MCEWEN DRIVE, LLC, KBSIII 155 NORTH 400 WEST, LLC, KBSIII 515 CONGRESS, LLC, and KBSIII 201 17TH STREET, LLC, each a Delaware limited liability company (individually or collectively as the context may require, “Borrower” or “Borrowers”), (ii) U.S. BANK NATIONAL ASSOCIATION, a national banking association, as agent (in such capacity, “Agent”), and (iii) each lender party hereto (individually, a “Lender” and collectively with any lender that becomes a party to the Loan Agreement (as defined in the Modification Agreement) in the future, the “Lenders”). All capitalized terms used but not defined in this Consent shall have the meanings given to such terms in the Modification Agreement. KBS REIT PROPERTIES III, LLC, a Delaware limited liability company (“Guarantor”), hereby (i) acknowledges that it has read, reviewed with counsel and agrees to the terms, conditions, provisions and modifications of the Modification Agreement and the transactions contemplated thereby, (ii) reaffirms the full force and effectiveness of that certain Payment Guaranty Agreement dated as of October 17, 2018 (the “Payment Guaranty”) executed by Guarantor in favor of Agent and Lenders in connection with the Loan, and that certain Recourse Carve-Out Guaranty Agreement dated as of October 17, 2018 (the “Recourse Carve-Out Guaranty” and collectively with the Payment Guaranty, the “Guaranty”) executed by Guarantor in favor of Agent and Lenders, as each may be modified from time to time including by the Modification Agreement, (iii) agrees that Guarantor’s obligations under the Guaranty shall remain unaffected by the Modification Agreement (except as expressly modified below) and that all references in the Guaranty to (a) the Loan Documents shall include (without limitation) the Modification Agreement, and (b) any particular Loan Document shall mean such Loan Document as modified by the Modification Agreement, and (iv) agrees that Guarantor’s obligations under the Guaranty are separate and distinct from those of Borrowers with respect to the Loan.

In addition to the forgoing, the Guaranty is amended as follows (which amendments shall be effective as of the Effective Date):

1.Amendments to Payment Guaranty.

(a)Section 10 of the Payment Guaranty is hereby amended as follows:

10. Event of Default. Without limiting anything set forth in Section 8.1 of the Loan Agreement, including without limitation Sections 8.1(d) and (e), it will be an Event of Default under the Loan Documents if, following written notice to Guarantor by Administrative Agent, Guarantor fails to pay (within ten (10) days following written request from Administrative Agent to Guarantor) any sums as required pursuant to the terms of this Guaranty or in any other document provided in relation hereto. Further, for the avoidance of doubt, to the extent that Guarantor’s failure to comply with any term or condition of this Guaranty (including, without limitation, Section 11 hereof) would constitute an Event of Default under the Loan Agreement, the

SMRH:4869-6734-5045.18	Guarantor Consent
		0YWK-279636

same shall, following written notice to Guarantor from Administrative Agent, also constitute a default by Guarantor hereunder.

(b)Section 11(e)(i) of the Payment Guaranty is hereby amended as follows:

“(i) Guarantor shall not permit its Leverage Ratio to be greater than 0.75 to 1.0. As used herein, (i) “Leverage Ratio” shall mean Total Liabilities to Total Asset Value, (ii) “Total Liabilities” shall mean all debt for borrowed money of Guarantor and its subsidiaries (including guaranties), without duplication, determined on a consolidated basis for the applicable measuring period in accordance with GAAP (but excluding any premiums or discounts on debt), and (iii) “Total Asset Value” shall mean the sum of (a) the total Market Value (defined below) of all properties owned by Guarantor, plus (b) all unencumbered cash and cash equivalents, including any holdings of shares of Prime US REIT (SGX Ticker: OXMU) using the value of such shares based on the closing price on the SGX as of the reporting date, plus (c) the book value of notes receivable and other tangible assets. For purposes of this Guaranty, “Market Value” shall mean the total market value of all properties wholly-owned (directly or indirectly) by Guarantor, which shall mean (i) for all properties owned for two full quarterly reporting periods, the capped value of real estate assets (net operating income for the applicable reporting periods (which shall include credits for tenants in a free-rent period related to leases with terms that do not exceed one (1) month of free rent per year of lease term to the extent rent under such lease will start within 6 months of the applicable testing date with such credit being equal to the amount of rent due in the first month when rent would be paid times the number of months in the calculation period (with any additional free-rent credits, subject to Administrative Agent’s approval)), annualized and capped at 7.25%, provided that for any property operating at a negative net operating income, Market Value for that asset shall be assumed to be $0.00), (ii) for all real properties owned by Guarantor for less than two full quarterly reporting periods, the undepreciated cost basis of such real property, (iii) at Guarantor’s option for all real properties operating at an economic occupancy of less than 85%, the “as-is” appraised value of such real property pursuant to the REIT’s annual MAI appraisal process, with such appraisals provided to Administrative Agent for review and approval at Administrative Agent’s reasonable discretion, or (iv) for properties under development (until such time that is twelve (12) months beyond such properties’ final completion date), the current cost basis in such property; provided, however, in no event (unless approved by Administrative Agent and the Lenders) shall the value calculated pursuant to clause (iii) above exceed the sum of thirty percent (30%) of the total Market Value for Guarantor; and provided further that the calculation of Leverage Ratio set forth above shall, in each instance, specifically exclude that certain parcel of real property commonly known as the 201 Spear Property and located in San Francisco, California. For avoidance of doubt, free rent related to (1) that certain Office Lease, dated as of July 14, 2011, by and between UST GEPT Joint Venture, L.P., as landlord, and Acquity Group, L.L.C., as tenant (as amended) at Accenture Tower located at 500 West Madison, Chicago, Illinois (the “Accenture Lease”) and (2) that certain Office Lease, dated as of December 16, 2020, by and between KBSIII 60 South Street, LLC, as landlord, and Fredrikson & Byron, P.A., at the 60 South Sixth Street in Minneapolis, MN (the “Fredrikson Lease”)

SMRH:4869-6734-5045.18	Guarantor Consent
		0YWK-279636

shall be deemed approved to be included in net operating income for purposes of calculating clause (i) above.”

(c)Section 11(e)(iii) of the Payment Guaranty is hereby amended as follows

“(iii) Guarantor shall not permit the ratio of EBITDA to Fixed Charges for the preceding four trailing consecutive fiscal quarters to be less than 1.30 to 1.0. As used herein, “EBITDA” shall mean an amount equal to (a) net income as defined by GAAP for Guarantor and its subsidiaries, without duplication, on a consolidated basis for the applicable measuring period, plus (1) interest expense, income taxes, depreciation and amortization expense, acquisition costs and expenses, and extraordinary or non-recurring losses or losses from sales of assets, plus (2) any non-cash expense or contra revenue reducing net income, minus (3) any extraordinary or non-recurring gains or gains from asset sales, minus (4) any non-cash income or gains increasing net income with the exception of any straight line rent, and minus (5) an amount equal to the sum of (A) $0.25 multiplied by the aggregate number of square feet of office buildings owned by Guarantor not under construction, plus (B) $0.10 multiplied by the aggregate number of square feet of industrial buildings owned by Guarantor and not under construction, all as determined in accordance with GAAP (or, if not determined by GAAP, as determined in accordance with industry practice); plus (b) Guarantor's share of EBITDA (using the definition under subsection (a) above) in all unconsolidated joint ventures, without duplication (and, for avoidance of doubt, EBIDTA shall include dividends received in connection with Guarantor’s ownership of shares of Prime US REIT), each as determined by Administrative Agent in its reasonable discretion. For purposes of this definition, nonrecurring items shall be deemed to include, without limitation, (w) gains and losses on early extinguishment of Indebtedness, (x) any breakage payments or fees in connection with a Swap Transaction, (y) non-cash severance and other non-cash restructuring charges and (z) transaction costs of acquisitions not permitted to be capitalized pursuant to GAAP. As used herein, "Fixed Charges" shall mean the sum of Guarantor's and Guarantor's subsidiaries (without duplication) (A) interest expense (excluding any amortized loan costs relating to loan fees or costs or fees relating to hedging instruments, and amortization related to discounts or premiums on debt), (B) the aggregate amount of scheduled principal payments, excluding balloon payments, and (C) distributions on preferred interests and/or preferred stock.”

2.Amendments to the Recourse Carve-Out Guaranty.

(a)Section 10 of the Recourse Carve-Out Guaranty is hereby amended as follows:

SMRH:4869-6734-5045.18	Guarantor Consent
		0YWK-279636

limitation, Section 11 hereof) would constitute an Event of Default under the Loan Agreement, the same shall, following written notice to Guarantor from Administrative Agent, also constitute a default by Guarantor hereunder.

(b)Section 11(e)(i) of the Recourse Carve-Out Guaranty is hereby amended as follows:

SMRH:4869-6734-5045.18	Guarantor Consent
		0YWK-279636

60 South Sixth Street in Minneapolis, MN (the “Fredrikson Lease”) shall be deemed approved to be included in net operating income for purposes of calculating clause (i) above.”

(c)Section 11(e)(iii) of the Recourse Carve-Out Guaranty is hereby amended as follows

[Signature on Following Page]

SMRH:4869-6734-5045.18	Guarantor Consent
		0YWK-279636

GUARANTOR:

KBS REIT PROPERTIES III, LLC,

a Delaware limited liability company

By: KBS LIMITED PARTNERSHIP III,

a Delaware limited partnership,

its sole member

By: KBS REAL ESTATE INVESTMENT TRUST III, INC.,

a Maryland corporation

its general partner

By: /s/ Charles J. Schreiber, Jr.

Charles J. Schreiber, Jr.

Chief Executive Officer

SMRH:4862-5257-8109
[Signature Page to Guarantor Consent]

SCHEDULE 1

LEASING CRITERIA SCHEDULE

Property	Minimum Rents<br><br>(Per SF / Year)	Minimum Term	Maximum Free Rent	TI’s<br><br>(New)<br><br>(Per SF Per Year of Term)	TI’s<br><br>(Renewal)<br><br>(Per SF Per<br><br>Year of Term)	LC’s<br><br>(New)<br><br>(% of gross<br><br>equivalent rent)	LC’s<br><br>(Renewal)<br><br>(% of gross<br><br>equivalent rent)
1550 West<br>McEwen Drive<br>Project	n/a	n/a	n/a	n/a	n/a	n/a	n/a
155 North<br>400 West<br>Project	$33.00 FSG	2 years	1 month<br>per year of<br>term	$12.00	$5.00	7.0%	6.0%
201 17th<br><br>Street<br><br>Property	$44.00 FSG	2 years	1 month<br>per year of<br>term	<10,000sf:<br><br>$10.00<br><br><br><br>≥10,000sf:<br><br>$14.00	<10,000sf:<br><br>$5.00<br><br><br><br>≥10,000sf:<br><br>$7.00	6% + initial 1 ½ mos rent	6.0%
Congress<br>Project	Office:<br><br>$40.00 NNN<br><br><br><br>Retail:<br><br>$45.00 NNN	2 years	1 month<br>per year of<br>term	Office:<br><br>$10.00<br><br><br><br>Retail:<br><br>$10.00	Office:<br><br>$5.00<br><br><br><br>Retail:<br><br>$5.00	Office:<br><br>7.0%<br><br><br><br>Retail:<br><br>7.0% of net equivalent rent	Office:<br><br>6.0%<br><br><br><br>Retail:<br><br>6.0% of net equivalent rent
SMRH:4869-6734-5045	Schedule 1
---	---

EXHIBIT K

RESERVED

SMRH:4869-6734-5045	EXHIBIT K

Document

Exhibit 10.4

RECORDING REQUESTED BY<br><br>AND WHEN RECORDED MAIL TO:
Sheppard, Mullin, Richter & Hampton LLP<br><br>650 Town Center Drive, 10th Floor<br><br>Costa Mesa, California 92626<br><br>Attention: David Hengstler
	THIS SPACE ABOVE FOR RECORDER'S USE

NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OF THE FOLLOWING INFORMATION FROM THIS INSTRUMENT BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER.

ADDITIONAL ADVANCE AND THIRD MODIFICATION AGREEMENT

(Short Form – 515 Congress)

This ADDITIONAL ADVANCE AND THIRD MODIFICATION AGREEMENT (Short Form – 515 Congress) (this "Agreement") is dated as of February 9, 2024, by and between KBSIII 515 CONGRESS, LLC, a Delaware limited liability company ("Trustor"), and U.S. BANK NATIONAL ASSOCIATION, a national banking association, as administrative agent (in such capacity, "Agent") for the lenders from time to time party to the Loan Agreement described below (the "Lenders").

RECITALS

A. Under that certain Term Loan Agreement dated as of October 17, 2018 (the "Original Loan Agreement"), by and among Trustor, KBSIII 155 North 400 West, LLC ("400 W Borrower"), KBSIII 1550 West McEwen Drive, LLC ("McEwen Borrower") and KBSIII Domain Gateway, LLC, each a Delaware limited liability company ("Domain Gateway Borrower"; Domain Gateway Borrower, together with Trustor, 400 W Borrower and McEwen Borrower are referred to herein collectively as "Original Borrowers"), Agent and the Lenders, as such Original Loan Agreement was amended by (i) that certain (1) First Modification and Additional Advance Agreement (Long Form) dated as of January 23, 2020, by and among Original Borrowers, KBSIII 201 17th Street, LLC, a Delaware limited liability company ("17th Street Borrower"; 17th Street Borrower, McEwen Borrower, 400 W Borrower and Trustor are referred to herein collectively as the "Borrowers"), Agent and the Lenders (the "First Modification (Long Form)"), and (2) First Modification and Additional Advance Agreement (Short Form – 515 Congress) dated as of January 23, 2020 by and between Agent and 515 Congress Borrower, and recorded as Instrument No. 2020011688 in the Official Records of Travis County, Texas (the "Official Records") on January 24, 2020 (the "First Modification (Short Form)"), (ii) that certain (1) Second Modification Agreement (Long Form) dated as of February 28, 2023, by and among Borrowers, Agent and the

SMRH:4864-9453-7376.4	-1-

Lenders (the "Second Modification (Long Form)"), and (2) Second Modification Agreement (Short Form – 515 Congress) dated as of February 28, 2023, by and between Agent and 515 Congress Borrower, and recorded as Instrument No. 2023020596 in the Official Records on March 1, 2023 (the "Second Modification (Short Form)"), and (iii) the other Prior Modification Documents (as defined in the Third Modification (Long Form) (as defined below); the Original Loan Agreement, as amended by the Prior Modification Documents (as defined in the Third Modification (Long Form)), as the same may be further amended or modified in writing from time to time, is referred to herein as the "Loan Agreement"), Lenders agreed to make a term loan of up to $215,000,000.00 to Borrowers consisting of a Revolving Portion and a Non-Revolving Portion (as such terms are defined in the Loan Agreement), which loan amount was subsequently increased to up to $325,000,000.00 (consisting of a Revolving Portion and a Non-Revolving Portion) (as the same may be further amended hereby and by the Third Modification (Long Form), the "Loan") pursuant to the First Modification (Long Form) and the First Modification Agreement (Short Form). Capitalized terms used herein without definition have the meanings ascribed to them in the Loan Agreement or the Third Modification (Long Form), as applicable.

B. Borrower's obligations under the Loan are evidenced by those certain:

(i) Promissory Note dated January 23, 2020, in the original principal amount of $65,000,000.00, made by Borrowers in favor of Citizens Bank, a national banking association (the "Citizens Bank Note");

(iii) Amended and Restated Promissory Note dated January 23, 2020, in the original principal amount of $65,000,000.00, made by Borrowers in favor of Regions Bank (the "Regions Bank Note");

(v) Second Amended and Restated Promissory Note dated January 23, 2020, in the original principal amount of $95,000,000.00, made by Borrowers in favor of U.S. Bank National Association, a national banking association (the "US Bank Note" and collectively with the Citizens Bank Note, Associated Bank Note, Regions Bank Note and City National Bank Note, the "Notes"); and

(vi) Deed of Trust, Assignment of Leases and Rents, Security Agreement, Fixture Filing and Financing Statement (515 Congress Project) recorded as Instrument No. 2018164110 in the Official Records on October 18, 2018 (as the same was amended pursuant to the First Modification (Long Form), the First Modification (Short Form), the Second Modification (Long Form) and the Second Modification (Short Form), as the same may be further amended or modified from time to time (including hereby), the "Deed of Trust"), which Deed of Trust

SMRH:4864-9453-7376.4	-2-

encumbers the real property described on Exhibit A attached hereto and incorporated herein by reference.

C. Concurrently with entering into this Agreement, Borrowers, Agent and Lenders are entering into that certain Additional Advance and Third Modification Agreement (Long Form) of even date herewith (the "Third Modification (Long Form)") pursuant to which Lenders have agreed to amend the Loan Documents, subject to the terms and conditions of the Third Modification (Long Form).

D. As used herein, the term "Loan Documents" shall mean the Loan Agreement, the Deed of Trust, the Notes, and the other "Loan Documents" described in the Loan Agreement and the Third Modification (Long Form). This Agreement and the Third Modification (Long Form) also shall constitute Loan Documents.

AGREEMENT

NOW, THEREFORE, with reference to the foregoing Recitals and information, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Agent and Trustor hereby agree as follows:

1.The recitals set forth above are incorporated herein by this reference.

2.The Third Modification (Long Form) is incorporated in this Agreement by reference, as though set forth in full herein.

3.On and subject to the terms and conditions of the Third Modification (Long Form), Agent and Lenders have agreed to, among other things, (A) provide for the extension of the current Maturity Date from March 1, 2024 to April 15, 2024, (B) subject to the satisfaction of certain terms and conditions set forth in the Third Modification (Long Form), provide for an additional extension of the Maturity Date from April 15, 2024 to March 1, 2026, and (C) subject to the terms and conditions of the Third Modification (Long Form), (i) convert the Revolving Debt into debt under the Non-Revolving Portion (such that it may not be reborrowed once repaid) and eliminate the Revolving Portion (and the rights of Borrower to borrow Loan proceeds on a revolving basis thereunder) under the Loan Documents, (ii) eliminate the Accordion Option, (iii) provide for a holdback of a portion of the Loan (consisting of the Tenant Improvement Allocation and the General Use Allocation (as such terms are defined in the Third Modification (Long Form)) to be disbursed subject to the satisfaction of certain terms and conditions, including, among other things, Borrower's causing the release of one of the Projects (subject to the terms of the Third Modification (Long Form)), (iv) provide for certain cash management mechanisms, (v) modify certain terms and provision related to the interest rate, and (vi) amend certain other terms and conditions described herein, in each case, subject to the terms and conditions of the Third Modification (Long Form).

4.All references in the Loan Documents to the Deed of Trust shall be deemed to refer to the Deed of Trust as amended by this Agreement. All references in the Deed of Trust to any Loan Document shall be deemed to refer to such Loan Document as modified hereby, and by the Third Modification (Long Form).

SMRH:4864-9453-7376.4	-3-

5.In addition to all other indebtedness and obligations secured thereby, the Deed of Trust is amended to secure the payment and performance of the Loan as amended, and all present and future indebtedness and obligations of Borrowers under (i) the Notes, (ii) the Loan Agreement and the other Loan Documents, as amended by the Third Modification (Long Form), (iii) the Third Modification (Long Form), (iv) this Agreement, (v) any Lender-Provided Swap Transactions, and (vi) any and all amendments, modifications, renewals and/or extensions of this Agreement, the Loan Agreement, the Lender-Provided Swap Transactions, the other Loan Documents and/or the Third Modification (Long Form), regardless of whether any such amendment, modification, renewal or extension is evidenced by a new or additional instrument, document or agreement.

6.All references in the Loan Documents to the Deed of Trust shall be deemed to refer to the Deed of Trust as amended by this Agreement. All references in the Deed of Trust to any Loan Document shall be deemed to refer to such Loan Document as modified hereby, and by the Third Modification (Long Form).

7.This Agreement shall be governed by the laws of the State of Texas, without regard to the principles thereof regarding conflict of laws, and any applicable laws of the United States of America.

8.This Agreement may be executed and recorded in any number of counterparts, all of which shall be considered one and the same instrument. The original, executed signature and acknowledgement pages of exact copies of this Agreement may be attached to one of such copies to form one document.

9.Section 10.33 of the Loan Agreement (Limited Recourse Provision) and Section 10.13 of the Loan Agreement (Joint Borrower Provisions) are by this reference hereby incorporated in their entirety.

10.Not a Novation. The parties each agree and acknowledge that the modifications set forth herein are not intended to be a novation or to constitute or evidence a new loan but rather a continuation of the existing Loan and the lien and charge of the Deed of Trust against the Property, and all assets and properties described in the Deed of Trust shall continue unabrogated and in full force and effect.

THE WRITTEN LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

[SIGNATURES TO FOLLOW]

SMRH:4864-9453-7376.4	-4-

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above.

TRUSTOR:

KBSIII 515 CONGRESS, LLC,

a Delaware limited liability company

By: KBSIII REIT ACQUISITION XXVII, LLC,

a Delaware limited liability company,

its sole member

By: KBS REIT PROPERTIES III, LLC,

a Delaware limited liability company,

its sole member

By: KBS LIMITED PARTNERSHIP III,

a Delaware limited partnership,

its sole member

By: KBS REAL ESTATE INVESTMENT TRUST III, INC.,

a Maryland corporation,

its general partner

By: /s/Charles J. Schreiber, Jr.

Charles J. Schreiber, Jr.

Chief Executive Officer

SMRH:4864-9453-7376
[Signature Page to Third Modification (Short Form)]
ACKNOWLEDGMENT
---
A notary public or other officer completing this<br>certificate verifies only the identity of the individual<br>who signed the document to which this certificate is<br>attached, and not the truthfulness, accuracy, or<br>validity of that document.
State of California<br><br>County of Orange)
On February 5, 2024 before me, K. Godin, Notary Public<br><br>(insert name and title of the officer)<br><br>personally appeared Charles J. Schreiber, Jr. ,<br><br>who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are<br><br>subscribed to the within instrument and acknowledged to me that he/she/they executed the same in<br><br>his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the<br><br>person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature /s/ K. Godin (Seal)

AGENT:

U.S. BANK NATIONAL ASSOCIATION,

a national banking association,

By: /s/Christopher Coburn

Name: Christopher Coburn

Title: SVP

SMRH:4864-9453-7376
[Signature Page to Third Modification (Short Form)]
ACKNOWLEDGMENT
---
A notary public or other officer completing this<br>certificate verifies only the identity of the individual<br>who signed the document to which this certificate is<br>attached, and not the truthfulness, accuracy, or<br>validity of that document.
State of California<br><br>County of Orange)
On February 5, 2024 before me, iilandia jaylynn englesby, notary public<br><br>(insert name and title of the officer)<br><br>personally appeared Christopher Coburn ,<br><br>who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are<br><br>subscribed to the within instrument and acknowledged to me that he/she/they executed the same in<br><br>his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the<br><br>person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature /s/ Iilandia Jaylynn Englesby (Seal)

EXHIBIT A

LEGAL DESCRIPTION

That certain real property located in Travis County, Texas, more particularly described as follows:

TRACT 1 (Bank of America Land):

All of Lots 4, 5 and 6, Block 56, of the Original City of Austin, Travis County, Texas, according to the Plat

on file at the General Land Office of the State of Texas.

TRACT 2 (515 Aliev Tract):

The westerly one-half of the alley adjoining Lots 4, 5 and 6, Block 56, of the Original City of Austin, Travis

County, Texas, according to the Plat on file at the General Land Office of the State of Texas as vacated by

the City of Austin by Ordinance No. 20081211-013, a certified copy of which is recorded under Document

No. 2008201289, of the Official Public Records of Travis County, Texas.

TRACT 3 (Access Easement Estate):

Easement Estate created by that certain Access Easement Agreement dated July 15, 2015, recorded

under Document No. 2015113052, of the Official Public Records of Travis County, Texas, upon, over and

across:

The westerly one-half of the alley adjacent to Lots 1, 2 and 3, Block 56, of the Original City of Austin,

Travis County, Texas, according to the Plat on file at the General Land Office of the State of Texas as

vacated by the City of Austin by Ordinance No. 20081211-013, a certified copy of which is recorded under

Document No. 2008201289, of the Official Public Records of Travis County, Texas; and

The easterly one-half of the alley adjacent to Lots 11 and 12, Block 56, of the Original City of Austin,

Travis County, Texas, according to the Plat on file at the General Land Office of the State of Texas as

vacated by the City of Austin by Ordinance No. 20081211-013, a certified copy of which is recorded under

Document No. 2008201289, of the Official Public Records of Travis County, Texas; and

The easterly one-half of the alley adjacent to the west 57 feet of Lots 7 and 8 and all of Lots 9 and 10,

Block 56, of the Original City of Austin, Travis County, Texas, according to the Plat on file at the General

SMRH:4864-9453-7376.4	Exhibit A

Land Office of the State of Texas as vacated by the City of Austin by Ordinance No. 20081211-013, a

certified copy of which is recorded under Document No. 2008201289, of the Official Public Records of

Travis County, Texas.

SMRH:4864-9453-7376.4	Exhibit A

Document

Exhibit 10.5

RECORDING REQUESTED BY<br><br>AND WHEN RECORDED MAIL TO:
Sheppard, Mullin, Richter & Hampton LLP<br><br>650 Town Center Drive, 10th Floor<br><br>Costa Mesa, California 92626<br><br>Attention: David Hengstler
	THIS SPACE ABOVE FOR RECORDER'S USE

ADDITIONAL ADVANCE AND THIRD MODIFICATION AGREEMENT

(Short Form – 515 Congress)

RECITALS

SMRH:4890-7842-5504.4	-1-

Lenders (the "Second Modification (Long Form)"), and (2) Second Modification Agreement (Short Form – 515 Congress) dated as of February 28, 2023, by and between Agent and 515 Congress Borrower, and recorded as Instrument No. 2023020597 in the Official Records on March 1, 2023 (the "Second Modification (Short Form)"), and (iii) the other Prior Modification Documents (as defined in the Third Modification (Long Form) (as defined below); the Original Loan Agreement, as amended by the Prior Modification Documents (as defined in the Third Modification (Long Form)), as the same may be further amended or modified in writing from time to time, is referred to herein as the "Loan Agreement"), Lenders agreed to make a term loan of up to $215,000,000.00 to Borrowers consisting of a Revolving Portion and a Non-Revolving Portion (as such terms are defined in the Loan Agreement), which loan amount was subsequently increased to up to $325,000,000.00 (consisting of a Revolving Portion and a Non-Revolving Portion) (as the same may be further amended hereby and by the Third Modification (Long Form), the "Loan") pursuant to the First Modification (Long Form) and the First Modification Agreement (Short Form). Capitalized terms used herein without definition have the meanings ascribed to them in the Loan Agreement or the Third Modification (Long Form), as applicable.

B. Borrower's obligations under the Loan are evidenced by those certain:

(i) Promissory Note dated January 23, 2020, in the original principal amount of $65,000,000.00, made by Borrowers in favor of Citizens Bank, a national banking association (the "Citizens Bank Note");

(iii) Amended and Restated Promissory Note dated January 23, 2020, in the original principal amount of $65,000,000.00, made by Borrowers in favor of Regions Bank (the "Regions Bank Note");

(v) Second Amended and Restated Promissory Note dated January 23, 2020, in the original principal amount of $95,000,000.00, made by Borrowers in favor of U.S. Bank National Association, a national banking association (the "US Bank Note" and collectively with the Citizens Bank Note, Associated Bank Note, Regions Bank Note and City National Bank Note, the "Notes"); and

(vi) Junior Deed of Trust, Assignment of Leases and Rents, Security Agreement, Fixture Filing and Financing Statement (515 Congress Project) recorded as Instrument No. 2020011689 in the Official Records on January 24, 2020 (as the same was amended pursuant to the Second Modification (Long Form) and the Second Modification (Short Form), as the same may be further amended or modified from time to time (including hereby), the "Deed of Trust"), which Deed of Trust encumbers the real property described on Exhibit A attached hereto and incorporated herein by reference.

SMRH:4890-7842-5504.4	-2-

AGREEMENT

1.The recitals set forth above are incorporated herein by this reference.

2.The Third Modification (Long Form) is incorporated in this Agreement by reference, as though set forth in full herein.

SMRH:4890-7842-5504.4	-3-

Modification (Long Form), (iv) this Agreement, (v) any Lender-Provided Swap Transactions, and (vi) any and all amendments, modifications, renewals and/or extensions of this Agreement, the Loan Agreement, the Lender-Provided Swap Transactions, the other Loan Documents and/or the Third Modification (Long Form), regardless of whether any such amendment, modification, renewal or extension is evidenced by a new or additional instrument, document or agreement.

7.This Agreement shall be governed by the laws of the State of Texas, without regard to the principles thereof regarding conflict of laws, and any applicable laws of the United States of America.

9.Section 10.33 of the Loan Agreement (Limited Recourse Provision) and Section 10.13 of the Loan Agreement (Joint Borrower Provisions) are by this reference hereby incorporated in their entirety.

THE WRITTEN LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

[SIGNATURES TO FOLLOW]

SMRH:4890-7842-5504.4	-4-

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above.

TRUSTOR:

KBSIII 515 CONGRESS, LLC,

a Delaware limited liability company

By: KBSIII REIT ACQUISITION XXVII, LLC,

a Delaware limited liability company,

its sole member

By: KBS REIT PROPERTIES III, LLC,

a Delaware limited liability company,

its sole member

By: KBS LIMITED PARTNERSHIP III,

a Delaware limited partnership,

its sole member

By: KBS REAL ESTATE INVESTMENT TRUST III, INC.,

a Maryland corporation,

its general partner

By: /s/Charles J. Schreiber, Jr.

Charles J. Schreiber, Jr.

Chief Executive Officer

SMRH:4890-7842-5504
[Signature Page to Third Modification (Short Form)]
ACKNOWLEDGMENT
---
A notary public or other officer completing this<br>certificate verifies only the identity of the individual<br>who signed the document to which this certificate is<br>attached, and not the truthfulness, accuracy, or<br>validity of that document.
State of California<br><br>County of Orange)
On February 5, 2024 before me, K. Godin, Notary Public<br><br>(insert name and title of the officer)<br><br>personally appeared Charles J. Schreiber, Jr. ,<br><br>who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are<br><br>subscribed to the within instrument and acknowledged to me that he/she/they executed the same in<br><br>his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the<br><br>person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature /s/ K. Godin (Seal)

AGENT:

U.S. BANK NATIONAL ASSOCIATION,

a national banking association,

By: /s/Christopher Coburn

Name: Christopher Coburn

Title: SVP

SMRH:4890-7842-5504
[Signature Page to Third Modification (Short Form)]
ACKNOWLEDGMENT
---
A notary public or other officer completing this<br>certificate verifies only the identity of the individual<br>who signed the document to which this certificate is<br>attached, and not the truthfulness, accuracy, or<br>validity of that document.
State of California<br><br>County of Orange)
On February 5, 2024 before me, iilandia jaylynn englesby, notary public<br><br>(insert name and title of the officer)<br><br>personally appeared Christopher Coburn ,<br><br>who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are<br><br>subscribed to the within instrument and acknowledged to me that he/she/they executed the same in<br><br>his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the<br><br>person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature /s/ Iilandia Jaylynn Englesby (Seal)