KBS REIT Snares $1B Financing Commitment

BofA, Wells Fargo and U.S. Bank were the joint lead arrangers of the three-year facility, which marks the largest single financing transaction in the company’s history.
Chuck Schreiber, KBS CEO
Chuck Schreiber, KBS CEO

KBS Real Estate Investment Trust III, of Newport Beach, Calif., has closed on the largest financing facility in KBS’s history, a three-year $1.01 billion financing commitment consisting of a $757.5 million term loan that was funded at close and a $252.5 million revolving loan, of which $222.5 million remains unfunded, the REIT announced. Proceeds from the new loan facility reportedly will be used to replace existing debt agreements and fund other KBS REIT III liquidity needs, including capital improvement and capital expenditures on office properties held by the non-traded REIT.

This new financing facility, the largest single financing transaction in KBS history, allows us to take advantage of favorable conditions in the debt markets, while providing new capital to further enhance the properties in the portfolio,” KBS CEO Chuck Schreiber said in a prepared statement.

He added that the loan encumbers eight of the 29 properties held by KBS REIT III and that the REIT’s portfolio is valued at more than $3.5 billion.

Bank of America is the joint lead arranger and administrative agent for a group of financial institutions providing the debt, which include joint lead arrangers Wells Fargo and U.S. Bank.

Additional lenders will be buying into the facility in the coming weeks, but it has not yet been determined who they will be, a KBS spokesperson told Commercial Property Executive.

KBS Capital Advisors is the external advisor to the KBS REITs and is an affiliate of KBS Realty Advisors.

A sizable portfolio studded with trophies 

Some of the more prominent assets in the REIT’s portfolio include The Almaden, a three-building, 416,100-square-foot office park in San Jose. KBS REIT III bought this property in September 2015 for $150 million.

Other assets include 201 17th St. in Atlanta, a 17-story, 355,870-square-foot office tower situated in the Midtown submarket; Park Place Village in Leawood, Kan., a 483,119-square-foot, 10-building office-and-retail property in metro Kansas City; Village Center Station in Greenwood Village, Colo., a nine-story, 234,915-square-foot Class A office building in metro Denver; 3003 Washington Blvd. in Arlington, Va., a recently completed 10-story, 211,170-square-foot office building; Towers at Emeryville in Emeryville, Calif., a three-building, 815,018-square-foot Class A office park across the bay from San Francisco; Carillon, a 24-story, 476,300-square-foot LEED Gold office tower in Charlotte, N.C.; 515 Congress, Austin, Texas, a 26-story, 258,100-square-foot downtown office tower; as well as Crosspoint in Wayne, Pa., a 272,300-square-foot office building in metro Philadelphia.

Image courtesy of KBS REIT