On May 7, 2020, KBS Real Estate Investment Trust III, Inc. (the “Company”), through a consolidated joint venture (the “Hardware Village Joint Venture”) sold a multi-family apartment project (“Hardware Village”) to a buyer unaffiliated with the Hardware Village Joint Venture, the Company or the Company’s advisor, KBS Capital Advisors LLC (the “Advisor”), for a purchase price of $178.0 million, before third-party closing costs, credits and the disposition fee payable to the Advisor. The cost basis of the Company’s investment in Hardware Village, including the cost for the Company to buyout the joint venture partner’s interest in the Hardware Village Joint Venture as of May 7, 2020, was $134.7 million. The buyer of Hardware Village paid the purchase price in a combination of approximatel y $27.8 million in cash and approximately $150.2 million in seller financing provided by an indirect wholly owned subsidiary of the Company (the “Lender”). In connection with the sale and seller financing, on May 7, 2020, the buyer entered into a promissory note with the Lender for $150.2 million. The promissory note was secured by a first mortgage on Hardware Village (the “Hardware Village First Mortgage”).
On December 11, 2020, the buyer/borrower on the Hardware Village First Mortgage exercised its prepayment option available under the promissory note, pursuant to which the buyer/borrower paid off the entire outstanding principal balance and accrued interest in the amount of $150.4 million, without fee, premium or penalty. The Hardware Village First Mortgage had an original maturity date of May 6, 2021.
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 hereunto duly authorized.
KBS REAL ESTATE INVESTMENT TRUST III, INC.
Dated: December 16, 2020
/s/ Jeffrey K. Waldvogel
Jeffrey K. Waldvogel
Chief Financial Officer, Treasurer and Secretary
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