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☒ No fee required. ☐ Fee paid previously with preliminary materials. ☐ Fee computed on table in exhibit required by Item 25(b) per |
¨ Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2)Rules 14a-6(i)(1) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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We expect to mail a Notice of Internet Availability of Proxy Materials containing instructions on how to access our proxy materials, including our
We expect to mail a paper copy of our proxy materials to our other stockholders on or about April 22, 2016.
27, 2023.
IMPORTANT NOTICE REGARDING AVAILABILITY OF PROXY MATERIALS FOR THE 2016 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JULY 7, 2016:
Our proxy statement, form of proxy card and 2015 annual report to stockholders are also available at
www.proxyvote.com, and can be accessed by using the 12-digit control number and following the instructions
located on the proxy card.
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IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON TUESDAY, JULY 11, 2023: Our proxy statement, form of proxy card and 2022 annual report to stockholders are also available at www.proxyvote.com, and can be accessed by using the 16-digit control number and following the instructions located on the enclosed proxy card. | ||
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Directors.”
Director Independence
Althoughindependence criteria as specified in our charter. Our charter defines an independent director as a director who is not and has not for the last two years been associated, directly or indirectly, with our sponsor, KBS Holdings LLC (“KBS Holdings”), or our advisor, KBS Capital Advisors. A director is deemed to be associated with our sponsor or our advisor if he or she (i) owns an interest in our sponsor, our advisor or any of their affiliates; (ii) is employed by our sponsor, our advisor or any of their affiliates; (iii) is an officer or director of our sponsor, our advisor or any of their affiliates, (iv) performs services, other than as a director, for us; (v) is a director for more than three REITs organized by our sponsor or advised by our advisor; or (vi) has any material business or professional relationship with our sponsor, our advisor or any of their affiliates. A business or professional relationship will be
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board of directors considered that Peter M. Bren, one of our executive officers and sponsors, is a founding member of the Richard S. Ziman Center for Real Estate at the UCLA Anderson School of Management, that Professor Gabriel is a Director of the Richard S. Ziman Center for Real Estate and Professor of Finance and Arden Realty Chair at the UCLA Anderson School of Management and that in March 2012, Mr. Bren pledged a gift of $1.25 million to the Richard S. Ziman Center for Real Estate at the UCLA Anderson School of Management. The contribution by Mr. Bren would be made over five years in the amount of $250,000 per year. Because this contribution is to a tax exempt entity and the contribution will not exceed $250,000 in any year, the board of directors determined that this contribution was not material and Professor Gabriel met the New York Stock Exchange independence standards.
www.kbsreitiii.com.
19 meetings, 13 of which were joint meetings with the audit committee of KBS Real Estate Investment Trust II, Inc. (“KBS REIT II”). During 2022, each director who was a member of the audit committee attended at least 75% of the meetings of the audit committee held during the period for which he was a member of the audit committee.
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2015 2014 Audit fees Audit-related fees Tax fees All other fees Total Young LLP’s communications with the audit committee concerning independence and discussed with Ernst & Young LLP their independence from us. In addition, the audit committee considered whether Ernst & April one occasion. During 2022, each director who was a member of the conflicts committee attended at least 75% of the meetings of the conflicts committee held during the period for which he was a member of the conflicts committee. affiliates, including information regarding future payments by our advisor to its employees under our advisor’s employee retention program that are reimbursed by us from the Bonus Retention Fund (defined below). to offer shares under our dividend reinvestment plan. In some states, we will need to renew the registration statement annually or file a new registration statement to continue our dividend reinvestment plan offering. We may terminate our dividend reinvestment plan offering at any time. For the year ended December 31, the SREIT decides to forego the acquisition opportunity, such asset may then be offered to the Core Strategy REITs at the discretion of our advisor. 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 SREIT. our advisor. unlimited number of successive one-year renewals upon the mutual consent of the parties. From January 1, behalf. loans. management fees accruing from March 1, 2014, our advisor manager to the surviving entity in such transaction; and us. our al did not incur any disposition fees. 1, 2022 through February 28, 2023, we incurred offering. this agreement, of which Amended Lease. Prior to their approval of the lease and the Amended Lease, our conflicts committee and board of directors determined the lease and the Amended Lease to be fair and reasonable to us. April 866-527-4264. •Via the Internet at http://kbsreitiii.ethicspoint.com; •By mailing a description of the suspected violation or concern to:Principal Independent Registered Public Accounting Firm FeesThe audit committee reviewed the audit and non-audit services performed by Ernst & Young LLP, as well as the fees charged by Ernst & Young LLP for such services. In its review of the non-audit service fees, the audit committee considered whether the provision of such services is compatible with maintaining the independence of Ernst & Young.Young LLP. The aggregate fees billed to us for professional accounting services, including the audit of our annual financial statements by Ernst & Young LLP for the years ended December 31, 20152022 and 2014,2021, are set forth in the table below. $745,500 $666,465 10,000 25,000 266,707 168,868 333 399 $1,022,540 $860,732 2022 2021 Audit fees $ 800,000 $ 778,500 Audit-related fees — — Tax fees 181,956 163,558 All other fees 2,400 2,400 Total $ 984,356 $ 944,458 For purposes of the preceding table, Ernst & Young’sYoung LLP’s professional fees are classified as follows:●Audit fees – These are fees for professional services performed for the audit of our annual financial statements and the required review of quarterly financial statements and other procedures performed by Ernst & Young in order for them to be able to form an opinion on our consolidated financial statements. These fees also cover services that are normally provided by independent auditors in connection with statutory and regulatory filings or engagements.●Audit-related fees – These are fees for assurance and related services that traditionally are performed by independent auditors that are reasonably related to the performance of the audit or review of our financial statements, such as due diligence related to acquisitions and dispositions, attestation services that are not required by statute or regulation, internal control reviews and consultation concerning financial accounting and reporting standards.●Tax fees – These are fees for all professional services performed by professional staff in our independent auditor’s tax division, except those services related to the audit of our financial statements. These include fees for tax compliance, tax planning and tax advice, including federal, state and local issues. Services may also include assistance with tax audits and appeals before the IRS and similar state and local agencies, as well as federal, state and local tax issues related to due diligence.●All other fees – These are fees for any services not included in the above-described categories.•Audit fees – These are fees for professional services performed for the audit of our annual financial statements and the required review of quarterly financial statements and other procedures performed by Ernst & Young LLP in order for them to be able to form an opinion on our consolidated financial statements. These fees also cover services that are normally provided by independent registered public accounting firms in connection with statutory and regulatory filings or engagements.•Audit-related fees – These are fees for assurance and related services that traditionally are performed by independent registered public accounting firms that are reasonably related to the performance of the audit or review of our financial statements, such as due diligence related to acquisitions and dispositions, attestation services that are not required by statute or regulation, internal control reviews and consultation concerning financial accounting and reporting standards.•Tax fees – These are fees for all professional services performed by professional staff in our independent registered public accounting firm’s tax division, except those services related to the audit of our financial statements. These include fees for tax compliance, tax planning and tax advice, including federal, state and local issues. Services may also include assistance with tax audits and appeals before the U.S. Internal Revenue Service (the “IRS”) and similar state and local agencies, as well as federal, state and local tax issues related to due diligence.•All other fees – These are fees for any services not included in the above-described categories.Report of the Audit CommitteeThe function of the audit committee is oversight of the financial reporting process on behalf of the board of directors. Management has responsibility for the financial reporting process, including the system of internal control over financial reporting, and for the preparation, presentation and integrity of our financial statements. In addition, theour independent auditors devoteregistered public accounting firm devotes more time and havehas access to more information than does the audit committee. Membership on the audit committee does not call for the professional training and technical skills generally associated with career professionals in the field of accounting and auditing. Accordingly, in fulfilling their responsibilities, it is recognized that members of the audit committee are not, and do not represent themselves to be, performing the functions of auditors or accountants.In this context, the audit committee reviewed and discussed the 20152022 audited financial statements with management, including a discussion of the quality and acceptability of our financial reporting, the reasonableness of significant judgments and the clarity of disclosures in the financial statements. The audit committee discussed with Ernst & Young LLP, which is responsible for expressing an opinion on the conformity of those audited financial statements with U.S. generally accepted accounting principles (“GAAP”), the matters required to be discussed by Auditing Standard No. 16, “Communications with Audit Committees,” as adopted bythe applicable requirements of the Public Company Accounting Oversight Board.Board and the SEC. The audit committee received from Ernst & Young LLP the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding Ernst & Young’s8Young’sYoung LLP’s provision of non-audit services is compatible with Ernst & Young’sYoung LLP’s independence.9Based on these reviews and discussions, the audit committee recommended to the board of directors that the audited financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 20152022 for filing with the SEC.6, 2016The Audit Committee of the Board of Directors:Hank Adler (chair), Barbara R. Cambon, andJeffrey A. Dritley, Stuart A. Gabriel, Ph.D.(chair), Robert Milkovich and Ron D. SturzeneggerThe foregoing Report of the Audit Committee shall not be deemed to be “soliciting material” or incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Exchange Act, except to the extent that we specifically incorporate this information by reference, and shall not otherwise be deemed filed under the Exchange Act.The Conflicts CommitteeGeneralThe members of the conflicts committee are Barbara R. CambonJeffrey A. Dritley (chair), Hank Adler and Stuart A. Gabriel, Ph.D., Robert Milkovich and Ron D. Sturzenegger, all of whom are independent directors. Our charter empowers the conflicts committee to act on any matter permitted under Maryland law if the matter at issue is such that the exercise of independent judgment by directors who are affiliates of our advisor could reasonably be compromised. Among the duties of the conflicts committee are the following:●reviewing and reporting on our policies (see “ – Report of the Conflicts Committee – Review of Our Policies” below);●approving transactions with affiliates and reporting on their fairness to us (see “ – Report of the Conflicts Committee – Certain Transactions with Related Persons” below);●supervising and evaluating the performance and compensation of our advisor;●reviewing our expenses and determining that they are reasonable and within the limits prescribed by our charter;●approving borrowings in excess of the total liabilities limit set forth in our charter; and●discharging the board of directors’ responsibilities relating to compensation.•reviewing and reporting on our policies;•approving transactions with affiliates and reporting on their fairness to us;•supervising and evaluating the performance and compensation of our advisor;•reviewing our expenses and determining that they are reasonable and within the limits prescribed by our charter;•approving borrowings in excess of the total liabilities limit set forth in our charter; and•discharging the board of directors’ responsibilities relating to compensation.The primary responsibilities of the conflicts committee are enumerated in our charter. The conflicts committee does not have a separate committee charter.During 2015,2022, the conflicts committee held 1451 meetings participated in three joint meetings with the entire board of directors and acted by unanimous consent on two occasions.Oversight of Executive CompensationAs noted above, the conflicts committee discharges the board of directors’ responsibilities relating to the compensation of our executives. However, we do not have any paid employees and our executive officers do not receive any compensation directly from us. Our executive officers are officers and/or employees of, or hold an indirect ownership interest in, our advisor and/or its affiliates and our executive officers are compensated by these entities, in part, for their services to us or our subsidiaries. See “– “—Report of the Conflicts Committee – Committee—Certain Transactions with Related Persons” below for a discussion of the fees paid to our advisor and its affiliates.Report of the Conflicts CommitteeReview of Our PoliciesThe conflicts committee has reviewed our policies and determined that they are in the best interest of our stockholders. Set forth below is a discussion of the basis for that determination.Offering Policy. We ceased offering shares of common stock in our primary initial public offering on May 29, 2015 and terminated our primary initial public offering on July 28, 2015. We believe the termination of our primary initial public offering was in the best interest of our stockholders because we had raised sufficient funds to acquire a diverse portfolio of real estate investments to meet our stated investment objectives. We plan to continue92015,2022, the costs of raising capital in our now-terminated primary initial public offering and our dividend reinvestment plan offering represented 9% less thanAcquisition and Investment Policies.As of April 25, 2023, we owned 16 office properties, one mixed-use office/retail property and an investment in the equity securities of Prime US REIT (SGX-ST Ticker: OXMU), a Singapore real estate investment trust (the “SREIT”).10We have invested substantially all of the net proceeds of our now-terminated primary initial public offering inacquired and manage a diverse portfolio of real estate investments. From time to time, and based upon asset sales, the maturity, prepayment or workout of debt-related investments, availability under our debt facilities or market conditions, we may seek to make additional real estate investments.We have made investments in core real estate properties, which are generally lower risk, existing properties with at least 80% occupancy and minimal near-term lease rollover. Ourproperties. At acquisition of the assets in the portfolio, our primary investment focus iswas core office properties located throughout the United States, though we have and may alsoin the future invest in other types of properties. The core office properties in which we have invested include low-rise, mid-rise and high-rise office buildings and office parks in urban and suburban locations in or near central business districts with access to transportation. Our core property focus in the U.S. office sector has reflected a more value-creating core strategy. In many cases, these properties have slightly higher (10% to 15%) vacancy rates and/or higher near-term lease rollover at acquisition than more conservative value-maintaining core properties. These characteristics may provide us with opportunities to lease space at higher rates, especially in markets with increasing absorption, or to re-lease space at higher rates, bringing below-market rates of in-place expiring leases up to market rates. Many of these properties required or will require a moderate level of additional investment for capital expenditures and tenant improvement costs in order to improve or rebrand the properties and increase rental rates. Thus, we believe these properties will provide an opportunity for us to achieve more significant capital appreciation by increasing occupancy, negotiating new leases with higher rental rates and/or executing enhancement projects.We acquire all of ourreal estate-related investments based on real estate assets directly or through our operating partnership, though we may invest in other entities that make similar investments. market conditions and investment opportunities. We generally hold fee title to or a long-term leasehold estate in the real estate properties we have acquired. We have also made investments through joint ventures, and in our portfolio. Wethe future we may also enter into other joint ventures, partnerships and other co-ownership arrangements (including preferred equity investments) or participations for the purpose of obtaining interests in real estate properties and for the development or improvement of properties.When making an acquisition, we have emphasized the performance and risk characteristics of that investment, how that investment fits with our portfolio-level performance objectives, the other assets in our portfolio and how the returns and risks of that investment compare to the returns and risks of available investment alternatives. We have attempted to construct a portfolio that produces stable and attractive returns by spreading risk across different real estate investments.WeAlso, in connection with the Singapore Transaction (defined under “– Certain Transactions with Related Persons – Singapore Transaction”), our board of directors and conflicts committee adopted the asset Allocation Process proposed by our advisor and KBS Realty Advisors LLC (“KBS Realty Advisors”).Allocation Policy. In connection with the Singapore Transaction, our advisor and KBS Realty Advisors proposed that our conflicts committee and board of directors adopt an asset allocation policy (the “Allocation Process”) among us, KBS REIT II and KBS Growth & Income REIT, Inc. (“KBS Growth & Income REIT”) (collectively, the “Core Strategy REITs”) and the SREIT. Our conflicts committee and board of directors adopted the Allocation Process as proposed. The Allocation Process provides that, in order to mitigate potential conflicts of interest that may arise among the Core REITs and the SREIT, upon the listing of the SREIT on the SGX-ST on July 19, 2019, potential asset acquisitions that meet all of the following criteria would be offered first to the SREIT:(i)Class A office building;(ii)Purchase price of at least $125.0 million;(iii)Average occupancy of at least 90% for the first two years based on contractual in-place leases; and(iv)Stabilized property investment yield that is generally supportive of the distributions per unit of the SREIT.To the extent the SREIT does not have also originated a first mortgage loan and currently do not expectthe funds to make any significant real estate-related investments.Asacquire the asset or to the extent the external manager of April 6, 2016, we owned 28 office properties and one mixed-use office/retail property and had originated one first mortgage loan.Borrowing Policies.Policies. We have financed our real estate acquisitions to date with a combination of the proceeds received from our now-terminated primary initial public offering and debt. We may use proceeds from borrowings to:to finance acquisitions of new real estate and real estate-related investments; to pay for capitalproperty improvements, repairs orand tenant build-outs to properties;properties and for other capital expenditures; to refinance existing indebtedness; to pay distributions; to fund the redemption or repurchase of our shares; or to provide working capital. Careful use of debt will help us to achieve our diversification goals because we will have more funds available for investment. Our investment strategy is to utilize primarily secured and possibly unsecured debt to finance our investment portfolio. portfolio, though from time to time we also use unsecured debt.We may elect to secure financing subsequent to the acquisition date of future real estate investments and initially acquire investments without debt financing. To the extentexpect that we do not finance our real estate investments, our ability to acquire additional real estate investments will be restricted.Once we have fully invested the proceeds of our now-terminated primary initial public offering, we expect our debt financing and other liabilities towill be between 35%45% and 65% of the cost of our tangible assets (before deducting depreciation orand other non-cash reserves). We expect our debt financing related to the acquisition of core real estate properties to be between 45% and 65% of the aggregate cost of all such assets. We expect our debt financing related to the acquisition and origination of real estate-related investments to be between 0% and 65% of the aggregate cost of all such assets depending upon the availability of such financings in the marketplace. 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 (before deducting depreciation or other non-cash reserves) of our tangible assets (before deducting depreciation and other non-cash reserves) meaning that our10aton attractive terms, the conflicts committee may approve debt in excess of this limit. From time to time, our total liabilities could also be below 35%45% of the cost of our tangible assets due to the lack of availability of debt financing. As of January 31, 2016,February 28, 2023, our borrowings and other liabilities were approximately 55%58% of both the cost (before deducting depreciation orand other noncash reserves) and 60% of the book value (before deducting depreciation) of our tangible assets, respectively.11Disposition Policies. We generally intend to hold our core properties for three to seven years, which we believe is a reasonable period to enable us to capitalize on the potential for increased income and capital appreciation of properties. We do not expect to make or invest in loans with a maturity of more than ten years from the date of our investment and anticipate that most loans will have a term of five years. We may hold some of our investments in loans for four to seven years. Our advisor develops a well-defined exit strategy for each investment we make and periodically performs a hold-sell analysis on each investment.asset. These periodic analyses focus on the remaining available value enhancement opportunities for the investment,asset, the demand for the investmentasset in the marketplace, market conditions and our overall portfolio objectives to determine if the sale of the investment,asset, whether via an individual sale or as part of a portfolio sale or merger, would generate a favorable return to our stockholders. Economic and market conditions may influence us to hold our investmentsassets for different periods of time. We may sell an investmentasset before the end of the expected holding period if we believe that market conditions and asset positioning have maximized its value to us or the sale of the investmentasset would otherwise be in the best interests of our stockholders.WeDuring the year ended December 31, 2022, we did not sell any real estate investments duringproperties or any units in the year ended December 31, 2015.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 conflicts committee’s and the board of directors’ assessment of alternatives available to us, market conditions, uncertainty as a result of the COVID-19 pandemic’s impact on work-from-home arrangements and the impact of such arrangements on the U.S. office market, the debt capital markets, and the lack of liquidity in the marketplace, and on September 28, 2022, 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.Policy Regarding Working Capital Reserves. We establish an annual budget for capital requirements and working capital reserves that we update periodically during the year. We have set aside proceeds from our now-terminated primary public offering for working capital purposes. We may also use proceeds from our dividend reinvestment plan offering, cash on hand, proceeds from asset sales, debt proceeds and cash flow from operations to meet our needs for working capital for the upcoming year and to build a moderate level of cash reserves.Policies Regarding Operating Expenses.Expenses. 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 December 31, 20152022 did not exceed the charter-imposed limitation. For the four consecutive quarters ended December 31, 2015,2022, total operating expenses represented approximately 0.9% and 23%31% of our average invested assets and our net income, respectively.11Our Policy Regarding Transactions with Related PersonsOur charter requires the conflicts committee to review and approve all transactions between us and our advisor, any of our officers or directors or any of their affiliates. Prior to entering into a transaction with a related party, a majority of the conflicts committee must conclude that the transaction is fair and reasonable to us and on terms and conditions not less favorable to us than those available from unaffiliated third parties.us. In addition, our Code of Conduct and Ethics lists examples of types of transactions with related parties that would create prohibited conflicts of interest and requires our officers and directors to be conscientious of actual and potential conflicts of interest with respect to our interests and to seek to avoid such conflicts or handle such conflicts in an ethical manner at all times consistent with applicable law. Our executive officers and directors are required to report potential and actual conflicts to the Compliance Officer, currently our advisor’s ChiefDirector of Internal Audit, Executive, via the Ethics Hotline or directly to the audit committee chair, as appropriate.Certain Transactions with Related PersonsThe conflicts committee has reviewed the material transactions between our affiliates and us since the beginning of 20152022 as well as any such currently proposed material transactions. Set forth below is a description of such transactions and the conflicts committee’s report on their fairness.As described further below, weWe have entered into agreements with certain affiliates pursuant to which they provide services to us. Peter M. Bren, Keith D. Hall, Peter McMillan IIIAll of our executive officers and our affiliated directors are also officers, directors, managers, or key professionals of and/or holders of a direct or indirect controlling interest in our advisor, KBS Capital Markets Group LLC, our dealer manager (“KBS Capital Markets Group”), and other affiliated KBS entities. Charles J. Schreiber, Jr. controlis our Chief Executive Officer, our President and indirectly own ouran affiliated director. Our advisor KBS Capital Advisors LLC, and the entity that acted as the dealer manager of our now-terminated primary initial public offering, KBS Capital Markets Group LLC. We refer to these individuals as our sponsors. They are also some of our executive officers. All four of our sponsors actively participate in the management and operations of our advisor. Our advisor has three managers: an entity owned and controlled by Mr. Bren; an entity ownedKBS Holdings, our sponsor. Charles J. Schreiber, Jr. indirectly controls our sponsor and controlled by Messrs. Hall and McMillan; and an entity owned and controlled by Mr. Schreiber.12Our Relationship with KBS Capital Advisors. OurAdvisors. Since our inception, our advisor provideshas provided day-to-day management of our business. Among the services that are provided or have been provided by our advisor under the terms of the advisory agreement are the following:●finding, presenting and recommending to us real estate and real estate-related investment opportunities consistent with our investment policies and objectives;●structuring the terms and conditions of our investments, sales and joint ventures;●acquiring properties and other investments on our behalf in compliance with our investment objectives and policies;●sourcing and structuring our loan originations and acquisitions;●arranging for financing and refinancing of our properties and our other investments;●entering into leases and service contracts for our properties;●supervising and evaluating each property manager’s performance;●reviewing and analyzing the properties’ operating and capital budgets;●assisting us in obtaining insurance;●generating an annual budget for us;●reviewing and analyzing financial information for each of our assets and our overall portfolio;●formulating and overseeing the implementation of strategies for the administration, promotion, management, operation, maintenance, improvement, financing and refinancing, marketing, leasing and disposition of our properties and other investments;●performing investor-relations services;●maintaining our accounting and other records and assisting us in filing all reports required to be filed with the SEC, the IRS and other regulatory agencies;●engaging in and supervising the performance of our agents, including our registrar and transfer agent; and●performing any other services reasonably requested by us.•finding, presenting and recommending to us investment opportunities consistent with our investment policies and objectives;•structuring the terms and conditions of our investments, sales and joint ventures;•acquiring properties and other investments on our behalf in compliance with our investment objectives and policies;•sourcing and structuring our loan originations and acquisitions;•arranging for financing and refinancing of our investments;•entering into leases and service contracts for our properties;•supervising and evaluating each property manager’s performance;•reviewing and analyzing the properties’ operating and capital budgets;•assisting us in obtaining insurance;•generating an annual budget for us;•reviewing and analyzing financial information for each of our assets and our overall portfolio;•formulating and overseeing the implementation of strategies for the administration, promotion, management, operation, maintenance, improvement, financing and refinancing, marketing, leasing and disposition of our investments;•performing investor-relations services;•maintaining our accounting and other records and assisting us in filing all reports required to be filed with the SEC, the IRS and other regulatory agencies;•engaging in and supervising the performance of our agents, including our registrar and transfer agent; and•performing any other services reasonably requested by us.Our advisor is subject to the supervision of the board of directors and only has such authority as we may delegate to it as our agent. The advisory agreement has a one-year term expiring September 27, 2016,2023, subject to an1220152022 through the most recent date practicable, which was January 31, 2016,February 28, 2023, we compensated our advisor as set forth below.OrganizationOur advisor or its affiliates have paid, and in the future may pay, some of the offering costs (other than selling commissions and dealer manager fees) related to our now-terminated primary initial public offering were sometimes paid and, with respect to our dividend reinvestment plan, offering, may be paid by our advisor, our dealer manager or their affiliates on our behalf, or we may pay these costs directly. Offering costs include all costs incurred in connection with our now-terminated primary initial public offering or the now withdrawn follow-on offering (the “Follow-on Offering”) or incurred or to be incurred with respect to our dividend reinvestment plan offering. Organization costs include all costs incurred by us in connection with our formation, including, but not limited to, our legal, feesaccounting, printing, mailing and other costs to incorporate.Pursuant to the advisory agreement and the dealer manager agreement, we were obligated to reimbursefiling fees. We are responsible for reimbursing our advisor our dealer manager and their affiliates for organization and offering costs they incurred on our behalf. However, atthese costs. At the terminationend of our now-terminated primary initial public offering and at the termination of our dividend reinvestment plan offering, our advisor has agreed to reimburse us to the extent that selling commissions, dealer manager fees and other organization and offering expenses incurred by us exceed 15% of the gross offering proceeds. In addition, at the termination of our now-terminated primary initial public offering and again at the termination our dividend reinvestment plan offering, our advisor has agreed to reimburse us to the extent that organization and other offering expenses excluding underwriting compensation (which includes selling commissions, dealer manager fees and any other items viewed as underwriting compensation by FINRA), exceed 2% of the gross offering proceeds. No reimbursements made by us to our advisor may cause total organization and offering expenses incurred by us to exceed 15% of the aggregate gross offering proceeds as of the date of reimbursement. From January 1, 20152022 through January 31, 2016,February 28, 2023, with respect to our dividend reinvestment plan, our advisor incurred approximately $0.4 million ofdid not incur any organization and offering expenses on our behalf related to our now-terminated primary initial public offering and our dividend reinvestment plan offering, all of which we had paid as of January 31, 2016.In addition, from inception through August 2015, we had recorded $1.2 million of offering costs related to the now-withdrawn Follow-on Offering. Pursuant to the advisory agreement, our advisor was obligated to reimburse us to the extent offering costs incurred by us in the Follow-on Offering exceeded 15% of the gross offering proceeds of the offering. On August 24, 2015, we withdrew the registration statement for the Follow-on Offering. As such, our advisor reimbursed us for $1.2 million of offering costs related to the Follow-on Offering.We incur acquisition and origination fees payable to our advisor equal to 1.0% of the cost of investments acquired by us, or the amount to be funded by us to acquire or originate loans, including the sum of the amount actually paid or allocated to the purchase, development, construction or improvement of such investments, acquisition and origination expenses and any debt attributable to such investments. Acquisition and origination fees relate to services provided in connection with the selection and acquisition or origination of real estate investments. Acquisition feesDuring the period from January 1, 20152022 through January 31, 2016 totaled approximately $9.2 million, all of whichFebruary 28, 2023, we had paid as of January 31, 2016. We did not acquire any investments accounted for as a business combination and we did not purchase or originate or purchase any loans from January 1, 2015 through January 31, 2016.In addition to acquisition and origination fees, we reimburse our advisor for customary acquisition and origination expenses, whether or not we ultimately acquire the asset. From January 1, 20152022 through January 31, 2016,February 28, 2023, our advisor and its affiliates did not incur any such costs on our behalf.13For asset management services, we pay our 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 or payable 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 or payable 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 or payable 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 the acquisition or origination fees paid or payable to our advisor), as of the time of calculation. However,We currently do not pay any asset management fees in connection with our investment in the equity securities of the SREIT.Notwithstanding the foregoing on November 8, 2022, we and our advisor renewed the advisory agreement and amended certain provisions related to the payment of asset management fees (the “Renewed Advisory Agreement”), among other provisions. Pursuant to the Renewed Advisory Agreement, commencing with asset management fees accruing from October 1, 2022, we will pay $1.15 million of the monthly asset management fee to our advisor in cash and we will deposit 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”). This Bonus Retention Fund was established in order to incentivize and retain key employees at our Advisor. We will be deemed to have fully funded the Bonus Retention Fund once we have deposited $8.5 million in cash into such account, at which time the monthly asset management fee will be payable in full 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 Renewed 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 Renewed 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 our advisor’s employee retention program, and our advisor has allocated awards of $725,000, $325,000, and $1,000,000 to Mr. Waldvogel, Ms. Yamane and Mr. DeLuca, respectively, from the Bonus Retention Fund, which awards would only be paid as set forth above. We have not made any payments to our advisor from the Bonus Retention Fund as of February 28, 2023.Prior to entering the Renewed Advisory Agreement, the advisory agreement had provided that with respect to asset13has agreed towould 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 IPAInstitute of Portfolio Alternatives (“IPA”) in November 2010 and interpreted by us, excluding asset management fees, doesdid not exceed the amount of distributions declared by us for record dates of that month. We remainremained obligated to pay our advisor an asset management fee in any month in which our MFFO, excluding asset management fees, for such month exceedsexceeded 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 will also bewas deferred under the advisory agreement. If the MFFO Surplus for any month exceedsexceeded the amount of the asset management fee payable for such month, any remaining MFFO Surplus will bewas applied to pay any asset management fee amounts previously deferred in accordance with the advisory agreement.NotwithstandingPursuant to the Renewed 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 Renewed 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.14Like the prior advisory agreement, the Renewed Advisory Agreement provides that notwithstanding the foregoing, any and all deferred asset management feesDeferred 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 deferredDeferred Asset Management Fees.In addition, the Renewed 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 management fees.(iv) the sale or other disposition of all or substantially all of our assets.The Renewed 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 Renewed 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 Renewed Advisory Agreement, all unpaid Deferred Asset Management Fees will automatically be forfeited by our advisor, and if the Renewed 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. There were no other material changes in the Renewed Advisory Agreement from the advisory agreement that was previously in effect.From January 1, 20152022 through January 31, 2016, ourFebruary 28, 2023, asset management fees totaled $22.1$20.7 million, and as of January 31, 2016, we had accrued and deferred payment of $12.1 million of theseexcluding asset management fees underthat were restricted for payment pursuant to the advisory agreement, as we believeRenewed Advisory Agreement related to the payment of this amount to our advisor is probable.Bonus Retention Fund. From January 1, 20152022 through January 31, 2016,February 28, 2023, we paid $13.4$20.2 million in asset management fees, $2.8 million $4.8 million of which related to asset management fees incurred in prior periods. These fees will be reimbursed in accordance with the terms noted above. The amountAs of February 28, 2023, we had accrued $11.2 million of asset management fees deferred will vary on a month-to-month basis andof which $8.5 million were Deferred Asset Management Fees. In addition to the total amountamounts above, as of February 28, 2023, we had accrued $2.7 million of asset management fees deferredthat were restricted for payment pursuant to the Renewed Advisory Agreement related to the Bonus Retention Fund. We have not made any payments to our advisor from the Bonus Retention Fund as well asof February 28, 2023. From January 1, 2022 through February 28, 2023, we agreed with our advisor to adjust MFFO for the timingpurpose of the deferralscalculation above to add back the following non-operating expenses: a one-time write-off of prepaid offering costs of $2.7 million and repayments are difficulta $0.5 million fee to predict as they will depend on the amountconflicts committee’s financial advisor in connection with the conflicts committee’s review of and terms of the debt we usealternatives available to acquire assets, the level of operating cash flow generated by future acquisitions and the performance of all of the real estate investments in our portfolio and other factors. In addition, deferrals and repayments may occur in the same period, and it is possible that there could be additional deferrals even after the initial deferrals are fully repaid.Under the advisory agreement, our advisor and its affiliates havehas the right to seek reimbursement from us for all costs and expenses they incurit incurs in connection with theirthe provision of services to us, including our allocable share of our advisor’s overhead, such as rent, employee costs, utilities, accounting software costs and cybersecurity costs. Our advisor may seek reimbursement forWith respect to employee costs, underand other than future payments pursuant to the advisory agreement. AtBonus Retention Fund, at this time our advisor only expects to seek reimbursement for our allocable portion of the salaries, benefits and overhead of internal audit department personnel providing services to us. In the future, if our advisor seeks reimbursement for additional employee costs, such costs may include our proportionate share of the salaries of persons involved in the preparation of documents to meet SEC reporting requirements. We currently do not reimburse our advisor or its affiliates for employee costs in connection with services for which our advisor earns acquisition or origination fees or disposition fees (other than reimbursement of travel and communication expenses) or, and other than future payments pursuant to the Bonus Retention Fund, we do not reimburse our advisor for the salaries and benefits our advisor or its affiliates may pay to our executive officers. officers or our directors that are affiliated with our advisor.From January 1, 20152022 through January 31, 2016,February 28, 2023, we reimbursed our advisor for $0.2 $0.3 million of operating expenses (of which $0.1 million was payable as of February 28, 2023), including $180,000$0.2 million of employee costs.15For substantial assistance in connection with the sale of properties or other investments, we pay our advisor or one of its affiliates 1.0% of the contract sales price of each property or other investment sold; provided, however, that if, in connection with such disposition, commissions are paid to third parties unaffiliated with our advisor or one of its affiliates, the fee paid to our advisor or one of its affiliates may not exceed the commissions paid to such unaffiliated third parties, and provided further that the aggregate disposition fees paid to our advisor or one of its affiliates and unaffiliated third parties may not exceed 6.0% of the contract sales price. We will not pay a disposition fee upon the maturity, prepayment or workout of a loan or other debt-related investment, provided that if we take ownership of a property as a result of a workout or foreclosure of a loan, we will pay a disposition fee upon the sale of such property. No disposition fees will be paid with respect to any sales of our investment in units of the SREIT. From January 1, 20152022 through January 31, 2016,February 28, 2023, we did not dispose ofsell any real estate investments.14On January 6, 2014, we, together with KBS Real Estate Investment Trust, Inc. (“KBS REIT I”), KBS Real Estate Investment Trust II, Inc. (“KBS REIT II”), KBS Strategic Opportunity REIT, Inc. (“KBS Strategic Opportunity REIT”), KBS Legacy Partners Apartment REIT, Inc. (“KBS Legacy Partners Apartment REIT”), KBS Strategic Opportunity REIT II, Inc. (“KBS Strategic Opportunity REIT II”), our dealer manager, our advisorproperties or other investments and other KBS-affiliated entities, entered into an errors and omissions and directors and officers liability insurance program where the lower tiers of such insurance coverage are shared. The cost of these lower tiers is allocated by our advisor and its insurance broker among each of the various entities covered by the program, and is billed directly to each entity. The allocation of these shared coverage costs is proportionate to the pricing by the insurance marketplace for the first tiers of directors and officers liability coverage purchased individually by each REIT. Our advisor’s and our dealer manager’s portion of the shared lower tiers’ cost is proportionate to the respective entities’ prior cost for the errors and omissions insurance. In June 2015, KBS Growth & Income REIT, Inc. (“KBS Growth & Income REIT”) was added to the insurance program at terms similar to those described above.In connection with our initial public offering, our sponsorsMessrs. Peter M. Bren, Schreiber, Keith D. Hall and Peter McMillan III agreed to provide additional indemnification to one of the participating broker-dealers. We agreed to add supplemental coverage to our directors’ and officers’ insurance coverage to insure our sponsors’the obligations of Messrs. Bren, Hall, McMillan and Schreiber under this indemnification agreement in exchange for reimbursement to us by our sponsorsMessrs. Bren, Hall, McMillan and Schreiber for all costs, expenses and premiums related to this supplemental coverage, which does not dilute the directors and officers liability insurance coverage for the KBS entities. From January 1, 20152022 through January 31, 2016,February 28, 2023, our advisor had incurred $0.1 millionmillion for the costs of the supplemental coverage obtained by us, all of which had been paid to the insurer or reimbursed to us as of February 28, 2023.As of December 31, 2021, we had been charged $0.8 million by certain vendors for services for which we believe we were either overcharged or which were never performed. From January 31, 2016.The conflicts committee considers our relationship with our advisor, our sponsor and our sponsorstheir affiliates during 20152022 to be fair. The conflicts committee believes that the amounts payable to our advisor under the advisory agreement are similar to those paid by other publicly offered, unlisted, externally advised REITs and that this compensation is necessary in order for our advisor to provide the desired level of services to us and our stockholders.Our Relationship with KBS Capital Markets Group. PursuantWe continue to the amended and restated dealer manager agreement, we paidoffer shares under our dealer manager up to 6.5% and 3.0% of the gross offering proceeds from our now-terminated primary initial public offering as selling commissions and dealer manager fees, respectively. A reduced sales commission and dealer manager fee was paiddividend reinvestment plan offering. From January 1, 2022 through February 28, 2023, with respect to certain categories of purchasers. No sales commission or dealer manager fee is paid with respect to shares issued pursuant to our dividend reinvestment plan offering. Our dealer manager reallowed 100% of selling commissions earned to participating broker-dealers. Our dealer manager also reallowed to certain participating broker-dealers up to 1.0% of the gross offering, proceeds attributable to that participating broker-dealer as a marketing fee and, in special cases, the dealer manager increased the reallowance. From January 1, 2015 through January 31, 2016, we incurred selling commissions of $33.2 million, all of which we had paid as of January 31, 2016 and all of which was reallowed by our dealer manager to participating broker-dealers. From January 1, 2015 through January 31, 2016, we incurred dealer manager fees of $15.7 million, all of which we had paid as of January 31, 2016 and $5.8 million of which was reallowed by our dealer manager to participating broker-dealers.In addition to selling commissions and dealer manager fees, we were also obligated todid not reimburse our dealer manager and its affiliates for certain offering related expenses that they incurred on our behalf. These expenses included, among others, the cost of bona fide training and education meetings held by us (primarily the travel, meal and lodging costs of registered representatives of broker-dealers), attendance and sponsorship fees and travel, meal and lodging costs for registered persons associated with our dealer manager and officers and employees of our affiliates to attend retail seminars conducted by broker-dealers and, in special cases, reimbursement to participating broker-dealers for technology costs associated with our now-terminated primary initial public offering, costs andany expenses related to such technology costs, and costs and expenses associated with the facilitation of the marketing of our shares by such broker-dealers and the ownership of our shares by such broker-dealers’ customers. We directly paid or reimbursed our dealer manager for underwriting compensation as discussed in the prospectus for our now-terminated primary initial public offering, provided that within 30 days after the end of the month in which our now-terminated primary initial public offering terminated, our dealer manager was required to reimburse us to the extent that our reimbursements caused total underwriting compensation for our now-terminated primary initial public offering to exceed 10% of the gross offering proceeds from such offering. We also directly paid or reimbursed our dealer manager for bona fide invoiced due diligence expenses of broker-dealers. However, no reimbursements made by us to our advisor or our dealer manager could cause total organization and offering expenses incurred by us15(including selling commissions, dealer manager fees and all other items of organization and offering expenses) to exceed 15% of the aggregate gross proceeds from our now-terminated primary initial public offering and our dividend reinvestment plan offering as of the date of reimbursement. From January 1, 2015 through January 31, 2016, our dealer manager sought reimbursement for $2.1 million in expenses, all of which we had paid as of January 31, 2016.We have also entered into a fee reimbursement agreement (the “AIP Reimbursement Agreement”) with our dealer manager pursuant to which we agreed to reimburse our dealer manager for certain fees and expenses it incurs for administering our participation in the DTCCDepository Trust Clearing Corporation (“DTCC”) Alternative Investment Product Platform with respect to certain accounts of our stockholders serviced through the platform. From January 1, 20152022 through January 31, 2016,February 28, 2023, we incurred and paid $0.1 million of costs and expenses related to the AIP Reimbursement Agreement.The conflicts committee believes that these arrangements with our dealer manager are fair. We believe that the compensation and reimbursements paid to our dealer manager has allowed us to achieve our goal of investing in a diverselarge, diversified portfolio of real estate investments.Our Relationship with other KBS-Affiliated Entities. Entities. On May 29, 2015, our indirect wholly owned subsidiary that owns 3003 Washington Boulevard entered into a lease with an affiliate of our advisor for 5,046 rentable square feet, or approximately 2.3%2.4% of the total rentable square feet, at 3003 Washington Boulevard. The lease commenced on October 1, 2015 and terminateshad an initial termination date of August 31, 2019. On March 14, 2019, the lessor entered into a First Amendment to Deed of Lease with the lessee to extend the lease period commencing on September 1, 2019 and terminating on August 31, 2019.2024 (the “Amended Lease”) and set the annual base rent during the extension period. The annualized base rent forfrom the leasecommencement of the Amended Lease is approximately $0.2$0.3 million, and the average annual rental rate (net of rental abatements) over the lease term of the Amended Lease through its termination is $46.38$62.55 per square foot. From the commencement of the lease on OctoberJanuary 1, 20152022 through January 31, 2016,February 28, 2023, we recognized $0.1 millionrecognized $0.4 million of rental income related to the lease.16Insurance Program. As of January 1, 2022, we, together with KBS REIT II, KBS Growth & Income REIT, our dealer manager, our 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 our advisor and its insurance broker among each of the various entities covered by the program, and is billed directly to each entity. In June 2022, we renewed our participation in the program. The program is effective through June 30, 2023. At renewal on June 30, 2022, due to its liquidation, KBS REIT II elected to cease participation in the program and obtained separate insurance coverage. The conflicts committee believes the insurance program with our affiliates is fair.Singapore Transaction. On July 18, 2019, we sold 11 of our properties (the “Singapore Portfolio”) to various subsidiaries of the SREIT, a Singapore real estate investment trust that listed on the Singapore Exchange Securities Trading Limited (the “SGX-ST”) (SGX-ST Ticker: OXMU) on July 19, 2019, and on July 19, 2019, we, through an indirect wholly owned subsidiary (“REIT Properties III”), acquired 307,953,999 units in the SREIT at a price of $0.88 per unit representing a 33.3% ownership interest in the SREIT (together, 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 units in the SREIT for $58.9 million, net of fees and costs, pursuant to a block trade, reducing REIT Properties III’s ownership in the SREIT to 18.5% of the outstanding units of the SREIT as of that date. As of February 28, 2023, REIT Properties III held 215,841,899 units of the SREIT, which represented 18.2% of the outstanding units of the SREIT as of that date. As of April 21, 2023, the aggregate value of our investment in the units of the SREIT was $58.3 million, which was based solely on the closing price of the units on the SGX-ST of $0.270 per unit as of April 21, 2023 and did not take into account any potential discount for the holding period risk due to the quantity of units we hold.The SREIT is affiliated with Charles J. Schreiber, Jr., one of our directors and executive officers. 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, 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 our 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 our conflicts committee.Also in connection with the Singapore Transaction, our advisor and KBS Realty Advisors proposed that our conflicts committee and board of directors adopt an Allocation Process among us, KBS REIT II, KBS Growth & Income REIT and the SREIT. The board of directors and conflicts committee adopted the Allocation Process as proposed. See above, “—Review of Our Policies – Allocation Policy.”The conflicts committee reviewed and approved the fairness of the Singapore Transaction and the conflicts committee believes that the Allocation Process with other KBS-affiliated entities is fair.No Other Transactions. From January 1, 2022 through February 28, 2023, no other transactions occurred between us and KBS REIT II, KBS Growth & Income REIT, our dealer manager, our advisor or other KBS-affiliated entities.Currently Proposed Transactions. There are no currently proposed material transactions with related persons other than those covered by the terms of the agreements described above.Conflicts Committee DeterminationThe conflicts committee has examined the fairness of the transactions described above, and has determined that all such transactions are fair and reasonable to us. The conflicts committee has also determined that the policies set forth in this Report of the Conflicts Committee are in the best interests of our stockholders because they provide us with the highest likelihood of achieving our investment objectives.6, 2016The Conflicts Committee of the Board of Directors:Barbara R. CambonJeffrey A. Dritley (chair), Hank Adler and Stuart A. Gabriel, Ph.D., Robert Milkovich and Ron D. Sturzenegger17Nomination of DirectorsGeneralWe do not have a standing nominating committee. Unless otherwise provided by Maryland law, the board of directors is responsible for selecting its own nominees and recommending them for election by our stockholders, provided that the conflicts committee is responsible for identifyingselecting and nominating replacements for vacancies among our independent director positions. Unless filled by a vote of theour stockholders as permitted by the Maryland General Corporation Law, a vacancy that results from the removal of a director will be filled by a vote of a majority of the remaining directors. Any vacancy on the board of directors for any other cause will be filled by a vote of a majority of the remaining directors, even if such majority vote is less than a quorum. The board of directors believes that the primary reason for creating a standing nominating committee is to ensure that candidates for independent director positions can be identified and their qualifications assessedevaluated under a process free from conflicts of interest with us. Because nominations for vacancies in independent director positions are handled exclusively by a committee composed only of independent directors, the board of directors has determined that the creation of a standing nominating committee is not necessary. We do not have a charter that governs the director nomination process.16Board Membership CriteriaWith respect to filling vacancies for independent director positions, the conflicts committee reviews the appropriate experience, skills and characteristics required of directors in the context of the then-current membership of the board of directors. The full board of directors annually conducts a similar review with respect to all director nominations. This assessment includes, in the context of the perceived needs of the board of directors at that time, issues of knowledge, experience, judgment and skills, such as an understanding of the real estate and real estate finance industries or accounting or financial management expertise. The board of directors seeks to nominate directors with diverse backgrounds, experiences and skill sets that complement each other so as to maximize the collective knowledge, experience, judgment and skills of the entire board of directors. The board of directors assesses its effectiveness in achieving this goal annually, in part, by reviewing the diversity of the skill sets of the directors and determining whether there are any deficiencies in the board of directors’ collective skill set that should be addressed in the nominating process. The board of directors made such an assessment in connection with director nominations for the 2016 annual meeting of stockholders and determined that the composition of the current board of directors satisfies its diversity objectives.Other considerations in director nominations include the candidate’s independence from conflict with us and the ability of the candidate to attend board meetings regularly and to devote an appropriate amount of time in preparation for those meetings. It also is expected that independent directors nominated by the conflicts committee will be individuals who possess a reputation and hold positions or affiliations befitting a director of a large publicly held company and who are actively engaged in their occupations or professions or are otherwise regularly involved in the business, professional or academic community. Moreover, as required by our charter, at least one of our independent directors must have at least three years of relevant real estate experience, and each director who is not an independent director must have at least three years of relevant experience demonstrating the knowledge and experience required to successfully acquire, manage and managedispose of the types of assets we acquire and manage.Selection of DirectorsUnless otherwise provided by Maryland law, the board of directors is responsible for selecting its own nominees and recommending them for election by our stockholders, provided that the conflicts committee must nominate replacements for any vacancies among the independent director positions. All director nominees stand for election by our stockholders annually.In nominating candidates for the board of directors, the board of directors (or the conflicts committee, as appropriate) solicits candidate recommendations from its own members and the management of KBS Capital Advisors. The board of directors and the conflicts committee may also engage the services of a search firm to assist in identifying potential director nominees.18The board of directors and the conflicts committee will consider recommendations made by stockholders for director nominees who meet the established director criteria set forth above. In order to be considered for nomination, recommendations made by stockholders must be submitted within the timeframe required to request a proposal to be included in the proxy materials. See “Stockholder Proposals” below. In evaluating the persons recommended as potential directors, the board of directors (or the conflicts committee, as appropriate) will consider each candidate without regard to the source of the recommendation and take into account those factors that they determine are relevant. Stockholders may directly nominate potential directors (without the recommendation of the board of directors or conflicts committee) by satisfying the procedural requirements for such nomination as provided in Article II, Section 2.12 of our bylaws. In addition to satisfying the advance notice requirements under our bylaws, to comply with the universal proxy rules, the notice given by any stockholder who intends to solicit proxies in support of director nominees other than the Company’s nominees must comply with any additional requirements of Rule 14a-19 under the Exchange Act. Any stockholder may request a copy of our bylaws free of charge by calling 1-866-584-1381 and selecting “Option 2”.17Stockholder Communications with the Board of DirectorsWe have established a procedure for stockholders to communicate comments and concerns to the board of directors. Stockholders may contact the board of directors at the following address:Board of Directors of KBS Real Estate Investment Trust III, Inc.800 Newport Center Drive, Suite 700Newport Beach, California 92660Stockholders should report any complaints or concerns regarding (1) suspected violations or concerns as to compliance with laws, regulations, our Code of Conduct and Ethics or other suspected wrongdoings affecting us or our properties or assets, or (2) any complaints or concerns regarding our accounting, internal accounting controls, auditing matters, or any concerns regarding any questionable accounting or auditing matters affecting us. Stockholders should report any such suspected violations or other complaints or concerns by any of the following means:•Via the Internet atkbsreitiii.ethicspoint.com;•By calling the toll freetoll-free Ethics Hotline at 1-888-329-6414; or
| Year First Became | ||||||
Name and Address(1) | Position(s) | Age(2) | a Director | |||
Peter M. Bren | President | 82 | N/A | |||
Charles J. Schreiber, Jr. | Chairman of the Board, Chief Executive Officer and Director | 64 | 2009 | |||
Peter McMillan III | Executive Vice President, Treasurer, Secretary and Director | 58 | 2010 | |||
Keith D. Hall | Executive Vice President | 57 | N/A | |||
Jeffrey K. Waldvogel | Chief Financial Officer | 38 | N/A | |||
Stacie K. Yamane | Chief Accounting Officer | 51 | N/A | |||
Hank Adler | Independent Director | 69 | 2010 | |||
Barbara R. Cambon | Independent Director | 62 | 2010 | |||
Stuart A. Gabriel, Ph.D. | Independent Director | 62 | 2010 |
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18
Peter M. Bren We have six seats on our board of directors. Stockholders may not vote for a greater number of persons than the number of nominees named.
Name and Address(1) | Position(s) | Age (2) | Year First Became a Director | |||||||||||||||||
| Charles J. Schreiber, Jr. | Chief Executive Officer, President and Director | 71 | 2009 | |||||||||||||||||
| Jeffrey K. Waldvogel | Chief Financial Officer, Treasurer and Secretary | 45 | N/A | |||||||||||||||||
| Stacie K. Yamane | Chief Accounting Officer and Assistant Secretary | 58 | N/A | |||||||||||||||||
| Marc DeLuca | Chairman of the Board and Director | 53 | 2022 | |||||||||||||||||
| Jeffrey A. Dritley | Independent Director | 66 | 2017 | |||||||||||||||||
| Stuart A. Gabriel, Ph.D. | Independent Director | 69 | 2010 | |||||||||||||||||
| Robert Milkovich | Independent Director | 63 | 2022 | |||||||||||||||||
| Ron D. Sturzenegger | Independent Director | 63 | 2019 | |||||||||||||||||
Mr. Bren is Chairman of the Board and President of KBS Realty Advisors LLC and is a principal of Koll Bren Schreiber Realty Advisors, Inc., each an active and nationally recognized real estate investment advisor. These entities are registered as investment advisers with the SEC. Messrs. Bren and Schreiber were the founding partners of the KBS-affiliated investment advisors. The first investment advisor affiliated with Messrs. Bren and Schreiber was formed in 1992. As of December 31, 2015,2022, KBS Realty Advisors, together with KBS affiliates, including KBS Capital Advisors, had been involved in the investment in or management of approximately $21 billion
Through October 31, 2019, our advisor also served as the U.S. asset manager for Keppel Pacific Oak US REIT, and KBS Realty Advisors serves as the U.S. asset manager for Prime US REIT, both Singapore real estate investment trusts.
Charles J. Schreiber, Jr. is our Chairman of the Board, our Chief Executive Officer and one of our directors, positions he has held since January 2010, January 2010 and December 2009, respectively. He is also the Chief Executive Officer of our advisor and Chairman of the Board, Chief Executive Officer and a director of KBS REIT I and KBS Growth & Income REIT, positions he has held for these entities since October 2004, June 2005 and January 2015, respectively. Mr. Schreiber is Chairman of the Board, Chief Executive Officer and a director of KBS REIT II, positions he has held since August 2007, August 2007 and July 2007, respectively. In addition, Mr. Schreiber is a sponsor of our company and is a sponsor of KBS REIT I, KBS REIT II, KBS Strategic Opportunity REIT, KBS Legacy Partners Apartment REIT, KBS Strategic Opportunity REIT II and KBS Growth & Income REIT, which were formed in 2009, 2005, 2007, 2008, 2009, 2013 and 2015, respectively. Other than de minimis amounts owned by family members or family trusts, Mr. Schreiber indirectly owns and controls a 33 1/3% interest in KBS Holdings LLC, which is the sole owner of our advisor and our dealer manager. All four of our sponsors, Messrs. Bren, Hall, McMillan and Schreiber, actively participate in the management and operations of our advisor. Mr. Schreiber is a member of the investment committee formed by KBS Capital Advisors to evaluate and recommend new investment opportunities for us.
Mr. Schreiber is the Chief Executive Officer of KBS Realty Advisors LLC and is a principal of Koll Bren Schreiber Realty Advisors, Inc., each an active and nationally recognized real estate investment advisor. These entities are registered as investment advisers with the SEC. The first KBS-affiliated investment advisor affiliated with Messrs. Bren and Schreiber was formed in 1992. As of December 31, 2015, KBS Realty Advisors, together with KBS affiliates, including KBS Capital Advisors, had been involved in the investment in or management of approximately $21
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billion of real estate investments on behalf of institutional investors, including public and private pension plans, endowments and foundations, institutional and sovereign wealth funds, and the investors in us, KBS REIT I, KBS REIT II, KBS Strategic Opportunity REIT, KBS Legacy Partners Apartment REIT, KBS Strategic Opportunity REIT II and KBS Growth & Income REIT.
Mr. Schreiber oversees all aspects of KBS Capital Advisors’ and KBS Realty Advisors’ operations, including the acquisition and management of individual investments and portfolios of investments for KBS-sponsored programs and KBS-advised investors. He also directs all facets of KBS Capital Advisors’ and KBS Realty Advisors’ business activities and is responsible for investor relationships.
Mr. Schreiber has been involved in real estate development, management, acquisition, disposition and financing for more than 40 years and with the acquisition, origination, management, disposition and financing of real estate-related debt investments for more than 30 years. Prior to teaming with Mr. Bren in 1992, he served as the Executive Vice President of Koll Investment Management Services and Executive Vice President of Acquisitions/Dispositions for The Koll Company. During the mid-1970s through the 1980s, he was Founder and President of Pacific Development Company and was previously Senior Vice President/Southern California Regional Manager of Ashwill-Burke Commercial Brokerage.
He is also a member of the National Council of Real Estate Investment Fiduciaries. Mr. Schreiber has served as a member of the board of directors and executive committee of The Irvine Company since August 2016, and since December 2016, Mr. Schreiber has served on the Board of Trustees of The Irvine Company.
Peter McMillan III
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Mr. McMillan is a Partner and co-owner of Temescal Canyon Partners LP, an investment advisor formed in 2013 to manage a multi-strategy hedge fund on behalf of investors. Mr. McMillan is also a co-founder and the Managing Partner of Willowbrook Capital Group, LLC which, from August 2003 until December 2012, was an asset management company. Prior to forming Willowbrook in 2000, Mr. McMillan served as an Executive Vice President and Chief InvestmentFinancial Officer, of SunAmerica Investments, Inc., which was later acquired by AIG. As Chief Investment Officer, he was responsible for over $75.0 billion in assets, including residential and commercial mortgage-backed securities, public and private investment grade and non-investment grade corporate bonds and commercial mortgage loans and real estate investments. Before joining SunAmerica in 1989, he served as Assistant Vice President for Aetna Life Insurance and Annuity Company with responsibility for the company’s $6.0 billion fixed income portfolios. Mr. McMillan received his Master of Business Administration in Finance from the Wharton Graduate School of Business at the University of Pennsylvania and his Bachelor of Arts Degree with honors in Economics from Clark University. Mr. McMillan is a member of the Board of Trustees of Metropolitan West Funds and TCW Mutual Funds and is a former director of Steinway Musical Instruments, Inc.
The board of directors has concluded that Mr. McMillan is qualified to serve as one of our directors for reasons including his expertise in real estate finance and with real estate-related investments. With over 30 years of experience investing in and managing real estate-related debt investments, Mr. McMillan offers insights and perspective with respect to our real estate-related investment portfolio as well as our real estate portfolio. As one of our executive officers and a principal of our advisor, Mr. McMillan is also able to direct the board of directors to the critical issues facing our company. Further, his experiences as a director of KBS REIT I, KBS REIT II, KBS Strategic Opportunity REIT, KBS Strategic Opportunity REIT II and KBS Growth & Income REIT, as a member of the Board of Trustees of Metropolitan West Funds and TCW Mutual Funds, and as a former director of Steinway Musical Instruments, Inc., provide him with an understanding of the requirements of serving on a public company board.
Keith D. Hall is one of our Executive Vice Presidents, a position he has held since January 2010. He is an Executive Vice President of KBS REIT I, KBS REIT II and KBS Growth & Income REIT, positions he has held for these entities since June 2005, August 2007 and January 2015, respectively. He is also the Chief Executive Officer and a director of KBS Strategic Opportunity REIT, positions he has held since December 2008 and October 2008, respectively, and is the Chief Executive Officer and a director of KBS Strategic Opportunity REIT II, positions he has held since February 2013.2015. In addition, Mr. Hall is a sponsor of our company and is a sponsor of KBS REIT I, KBS REIT II, KBS Strategic Opportunity REIT, KBS Legacy Partners Apartment REIT, KBS Strategic Opportunity REIT II and KBS Growth & Income REIT, which were formed in 2009, 2005, 2007, 2008, 2009, 2013 and 2015, respectively. Mr. Hall owns and controls a 50% interest in GKP Holding LLC. GKP Holding owns a 33 1/3% interest in KBS Holdings LLC, which is the sole owner of our advisor and our dealer manager. All four of our sponsors, Messrs. Bren, Hall, McMillan and Schreiber, actively participate in the management and operations of our advisor. Mr. Hall is a member of the investment committee formed by KBS Capital Advisors to evaluate and recommend new investment opportunities for us.
Mr. Hall is a co-founder of Willowbrook Capital Group, LLC which, from August 2003 until December 2012, was an asset management company. Prior to forming Willowbrook in 2000, Mr. Hall was a Managing Director at CS First Boston, where he managed the distribution strategy and business development for the Principal Transaction Group’s $18.0 billion real estate securities portfolio. Mr. Hall’s two primary business unit responsibilities were Mezzanine Lending and Commercial Real Estate Development. Before joining CS First Boston in 1996, he served as a Director in the Real Estate Products Group at Nomura Securities, with responsibility for the company’s $6.0 billion annual pipeline of fixed-income, commercial mortgage-backed securities. During the 1980s, Mr. Hall was a Senior Vice President in the High Yield Department of Drexel Burnham Lambert’s Beverly Hills office, whereJuly 2018, he was responsible for distribution of the group’s high-yield real estate securities. Mr. Hall received a Bachelor of Arts Degree with honors in Finance from California State University, Sacramento.
Jeffrey K. Waldvogelisalso elected our Chief Financial OfficerTreasurer and Assistant Secretary, positions he has held since June 2015.Secretary. He is also the Chief Financial Officer of our advisor and Chief Financial Officer and Assistant Secretary of KBS REIT I, KBS REIT II, and KBS Growth & Income REIT, positions he has held for each of these entities since June 2015. In August 2018, Mr. Waldvogel was elected the Treasurer and Secretary of KBS REIT II. He is also the Chief Financial Officer, Treasurer and Secretary of KBS Growth & Income REIT, positions he has held since June 2015, April 2017 and April 2017, respectively. From June 2015 until November 2019, he also served as the Chief Financial Officer, Treasurer and Secretary of Pacific Oak Strategic Opportunity REIT I and Pacific Oak Strategic Opportunity REIT II. He was Chief Financial Officer of KBS REIT I and KBS Legacy Partners Apartment REIT and KBS Strategic Opportunity REIT II, positions he has held for these
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entities sincefrom June 2015.2015 until their respective liquidations in December 2018. In January 2022, Mr. Waldvogel is a memberwas also appointed the Chief Financial Officer of the investment committee formed by KBS Capital Advisors to evaluate and recommend new investment opportunities for us.
Realty Advisors.
Hank Adler
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companies. He received a Bachelor of Science in Accounting and a Master of Business Administration from the University of California, Los Angeles. From 2004 to 2015, Professor Adler served on the board of directors and as chairman of the audit committee of Corinthian Colleges, Inc., and he served on the board of directors and on the finance committee of Healthy Smiles for Kids of Orange County, a California non-profit entity. From 1998 to 2007, he also chaired the Toshiba Senior Classic charity event, a PGA Senior Tour championship event. From 1994 to 2006, he served on the board of directors of Hoag Memorial Hospital Presbyterian. In the 1990s, he served on the board of trustees and as President of the Irvine Unified School District. Professor Adler is a Certified Public Accountant (California).
The board of directors has concluded that Professor Adler is qualified to serve as an independent director and as the chair of the audit committee for reasons including his extensive experience in public accounting. With over 30 years at one of the big four accounting firms, Professor Adler brings to the board of directors critical insights into and an understanding of the accounting principles and financial reporting rules and regulations affecting our company. His expertise in evaluating the financial and operational results of public companies and overseeing the financial reporting process makes him a valuable director and chair of the audit committee. In addition, as a director and chair of the audit committee of KBS REIT I and KBS REIT II and as a former director of Corinthian Colleges, Inc., of Hoag Memorial Hospital Presbyterian and of Healthy Smiles for Kids of Orange County, Professor Adler is well aware of the corporate governance and regulatory issues facing public and other companies.
Barbara R. Cambon is one of our independent directors and is the chair of the conflicts committee, positions she has held since September 2010. Ms. Cambon is also an independent director and chair of the conflicts committee of KBS REIT I and KBS REIT II, positions shehe has held for these entities since June 2005October 2017 and March 2008,July 2019, respectively. Mr. Dritley is Founder and Managing Partner of Kearny Real Estate Company. Kearny, headquartered in Los Angeles, is a partnership of experienced real estate professionals active in the acquisition, entitlement, repositioning, development, leasing, management and disposition of large, complex commercial projects in Southern California. Since 1993, Kearny has been involved in approximately $5.2 billion of projects including the acquisition and work-out of approximately $2.3 billion of distressed real estate debt.
Missouri and an MBA from Harvard Business School.
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position he held from 1990 to 2007. He received a number of awards at UCLA and USC for outstanding graduate teaching. In 2004, he was elected President of the American Real Estate and Urban Economics Association. Professor Gabriel serves on the editorial boards of seven academic journals. HeSince March 2016, Professor Gabriel has served on the board of directors of KB Home and is also a Fellowmember of the Homer Hoyt Institute for Advanced Real Estate Studies.its audit committee. Professor Gabriel has published extensively on the topics of real estate finance and urban and regional economics. His teaching and academic research experience include analysis of real estate and real estate capital markets performance as well as structured finance products, including credit default swaps, commercial mortgage-backed securities and collateralized debt obligations. Professor Gabriel serves as a consultant to numerous corporate and governmental entities. From 1986 through 1990, Professor Gabriel served on the economics staff of the Federal Reserve Board in Washington, D.C. He also has been a Visiting Scholar at the Federal Reserve Bank of San Francisco. Professor Gabriel holds a Ph.D. in Economics from the University of California, Berkeley.
affiliates, including information regarding future payments by our advisor to its employees under our advisor’s employee retention program that are reimbursed by us from the Bonus Retention Fund.
See “—Report of the Conflicts Committee—Certain Transactions with Related Persons” above for a discussion of the fees paid to our advisor and its affiliates, including information regarding future payments by our advisor to its employees under our advisor’s employee retention program that are reimbursed by us from the Bonus Retention Fund.
Name | Fees Earned or Paid in Cash in 2015(1) | All Other Compensation | Total | |||||||||||
Hank Adler | $ | 133,583 | $ | – | $ | 133,583 | ||||||||
Barbara R. Cambon | 143,583 | – | 143,583 | |||||||||||
Stuart A. Gabriel, Ph.D. | 129,583 | – | 129,583 | |||||||||||
Peter McMillan III(2) | – | – | – | |||||||||||
Charles J. Schreiber, Jr.(2) | – | – | – | |||||||||||
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2022.
| Name | Fees Earned or Paid in Cash in 2022 | All Other Compensation | Total | |||||||||||||||||
Marc DeLuca (1) | $ | — | $ | — | $ | — | ||||||||||||||
| Jeffrey A. Dritley | 293,000 | — | 293,000 | |||||||||||||||||
| Stuart A. Gabriel, Ph.D. | 263,500 | — | 263,500 | |||||||||||||||||
| Robert Milkovich | 22,819 | — | 22,819 | |||||||||||||||||
Charles J. Schreiber, Jr.(1) | — | — | — | |||||||||||||||||
| Ron D. Sturzenegger | 246,000 | — | 246,000 | |||||||||||||||||
meeting of each calendar year, each member of the conflicts committee is paid (i) $2,500 for each in-person conflicts committee meeting attended for the remainder of the calendar year and (ii) $2,000 for each teleconference conflicts committee meeting attended for the remainder of the calendar year (except that the conflicts committee chair is paid $3,000 for each in-person and teleconference conflicts committee meeting attended after the tenth conflicts committee meeting of each calendar year, for the remainder of each calendar year).Cash CompensationWe compensate each of our independent directors with an annual retainer of $40,000. In addition, we pay$135,000 as well as paying compensation to our independent directors for attending meetings as follows:•each member of the audit committee and conflicts committee is paid $10,000 annually for service on such committees (except that the chair of each of the audit committee and conflicts committee is paid $20,000 annually for service as the chair of such committees);•after the tenth board of directors meeting of each calendar year, each independent director is paid (i) $2,500 for each in-person board of directors meeting attended for the remainder of the calendar year and (ii) $2,000 for each teleconference board of directors meeting attended for the remainder of the calendar year;•after the tenth audit orcommittee meeting of each calendar year, each member of the audit committee is paid (i) $2,500 for each in-person audit committee meeting attended for the remainder of the calendar year and (ii) $2,000 for each teleconference audit committee meeting attended for the remainder of the calendar year (except that the audit committee chair is paid $3,000 for each in-person and teleconference audit committee meeting attended after the tenth audit committee meeting of each calendar year, for the remainder of each calendar year); and•after the tenth conflicts committee meetings as follows:●$2,500 for each board of directors meeting attended;●$2,500 for each audit or conflicts committee meeting attended (except that the committee chairman is paid $3,000 for each audit or conflicts committee meeting attended);●$2,000 for each teleconference board of directors meeting attended; and●$2,000 for each teleconference audit or conflicts committee meeting attended (except that the committee chairman is paid $3,000 for each teleconference audit or conflicts committee meeting attended).All directors receive reimbursement of reasonable out-of-pocket expenses incurred in connection with attendance at board of directors meetings and committee meetings.2526
Name and Address of Beneficial Owner(1) | Amount and Nature of Beneficial Ownership(2) | Percent of all Shares | ||||||
KBS Capital Advisors LLC | 20,000(3) | * | ||||||
Hank Adler, Independent Director | – | – | ||||||
Peter M. Bren, President | 20,000(3) | * | ||||||
Barbara R. Cambon, Independent Director | – | – | ||||||
Stuart A. Gabriel, Ph.D., Independent Director | – | – | ||||||
Keith D. Hall, Executive Vice President | 20,000(3) | * | ||||||
Peter McMillan III, Executive Vice President, Treasurer, Secretary and Director | 20,000(3) | * | ||||||
Charles J. Schreiber, Jr., Chairman of the Board, Chief Executive Officer and Director | 20,000(3) | * | ||||||
Jeffrey K. Waldvogel, Chief Financial Officer | – | – | ||||||
Stacie K. Yamane, Chief Accounting Officer | – | – | ||||||
All officers and directors as a group | 20,000(3) | * |
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Name and Address of | Amount and Nature of Beneficial Ownership (2) | Percentage of all Outstanding Shares | ||||||||||||
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| 20,857 (3) | * | ||||||||||||
| Marc DeLuca, Chairman of the Board and | — | — | ||||||||||||
| Jeffrey A. Dritley, Independent Director | — | — | ||||||||||||
| Stuart A. Gabriel, Ph.D., Independent Director | — | — | ||||||||||||
| Robert Milkovich, Independent Director | — | — | ||||||||||||
| Charles J. Schreiber, Jr., Chief Executive Officer, President and Director | 20,857 (3) | * | ||||||||||||
| Ron D. Sturzenegger, Independent Director | — | — | ||||||||||||
| Jeffrey K. Waldvogel, Chief Financial Officer, Treasurer and Secretary | — | — | ||||||||||||
| Stacie K. Yamane, Chief Accounting Officer and Assistant Secretary | — | — | ||||||||||||
| All executive officers and directors as a group | 20,857 (3) | * | ||||||||||||
Section 16(a) Beneficial Ownership Reporting Compliance
Under U.S. securities laws, directors, executive officers, and any persons beneficially owning more
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under “Certain Information About Management — Executive Officers and Directors.”
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2023.
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During the year ended December 31, 2015, Ernst & Young LLP served as our independent registered public accounting firm and provided certain tax and other services. Ernst & Young LLP has served as our independent registered public accounting firm since our formation.
Your shares may be voted for this proposal if they are held in the name of a brokerage firm even if you do not provide the brokerage firm with voting instructions.
2023.
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28, 2024. In addition to satisfying the foregoing advance notice requirements under our bylaws, to comply with the universal proxy rules
, the notice given by any stockholder who intends to solicit proxies in support of director nominees other than the Company’s nominees must comply with any additional requirements of Rule 14a-19 under the Exchange Act.29
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E03776-P77263 KEEP THIS PORTION FOR YOUR RECORDS
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PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
KBS REAL ESTATE INVESTMENT TRUST III, INC.
Thursday, July 7, 2016
11:00 a.m. (PDT)
At
Real Estate Investment Trust III, Inc. (“KBS”). This proxy campaign is distinct from the one you voted in earlier in the year. This proxy statement is for the 2023 annual meeting of stockholders and includes the KBS 2022 Annual Report. Boardroom, Newport Beach, California Offices
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April 27, 2023Thank you for being a stockholder of KBSOn Tuesday, July 11, 2023, KBS will hold its annual meeting of stockholders at the offices of KBS, 800 Newport Center Drive, First7th Floor Suite 140 Conference Center92660Your Vote is Important!FOLD HERE BEFORE INSERTING INTO RETURN ENVELOPE— — — — — — — — — — — — — — — — — —— — — — — — — — — — — — — — — — — — — — — — — — — — — — — E03777-P77263KBS Real Estate Investment Trust III, Inc.800 NEWPORT CENTER DRIVE • FIRST FLOOR • SUITE 140 CONFERENCE CENTERNEWPORT BEACH • CALIFORNIA 92660THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORSThe undersigned stockholder hereby appoints Charles J. Schreiber, Jr., Peter McMillan III, Jeffrey K. Waldvogel92660. The annual meeting will begin at 1:00 pm Pacific time. Whether or not you plan to attend the annual meeting and Stacie K. Yamane, and each of them, as proxy and attorney-in-fact, each with the power to appoint his or her substitute, on behalf and in the name of the undersigned, to represent the undersigned at the annual meeting of stockholders of KBS REAL ESTATE INVESTMENT TRUST III, INC. to be held on July 7, 2016, and at any adjournments or postponementsthereof, and to vote all shares of common stock that the undersigned would be entitled to vote if personally present, as indicated on the reverse side of this card. The undersigned acknowledges receipt of the notice of annual meeting of stockholders, the proxy statement and the annual report.This proxy, when properly executed, will be voted in the manner directed herein by the undersigned stockholder. If no direction is made, this proxy will be voted "FOR" all nominees listed in Proposal 1 and "FOR" Proposal 2. The proxies are authorized to vote upon such other matters as may properly come before the annual meeting or any adjournments or postponements thereof in accordance with the recommendation of the board of directors or, in the absence of such a recommendation, in their discretion, including, but not limited to, the power and authority to adjourn the annual meeting to a date not more than 120 days after the record date in the event that a quorum is not obtained by the July 7, 2016 meeting date.Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders:The following materials are available at www.proxyvote.com:Notice and Proxy Statement and Annual Report on Form 10-K for the year ended December 31, 2015.
Please Vote!Your vote is not cast automatically for you. Wein person, we encourage you to vote immediately. By doing so, you will help KBS avoid potential delays in meeting its quorum and avoid additional expenses associated with soliciting stockholders to vote. You can cast your vote promptly, whichby proxy either: (1) via the Internet; (2) by telephone; or (3) by mail, using the enclosed proxy card.With a goal of reducing environmental impact to our planet, KBS encourages its stockholders to consider paperless statements and sign-up for electronic delivery. When you enroll in electronic delivery, it reduces paper waste and the cost of printing and mailing. You’ll receive stockholder communications, such as account statements, tax forms, annual reports, proxy statements and other investor communications electronically. KBS will help minimize(i) make certain investor communications available on its website at www.kbs-cmg.com and notify you via email when such documents are available or (ii) email stockholder communications directly to your email address.Enrolling in electronic delivery is simple and you can switch to paper materials at any additional cost associated with soliciting votes.
Read Enclosed Materials Enclosed istime by changing your delivery preference online at www.kbs-cmg.com, under the following information for the 2016 Annual Meeting of Stockholders:• 2015 Annual Report• Proxy Statement that describes the proposals to be voted upon• Proxy card for each registration* *Investor Tab or by contacting KBS at (866) 584-1381. You may have more than one proxy card included inalso request a paper copy of any document by calling this number.You can set up your packet becauseusername and password and receive online access to your account and account documents at GOGREEN.KBS.COM.Thank you have multiple registrations. Please be sure to vote all proxies infor your packet. Complete the Proxy Card and Return by Mail On the proxy card, cast your vote on the proposals and sign and return it in the postage-paid envelope provided. Please note, all parties must sign. or Vote by Telephone* Call(800) 690-6903using a touch-tone telephone and follow the simple, recorded instructions. Your control number is located on the proxy card. or Vote by Internet* Visitwww.proxyvote.comand follow the online instructions to cast your vote. Your control number is located on the proxy card. * If you voted by telephone or the Internet, you do not need to mail back the proxy card. For Assistance If you have any questions or need assistance with completing your proxy card, please call our proxy solicitor, Broadridgesupport.Jeff WaldvogelChief Financial Solutions, Inc., at (855) 723-7816. Representatives are available Monday through Friday 9:00 a.m. to 10:00 p.m. (EDT).Thank you!We appreciate your participation and support. Again, please be sure to vote!KBS Real Estate Investment Trust III
