KBS REAL ESTATE INVESTMENT TRUST III, INC. ITEM 5.07 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS OnDecember 14, 2020 ,KBS Real Estate Investment Trust III, Inc. (the "Company") held its annual meeting of stockholders (the "Annual Meeting") at the offices of KBS,800 Newport Center Drive , 7th Floor Boardroom,Newport Beach, California 92660. At the Annual Meeting, the Company's stockholders voted in person or by proxy on (1) the election of four directors to hold office for one-year terms; and (2) the ratification of the appointment ofErnst & Young LLP ("E&Y") as the Company's independent registered public accounting firm for the year endingDecember 31, 2020 . All of the director nominees were elected. The number of votes cast for and votes withheld from each of the director nominees and the number of broker non-votes were as follows: Votes For Votes Withheld Broker Non-Votes Charles J. Schreiber, Jr. 60,807,190 2,588,782 51,974,208 Jeffrey A. Dritley 60,684,259 2,711,713 51,974,208 Stuart A. Gabriel, Ph.D. 60,825,789 2,570,183 51,974,208 Ron D. Sturzenegger 60,640,740 2,755,232 51,974,208 The appointment of E&Y was ratified. The number of votes cast for and votes cast against, and the number of abstentions with respect to, the ratification of the appointment of E&Y as the Company's independent registered public accounting firm for the year endingDecember 31, 2020 were as follows: Votes For Votes Against Abstentions Broker Non-Votes Ratification of E&Y Appointment 112,824,731 579,173 1,966,276 - ITEM 7.01 REGULATION FD DISCLOSURE Investor Presentation Information for stockholders regarding the Company's estimated value per share and other portfolio information is attached as Exhibit 99.2 to this Current Report on Form 8-K and the Company will use this presentation in connection with a webinar for stockholders and their financial professionals. The information in this Item 7.01 of Form 8-K and the attached Exhibit 99.2 are furnished to theSecurities and Exchange Commission (the "SEC"), and shall not be deemed to be "filed" with theSEC for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing. ITEM 8.01 OTHER EVENTS Estimated Value Per Share OnDecember 7, 2020 , the Company's board of directors approved an estimated value per share of the Company's common stock of$10.74 based on the estimated value of the Company's assets less the estimated value of the Company's liabilities, or net asset value, divided by the number of shares outstanding, all as ofSeptember 30, 2020 , with the exception of adjustments to the Company's net asset value to give effect to the change in the estimated value of the Company's investment in units of Prime US REIT (SGX Ticker: OXMU) as ofDecember 1, 2020 . Other than the change in the estimated value of the Company's investment in units of Prime US REIT, there have been no material changes betweenSeptember 30, 2020 and the date of this filing to the net values of the Company's assets and liabilities that impacted the overall estimated value per share. The Company is providing this estimated value per share to assist broker-dealers that participated in the Company's now-terminated initial public offering in meeting their customer account statement reporting obligations underFinancial Industry Regulatory Authority ("FINRA") Rule 2231. This valuation was performed in accordance with the provisions of and also to comply with Practice Guideline 2013-01, Valuations of Publicly Registered, Non-Listed REITs, issued by theInstitute for Portfolio Alternatives (formerly known as theInvestment Program Association ) ("IPA") inApril 2013 (the "IPA Valuation Guidelines"). 1 -------------------------------------------------------------------------------- The Company's conflicts committee, composed solely of all of the Company's independent directors, is responsible for the oversight of the valuation process used to determine the estimated value per share of the Company's common stock, including the review and approval of the valuation and appraisal processes and methodologies used to determine the Company's estimated value per share, the consistency of the valuation and appraisal methodologies with real estate industry standards and practices and the reasonableness of the assumptions used in the valuations and appraisals. With the approval of the conflicts committee, the Company engagedDuff & Phelps, LLC ("Duff & Phelps"), an independent third party real estate valuation firm, to provide (i) appraisals for 19 of the Company's consolidated real estate properties owned as ofSeptember 30, 2020 (the "Appraised Properties "), (ii) an estimated value for the Company's investment in units of Prime US REIT (described below) and (iii) a calculation of the range in estimated value per share of the Company's common stock as ofDecember 7, 2020 . Duff & Phelps based this range in estimated value per share upon (i) its appraisals of theAppraised Properties , (ii) its estimated value for the Company's investment in units of Prime US REIT, and (iii) valuations performed byKBS Capital Advisors LLC , the Company's external advisor (the "Advisor"), of the Company's real estate loan receivable, cash, other assets, mortgage debt and other liabilities, which are disclosed in the Company's Quarterly Report on Form 10-Q for the period endedSeptember 30, 2020 . The appraisal reports Duff & Phelps prepared summarized the key inputs and assumptions involved in the appraisal of each of theAppraised Properties . The methodologies and assumptions used to determine the estimated value of the Company's assets and the estimated value of the Company's liabilities are described further below. The conflicts committee reviewed Duff & Phelps' valuation report, which included an appraised value for each of theAppraised Properties , an estimated value of the Company's investment in units of Prime US REIT and a summary of the estimated value of each of the Company's other assets and the Company's liabilities as determined by the Advisor and reviewed by Duff & Phelps. In light of the valuation report and other factors considered by the conflicts committee and the conflicts committee's own extensive knowledge of the Company's assets and liabilities, the conflicts committee: (i) concluded that the range in estimated value per share of$9.96 to$11.48 , with an approximate mid-range value of$10.74 per share, as determined by Duff & Phelps and recommended by the Advisor, which approximate mid-range value was based on Duff & Phelps' appraisals of theAppraised Properties , Duff & Phelps' valuation of the Company's investment in units of Prime US REIT, valuations performed by the Advisor of the Company's real estate loan receivable, cash, other assets, mortgage debt and other liabilities, was reasonable and (ii) recommended to the Company's board of directors that it adopt$10.74 as the estimated value per share of the Company's common stock, which estimated value per share is based on those factors discussed in (i) above. The Company's board of directors unanimously agreed to accept the recommendation of the conflicts committee and approved$10.74 as the estimated value per share of the Company's common stock, which determination is ultimately and solely the responsibility of the board of directors. 2 -------------------------------------------------------------------------------- The table below sets forth the calculation of the Company's estimated value per share as ofDecember 7, 2020 as well as the calculation of the Company's prior estimated value per share as ofDecember 4, 2019 . Duff & Phelps was not responsible for the determination of the estimated value per share as ofDecember 7, 2020 orDecember 4, 2019 , respectively. December 7, 2020 December 4, 2019 Change in Estimated Value Estimated Value Estimated Value per Share per Share (1) per Share Real estate properties (2) $ 17.17 $ 19.36 $ (2.19) Real estate loan receivable (3) 0.81 - 0.81 Cash, restricted cash and cash equivalents 0.22 0.37 (0.15) Investment in Prime US REIT units (4) 1.12 1.50 (0.38) Other assets 0.09 0.10 (0.01) Mortgage debt (8.05) (8.21) 0.16 Advisor participation fee potential liability - (0.17) 0.17 Other liabilities (0.62) (0.46) (0.16) Non-controlling interest - (0.04) 0.04 Estimated value per share before impact of 2019 Special Dividend $ 10.74 $ 12.45 $ (1.71) Estimated enterprise value premium None assumed None assumed None assumed 2019 Special Dividend (5) - (0.80) 0.80 Estimated value per share after impact of 2019 Special Dividend $ 10.74 $ 11.65 $ (0.91) _____________________ (1) TheDecember 4, 2019 estimated value per share was based upon a calculation of the range in estimated value per share of the Company's common stock as ofDecember 4, 2019 by Duff & Phelps and the recommendation of the Advisor. Duff & Phelps based this range in estimated value per share upon (i) its appraisals for 20 of the Company's consolidated real estate properties owned as ofSeptember 30, 2019 , (ii) its estimated value for the Company's investment in units of Prime US REIT, (iii) valuations performed by the Advisor of the Company's cash, other assets, mortgage debt and other liabilities, and (iv) an adjustment for the impact of the Special Dividend (defined in note 5 below). For more information relating to theDecember 4, 2019 estimated value per share and the assumptions and methodologies used by Duff & Phelps and the Advisor, see Part II, Item 5 of the Company's Annual Report on Form 10-K for the year endedDecember 31, 2019 as filed with theSEC . (2) As ofSeptember 30, 2020 , the total appraised value of theAppraised Properties was$3.1 billion . The decrease in the estimated value of real estate properties per share was primarily due to the disposition of a multifamily apartment complex held through a consolidated joint venture (see note 3 below) and a decrease in the appraised value of real estate properties, partially offset by an increase in capital expenditures subsequent toSeptember 30, 2019 . (3) OnMay 7, 2020 , the Company through a consolidated joint venture (the "Hardware Village Joint Venture") sold a multifamily apartment project ("Hardware Village ") to a buyer unaffiliated with the Hardware Village Joint Venture, the Company or the Advisor. The purchase price was paid in a . . . ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS (d) Exhibits Ex. Description 99.1 Consent of Duff & Phelps, LLC 99.2 Presentation to Stockholders 12
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