San Diego Office Portfolio

3636 Nobel Drive, San Diego, CA 92122

Property Overview

KBS REIT has purchased a $20 million note in connection with a San Diego real estate portfolio. In March 2007, an unaffiliated investor purchased a portfolio of six office buildings and one retail building located in the greater San Diego area. The financing for this acquisition consisted of a single $157 million first lien mortgage. Subsequent to the acquisition, the loan was divided into a $137 million Senior A-note and a $20 million Junior B- note. The B-note is in the “first loss” position relative to the A note, however, both notes are secured by a first lien against all seven properties. Due to this structure KBS REIT was able to purchase the $20 million note at a discount of 33% providing a desirable yield to maturity.

The properties consist of six multi-tenant office buildings and a single tenant retail building constructed in the mid- 1980s. Six of the properties are located in the University Towne Center sub-market in north-central suburban San Diego. The other property, Torrey View Corporate Center is located east of I-5 in the city of San Diego.

Investment at a Glance

Location: San Diego, CA

Property Type: Office/Retail

Investment Type: B-Note

Acquisition Date: October 26, 2007

Initial Loan Funding: $20,000,000

Initial Loan-to Value: 74-81%

No. of Buildings: 7

Square Footage: 380,952 SF

$20,000,000 Total Purchase Price
380,952 square feet Total Rentable Area
Class A Building Class