kbsreiti-20150331

Foreclosed real estate held for sale

78,900

Real estate loans receivable, net

12,045

Total real estate, net

1,032,632

1,130,556

29,135

^[1]

28,922

^[1]

Total real estate and real estate-related investments, net

1,061,767

1,159,478

Cash and cash equivalents

Rents and other receivables, net

41,208

39,462

Above-market leases, net

Deferred financing costs, prepaid expenses and other assets, net

Notes payable:

Notes payable related to real estate held for sale

Accounts payable and accrued liabilities

Distributions payable

Commitments and contingencies (Note 13)

4,699

Below-market leases, net

Redeemable common stock

8,442

10,000

Stockholders’ equity

Preferred stock, $.01 par value; 10,000,000 shares authorized, no shares issued and outstanding

Common stock, $.01 par value; 1,000,000,000 shares authorized, 187,500,775 and 187,845,515 shares issued and outstanding as of March 31, 2015 and December 31, 2014, respectively

1,875

1,879

Additional paid-in capital

1,662,487

1,662,483

Cumulative distributions and net losses

(1,057,690)

(1,061,589)

Total stockholders’ equity

606,672

602,773

Total liabilities and stockholders' equity

$ 1,351,315

$ 1,376,167

[1]	Book value represents outstanding principal balance, adjusted for unamortized acquisition discounts, origination fees and direct origination and acquisition costs. Loan balances are presented gross of any asset-specific reserves.

CONSOLIDATED BALANCE SHEETS (Parenthetical) (Unaudited) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	10,000,000us-gaap_PreferredStockSharesAuthorized	10,000,000us-gaap_PreferredStockSharesAuthorized
Preferred stock, shares issued	0us-gaap_PreferredStockSharesIssued	0us-gaap_PreferredStockSharesIssued
Preferred stock, shares outstanding	0us-gaap_PreferredStockSharesOutstanding	0us-gaap_PreferredStockSharesOutstanding
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	1,000,000,000us-gaap_CommonStockSharesAuthorized	1,000,000,000us-gaap_CommonStockSharesAuthorized
Common stock, shares issued	187,500,775us-gaap_CommonStockSharesIssued	187,845,515us-gaap_CommonStockSharesIssued
Common stock, shares outstanding	187,500,775us-gaap_CommonStockSharesOutstanding	187,845,515us-gaap_CommonStockSharesOutstanding

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Revenues:
Rental income	$ 35,365	$ 39,143
Tenant reimbursements	12,554us-gaap_TenantReimbursements	13,058us-gaap_TenantReimbursements
Interest income from real estate loans receivable	726	801
Parking revenues and other operating income	932us-gaap_OtherRealEstateRevenue	1,004us-gaap_OtherRealEstateRevenue
Total revenues	49,577us-gaap_Revenues	54,006us-gaap_Revenues
Expenses:
Operating, maintenance, and management	21,989us-gaap_CostOfRealEstateRevenue	21,400us-gaap_CostOfRealEstateRevenue
Real estate taxes, property-related taxes, and insurance	6,781us-gaap_RealEstateTaxesAndInsurance	7,440us-gaap_RealEstateTaxesAndInsurance
Asset management fees to affiliate	2,420us-gaap_AssetManagementCosts	2,499us-gaap_AssetManagementCosts
General and administrative expenses	2,220us-gaap_GeneralAndAdministrativeExpense	3,644us-gaap_GeneralAndAdministrativeExpense
Depreciation and amortization	15,605	17,923
Interest expense	8,733us-gaap_InterestExpense	13,545us-gaap_InterestExpense
Impairment charge on real estate held for investment	0us-gaap_ImpairmentOfRealEstate	1,257us-gaap_ImpairmentOfRealEstate
Total expenses	57,748us-gaap_CostsAndExpenses	67,708us-gaap_CostsAndExpenses
Other income
Gain on sales of real estate securities (includes $3.8 million of unrealized gains reclassified from accumulated other comprehensive income during the three months ended March 31, 2014)	0	3,748
Gain on sales of real estate, net	13,967kbsreiti_GainLossOnSaleOfRealEstate	0kbsreiti_GainLossOnSaleOfRealEstate
Gain on sales of foreclosed real estate held for sale	2,509	0
Gain from extinguishment of debt	0	1,815
Other interest income	116us-gaap_InvestmentIncomeInterest	168us-gaap_InvestmentIncomeInterest
Other income	0us-gaap_OtherNonoperatingIncomeExpense	304us-gaap_OtherNonoperatingIncomeExpense
Total other income	16,592us-gaap_OtherIncome	6,035us-gaap_OtherIncome
Income (loss) from continuing operations	8,421	(7,667)
Discontinued operations:
Gain on sales of real estate, net	124	2,916
Income from discontinued operations	44	236
Total income from discontinued operations	168	3,152
Net income (loss)	$ 8,589us-gaap_ProfitLoss	$ (4,515)us-gaap_ProfitLoss
Basic and diluted income (loss) per common share:
Continuing operations (per share)	$ 0.05	$ (0.04)
Discontinued operations (per share)	$ 0.00	$ 0.02
Net income (loss) per common share	$ 0.05us-gaap_EarningsPerShareBasicAndDiluted	$ (0.02)us-gaap_EarningsPerShareBasicAndDiluted
Weighted-average number of common shares outstanding, basic and diluted	187,718,362	189,481,669

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Parenthetical) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014
Income Statement [Abstract]
Unrealized gains on real estate securities reclassified from accumulated other comprehensive income	$ 3.8

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 8,589us-gaap_ProfitLoss	$ (4,515)us-gaap_ProfitLoss
Other comprehensive (loss) income
Reclassification of realized gain on real estate securities	0	(3,783)
Unrealized change in market value of real estate securities	0	(136)
Total other comprehensive (loss) income	0	(3,919)
Total comprehensive income (loss)	$ 8,589	$ (8,434)

CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) (USD $) In Thousands, except Share data, unless otherwise specified	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Cumulative Distributions and Net Income (Loss) [Member]	Accumulated Other Comprehensive Income (Loss) [Member]
Balance, value at Jan. 26, 2006
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Redemptions of common stock, shares		(11,934,805)
Redemptions of common stock, value		$ (87,000)
Balance, value at Mar. 31, 2015		1,875			0
Balance, shares at Mar. 31, 2015		187,500,775
Balance, value at Dec. 31, 2013	645,893	1,896	1,670,356	(1,030,911)	4,552
Balance, shares at Dec. 31, 2013		189,616,701
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(21,266)us-gaap_ProfitLoss			(21,266)
Other comprehensive income	(4,552)				(4,552)
Redemptions of common stock, shares		(1,771,186)
Redemptions of common stock, value	(7,890)	(17)	(7,873)
Distributions declared	(9,412)us-gaap_DividendsCommonStock			(9,412)
Balance, value at Dec. 31, 2014	602,773	1,879	1,662,483	(1,061,589)	0
Balance, shares at Dec. 31, 2014	187,845,515us-gaap_CommonStockSharesOutstanding	187,845,515
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	8,589us-gaap_ProfitLoss			8,589
Other comprehensive income	0
Redemptions of common stock, shares		(344,740)
Redemptions of common stock, value	(1,558)	(4)	(1,554)
Transfers from redeemable common stock	1,558		1,558
Distributions declared	(4,690)us-gaap_DividendsCommonStock			(4,690)
Balance, value at Mar. 31, 2015	$ 606,672	$ 1,875	$ 1,662,487	$ (1,057,690)	$ 0
Balance, shares at Mar. 31, 2015	187,500,775us-gaap_CommonStockSharesOutstanding	187,500,775

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Cash Flows from Operating Activities:
Net income (loss)	$ 8,589us-gaap_ProfitLoss	$ (4,515)us-gaap_ProfitLoss
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	15,605	17,923
Impairment charge on real estate	0us-gaap_ImpairmentOfRealEstate	1,257us-gaap_ImpairmentOfRealEstate
Noncash interest income on real estate-related investments	(240)	(248)
Deferred rent	(495)us-gaap_RecognitionOfDeferredRevenue	(574)us-gaap_RecognitionOfDeferredRevenue
Bad debt expense	334us-gaap_ProvisionForDoubtfulAccounts	482us-gaap_ProvisionForDoubtfulAccounts
Amortization of deferred financing costs	476us-gaap_AmortizationOfFinancingCosts	377us-gaap_AmortizationOfFinancingCosts
Deferred interest	0kbsreiti_DeferredInterestPayable	480kbsreiti_DeferredInterestPayable
Amortization of above- and below-market leases, net	(1,790)	(2,094)
Gain on sales of foreclosed real estate held for sale	(2,509)	0
Gain on sales of real estate, net	(14,191)	(2,916)
Gain on sales of real estate securities	0	(3,748)
Gain on extinguishment of debt	0	(1,815)
Amortization of discounts and premiums on notes payable, net	511	639
Changes in operating assets and liabilities:
Restricted cash for operational expenditures	2,949	814
Rents and other receivables	(1,880)	(2,877)
Prepaid expenses and other assets	(3,615)	(3,188)
Accounts payable and accrued liabilities	3,894	1,834
Due to affiliates	651	0
Other liabilities	(1,480)	(834)
Net cash provided by operating activities	6,809	997
Cash Flows from Investing Activities:
Improvements to real estate	(11,903)us-gaap_PaymentsForCapitalImprovements	(5,025)us-gaap_PaymentsForCapitalImprovements
Proceeds from sales of real estate, net	99,915us-gaap_ProceedsFromSaleOfRealEstate	47,324us-gaap_ProceedsFromSaleOfRealEstate
Proceeds from sales of foreclosed real estate held for sale	14,155	0
Principal repayments on real estate loans receivable	27	20
Proceeds from sale of real estate securities	0	6,588
Net change in restricted cash for capital expenditures	4,111	(175)
Net cash provided by investing activities	106,305	48,732
Cash Flows from Financing Activities:
Proceeds from notes payable	0us-gaap_ProceedsFromNotesPayable	2,500us-gaap_ProceedsFromNotesPayable
Principal payments on notes payable	(19,263)us-gaap_RepaymentsOfNotesPayable	(104,747)us-gaap_RepaymentsOfNotesPayable
Net change in restricted cash for debt service obligations	276	(346)
Payments of deferred financing costs	0us-gaap_PaymentsOfFinancingCosts	(727)us-gaap_PaymentsOfFinancingCosts
Payments to redeem common stock	(1,558)	(1,628)
Distributions paid to common stockholders	(9,389)us-gaap_PaymentsOfDividendsCommonStock	0us-gaap_PaymentsOfDividendsCommonStock
Net cash used in financing activities	(29,934)	(104,948)
Net increase (decrease) in cash and cash equivalents	83,180	(55,219)
Cash and cash equivalents, beginning of period	58,675	211,391
Cash and cash equivalents, end of period	$ 141,855	$ 156,172

ORGANIZATION	3 Months Ended
ORGANIZATION	Mar. 31, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
ORGANIZATION	ORGANIZATION KBS Real Estate Investment Trust, Inc. (the “Company”) was formed on June 13, 2005 as a Maryland corporation and has elected to be taxed as a real estate investment trust (“REIT”). Substantially all of the Company’s assets are held by, and the Company conducts substantially all of its operations through, KBS Limited Partnership, a Delaware limited partnership (the “Operating Partnership”), and its subsidiaries. The Company is the sole general partner of and directly owns a 99% partnership interest in the Operating Partnership. The Company’s wholly owned subsidiary, KBS REIT Holdings LLC, a Delaware limited liability company (“KBS REIT Holdings”), owns the remaining 1% partnership interest in the Operating Partnership and is its sole limited partner. The Company owns a diverse portfolio of real estate and real estate-related investments. As of March 31, 2015, the Company owned or, with respect to a limited number of properties, held a leasehold interest in, 397 real estate properties, including the GKK Properties (defined below). In addition, as of March 31, 2015, the Company owned four real estate loans receivable and a participation interest with respect to a real estate joint venture. On September 1, 2011, the Company, through indirect wholly owned subsidiaries (collectively, “KBS”), entered into a Collateral Transfer and Settlement Agreement (the “Settlement Agreement”) with, among other parties, GKK Stars Acquisition LLC (“GKK Stars”), the wholly owned subsidiary of Gramercy Property Trust, Inc. (“Gramercy”) that indirectly owned the Gramercy real estate portfolio, to effect the orderly transfer of certain assets and liabilities of the Gramercy real estate portfolio to KBS in satisfaction of certain debt obligations under a mezzanine loan owed by wholly owned subsidiaries of Gramercy to KBS (the “GKK Mezzanine Loan”). The Settlement Agreement resulted in the transfer of the equity interests in certain subsidiaries of Gramercy (the “Equity Interests”) that indirectly owned or, with respect to a limited number of properties, held a leasehold interest in, 867 properties (the “GKK Properties”), consisting of 576 bank branch properties and 291 office buildings, operations centers and other properties. As of December 15, 2011, GKK Stars had transferred all of the Equity Interests to the Company, giving the Company title to or, with respect to a limited number of GKK Properties, a leasehold interest in, 867 GKK Properties as of that date. Subject to certain restrictions and limitations, the business of the Company is managed by KBS Capital Advisors LLC (the “Advisor”), an affiliate of the Company, pursuant to an advisory agreement with the Company (as amended, the “Advisory Agreement”) in effect through November 8, 2015. The Advisory Agreement may be renewed for an unlimited number of one-year periods upon the mutual consent of the Advisor and the Company. Either party may terminate the Advisory Agreement upon 60 days written notice. The Advisor owns 20,000 shares of the Company’s common stock. Upon commencing its initial public offering (the “Offering”), the Company retained KBS Capital Markets Group LLC (the “Dealer Manager”), an affiliate of the Advisor, to serve as the dealer manager of the Offering pursuant to a dealer manager agreement dated January 27, 2006 (the “Dealer Manager Agreement”). The Company ceased offering shares of common stock in its primary offering on May 30, 2008. The Company terminated its dividend reinvestment plan effective April 10, 2012. The Company sold 171,109,494 shares of common stock in its primary offering for gross offering proceeds of $1.7 billion. The Company sold 28,306,086 shares of common stock under its dividend reinvestment plan for gross offering proceeds of $233.7 million. As of March 31, 2015, the Company had redeemed 11,934,805 of the shares sold in the Offering for $87.0 million. Asset Management Services Agreement Related to the GKK Properties On December 19, 2013, the Company, through an indirect wholly owned subsidiary (“KBS Acquisition Sub”), entered into an amended and restated asset management services agreement (the “Amended Services Agreement”) with GKK Realty Advisors LLC (the “Property Manager”), an affiliate of Gramercy, with respect to the GKK Properties. The effective date of the Amended Services Agreement was December 1, 2013. Pursuant to the Amended Services Agreement, the Property Manager agreed to provide, among other services: standard asset management services, assistance related to dispositions, accounting services and budgeting and business plans for the GKK Properties (the “Services”). The Property Manager is not affiliated with the Company or KBS Acquisition Sub. As compensation for the Services, the Company agreed to pay the Property Manager: (i) an annual fee of $7.5 million plus all GKK Property-related expenses incurred by the Property Manager, (ii) subject to certain terms and conditions in the Amended Services Agreement, a profit participation interest based on a percentage (ranging from 10% to 30%) of the amount by which the gross fair market value or gross sales price of certain identified portfolios of GKK Properties exceeds the sum of (a) an agreed-upon baseline value for such GKK Property portfolios plus (b) new capital expended to increase the value of GKK Properties within the portfolios and expenditures made to pay for tenant improvements and leasing commissions related to these GKK Properties as of the measurement date, and (iii) a monthly construction oversight fee equal to a percentage of construction costs for certain construction projects at the GKK Properties overseen by the Property Manager. The Amended Services Agreement will terminate on December 31, 2016, with a one-year extension option at the Company’s option, subject to certain terms and conditions contained in the Amended Services Agreement. The Amended Services Agreement supersedes and replaces all prior agreements related to the Services among the Company and its affiliates and the Property Manager and its affiliates.

Real Estate Held for Investment [Abstract]

The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure.

+ References+ Details

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	Mar. 31, 2015
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES There have been no significant changes to the Company’s accounting policies since it filed its audited financial statements in its Annual Report on Form 10-K for the year ended December 31, 2014. For further information about the Company’s accounting policies, refer to the Company’s consolidated financial statements and notes thereto for the year ended December 31, 2014 included in the Company’s Annual Report on Form 10-K filed with the SEC. Principles of Consolidation and Basis of Presentation The accompanying unaudited consolidated financial statements and condensed notes thereto have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and the rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for audited financial statements. In the opinion of management, the financial statements for the unaudited interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair and consistent presentation of the results for such periods. Operating results for the three months ended March 31, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. The consolidated financial statements include the accounts of the Company, KBS REIT Holdings, the Operating Partnership and their direct and indirect wholly owned subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation. Use of Estimates The preparation of the consolidated financial statements and condensed notes thereto in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates. Reclassifications Certain amounts in the Company’s prior period consolidated financial statements have been reclassified to conform to the current period presentation. These reclassifications have not changed the results of operations of prior periods. During the three months ended March 31, 2015, the Company sold four properties (of which two were GKK Properties), two of which were held for sale as of December 31, 2014. As a result, certain assets and liabilities were reclassified to held for sale on the consolidated balance sheets for all periods presented. Operating results of properties that were classified as held for sale in financial statements prior to January 1, 2014 will remain in discontinued operations on the Company’s consolidated statements of operations. Operating results of properties that were disposed of or classified as held for sale in the ordinary course of business subsequent to January 1, 2014 that had not been classified as held for sale in financial statements issued for the reporting periods prior to January 1, 2014 are included in continuing operations on the Company’s consolidated statements of operations. Per Share Data Basic net income (loss) per share of common stock is calculated by dividing net income (loss) by the weighted-average number of shares of common stock issued and outstanding during such period. Diluted net income (loss) per share of common stock equals basic net income (loss) per share of common stock as there were no potentially dilutive securities outstanding during the three months ended March 31, 2015 and 2014, respectively. Distributions declared per share of common stock were $0.025 for the three months ended March 31, 2015. On March 6, 2015, the Company’s board of directors declared a distribution in the amount of $0.025 per share of common stock to stockholders of record as of the close of business on March 20, 2015. No distributions were declared during the three months ended March 31, 2014. Segments The Company’s segments are based on the Company’s method of internal reporting, which classifies its operations by investment type: (i) real estate, (ii) real estate-related and (iii) commercial properties primarily leased to financial institutions received under the Settlement Agreement, the GKK Properties. For financial data by segment, see Note 12, “Segment Information.” Recently Issued Accounting Standards Update In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU No. 2014-09”). ASU No. 2014-09 requires an entity to recognize the revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. ASU No. 2014-09 supersedes the revenue requirements in Revenue Recognition (Topic 605) and most industry-specific guidance throughout the Industry Topics of the Codification. ASU No. 2014-09 does not apply to lease contracts within the scope of Leases (Topic 840). ASU No. 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and is to be applied retrospectively, with early application not permitted. The Company is still evaluating the impact of adopting ASU No. 2014-09 on its financial statements, but does not expect the adoption of ASU No. 2014-09 to have a material impact on its financial statements. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU No. 2014-15”). The amendments in ASU No. 2014-15 require management to evaluate, for each annual and interim reporting period, whether there are conditions or events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or are available to be issued when applicable) and, if so, provide related disclosures. ASU No. 2014-15 is effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early adoption is permitted for annual or interim reporting periods for which the financial statements have not previously been issued. The Company does not expect the adoption of ASU No. 2014-15 to have a significant impact on its financial statements. In January 2015, the FASB issued ASU No. 2015-01, Income Statement - Extraordinary and Unusual Items (Subtopic 225-20), Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items (“ASU No. 2015-01”). The amendments in ASU No. 2015-01 eliminate from GAAP the concept of extraordinary items. Although the amendments will eliminate the requirements in Subtopic 225-20 for reporting entities to consider whether an underlying event or transaction is extraordinary, the presentation and disclosure guidance for items that are unusual in nature or occur infrequently will be retained and will be expanded to include items that are both unusual in nature and infrequently occurring. ASU No. 2015-01 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The Company does not expect the adoption of ASU No. 2015-01 to have a significant impact on its financial statements. In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs (“ASU No. 2015-03”). The amendments in ASU No. 2015-03 require debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. ASU No. 2015-03 is limited to the presentation of debt issuance costs and does not affect the recognition and measurement of debt issuance costs. ASU No. 2015-03 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015 and is to be applied retrospectively. Early adoption is permitted for financial statements that have not been previously issued. The adoption of ASU No. 2015-03 would change the presentation of debt issuance costs as the Company presents debt issuance costs as deferred financing costs, prepaid expenses and other assets, net on the accompanying consolidated balance sheets.

REAL ESTATE HELD FOR INVESTMENT

3 Months Ended

Mar. 31, 2015

REAL ESTATE HELD FOR INVESTMENT

As of March 31, 2015, the Company’s portfolio of real estate held for investment, including the GKK Properties, was composed of approximately 9.7 million rentable square feet and was 79% occupied. These properties are located in 31 states and include office properties, industrial properties and bank branch properties. Included in the Company’s portfolio of real estate held for investment was 6.3 million rentable square feet related to the GKK Properties held for investment, which were 80% occupied as of March 31, 2015.

The following table summarizes the Company’s investments in real estate as of March 31, 2015 and December 31, 2014 (in thousands):



	Land		Buildings and Improvements			Tenant Origination and Absorption Costs			Total Real Estate Held for Investment
As of March 31, 2015:
Office	$	68,178	$	404,910		$	1,661		$	474,749
Industrial	16,787		82,486			2,244			101,517
GKK Properties	186,601		385,841			83,276			655,718
Real estate held for investment, at cost and net of impairment charges	271,566		873,237			87,181			1,231,984
Accumulated depreciation/amortization	—		(160,670		)	(38,682		)	(199,352		)
Real estate held for investment, net	$	271,566	$	712,567		$	48,499		$	1,032,632
As of December 31, 2014:
Office	$	68,178	$	401,083		$	1,825		$	471,086
Industrial	16,787		80,565			3,137			100,489
GKK Properties	186,601		385,508			83,388			655,497
Real estate held for investment, at cost and net of impairment charges	271,566		867,156			88,350			1,227,072
Accumulated depreciation/amortization	—		(150,434		)	(37,027		)	(187,461		)
Real estate held for investment, net	$	271,566	$	716,722		$	51,323		$	1,039,611

Operating Leases

The Company’s real estate assets are leased to tenants under operating leases for which the terms and expirations vary. As of March 31, 2015, the Company’s leases, including the GKK Properties held for investment and excluding options to extend, had remaining terms of up to 11.9 years with a weighted-average remaining term of 4.9 years. As of March 31, 2015, leases related to the GKK Properties, excluding options to extend, had remaining terms of up to 11.9 years with a weighted-average remaining term of 5.0 years. Some of the Company’s leases have provisions to extend the term of the leases, options for early termination for all or a part of the leased premises after paying a specified penalty, rights of first refusal to purchase the property at competitive market rates, and other terms and conditions as negotiated. Additionally, the Company assumed several leases related to the GKK Properties which contain shedding rights provisions. As of March 31, 2015, these shedding rights totaled approximately 0.3 million square feet and can be exercised at various dates during the remainder of 2015 through 2016. The Company retains substantially all of the risks and benefits of ownership of the real estate assets leased to tenants. Generally, upon the execution of a lease, the Company requires a security deposit from the tenant in the form of a cash deposit and/or a letter of credit. The amount required as a security deposit varies depending upon the terms of the respective lease and the creditworthiness of the tenant, but generally is not a significant amount. Therefore, exposure to credit risk exists to the extent that a receivable from a tenant exceeds the amount of its security deposit. Security deposits received in cash related to tenant leases are included in other liabilities in the accompanying consolidated balance sheets and totaled $2.9 million and $3.0 million as of March 31, 2015 and December 31, 2014, respectively.

During the three months ended March 31, 2015 and 2014, the Company recognized deferred rent from tenants of $0.5 million and $0.6 million, respectively. These excess amounts for the three months ended March 31, 2015 and 2014 were net of $0.4 million and $0.4 million of lease incentive amortization, respectively. As of March 31, 2015 and December 31, 2014, the cumulative deferred rent balance was $30.4 million and $29.3 million, respectively, and is included in rents and other receivables on the accompanying balance sheets. The cumulative deferred rent balance included $6.0 million and $5.7 million of unamortized lease incentives as of March 31, 2015 and December 31, 2014, respectively. The Company records property operating expense reimbursements due from tenants for common area maintenance, real estate taxes and other recoverable costs in the period the related expenses are incurred.

The future minimum rental income from the Company’s properties under non-cancelable operating leases, including leases subject to shedding rights and excluding options to extend, as of March 31, 2015 for the years ending December 31 is as follows (in thousands):



April 1, 2015 through December 31, 2015	$	90,848
2016	119,917
2017	110,491
2018	97,651
2019	82,967
Thereafter	208,183
	$	710,057

As of March 31, 2015, the Company’s highest tenant industry concentration (greater than 10% of annualized base rent) was as follows:



Industry	Number of Tenants	Annualized Base Rent ⁽¹⁾ (in thousands)		Percentage of Annualized Base Rent
Finance	69	$	61,552	49.3	%

_____________________

⁽¹⁾Annualized base rent represents annualized contractual base rental income as of March 31, 2015, adjusted to straight-line any contractual tenant concessions (including free rent), rent increases and rent decreases from the lease's inception through the balance of the lease term.

As of March 31, 2015, no other tenant industries accounted for more than 10% of the Company’s annualized base rent. The Company currently has approximately 360 tenants over a diverse range of industries and geographical regions. As of March 31, 2015 and December 31, 2014, the Company had a bad debt expense reserve of $1.4 million and $1.1 million, respectively. The Company’s bad debt expense reserve as of March 31, 2015 and December 31, 2014 included $1.1 million and $0.9 million related to the GKK Properties, respectively. During the three months ended March 31, 2015 and 2014, the Company recorded bad debt expense related to its tenant receivables of $0.4 million and $0.4 million, respectively.

As of March 31, 2015, the Company had a concentration of credit risk related to leases with the following tenant that represented more than 10% of the Company’s annualized base rent:

Annualized Base Rent Statistics

Tenant

Property

Tenant

Industry

Rentable Square Feet

% of

Portfolio Rentable Square Feet

Annualized Base Rent ⁽¹⁾

(in thousands)

% of Portfolio Annualized Base Rent

Annualized Base Rent per Square Foot

Lease Expirations

Bank of America, N.A.

Various

Finance

3,085,003

31.7

%

$

27,406

22.0

%

$

8.88

⁽²⁾

_____________________

⁽¹⁾ Annualized base rent represents annualized contractual base rental income as of March 31, 2015, adjusted to straight-line any contractual tenant concessions (including free rent), rent increases and rent decreases from the lease’s inception through the balance of the lease term.

⁽²⁾ As of March 31, 2015, lease expiration dates ranged from the remainder of 2015 through 2026 with a weighted-average remaining term of 5.0 years. Additionally, as of March 31, 2015, certain of Bank of America’s leases contained shedding right provisions. These shedding rights totaled approximately 0.3 million square feet and can be exercised at various dates during the remainder of 2015 through 2016.

Bank of America Corporation is the guarantor of various leases that its subsidiary, Bank of America, N.A., has with the Company. The condensed consolidated financial information of Bank of America Corporation has been included herein because of the significant credit concentration the Company has with this guarantor. Bank of America Corporation currently files its financial statements in reports filed with the SEC, and the following unaudited summary financial data regarding Bank of America Corporation is taken from its previously filed public reports. For more detailed financial information regarding Bank of America Corporation, please refer to its financial statements, which are publicly available with the SEC at http:// www.sec.gov.



	Three Months Ended March 31,
	2015		2014
Consolidated Statements of Income (in millions)
Total revenue, net of interest expense	$	21,202	$	22,566
Income before income taxes	4,742		(681		)
Net income (loss)	3,357		(276		)

	As of
	March 31, 2015		December 31, 2014
Consolidated Balance Sheets (in millions)
Total assets	$	2,143,545	$	2,104,534
Total liabilities	1,893,357		1,861,063
Total stockholders’ equity	250,188		243,471

No other tenant represented more than 10% of the Company’s annualized base rent.

Geographic Concentration Risk

As of March 31, 2015, the Company’s net investments in real estate in North Carolina represented 12.0% of the Company’s total assets. As a result, the geographic concentration of the Company’s portfolio makes it particularly susceptible to adverse economic developments in North Carolina’s real estate market. Any adverse economic or real estate developments in this market, such as business layoffs or downsizing, industry slowdowns, relocations of businesses, changing demographics and other factors, or any decrease in demand for office or bank branch space resulting from the local business climate, could adversely affect the Company’s operating results.

TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES

3 Months Ended

Mar. 31, 2015

Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities [Abstract]

TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES

As of March 31, 2015 and December 31, 2014, the Company’s tenant origination and absorption costs, above-market lease assets, and below-market lease liabilities (excluding fully amortized assets and liabilities and accumulated amortization) were as follows (in thousands):



	Tenant Origination and Absorption Costs						Above-Market Lease Assets						Below-Market Lease Liabilities
	March 31, 2015			December 31, 2014			March 31, 2015			December 31, 2014			March 31, 2015			December 31, 2014
Cost, net of impairments	$	87,181		$	88,350		$	34,329		$	34,329		$	(75,946	)	$	(76,128	)
Accumulated amortization	(38,682		)	(37,027		)	(12,417		)	(11,562		)	37,729			35,274
Net Amount	$	48,499		$	51,323		$	21,912		$	22,767		$	(38,217	)	$	(40,854	)

Increases (decreases) in net income as a result of amortization of the Company’s tenant origination and absorption costs, above-market lease assets and below-market lease liabilities for the three months ended March 31, 2015 and 2014 were as follows (in thousands):



	Tenant Origination and Absorption Costs						Above-Market Lease Assets						Below-Market Lease Liabilities
	For the Three Months Ended March 31,						For the Three Months Ended March 31,						For the Three Months Ended March 31,
	2015			2014			2015			2014			2015		2014
Amortization	$	(2,824	)	$	(3,834	)	$	(855	)	$	(1,008	)	$	2,645	$	3,021

REAL ESTATE LOANS RECEIVABLE

3 Months Ended

Mar. 31, 2015

Receivables [Abstract]

REAL ESTATE LOANS RECEIVABLE

As of March 31, 2015 and December 31, 2014, the Company, through indirect wholly owned subsidiaries, had invested in or originated real estate loans receivable as follows (dollars in thousands):



Loan Name Location of Related Property or Collateral	Date Acquired/ Originated	Property Type	Loan Type	Outstanding Principal Balance as of March 31, 2015⁽¹⁾		Book Value as of March 31, 2015 ⁽²⁾			Book Value as of December 31, 2014 ⁽²⁾			Contractual Interest Rate ⁽³⁾	Annualized Effective Interest Rate ⁽³⁾		Maturity Date
Sandmar Mezzanine Loan Southeast U.S. ⁽⁴⁾	01/09/2007	Retail	Mezzanine	$	5,150	$	5,172		$	5,181		5.4%	—	%	01/01/2017
Lawrence Village Plaza Loan Origination New Castle, Pennsylvania	08/06/2007	Retail	Mortgage	6,915		6,915			6,920			8.0%	8.1	%	09/01/2015
San Diego Office Portfolio B-Note San Diego, California ⁽⁵⁾	10/26/2007	Office	B-Note	20,000		17,645			17,450			5.8%	11.2	%	10/11/2017
4929 Wilshire B-Note Los Angeles, California	11/19/2007	Office	B-Note	3,873		3,397			3,365			6.1%	12.4	%	07/11/2017
				$	35,938	$	33,129		$	32,916
Reserve for Loan Losses ⁽⁶⁾				—		(3,994		)	(3,994		)
				$	35,938	$	29,135		$	28,922

_____________________

⁽¹⁾ Outstanding principal balance as of March 31, 2015 represents original principal balance outstanding under the loan, increased for any subsequent fundings and reduced for any principal paydowns.

⁽²⁾ Book value represents outstanding principal balance, adjusted for unamortized acquisition discounts, origination fees and direct origination and acquisition costs. Loan balances are presented gross of any asset-specific reserves.

⁽³⁾ Contractual interest rate is the stated interest rate on the face of the loan. Annualized effective interest rate is calculated as the actual interest income recognized in 2015, using the interest method, annualized and divided by the average amortized cost basis of the investment during 2015. The contractual interest rates and annualized effective interest rates presented are as of March 31, 2015.

⁽⁴⁾ The Company had recorded an asset-specific loan loss reserve against this investment as of March 31, 2015. See “—Reserve for Loan Losses.”

⁽⁵⁾ The borrower under this note is a wholly owned subsidiary of the Irvine Company. Donald Bren, who is the brother of Peter Bren (one of the Company’s executive officers and sponsors), is the chairman of the Irvine Company. During the three months ended March 31, 2015, the Company recognized $0.5 million of interest income related to its investment in this loan.

⁽⁶⁾ See “—Reserve for Loan Losses.”

As of March 31, 2015 and December 31, 2014, interest receivable from real estate loans receivable was $0.1 million and $0.1 million, respectively, and is included in rents and other receivables.

The following summarizes the activity related to real estate loans receivable for the three months ended March 31, 2015 (in thousands):



Real estate loans receivable, net - December 31, 2014	$	28,922
Principal repayments received on real estate loans receivable	(27		)
Accretion of discounts on purchased real estate loans receivable	248
Amortization of origination fees and costs on purchased and originated real estate loans receivable	(8		)
Real estate loans receivable, net - March 31, 2015	$	29,135

For the three months ended March 31, 2015 and 2014, interest income from real estate loans receivable consisted of the following (in thousands):



	Three Months Ended March 31,
	2015			2014
Contractual interest income	$	486		$	553
Interest accretion	248			257
Amortization of origination fees and costs	(8		)	(9		)
Interest income from real estate loans receivable	$	726		$	801

The Company generally recognizes income on impaired loans on either a cash basis, where interest income is only recorded when received in cash, or on a cost-recovery basis, where all cash receipts are applied against the carrying value of the loan. The Company will resume the accrual of interest if it determines the collection of interest according to the contractual terms of the loan is probable. The Company considers the collectibility of the loan’s principal balance in determining whether to recognize income on impaired loans on a cash basis or a cost-recovery basis. Beginning in July 2014, interest income received on the Sandmar Mezzanine Loan was recorded on a cost-recovery basis. During the three months ended March 31, 2014, the Company recognized $0.1 million of interest income related to the Sandmar Mezzanine Loan, which has an asset-specific reserve. The Company did not recognize any interest income related to the Sandmar Mezzanine Loan during the three months ended March 31, 2015.

Reserve for Loan Losses

As of March 31, 2015, the total reserve for loan losses consisted of $4.0 million of asset-specific reserves related to the Sandmar Mezzanine Loan, which had an amortized cost basis of $5.2 million.

The Company did not record a provision for loan loss reserves during the three months ended March 31, 2015 or 2014. As of March 31, 2015, the borrower under the Sandmar Mezzanine Loan was delinquent and the Company will recognize income on this loan on a cost-recovery basis.

Discontinued Operations and Disposal Groups [Abstract]

The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses.

+ References+ Details

REAL ESTATE HELD FOR SALE AND DISCONTINUED OPERATIONS

3 Months Ended

Mar. 31, 2015

REAL ESTATE HELD FOR SALE AND DISCONTINUED OPERATIONS

In accordance with ASU No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (“ASU No. 2014-08”), operating results of properties that are classified as held for sale in the ordinary course of business on or subsequent to January 1, 2014 would generally be included in continuing operations on the Company’s consolidated statements of operations. Operating results of properties that were classified as held for sale in financial statements issued for the reporting periods prior to January 1, 2014 will remain in discontinued operations on the Company’s consolidated statement of operations. Prior to the adoption of ASU No. 2014-08, the operations of properties held for sale or to be disposed of and the aggregate net gains recognized upon their disposition were presented as discontinued operations in the accompanying consolidated statements of operations for all periods presented. During the year ended December 31, 2014, the Company disposed of 16 properties (of which 11 were GKK Properties), transferred a portfolio of five GKK Properties to the lender in satisfaction of the debt and other obligations due under the BOA Windsor Mortgage Portfolio, terminated its leasehold interest in three GKK Properties and transferred two GKK Properties to the lenders in connection with foreclosure proceedings. During the three months ended March 31, 2015, the Company disposed of four properties (of which two were GKK Properties). As of March 31, 2015, the Company did not own any properties that were classified as held for sale.

The following summary presents the major components of assets and liabilities related to real estate held for sale as of March 31, 2015 and December 31, 2014 (in thousands):



	March 31, 2015		December 31, 2014
Assets related to real estate held for sale
Total real estate, at cost and net of impairment charges	$	—	$	84,847
Accumulated depreciation and amortization	—		(5,947		)
Real estate held for sale, net	—		78,900
Other assets	—		6,918
Total assets related to real estate held for sale	$	—	$	85,818
Liabilities related to real estate held for sale
Notes payable	—		16,575
Other liabilities	—		308
Total liabilities related to real estate held for sale	$	—	$	16,883

During the three months ended March 31, 2015, the Company sold two historical real estate properties and one GKK Property, which properties were not classified as held for sale in financial statements issued for the reporting periods prior to January 1, 2014. During the year ended December 31, 2014, the Company sold four historical real estate properties and two GKK Properties, disposed of a portfolio of five properties in connection with a deed-in-lieu of foreclosure, and transferred two GKK Properties to the lenders in connection with foreclosure proceedings, which properties were not classified as held for sale in financial statements issued for the reporting periods prior to January 1, 2014. In accordance with ASU No. 2014-08, the operations of these properties are included in continuing operations on the Company’s consolidated statements of operations. The following table summarizes certain revenues and expenses related to all of these properties, which were included in continuing operations (in thousands):



	Three Months Ended March 31,
	2015		2014
Revenues
Rental income	$	2,196	$	5,379
Tenant reimbursements and other operating income	668		1,057
Total Revenues	2,864		6,436
Expenses
Operating, maintenance, and management	1,125		1,377
Real estate taxes and insurance	260		831
Asset management fees to affiliate	98		195
General and administrative expenses	—		7
Depreciation and amortization	220		2,394
Interest expense	194		2,493
Impairment of real estate	—		1,257
Total expenses	1,897		8,554

Discontinued Operations

The following table summarizes operating income from discontinued operations for the three months ended March 31, 2015 and 2014 (in thousands):



	Three Months Ended March 31,
	2015			2014
Total revenues and other income	$	33		$	692
Total expenses	(11		)	456
Income from discontinued operations before gain on sales of real estate, net and impairment charge	44			236
Gain on sales of real estate, net	124			2,916
Income from discontinued operations	$	168		$	3,152

The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component.

Reference 1: http://www.xbrl.org/2003/role/presentationRef

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+ Details

FORECLOSED REAL ESTATE HELD FOR SALE	3 Months Ended
FORECLOSED REAL ESTATE HELD FOR SALE	Mar. 31, 2015
Foreclosed Real Estate Held for Sale [Abstract]
FORECLOSED REAL ESTATE HELD FOR SALE	FORECLOSED REAL ESTATE HELD FOR SALE In 2006 and 2007, the Company originally made three debt investments (collectively, the “Tribeca Loans”) related to the conversion of an eight-story loft building into a 10-story condominium building with 62 units (the “Tribeca Building”) located at 415 Greenwich Street in New York, New York. On February 19, 2010, the borrowers under the Tribeca Loans defaulted and the Company foreclosed on the Tribeca Building by exercising its right to accept 100% of the ownership interest of the borrowers. The Company acquired the remaining unsold condominium units of the Tribeca Building (the residential, retail and parking space condominium units transferred to the Company are, collectively, the “Units” and, individually, each is a “Unit”) and assumed the project liabilities. The Company recorded the Tribeca Building at fair value using a discounted cash flow valuation model based on the net realizable value (expected sales price less estimated costs to sell the unsold Units) of the real estate. As of December 31, 2014, the Company’s investment in the Tribeca Building consisted of two Units with a carrying value of $12.0 million and is presented as foreclosed real estate held for sale on the consolidated balance sheet. During the three months ended March 31, 2015, the Company sold the remaining two Units and recognized a gain on sale of $2.5 million (which gain on sale has been reduced by disposition fees to the Advisor of $0.2 million related to these two Units) and recorded expenses of $0.2 million related to foreclosed real estate held for sale. During the three months ended March 31, 2014, the Company did not sell any Units of the Tribeca Building and recorded expenses of $0.3 million related to foreclosed real estate held for sale.

NOTES PAYABLE

3 Months Ended

Mar. 31, 2015

Notes Payable [Abstract]

NOTES PAYABLE

As of March 31, 2015 and December 31, 2014, the Company’s notes payable, including notes payable related to real estate held for sale, consisted of the following (dollars in thousands):



Loan Type	Book Value as of March 31, 2015			Book Value as of December 31, 2014			Contractual Interest Rates as of March 31, 2015 ⁽¹⁾	Weighted-Average Interest Rates as of March 31, 2015 ⁽¹⁾	Weighted-Average Remaining Term in Years ⁽²⁾
Fixed Rate
Mortgage loans	$	62,200		$	62,200		5.9%	5.9%	1.5
GKK Properties mortgage loans	379,035			381,179			5.3% - 6.8%	5.9%	3.7
	441,235			443,379
Variable Rate
Mortgage loans	164,131			181,249			One-month LIBOR + 1.80%	2.0%	0.8
GKK Properties mortgage loans	40,000			40,000			One-month LIBOR + 3.00%	3.2%	2.2
	204,131			221,249
Total notes payable principal outstanding	645,366			664,628
Discount on notes payable, net⁽³⁾	(6,020		)	(6,530		)
Total notes payable, net	$	639,346		$	658,098

_____________________

⁽¹⁾ Contractual interest rates as of March 31, 2015 represent the range of interest rates in effect under these loans as of March 31, 2015. Weighted-average interest rates as of March 31, 2015 are calculated as the actual interest rates in effect under these loans as of March 31, 2015 (consisting of the contractual interest rates), using interest rate indices as of March 31, 2015, where applicable.

⁽²⁾ Weighted-average remaining term in years represents the initial maturity dates or the maturity dates as extended as of March 31, 2015; subject to certain conditions, the maturity dates of certain loans may be further extended.

⁽³⁾ Represents the unamortized discounts and premiums on notes payable due to the above- and below-market interest rates when the loans were assumed. The discounts and premiums are amortized over the remaining life of the respective loan.

As of March 31, 2015 and December 31, 2014, the Company’s deferred financing costs were $1.6 million and $1.9 million, respectively, net of amortization. During the three months ended March 31, 2015 and 2014, the Company incurred interest expense, net of discontinued operations, of $8.7 million and $13.5 million, respectively. Included in interest expense was: (i) the amortization of deferred financing costs of $0.5 million and $0.3 million for the three months ended March 31, 2015 and 2014, respectively, and (ii) the amortization of discounts and premiums on notes payable, which increased interest expense by $0.5 million and $0.6 million for the three months ended March 31, 2015 and 2014, respectively. As of March 31, 2015 and December 31, 2014, $2.6 million and $1.9 million of interest was payable, respectively.

The following is a schedule of maturities, including principal amortization payments, for all notes payable outstanding as of March 31, 2015 (in thousands):



April 1, 2015 through December 31, 2015	$	13,346
2016	304,640
2017	159,175
2018	8,651
2019	126,044
Thereafter	33,510
	$	645,366

The following summarizes the activity related to notes payable for the three months ended March 31, 2015 (in thousands):



Total notes payable, net - December 31, 2014	$	658,098
Principal repayments	(19,263		)
Amortization of discounts and premiums on notes payable, net	511
Total notes payable, net - March 31, 2015	$	639,346

Debt Covenants

The documents evidencing the Company’s outstanding debt obligations typically require that specified loan-to-value and debt service coverage ratios be maintained with respect to the financed properties. A breach of the financial covenants in these documents may result in the lender imposing additional restrictions on the Company’s operations, such as restrictions on the Company’s ability to incur additional debt, or may allow the lender to impose “cash traps” with respect to cash flow from the property securing the loan. In addition, such a breach may constitute an event of default and the lender could require the Company to repay the debt immediately. If the Company fails to make such repayment in a timely manner, the lender may be entitled to take possession of any property securing the loan. Except as described below, as of March 31, 2015, the Company was in compliance with these debt covenants.

BBD2 Loan

As of March 31, 2015, the borrower under the BBD2 Loan was out of debt service coverage compliance. As a result of such non-compliance, the loan servicer will impose a “cash trap,” which restricts distributions to the Company to the budgeted property operating expenses.

FAIR VALUE DISCLOSURES

3 Months Ended

Mar. 31, 2015

Fair Value Disclosures [Abstract]

FAIR VALUE DISCLOSURES

Under GAAP, the Company is required to measure certain financial instruments at fair value on a recurring basis. In addition, the Company is required to measure other financial instruments and balances at fair value on a non-recurring basis (e.g., carrying value of impaired real estate loans receivable and long-lived assets). Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The GAAP fair value framework uses a three-tiered approach. Fair value measurements are classified and disclosed in one of the following three categories:


•	Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities;


•	Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and


•	Level 3: prices or valuation techniques where little or no market data is available that requires inputs that are both significant to the fair value measurement and unobservable.

The fair value for certain financial instruments is derived using a combination of market quotes, pricing models and other valuation techniques that involve significant management judgment. The price transparency of financial instruments is a key determinant of the degree of judgment involved in determining the fair value of the Company’s financial instruments. Financial instruments for which actively quoted prices or pricing parameters are available and for which markets contain orderly transactions will generally have a higher degree of price transparency than financial instruments for which markets are inactive or consist of non-orderly trades. The Company evaluates several factors when determining if a market is inactive or when market transactions are not orderly. The following is a summary of the methods and assumptions used by management in estimating the fair value of each class of assets and liabilities for which it is practicable to estimate the fair value:

Cash and cash equivalents, restricted cash, rent and other receivables, and accounts payable and accrued liabilities: These balances approximate their fair values due to the short maturities of these items.

Real estate loans receivable: These instruments are presented in the accompanying consolidated balance sheets at their amortized cost net of recorded loan loss reserves and not at fair value. The fair values of real estate loans receivable were estimated using an internal valuation model that considered the expected cash flows for the loans, underlying collateral values (for collateral-dependent loans) and estimated yield requirements of institutional investors for loans with similar characteristics, including remaining loan term, loan-to-value, type of collateral and other credit enhancements. The Company classifies these inputs as Level 3 inputs.

Notes payable: The fair values of the Company’s notes payable are estimated using a discounted cash flow analysis based on management’s estimates of current market interest rates for instruments with similar characteristics, including remaining loan term, loan-to-value ratio, type of collateral and other credit enhancements. Additionally, when determining the fair value of a liability in circumstances in which a quoted price in an active market for an identical liability is not available, the Company measures fair value using (i) a valuation technique that uses the quoted price of the identical liability when traded as an asset or quoted prices for similar liabilities when traded as assets or (ii) another valuation technique that is consistent with the principles of fair value measurement, such as the income approach or the market approach. The Company classifies these inputs as Level 3 inputs.

The following were the face values, carrying amounts and fair values of the Company’s real estate loans receivable and notes payable as of March 31, 2015 and December 31, 2014, which carrying amounts generally do not approximate the fair values (in thousands):



	March 31, 2015						December 31, 2014
	Face Value		Carrying Amount		Fair Value		Face Value		Carrying Amount		Fair Value
Financial assets:
Real estate loans receivable ⁽¹⁾	$	35,938	$	29,135	$	26,314	$	35,966	$	28,922	$	25,818
Financial liabilities:
Notes payable	$	645,366	$	639,346	$	669,642	$	664,628	$	658,098	$	688,374

_____________________

⁽¹⁾ Carrying amount of real estate loans receivable includes loan loss reserves.

Disclosure of the fair values of financial instruments is based on pertinent information available to the Company as of the period end and requires a significant amount of judgment. The actual value of these investments could be materially different from the Company’s estimate of value.

RELATED PARTY TRANSACTIONS

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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RELATED PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2015

The Company has entered into an Advisory Agreement with the Advisor, which entitles the Advisor to specified fees for the management and disposition of investments, among other services, as well as to reimbursement for certain costs incurred by the Advisor in providing services to the Company. In addition, the Advisor is entitled to certain other fees, including an incentive fee upon achieving certain performance goals, as detailed in the Advisory Agreement. The Company has also entered into a fee reimbursement agreement (the “AIP Reimbursement Agreement”) with the Dealer Manager pursuant to which the Company agreed to reimburse the Dealer Manager for certain fees and expenses it incurs for administering the Company’s participation in the DTCC Alternative Investment Product Platform with respect to certain accounts of the Company’s investors serviced through the platform. The Advisor also serves, and the Dealer Manager also serves or served, as the advisor and dealer manager, respectively, for KBS Real Estate Investment Trust II, Inc., KBS Real Estate Investment Trust III, Inc., KBS Strategic Opportunity REIT, Inc., KBS Legacy Partners Apartment REIT, Inc. and KBS Strategic Opportunity REIT II, Inc. and anticipate that they will serve as the advisor and dealer manager, respectively, to KBS Growth & Income REIT, Inc.

On January 6, 2014, the Company, together with KBS Real Estate Investment Trust II, Inc., KBS Real Estate Investment Trust III, Inc., KBS Strategic Opportunity REIT, Inc., KBS Legacy Partners Apartment REIT, Inc., KBS Strategic Opportunity REIT II, Inc., the Dealer Manager, the Advisor 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 the 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. The Advisor’s and the Dealer Manager’s portion of the shared lower tiers’ cost is proportionate to the respective entities’ prior cost for the errors and omissions insurance.

During the three months ended March 31, 2015 and 2014, no other business transactions occurred between the Company and the other KBS-sponsored programs. On May 18, 2012, KBS Strategic Opportunity REIT, Inc. made an $8.0 million investment in a joint venture in which the Company indirectly owns a participation interest through another joint venture investment.

Pursuant to the terms of the Advisory Agreement and the AIP Reimbursement Agreement, summarized below are the related-party costs incurred by the Company for the three months ended March 31, 2015 and 2014, respectively, and any related amounts payable as of March 31, 2015 and December 31, 2014 (in thousands):



	Incurred				Payable
	Three Months Ended March 31,				March 31,		December 31,
	2015		2014		2015		2014
Expensed
Asset management fees⁽¹⁾	$	2,420	$	2,516	$	—	$	—
Reimbursement of operating expenses⁽²⁾	49		49		80		45
Disposition fees⁽³⁾	1,185		376		616		399
	$	3,654	$	2,941	$	696	$	444

_____________________

⁽¹⁾ Amounts include asset management fees from discontinued operations totaling $0.1 million for the three months ended March 31, 2014.

⁽²⁾ The Advisor may seek reimbursement for certain employee costs under the Advisory Agreement. The Company reimburses the Advisor for the Company’s allocable portion of the salaries, benefits and overhead of internal audit department personnel providing services to the Company. These amounts totaled $45,000 and $49,000 for the three months ended March 31, 2015 and 2014, respectively. These were the only type of employee costs reimbursed under the Advisory Agreement for the three months ended March 31, 2015 and 2014. The Company will not reimburse for employee costs in connection with services for which the Advisor earns disposition fees (other than reimbursement of travel and communication expenses) or for the salaries or benefits the Advisor or its affiliates may pay to the Company’s executive officers.

⁽³⁾ Disposition fees with respect to real estate sold are included in the gain (loss) on sales of real estate in the accompanying consolidated statements of operations.

Advisory Agreement Amendment

On January 15, 2015, the Company and the Advisor entered into an amendment to the Advisory Agreement to amend certain terms related to the disposition fee payable to the Advisor by the Company. In accordance with the Advisory Agreement, for substantial assistance in connection with the sale of properties, loans or other investments as determined by the conflicts committee of the Company’s board of directors, the Company pays the Advisor or its affiliates a disposition fee of 1% of the contract sales price of the properties, loans or other investments sold. However, in no event may the total commissions (including such disposition fees) paid to the Advisor, its affiliates and unaffiliated third parties exceed 6% of the contract sales price of the property, loan or other investment sold or exceed a competitive real estate commission. Pursuant to the amendment, the disposition fee related to the sales of GKK Properties has been modified to provide that the conflicts committee will determine in its sole discretion the amount of the disposition fee related to the sale of GKK Properties upon the terms set forth below, which disposition fee may be an amount not to exceed 1% of the contract sales price, which maximum amount is consistent with the fixed percentage applicable to the sales of other properties, loans and other investments under the Advisory Agreement.

The amendment provides that with respect to sales of the GKK Properties, and provided that the conflicts committee determines that the Advisor has provided a substantial amount of services in connection with the sale of each GKK Property for which the payment of a disposition fee is requested by the Advisor, then:

(a)

With respect to portfolio or single asset sales of GKK Properties designated by the conflicts committee in its sole discretion at or about the time of the sale, the Company will pay the Advisor a fee in an amount not to exceed 1% of the contract sales price and subject to other limitations and conditions set forth in the Advisory Agreement, as determined by the conflicts committee in its sole discretion, which fee will be payable upon the respective closing; and

(b)

With respect to sales of all other GKK Properties for which a disposition fee has not yet been paid, if, upon the sale of the final GKK Property, the conflicts committee determines in its sole discretion that the Company has recovered its entire investment related to the GKK Mezzanine Loan and the GKK Properties subsequent to the Settlement Agreement, after taking into consideration the net cash flow received by the Company from the investment, whether in the form of (i) net proceeds from the sales or other dispositions or transfers of the GKK Properties, (ii) the net cash flow related to the GKK Mezzanine Loan, (iii) the net cash flow related to the GKK Properties subsequent to the Settlement Agreement and/or (iv) other proceeds related to the assets and liabilities received under the Settlement Agreement, then the Company will pay the Advisor a fee in an amount not to exceed 1% of the contract sales price and subject to other conditions set forth in the Advisory Agreement, as determined by the conflicts committee in its sole discretion, which fee will be payable promptly upon such determination by the conflicts committee.

As of March 31, 2015, the Company had sold 159 GKK Properties for an aggregate contract sales price of $212.3 million for which the Company had not paid or accrued a disposition fee. If the conflicts committee determines the Company has recovered its entire investment related to the GKK Mezzanine Loan and the GKK Properties upon the sale of the final GKK Property, the conflicts committee may authorize the Company to pay the Advisor a disposition fee of up to 1% of the aggregate contract sales price of these GKK Properties sold as of March 31, 2015, which amount would be determined by the conflicts committee in its sole discretion.

Supplemental Cash Flow and Significant Noncash Transaction Disclosures [Abstract]

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

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SUPPLEMENTAL CASH FLOW AND SIGNIFICANT NONCASH TRANSACTION DISCLOSURES

3 Months Ended

Mar. 31, 2015

SUPPLEMENTAL CASH FLOW AND SIGNIFICANT NONCASH TRANSACTION DISCLOSURES

Supplemental cash flow and significant noncash transaction disclosures were as follows (in thousands):



	For the Three Months Ended March 31,
	2015		2014
Supplemental Disclosure of Cash Flow Information:
Interest paid	$	7,086	$	11,857
Supplemental Disclosure of Significant Noncash Transactions:
Mortgage loans extinguished in connection with foreclosures and deed in lieu of foreclosure	$	—	$	6,134
Increase in lease incentives payable	$	—	$	143

SEGMENT INFORMATION

3 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

SEGMENT INFORMATION

The Company presently operates in three business segments based on its investment types: real estate, real estate-related and commercial properties primarily leased to financial institutions received under the Settlement Agreement, or the GKK Properties. Under the real estate segment, the Company has invested primarily in office and industrial properties located throughout the United States. The real estate segment excludes all real estate properties that were classified as discontinued operations. Under the real estate-related segment, the Company has invested in or originated mortgage loans, mezzanine loans and other real estate-related assets, including real estate securities. The GKK Properties segment consists of primarily office properties, bank branch properties, operations centers and other properties located in 30 states but excludes GKK Properties that were classified as discontinued operations. All revenues earned from the Company’s three reporting segments were from external customers and there were no intersegment sales or transfers. The Company does not allocate corporate-level accounts to its reporting segments. Corporate-level accounts include corporate general and administrative expenses, asset management fees, non-operating interest income and other corporate-level expenses. The accounting policies of the reporting segments are consistent with those described in Note 2, “Summary of Significant Accounting Policies.”

The Company evaluates the performance of its segments based upon net operating income from continuing operations (“NOI”), which is a non-GAAP supplemental financial measure. The Company defines NOI for its real estate segment and the GKK Properties segment as operating revenues (rental income, tenant reimbursements and other operating income) less property and related expenses (property operating expenses, real estate taxes, insurance and provision for bad debt) less interest expense. The Company defines NOI for its real estate-related segment as interest income and income from its unconsolidated joint venture investment less loan servicing costs (if applicable) and interest expense (if applicable). NOI excludes certain items that are not considered to be controllable in connection with the management of an asset such as non-property income and expenses, depreciation and amortization, asset management fees and corporate general and administrative expenses. The Company uses NOI to evaluate the operating performance of the Company’s real estate investments, real estate-related investments and the GKK Properties and to make decisions about resource allocations. The Company believes that net income is the GAAP measure that is most directly comparable to NOI; however, NOI should not be considered as an alternative to net income as the primary indicator of operating performance as it excludes the items described above. Additionally, NOI as defined above may not be comparable to other REITs or companies as their definitions of NOI may differ from the Company’s definition. During the year ended December 31, 2014, the Company revised its definition of NOI to exclude asset management fees, which the Company does not consider to be controllable in connection with the management of each property or real estate-related asset and is viewed by the chief operating decision makers as a corporate-level administrative expense. NOI for all prior periods presented has been adjusted to conform to the current period definition.

The following tables summarize total revenues, interest expense and NOI for each reportable segment for the three months ended March 31, 2015 and 2014, and total assets and total liabilities for each reportable segment as of March 31, 2015 and December 31, 2014 (in thousands):



	For the Three Months Ended March 31,
	2015		2014
Revenues:
Real estate segment ⁽¹⁾	$	17,841	$	18,919
Real estate-related segment	726		801
GKK Properties segment ⁽¹⁾	31,010		34,286
Total revenues	$	49,577	$	54,006
Interest expense:
Real estate segment ⁽¹⁾	$	2,209	$	2,966
Real estate-related segment	—		—
GKK Properties segment ⁽¹⁾	6,524		10,579
Total interest expense	$	8,733	$	13,545
NOI:
Real estate segment ⁽¹⁾	$	6,394	$	7,563
Real estate-related segment	725		800
GKK Properties segment ⁽¹⁾	4,955		3,258
Total NOI	$	12,074	$	11,621

	As of March 31,		As of December 31,
	2015		2014
Assets:
Real estate segment	$	546,677	$	542,512
Real estate-related segment	29,291		29,096
GKK Properties segment	718,214		671,905
Total segment assets	1,294,182		1,243,513
Real estate held for sale	—		85,818
Foreclosed real estate held for sale	—		12,045
Corporate-level ⁽²⁾	57,133		34,791
Total assets	$	1,351,315	$	1,376,167
Liabilities:
Real estate segment	$	243,523	$	240,965
Real estate-related segment	5		—
GKK Properties segment	491,732		499,908
Total segment liabilities	735,260		740,873
Real estate held for sale	—		16,883
Corporate-level ⁽³⁾	941		5,638
Total liabilities	$	736,201	$	763,394

_____________________

⁽¹⁾Amounts include certain properties in continuing operations that were sold as of March 31, 2015. See Note 6, “Real Estate Held for Sale and Discontinued Operations” for more information.

⁽²⁾ Total corporate-level assets consisted primarily of cash and cash equivalents of approximately $56.7 million and $34.2 million as of March 31, 2015 and December 31, 2014, respectively.

⁽³⁾ As of March 31, 2015, corporate-level liabilities consisted primarily of accounts payable and accrued liabilities for general and administrative expenses. As of December 31, 2014, corporate-level liabilities consisted primarily of distributions payable.

The following table reconciles the Company’s net income (loss) to its NOI for the three months ended March 31, 2015 and 2014 (amounts in thousands):



	For the Three Months Ended March 31,
	2015			2014
Net income (loss)	$	8,589		$	(4,515	)
Gain on sales of real estate	(13,967		)	—
Gain on sales of real estate securities	—			(3,748		)
Gain from extinguishment of debt	—			(1,815		)
Gain on sale of foreclosed real estate held for sale	(2,509		)	—
Other income and interest income	(116		)	(472		)
Asset management fees to affiliate	2,420			2,499
General and administrative expenses	2,220			3,644
Depreciation and amortization	15,605			17,923
Impairment charge on real estate held for investment	—			1,257
Total income from discontinued operations	(168		)	(3,152		)
NOI ⁽¹⁾	$	12,074		$	11,621

_____________________

⁽¹⁾Amounts include certain properties in continuing operations that were sold as of March 31, 2015. See Note 6, “Real Estate Held for Sale and Discontinued Operations” for more information.

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

Commitments and Contingencies Disclosure [Abstract]

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+ Details

COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2015

COMMITMENTS AND CONTINGENCIES

Lease Obligations

Pursuant to the Settlement Agreement, the Company indirectly received leasehold interests in certain commercial properties, pursuant to leases between the owner of the property, as landlord, and the Company, as tenant. The ground leases have expiration dates between 2017 and 2101 and the building leases have expiration dates during the remainder of 2015 through 2085. These lease obligations generally contain rent increases and renewal options. In certain instances, the rent owed by the Company to the owner of the property under the lease is greater than the revenue received by the Company from the tenants occupying the property.

Future minimum lease payments owed by the Company under non-cancelable operating building and ground leases as of March 31, 2015 were as follows (in thousands):



April 1, 2015 through December 31, 2015	$	13,060
2016	16,923
2017	12,981
2018	2,782
2019	2,338
Thereafter	36,079
	$	84,163

Economic Dependency

The Company is dependent on the Advisor for certain services that are essential to the Company, including the management of the Company’s real estate and real estate-related investment portfolio; the disposition of real estate and real estate-related investments; and other general and administrative responsibilities. In the event that the Advisor is unable to provide any of these services, the Company will be required to obtain such services from other sources. The Company is also dependent on the Property Manager for the Services under the Amended Services Agreement, including the operations, leasing and eventual dispositions of the GKK Properties.

Environmental

As an owner of real estate, the Company is subject to various environmental laws of federal, state and local governments. Although there can be no assurance, the Company is not aware of any environmental liability that could have a material adverse effect on its financial condition or results of operations. However, changes in applicable environmental laws and regulations, the uses and conditions of properties in the vicinity of the Company’s properties, the activities of its tenants and other environmental conditions of which the Company is unaware with respect to the properties could result in future environmental liabilities.

Under the Settlement Agreement, the Company indirectly took title to or, with respect to a limited number of the GKK Properties, indirectly took a leasehold interest in, the GKK Properties on an “as is” basis. As such, the Company was not able to inspect the GKK Properties or conduct standard due diligence on certain of the GKK Properties before the transfers of the properties. Additionally, the Company did not receive representations, warranties and indemnities relating to the GKK Properties from Gramercy and/or its affiliates. Thus, the value of the GKK Properties may decline if the Company subsequently discovers environmental problems with the GKK Properties.

Legal Matters

From time to time, the Company is party to legal proceedings that arise in the ordinary course of its business. Management is not aware of any legal proceedings the outcome of which is probable or reasonably possible to have a material adverse effect on the Company’s results of operations or financial condition, which would require accrual or disclosure of the contingency and possible range of loss. Additionally, the Company has not recorded any loss contingencies related to legal proceedings in which the potential loss is deemed to be remote.

SUBSEQUENT EVENTS	3 Months Ended
SUBSEQUENT EVENTS	Mar. 31, 2015
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	SUBSEQUENT EVENTS The Company evaluates subsequent events up until the date the consolidated financial statements are issued. Distribution Declared On May 13, 2015, the Company’s board of directors declared a distribution in the amount of $0.025 per share of common stock to stockholders of record as of the close of business on June 19, 2015. The Company expects to pay this distribution on or about June 26, 2015. Disposition of Properties Subsequent to March 31, 2015 101 Independence On May 1, 2015, the Company, through an indirect wholly owned subsidiary, sold an office building containing 565,694 rentable square feet located in Charlotte, North Carolina (“101 Independence”) for $107.8 million or $106.8 million net of concessions and credits. The carrying value of 101 Independence as of the date of sale was $69.5 million. The purchaser is not affiliated with the Company or the Advisor. In connection with the disposition of 101 Independence, the Company repaid the entire $65.3 million principal balance and all other sums due under a mortgage loan secured by 101 Independence, including a prepayment premium of $4.4 million.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	Mar. 31, 2015
Accounting Policies [Abstract]
Principles of Consolidation and Basis of Presentation	The accompanying unaudited consolidated financial statements and condensed notes thereto have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and the rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for audited financial statements. In the opinion of management, the financial statements for the unaudited interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair and consistent presentation of the results for such periods. Operating results for the three months ended March 31, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. The consolidated financial statements include the accounts of the Company, KBS REIT Holdings, the Operating Partnership and their direct and indirect wholly owned subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation.
Use of Estimates	The preparation of the consolidated financial statements and condensed notes thereto in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates.
Reclassifications	Certain amounts in the Company’s prior period consolidated financial statements have been reclassified to conform to the current period presentation. These reclassifications have not changed the results of operations of prior periods. During the three months ended March 31, 2015, the Company sold four properties (of which two were GKK Properties), two of which were held for sale as of December 31, 2014. As a result, certain assets and liabilities were reclassified to held for sale on the consolidated balance sheets for all periods presented. Operating results of properties that were classified as held for sale in financial statements prior to January 1, 2014 will remain in discontinued operations on the Company’s consolidated statements of operations. Operating results of properties that were disposed of or classified as held for sale in the ordinary course of business subsequent to January 1, 2014 that had not been classified as held for sale in financial statements issued for the reporting periods prior to January 1, 2014 are included in continuing operations on the Company’s consolidated statements of operations.
Per Share Data	Basic net income (loss) per share of common stock is calculated by dividing net income (loss) by the weighted-average number of shares of common stock issued and outstanding during such period. Diluted net income (loss) per share of common stock equals basic net income (loss) per share of common stock as there were no potentially dilutive securities outstanding during the three months ended March 31, 2015 and 2014, respectively. Distributions declared per share of common stock were $0.025 for the three months ended March 31, 2015. On March 6, 2015, the Company’s board of directors declared a distribution in the amount of $0.025 per share of common stock to stockholders of record as of the close of business on March 20, 2015. No distributions were declared during the three months ended March 31, 2014.
Segments	The Company’s segments are based on the Company’s method of internal reporting, which classifies its operations by investment type: (i) real estate, (ii) real estate-related and (iii) commercial properties primarily leased to financial institutions received under the Settlement Agreement, the GKK Properties.
Recently Issued Accounting Standards Update	In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU No. 2014-09”). ASU No. 2014-09 requires an entity to recognize the revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. ASU No. 2014-09 supersedes the revenue requirements in Revenue Recognition (Topic 605) and most industry-specific guidance throughout the Industry Topics of the Codification. ASU No. 2014-09 does not apply to lease contracts within the scope of Leases (Topic 840). ASU No. 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and is to be applied retrospectively, with early application not permitted. The Company is still evaluating the impact of adopting ASU No. 2014-09 on its financial statements, but does not expect the adoption of ASU No. 2014-09 to have a material impact on its financial statements. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU No. 2014-15”). The amendments in ASU No. 2014-15 require management to evaluate, for each annual and interim reporting period, whether there are conditions or events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or are available to be issued when applicable) and, if so, provide related disclosures. ASU No. 2014-15 is effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early adoption is permitted for annual or interim reporting periods for which the financial statements have not previously been issued. The Company does not expect the adoption of ASU No. 2014-15 to have a significant impact on its financial statements. In January 2015, the FASB issued ASU No. 2015-01, Income Statement - Extraordinary and Unusual Items (Subtopic 225-20), Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items (“ASU No. 2015-01”). The amendments in ASU No. 2015-01 eliminate from GAAP the concept of extraordinary items. Although the amendments will eliminate the requirements in Subtopic 225-20 for reporting entities to consider whether an underlying event or transaction is extraordinary, the presentation and disclosure guidance for items that are unusual in nature or occur infrequently will be retained and will be expanded to include items that are both unusual in nature and infrequently occurring. ASU No. 2015-01 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The Company does not expect the adoption of ASU No. 2015-01 to have a significant impact on its financial statements. In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs (“ASU No. 2015-03”). The amendments in ASU No. 2015-03 require debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. ASU No. 2015-03 is limited to the presentation of debt issuance costs and does not affect the recognition and measurement of debt issuance costs. ASU No. 2015-03 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015 and is to be applied retrospectively. Early adoption is permitted for financial statements that have not been previously issued. The adoption of ASU No. 2015-03 would change the presentation of debt issuance costs as the Company presents debt issuance costs as deferred financing costs, prepaid expenses and other assets, net on the accompanying consolidated balance sheets.

Disclosure of accounting policy regarding (1) the principles it follows in consolidating or combining the separate financial statements, including the principles followed in determining the inclusion or exclusion of subsidiaries or other entities in the consolidated or combined financial statements and (2) its treatment of interests (for example, common stock, a partnership interest or other means of exerting influence) in other entities, for example consolidation or use of the equity or cost methods of accounting. The accounting policy may also address the accounting treatment for intercompany accounts and transactions, noncontrolling interest, and the income statement treatment in consolidation for issuances of stock by a subsidiary.

+ References+ Details

Schedule of Real Estate Investments

Disclosure of accounting policy for computing basic and diluted earnings or loss per share for each class of common stock and participating security. Addresses all significant policy factors, including any antidilutive items that have been excluded from the computation and takes into account stock dividends, splits and reverse splits that occur after the balance sheet date of the latest reporting period but before the issuance of the financial statements.

+ References+ Details

REAL ESTATE HELD FOR INVESTMENT (Tables)

3 Months Ended

Mar. 31, 2015

Guarantor by Name [Line Items]

The following table summarizes the Company’s investments in real estate as of March 31, 2015 and December 31, 2014 (in thousands):



	Land		Buildings and Improvements			Tenant Origination and Absorption Costs			Total Real Estate Held for Investment
As of March 31, 2015:
Office	$	68,178	$	404,910		$	1,661		$	474,749
Industrial	16,787		82,486			2,244			101,517
GKK Properties	186,601		385,841			83,276			655,718
Real estate held for investment, at cost and net of impairment charges	271,566		873,237			87,181			1,231,984
Accumulated depreciation/amortization	—		(160,670		)	(38,682		)	(199,352		)
Real estate held for investment, net	$	271,566	$	712,567		$	48,499		$	1,032,632
As of December 31, 2014:
Office	$	68,178	$	401,083		$	1,825		$	471,086
Industrial	16,787		80,565			3,137			100,489
GKK Properties	186,601		385,508			83,388			655,497
Real estate held for investment, at cost and net of impairment charges	271,566		867,156			88,350			1,227,072
Accumulated depreciation/amortization	—		(150,434		)	(37,027		)	(187,461		)
Real estate held for investment, net	$	271,566	$	716,722		$	51,323		$	1,039,611

Schedule of Future Minimum Rental Income Under Non-cancelable Operating Leases

The future minimum rental income from the Company’s properties under non-cancelable operating leases, including leases subject to shedding rights and excluding options to extend, as of March 31, 2015 for the years ending December 31 is as follows (in thousands):



April 1, 2015 through December 31, 2015	$	90,848
2016	119,917
2017	110,491
2018	97,651
2019	82,967
Thereafter	208,183
	$	710,057

Schedules of Concentration of Risk, by Risk Factor

As of March 31, 2015, the Company had a concentration of credit risk related to leases with the following tenant that represented more than 10% of the Company’s annualized base rent:

Annualized Base Rent Statistics

Tenant

Property

Tenant

Industry

Rentable Square Feet

% of

Portfolio Rentable Square Feet

Annualized Base Rent ⁽¹⁾

(in thousands)

% of Portfolio Annualized Base Rent

Annualized Base Rent per Square Foot

Lease Expirations

Bank of America, N.A.

Various

Finance

3,085,003

31.7

%

$

27,406

22.0

%

$

8.88

⁽²⁾

_____________________

⁽¹⁾ Annualized base rent represents annualized contractual base rental income as of March 31, 2015, adjusted to straight-line any contractual tenant concessions (including free rent), rent increases and rent decreases from the lease’s inception through the balance of the lease term.

⁽²⁾ As of March 31, 2015, lease expiration dates ranged from the remainder of 2015 through 2026 with a weighted-average remaining term of 5.0 years. Additionally, as of March 31, 2015, certain of Bank of America’s leases contained shedding right provisions. These shedding rights totaled approximately 0.3 million square feet and can be exercised at various dates during the remainder of 2015 through 2016.

As of March 31, 2015, the Company’s highest tenant industry concentration (greater than 10% of annualized base rent) was as follows:



Industry	Number of Tenants	Annualized Base Rent ⁽¹⁾ (in thousands)		Percentage of Annualized Base Rent
Finance	69	$	61,552	49.3	%

_____________________

⁽¹⁾

Bank of America Corporation [Member]

Guarantor by Name [Line Items]

Schedule of Condensed Consolidated Information

Bank of America Corporation is the guarantor of various leases that its subsidiary, Bank of America, N.A., has with the Company. The condensed consolidated financial information of Bank of America Corporation has been included herein because of the significant credit concentration the Company has with this guarantor. Bank of America Corporation currently files its financial statements in reports filed with the SEC, and the following unaudited summary financial data regarding Bank of America Corporation is taken from its previously filed public reports. For more detailed financial information regarding Bank of America Corporation, please refer to its financial statements, which are publicly available with the SEC at http:// www.sec.gov.



	Three Months Ended March 31,
	2015		2014
Consolidated Statements of Income (in millions)
Total revenue, net of interest expense	$	21,202	$	22,566
Income before income taxes	4,742		(681		)
Net income (loss)	3,357		(276		)

	As of
	March 31, 2015		December 31, 2014
Consolidated Balance Sheets (in millions)
Total assets	$	2,143,545	$	2,104,534
Total liabilities	1,893,357		1,861,063
Total stockholders’ equity	250,188		243,471

Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities [Abstract]

Tabular disclosure of the nature of a concentration, a benchmark to which it is compared, and the percentage that the risk is to the benchmark.

+ References+ Details

TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES (Tables)

3 Months Ended

Mar. 31, 2015

Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities

As of March 31, 2015 and December 31, 2014, the Company’s tenant origination and absorption costs, above-market lease assets, and below-market lease liabilities (excluding fully amortized assets and liabilities and accumulated amortization) were as follows (in thousands):



	Tenant Origination and Absorption Costs						Above-Market Lease Assets						Below-Market Lease Liabilities
	March 31, 2015			December 31, 2014			March 31, 2015			December 31, 2014			March 31, 2015			December 31, 2014
Cost, net of impairments	$	87,181		$	88,350		$	34,329		$	34,329		$	(75,946	)	$	(76,128	)
Accumulated amortization	(38,682		)	(37,027		)	(12,417		)	(11,562		)	37,729			35,274
Net Amount	$	48,499		$	51,323		$	21,912		$	22,767		$	(38,217	)	$	(40,854	)

Amortization of Tenant Origination and Absorption Costs, Above-Market Leases and Below-Market Lease Liabilities

Increases (decreases) in net income as a result of amortization of the Company’s tenant origination and absorption costs, above-market lease assets and below-market lease liabilities for the three months ended March 31, 2015 and 2014 were as follows (in thousands):



	Tenant Origination and Absorption Costs						Above-Market Lease Assets						Below-Market Lease Liabilities
	For the Three Months Ended March 31,						For the Three Months Ended March 31,						For the Three Months Ended March 31,
	2015			2014			2015			2014			2015		2014
Amortization	$	(2,824	)	$	(3,834	)	$	(855	)	$	(1,008	)	$	2,645	$	3,021

REAL ESTATE LOANS RECEIVABLE (Tables)

3 Months Ended

Mar. 31, 2015

Receivables [Abstract]

Schedule of Real Estate Loans Receivable

As of March 31, 2015 and December 31, 2014, the Company, through indirect wholly owned subsidiaries, had invested in or originated real estate loans receivable as follows (dollars in thousands):



Loan Name Location of Related Property or Collateral	Date Acquired/ Originated	Property Type	Loan Type	Outstanding Principal Balance as of March 31, 2015⁽¹⁾		Book Value as of March 31, 2015 ⁽²⁾			Book Value as of December 31, 2014 ⁽²⁾			Contractual Interest Rate ⁽³⁾	Annualized Effective Interest Rate ⁽³⁾		Maturity Date
Sandmar Mezzanine Loan Southeast U.S. ⁽⁴⁾	01/09/2007	Retail	Mezzanine	$	5,150	$	5,172		$	5,181		5.4%	—	%	01/01/2017
Lawrence Village Plaza Loan Origination New Castle, Pennsylvania	08/06/2007	Retail	Mortgage	6,915		6,915			6,920			8.0%	8.1	%	09/01/2015
San Diego Office Portfolio B-Note San Diego, California ⁽⁵⁾	10/26/2007	Office	B-Note	20,000		17,645			17,450			5.8%	11.2	%	10/11/2017
4929 Wilshire B-Note Los Angeles, California	11/19/2007	Office	B-Note	3,873		3,397			3,365			6.1%	12.4	%	07/11/2017
				$	35,938	$	33,129		$	32,916
Reserve for Loan Losses ⁽⁶⁾				—		(3,994		)	(3,994		)
				$	35,938	$	29,135		$	28,922

_____________________

⁽¹⁾ Outstanding principal balance as of March 31, 2015 represents original principal balance outstanding under the loan, increased for any subsequent fundings and reduced for any principal paydowns.

⁽²⁾ Book value represents outstanding principal balance, adjusted for unamortized acquisition discounts, origination fees and direct origination and acquisition costs. Loan balances are presented gross of any asset-specific reserves.

⁽³⁾ Contractual interest rate is the stated interest rate on the face of the loan. Annualized effective interest rate is calculated as the actual interest income recognized in 2015, using the interest method, annualized and divided by the average amortized cost basis of the investment during 2015. The contractual interest rates and annualized effective interest rates presented are as of March 31, 2015.

⁽⁴⁾ The Company had recorded an asset-specific loan loss reserve against this investment as of March 31, 2015. See “—Reserve for Loan Losses.”

⁽⁵⁾ The borrower under this note is a wholly owned subsidiary of the Irvine Company. Donald Bren, who is the brother of Peter Bren (one of the Company’s executive officers and sponsors), is the chairman of the Irvine Company. During the three months ended March 31, 2015, the Company recognized $0.5 million of interest income related to its investment in this loan.

⁽⁶⁾ See “—Reserve for Loan Losses.”

Schedule of Activity Related to Real Estate Loans Receivable

The following summarizes the activity related to real estate loans receivable for the three months ended March 31, 2015 (in thousands):



Real estate loans receivable, net - December 31, 2014	$	28,922
Principal repayments received on real estate loans receivable	(27		)
Accretion of discounts on purchased real estate loans receivable	248
Amortization of origination fees and costs on purchased and originated real estate loans receivable	(8		)
Real estate loans receivable, net - March 31, 2015	$	29,135

Schedule of Interest Income from Real Estate Loans Receivable

For the three months ended March 31, 2015 and 2014, interest income from real estate loans receivable consisted of the following (in thousands):



	Three Months Ended March 31,
	2015			2014
Contractual interest income	$	486		$	553
Interest accretion	248			257
Amortization of origination fees and costs	(8		)	(9		)
Interest income from real estate loans receivable	$	726		$	801

REAL ESTATE HELD FOR SALE AND DISCONTINUED OPERATIONS (Tables)

3 Months Ended

Mar. 31, 2015

Discontinued Operations and Disposal Groups [Abstract]

Schedule of Major Components of Real Estate Held for Sale and Liabilities Related to Real Estate Held for Sale

The following summary presents the major components of assets and liabilities related to real estate held for sale as of March 31, 2015 and December 31, 2014 (in thousands):



	March 31, 2015		December 31, 2014
Assets related to real estate held for sale
Total real estate, at cost and net of impairment charges	$	—	$	84,847
Accumulated depreciation and amortization	—		(5,947		)
Real estate held for sale, net	—		78,900
Other assets	—		6,918
Total assets related to real estate held for sale	$	—	$	85,818
Liabilities related to real estate held for sale
Notes payable	—		16,575
Other liabilities	—		308
Total liabilities related to real estate held for sale	$	—	$	16,883

Schedule of Revenue and Expenses Related to Real Estate Properties

The following table summarizes certain revenues and expenses related to all of these properties, which were included in continuing operations (in thousands):



	Three Months Ended March 31,
	2015		2014
Revenues
Rental income	$	2,196	$	5,379
Tenant reimbursements and other operating income	668		1,057
Total Revenues	2,864		6,436
Expenses
Operating, maintenance, and management	1,125		1,377
Real estate taxes and insurance	260		831
Asset management fees to affiliate	98		195
General and administrative expenses	—		7
Depreciation and amortization	220		2,394
Interest expense	194		2,493
Impairment of real estate	—		1,257
Total expenses	1,897		8,554

Schedule of Operating Income from Discontinued Operations

The following table summarizes operating income from discontinued operations for the three months ended March 31, 2015 and 2014 (in thousands):



	Three Months Ended March 31,
	2015			2014
Total revenues and other income	$	33		$	692
Total expenses	(11		)	456
Income from discontinued operations before gain on sales of real estate, net and impairment charge	44			236
Gain on sales of real estate, net	124			2,916
Income from discontinued operations	$	168		$	3,152

Tabular disclosure of information related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component.

Schedule of Long-term Debt Instruments

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+ Details

NOTES PAYABLE (Tables)

3 Months Ended

Mar. 31, 2015

Notes Payable [Abstract]

As of March 31, 2015 and December 31, 2014, the Company’s notes payable, including notes payable related to real estate held for sale, consisted of the following (dollars in thousands):



Loan Type	Book Value as of March 31, 2015			Book Value as of December 31, 2014			Contractual Interest Rates as of March 31, 2015 ⁽¹⁾	Weighted-Average Interest Rates as of March 31, 2015 ⁽¹⁾	Weighted-Average Remaining Term in Years ⁽²⁾
Fixed Rate
Mortgage loans	$	62,200		$	62,200		5.9%	5.9%	1.5
GKK Properties mortgage loans	379,035			381,179			5.3% - 6.8%	5.9%	3.7
	441,235			443,379
Variable Rate
Mortgage loans	164,131			181,249			One-month LIBOR + 1.80%	2.0%	0.8
GKK Properties mortgage loans	40,000			40,000			One-month LIBOR + 3.00%	3.2%	2.2
	204,131			221,249
Total notes payable principal outstanding	645,366			664,628
Discount on notes payable, net⁽³⁾	(6,020		)	(6,530		)
Total notes payable, net	$	639,346		$	658,098

_____________________

⁽¹⁾ Contractual interest rates as of March 31, 2015 represent the range of interest rates in effect under these loans as of March 31, 2015. Weighted-average interest rates as of March 31, 2015 are calculated as the actual interest rates in effect under these loans as of March 31, 2015 (consisting of the contractual interest rates), using interest rate indices as of March 31, 2015, where applicable.

⁽²⁾ Weighted-average remaining term in years represents the initial maturity dates or the maturity dates as extended as of March 31, 2015; subject to certain conditions, the maturity dates of certain loans may be further extended.

⁽³⁾ Represents the unamortized discounts and premiums on notes payable due to the above- and below-market interest rates when the loans were assumed. The discounts and premiums are amortized over the remaining life of the respective loan.

Schedule of Maturities of Long-term Debt

The following is a schedule of maturities, including principal amortization payments, for all notes payable outstanding as of March 31, 2015 (in thousands):



April 1, 2015 through December 31, 2015	$	13,346
2016	304,640
2017	159,175
2018	8,651
2019	126,044
Thereafter	33,510
	$	645,366

Schedule of Activity Related to Notes Payable and Repurchase Agreements

The following summarizes the activity related to notes payable for the three months ended March 31, 2015 (in thousands):



Total notes payable, net - December 31, 2014	$	658,098
Principal repayments	(19,263		)
Amortization of discounts and premiums on notes payable, net	511
Total notes payable, net - March 31, 2015	$	639,346

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

Schedule of Face Value, Carrying Amounts and Fair Value

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-URI http://asc.fasb.org/extlink&oid=6479336&loc=d3e64711-112823

Reference 10: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 235

-SubTopic 10

-Section S99

-Paragraph 1

-Subparagraph (SX 210.4-08.(e),(f))

-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

+ Details

FAIR VALUE DISCLOSURES (Tables)

3 Months Ended

Mar. 31, 2015

Fair Value Disclosures [Abstract]

The following were the face values, carrying amounts and fair values of the Company’s real estate loans receivable and notes payable as of March 31, 2015 and December 31, 2014, which carrying amounts generally do not approximate the fair values (in thousands):



	March 31, 2015						December 31, 2014
	Face Value		Carrying Amount		Fair Value		Face Value		Carrying Amount		Fair Value
Financial assets:
Real estate loans receivable ⁽¹⁾	$	35,938	$	29,135	$	26,314	$	35,966	$	28,922	$	25,818
Financial liabilities:
Notes payable	$	645,366	$	639,346	$	669,642	$	664,628	$	658,098	$	688,374

_____________________

⁽¹⁾ Carrying amount of real estate loans receivable includes loan loss reserves.

Schedule of Related Party Costs

Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

+ References+ Details

RELATED PARTY TRANSACTIONS (Tables)

3 Months Ended

Mar. 31, 2015

Pursuant to the terms of the Advisory Agreement and the AIP Reimbursement Agreement, summarized below are the related-party costs incurred by the Company for the three months ended March 31, 2015 and 2014, respectively, and any related amounts payable as of March 31, 2015 and December 31, 2014 (in thousands):



	Incurred				Payable
	Three Months Ended March 31,				March 31,		December 31,
	2015		2014		2015		2014
Expensed
Asset management fees⁽¹⁾	$	2,420	$	2,516	$	—	$	—
Reimbursement of operating expenses⁽²⁾	49		49		80		45
Disposition fees⁽³⁾	1,185		376		616		399
	$	3,654	$	2,941	$	696	$	444

_____________________

⁽¹⁾ Amounts include asset management fees from discontinued operations totaling $0.1 million for the three months ended March 31, 2014.

⁽²⁾ The Advisor may seek reimbursement for certain employee costs under the Advisory Agreement. The Company reimburses the Advisor for the Company’s allocable portion of the salaries, benefits and overhead of internal audit department personnel providing services to the Company. These amounts totaled $45,000 and $49,000 for the three months ended March 31, 2015 and 2014, respectively. These were the only type of employee costs reimbursed under the Advisory Agreement for the three months ended March 31, 2015 and 2014. The Company will not reimburse for employee costs in connection with services for which the Advisor earns disposition fees (other than reimbursement of travel and communication expenses) or for the salaries or benefits the Advisor or its affiliates may pay to the Company’s executive officers.

⁽³⁾ Disposition fees with respect to real estate sold are included in the gain (loss) on sales of real estate in the accompanying consolidated statements of operations.

SUPPLEMENTAL CASH FLOW AND SIGNIFICANT NONCASH TRANSACTION DISCLOSURES (Tables)

3 Months Ended

Mar. 31, 2015

Supplemental Cash Flow and Significant Noncash Transaction Disclosures [Abstract]

Schedule of Cash Flow, Supplemental Disclosures

Supplemental cash flow and significant noncash transaction disclosures were as follows (in thousands):



	For the Three Months Ended March 31,
	2015		2014
Supplemental Disclosure of Cash Flow Information:
Interest paid	$	7,086	$	11,857
Supplemental Disclosure of Significant Noncash Transactions:
Mortgage loans extinguished in connection with foreclosures and deed in lieu of foreclosure	$	—	$	6,134
Increase in lease incentives payable	$	—	$	143

SEGMENT INFORMATION (Tables)

3 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

The following tables summarize total revenues, interest expense and NOI for each reportable segment for the three months ended March 31, 2015 and 2014, and total assets and total liabilities for each reportable segment as of March 31, 2015 and December 31, 2014 (in thousands):



	For the Three Months Ended March 31,
	2015		2014
Revenues:
Real estate segment ⁽¹⁾	$	17,841	$	18,919
Real estate-related segment	726		801
GKK Properties segment ⁽¹⁾	31,010		34,286
Total revenues	$	49,577	$	54,006
Interest expense:
Real estate segment ⁽¹⁾	$	2,209	$	2,966
Real estate-related segment	—		—
GKK Properties segment ⁽¹⁾	6,524		10,579
Total interest expense	$	8,733	$	13,545
NOI:
Real estate segment ⁽¹⁾	$	6,394	$	7,563
Real estate-related segment	725		800
GKK Properties segment ⁽¹⁾	4,955		3,258
Total NOI	$	12,074	$	11,621

	As of March 31,		As of December 31,
	2015		2014
Assets:
Real estate segment	$	546,677	$	542,512
Real estate-related segment	29,291		29,096
GKK Properties segment	718,214		671,905
Total segment assets	1,294,182		1,243,513
Real estate held for sale	—		85,818
Foreclosed real estate held for sale	—		12,045
Corporate-level ⁽²⁾	57,133		34,791
Total assets	$	1,351,315	$	1,376,167
Liabilities:
Real estate segment	$	243,523	$	240,965
Real estate-related segment	5		—
GKK Properties segment	491,732		499,908
Total segment liabilities	735,260		740,873
Real estate held for sale	—		16,883
Corporate-level ⁽³⁾	941		5,638
Total liabilities	$	736,201	$	763,394

_____________________

⁽¹⁾Amounts include certain properties in continuing operations that were sold as of March 31, 2015. See Note 6, “Real Estate Held for Sale and Discontinued Operations” for more information.

⁽²⁾ Total corporate-level assets consisted primarily of cash and cash equivalents of approximately $56.7 million and $34.2 million as of March 31, 2015 and December 31, 2014, respectively.

⁽³⁾ As of March 31, 2015, corporate-level liabilities consisted primarily of accounts payable and accrued liabilities for general and administrative expenses. As of December 31, 2014, corporate-level liabilities consisted primarily of distributions payable.

Reconciliation of Net Income (Loss) to Net Operating Income (Loss)

The following table reconciles the Company’s net income (loss) to its NOI for the three months ended March 31, 2015 and 2014 (amounts in thousands):



	For the Three Months Ended March 31,
	2015			2014
Net income (loss)	$	8,589		$	(4,515	)
Gain on sales of real estate	(13,967		)	—
Gain on sales of real estate securities	—			(3,748		)
Gain from extinguishment of debt	—			(1,815		)
Gain on sale of foreclosed real estate held for sale	(2,509		)	—
Other income and interest income	(116		)	(472		)
Asset management fees to affiliate	2,420			2,499
General and administrative expenses	2,220			3,644
Depreciation and amortization	15,605			17,923
Impairment charge on real estate held for investment	—			1,257
Total income from discontinued operations	(168		)	(3,152		)
NOI ⁽¹⁾	$	12,074		$	11,621

_____________________

⁽¹⁾Amounts include certain properties in continuing operations that were sold as of March 31, 2015. See Note 6, “Real Estate Held for Sale and Discontinued Operations” for more information.

Commitments and Contingencies Disclosure [Abstract]

Tabular disclosure of the profit or loss and total assets for each reportable segment. An entity discloses certain information on each reportable segment if the amounts (a) are included in the measure of segment profit or loss reviewed by the chief operating decision maker or (b) are otherwise regularly provided to the chief operating decision maker, even if not included in that measure of segment profit or loss.

+ References+ Details

COMMITMENTS AND CONTINGENCIES (Tables)

3 Months Ended

Mar. 31, 2015

Future Minimum Lease Payments, Non-Cancelable Operating Leases

Future minimum lease payments owed by the Company under non-cancelable operating building and ground leases as of March 31, 2015 were as follows (in thousands):



April 1, 2015 through December 31, 2015	$	13,060
2016	16,923
2017	12,981
2018	2,782
2019	2,338
Thereafter	36,079
	$	84,163

ORGANIZATION (Details) (USD $)	3 Months Ended	12 Months Ended	28 Months Ended	80 Months Ended	110 Months Ended	0 Months Ended
ORGANIZATION (Details) (USD $)	Mar. 31, 2015 property	Dec. 31, 2014	May 30, 2008	Sep. 30, 2012	Mar. 31, 2015	Dec. 19, 2013	Sep. 01, 2011 property
Organizational Structure [Line Items]
Partnership interest in the Operating Partnership and is its sole limited partner	99.00%
Partnership interest in Operating Partnership	1.00%
Number of real estate properties	397us-gaap_NumberOfRealEstateProperties				397us-gaap_NumberOfRealEstateProperties
Number of real estate loans receivable	4				4
Redemptions of common stock, value	$ 1,558,000	$ 7,890,000
Common Stock [Member]
Organizational Structure [Line Items]
Issuance of common stock, shares			171,109,494
Issuance of common stock, value			1,700,000,000
Shares of common stock sold under dividend reinvestment plan, shares				28,306,086
Shares of common stock sold under dividend reinvestment plan, value				233,700,000
Redemptions of common stock, shares	344,740	1,771,186			11,934,805
Redemptions of common stock, value	4,000	17,000			87,000,000
KBS Capital Advisors LLC [Member]
Organizational Structure [Line Items]
Period of termination notice	60 days
KBS Capital Advisors LLC [Member] \| Common Stock [Member]
Organizational Structure [Line Items]
Shares held by affiliate	20,000				20,000
GKK Properties [Member]
Organizational Structure [Line Items]
Number of real estate properties							867
Agreement for annual fee to be paid for real estate services, amount						$ 7,500,000
Amended service agreement, extension period						1 year
GKK Properties [Member] \| Minimum [Member]
Organizational Structure [Line Items]
Profit participation interest based on a percentage rate of gross fair value of gross sale price						10.00%
GKK Properties [Member] \| Maximum [Member]
Organizational Structure [Line Items]
Profit participation interest based on a percentage rate of gross fair value of gross sale price						30.00%
GKK Properties [Member] \| Bank Branches [Member]
Organizational Structure [Line Items]
Number of real estate properties							576
GKK Properties [Member] \| Office Building [Member]
Organizational Structure [Line Items]
Number of real estate properties							291

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $)	3 Months Ended		12 Months Ended
	Mar. 31, 2015 property	Mar. 31, 2014	Dec. 31, 2014 property	Sep. 01, 2011 property
Summary of Significant Accounting Policies [Line Items]
Number of real estate properties disposed	4		16
Number of real estate properties	397us-gaap_NumberOfRealEstateProperties
Distributions declared per common share	$ 0.025	$ 0
Held-for-Sale [Member]
Summary of Significant Accounting Policies [Line Items]
Number of real estate properties			2
GKK Properties [Member]
Summary of Significant Accounting Policies [Line Items]
Number of real estate properties disposed	2		11
Number of real estate properties				867

REAL ESTATE HELD FOR INVESTMENT (Narrative) (Details)	Mar. 31, 2015 States sqft
Real Estate Properties [Line Items]
Rentable square feet	9,700,000us-gaap_AreaOfRealEstateProperty
Percentage of real estate portfolio occupied	79.00%
Number of states in which entity operates	31
GKK Properties [Member]
Real Estate Properties [Line Items]
Rentable square feet	6,300,000
Percentage of real estate portfolio occupied	80.00%

REAL ESTATE HELD FOR INVESTMENT (Schedule of Real Estate Investments) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Real Estate Properties [Line Items]
Real estate held for investment, at cost and net of impairment charges	$ 1,231,984	$ 1,227,072
Accumulated depreciation/amortization	(199,352)	(187,461)
Total real estate held for investment, net	1,032,632us-gaap_RealEstateInvestmentPropertyNet	1,039,611us-gaap_RealEstateInvestmentPropertyNet
Office [Member]
Real Estate Properties [Line Items]
Real estate held for investment, at cost and net of impairment charges	474,749	471,086
Industrial [Member]
Real Estate Properties [Line Items]
Real estate held for investment, at cost and net of impairment charges	101,517	100,489
GKK Properties [Member]
Real Estate Properties [Line Items]
Real estate held for investment, at cost and net of impairment charges	655,718	655,497
Land [Member]
Real Estate Properties [Line Items]
Real estate held for investment, at cost and net of impairment charges	271,566	271,566
Accumulated depreciation/amortization	0	0
Total real estate held for investment, net	271,566	271,566
Land [Member] \| Office [Member]
Real Estate Properties [Line Items]
Real estate held for investment, at cost and net of impairment charges	68,178	68,178
Land [Member] \| Industrial [Member]
Real Estate Properties [Line Items]
Real estate held for investment, at cost and net of impairment charges	16,787	16,787
Land [Member] \| GKK Properties [Member]
Real Estate Properties [Line Items]
Real estate held for investment, at cost and net of impairment charges	186,601	186,601
Buildings and Improvements [Member]
Real Estate Properties [Line Items]
Real estate held for investment, at cost and net of impairment charges	873,237	867,156
Accumulated depreciation/amortization	(160,670)	(150,434)
Total real estate held for investment, net	712,567	716,722
Buildings and Improvements [Member] \| Office [Member]
Real Estate Properties [Line Items]
Real estate held for investment, at cost and net of impairment charges	404,910	401,083
Buildings and Improvements [Member] \| Industrial [Member]
Real Estate Properties [Line Items]
Real estate held for investment, at cost and net of impairment charges	82,486	80,565
Buildings and Improvements [Member] \| GKK Properties [Member]
Real Estate Properties [Line Items]
Real estate held for investment, at cost and net of impairment charges	385,841	385,508
Tenant Origination and Absorption Costs [Member]
Real Estate Properties [Line Items]
Real estate held for investment, at cost and net of impairment charges	87,181	88,350
Accumulated depreciation/amortization	(38,682)	(37,027)
Total real estate held for investment, net	48,499	51,323
Tenant Origination and Absorption Costs [Member] \| Office [Member]
Real Estate Properties [Line Items]
Real estate held for investment, at cost and net of impairment charges	1,661	1,825
Tenant Origination and Absorption Costs [Member] \| Industrial [Member]
Real Estate Properties [Line Items]
Real estate held for investment, at cost and net of impairment charges	2,244	3,137
Tenant Origination and Absorption Costs [Member] \| GKK Properties [Member]
Real Estate Properties [Line Items]
Real estate held for investment, at cost and net of impairment charges	$ 83,276	$ 83,388

REAL ESTATE HELD FOR INVESTMENT (Operating Leases) (Narrative) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015 Tenants	Mar. 31, 2014	Dec. 31, 2014
Operating Leased Assets [Line Items]
Recognition of deferred revenue, net of discontinued operations	$ 0.5	$ 0.6
Amortization of lease incentives	0.4us-gaap_AmortizationOfLeaseIncentives	0.4us-gaap_AmortizationOfLeaseIncentives
Deferred rent receivables	30.4us-gaap_DeferredRentReceivablesNet		29.3us-gaap_DeferredRentReceivablesNet
Unamortized lease incentives	6.0us-gaap_IncentiveToLessee		5.7us-gaap_IncentiveToLessee
Number of tenants	360kbsreiti_NumberOfTenants
Bad debt reserve	1.4		1.1
Provision of doubtful accounts, net of discontinued operations	0.4	0.4
Maximum [Member]
Operating Leased Assets [Line Items]
Operating lease, term	11 years 10 months 24 days
Weighted Average [Member]
Operating Leased Assets [Line Items]
Operating lease, term	4 years 10 months 24 days
GKK Properties [Member]
Operating Leased Assets [Line Items]
Bad debt reserve	1.1		0.9
GKK Properties [Member] \| Maximum [Member]
Operating Leased Assets [Line Items]
Operating lease, term	11 years 10 months 24 days
GKK Properties [Member] \| Weighted Average [Member]
Operating Leased Assets [Line Items]
Operating lease, term	5 years
Other Liabilities [Member]
Operating Leased Assets [Line Items]
Security deposit liability	$ 2.9		$ 3.0
Exercised at Various Dates (2015-2016) [Member]
Operating Leased Assets [Line Items]
Net rentable area	300,000

REAL ESTATE HELD FOR INVESTMENT (Future Minimum Rental Income) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015
Real Estate Held for Investment [Abstract]
April 1, 2015 through December 31, 2015	$ 90,848
2016	119,917
2017	110,491
2018	97,651
2019	82,967
Thereafter	208,183
Future minimum rental income	$ 710,057

REAL ESTATE HELD FOR INVESTMENT (Highes Tenant Industry Concentrations- Grater than 10% of Annual Base Rent) (Details) (USD $)
In Thousands, unless otherwise specified

3 Months Ended

Mar. 31, 2015

Tenants

Industry - Finance [Member]

Number of Tenants

360

Percentage of Annualized Base Rent

^[1]

49.30%

[1]	Annualized base rent represents annualized contractual base rental income as of March 31, 2015, adjusted to straight-line any contractual tenant concessions (including free rent), rent increases and rent decreases from the lease's inception through the balance of the lease term.

REAL ESTATE HELD FOR INVESTMENT (Concentration of Credit Risk, Tenant Lease that Represents More than 10% of Annualized Base Rent) (Details) (USD $)
In Thousands, unless otherwise specified

3 Months Ended

Mar. 31, 2015

Exercised at Various Dates (2015-2016) [Member]

Weighted Average [Member]

Rentable Square Feet

300,000

Tenant Lease - Bank of America, N.A. [Member]

Operating lease, term

4 years 10 months 24 days

Annualized Base Rent per Square Foot

^[1]

8.88

Tenant Lease - Bank of America, N.A. [Member] | Exercised at Various Dates (2015-2016) [Member]

Tenant Lease - Bank of America, N.A. [Member] | Weighted Average [Member]

Rentable Square Feet

300,000

Tenant Lease - Bank of America, N.A. [Member] | Rentable Square Feet [Member]

Operating lease, term

5 years

Percentage of Annualized Base Rent

31.70%

Tenant Lease - Bank of America, N.A. [Member] | Base Rent [Member]

Percentage of Annualized Base Rent

22.00%

[1]	Annualized base rent represents annualized contractual base rental income as of March 31, 2015, adjusted to straight-line any contractual tenant concessions (including free rent), rent increases and rent decreases from the lease’s inception through the balance of the lease term.

REAL ESTATE HELD FOR INVESTMENT (Condensed Financial Information of Bank of America Corporation) (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Consolidated Statements of Income
Total revenues	$ 49,577,000us-gaap_Revenues	$ 54,006,000us-gaap_Revenues
Consolidated Balance Sheets
Total assets	1,351,315,000us-gaap_Assets		1,376,167,000us-gaap_Assets
Total liabilities	736,201,000us-gaap_Liabilities		763,394,000us-gaap_Liabilities
Total stockholders’ equity	606,672,000us-gaap_StockholdersEquity		602,773,000us-gaap_StockholdersEquity
Bank of America Corporation [Member]
Consolidated Statements of Income
Total revenues	21,202,000,000	22,566,000,000
Income before income taxes	4,742,000,000	(681,000,000)
Net income (loss)	3,357,000,000	(276,000,000)
Consolidated Balance Sheets
Total assets	2,143,545,000,000		2,104,534,000,000
Total liabilities	1,893,357,000,000		1,861,063,000,000
Total stockholders’ equity	$ 250,188,000,000		$ 243,471,000,000

Accounts, Notes, Loans and Financing Receivable [Line Items]

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References+ Details

REAL ESTATE HELD FOR INVESTMENT (Geographic Concentration Risk) (Details)	3 Months Ended
	Mar. 31, 2015
NORTH CAROLINA \| Assets, Total [Member]
Concentration Risk [Line Items]
Concentration risk, percentage	12.00%
Customer Concentration Risk [Member] \| Annualized Rent [Member]
Concentration Risk [Line Items]
Number of customers	0

TENANT ORIGINATION AND ABSORPTION COSTS, ABOVE-MARKET LEASE ASSETS AND BELOW-MARKET LEASE LIABILITIES (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Tenant Origination and Absorption Costs, Above-Market Lease Assets and Below-Market Lease Liabilities [Abstract]
Tenant Origination and Absorption Costs, Cost, net of impairments	$ 87,181		$ 88,350
Tenant Origination and Absorption Costs, Accumulated amortization	(38,682)		(37,027)
Tenant Origination and Absorption Costs, Net Amount	48,499		51,323
Tenant Origination and Absorption Costs, Amortization expense	(2,824)	(3,834)
Above-Market Lease Assets, Cost, net of impairments	34,329kbsreiti_AboveMarketLeasesGross		34,329kbsreiti_AboveMarketLeasesGross
Above-Market Lease Assets, Accumulated amortization	(12,417)		(11,562)
Above-Market Lease Assets, Net Amount	21,912kbsreiti_AboveMarketLeasesNet		22,767kbsreiti_AboveMarketLeasesNet
Above-Market Lease Assets, Amortization expense	(855)	(1,008)
Below-Market Lease Liabilities, Cost, net of impairments	(75,946)kbsreiti_OffMarketLeaseUnfavorableGross		(76,128)kbsreiti_OffMarketLeaseUnfavorableGross
Below-Market Lease Liabilities, Accumulated amortization	37,729		35,274
Below-Market Lease Liabilities, Net Amount	(38,217)us-gaap_OffMarketLeaseUnfavorable		(40,854)us-gaap_OffMarketLeaseUnfavorable
Below-Market Lease Liabilities, Amortization expense	$ 2,645	$ 3,021

REAL ESTATE LOANS RECEIVABLE (Schedule of Real Estate Loans Receivable) (Details) (USD $)

3 Months Ended

Mar. 31, 2015

Dec. 31, 2014

Sandmar Mezzanine Loan Southeast U.S. [Member] | Mezzanine [Member]

^[1]

^[2]

^[2]

Reserve for Loan Losses

^[2],[3]

^[2],[3]

^[2]

^[2]

Accounts, Notes, Loans and Financing Receivable [Line Items]

Jan. 09, 2007

^[4]

^[1],[4]

^[2],[4]

^[2],[4]

5.40%

^[4],[5]

0.00%

^[4],[5]

Lawrence Village Plaza Loan Origination New Castle, Pennsylvania [Member] | Mortgages [Member]

Jan. 01, 2017

^[4]

Accounts, Notes, Loans and Financing Receivable [Line Items]

Aug. 06, 2007

^[1]

^[2]

^[2]

8.00%

^[5]

8.10%

^[5]

San Diego Office Portfolio B-Note San Diego, California [Member]

Sep. 01, 2015

Accounts, Notes, Loans and Financing Receivable [Line Items]

Interest income

500,000

San Diego Office Portfolio B-Note San Diego, California [Member] | B-Note [Member]

Accounts, Notes, Loans and Financing Receivable [Line Items]

Oct. 26, 2007

^[6]

^[1],[6]

^[2],[6]

^[2],[6]

5.80%

^[5],[6]

11.20%

^[5],[6]

4929 Wilshire B-Note Los Angeles, California [Member] | B-Note [Member]

Oct. 11, 2017

^[6]

Accounts, Notes, Loans and Financing Receivable [Line Items]

Nov. 19, 2007

^[1]

^[2]

^[2]

6.10%

^[5]

12.40%

^[5]

Real Estate Loans Receivable [Roll Forward]

Jul. 11, 2017

[1]	Outstanding principal balance as of March 31, 2015 represents original principal balance outstanding under the loan, increased for any subsequent fundings and reduced for any principal paydowns.
[2]	Book value represents outstanding principal balance, adjusted for unamortized acquisition discounts, origination fees and direct origination and acquisition costs. Loan balances are presented gross of any asset-specific reserves.
[3]	See “—Reserve for Loan Losses.”
[4]	The Company had recorded an asset-specific loan loss reserve against this investment as of March 31, 2015. See “—Reserve for Loan Losses.”
[5]	Contractual interest rate is the stated interest rate on the face of the loan. Annualized effective interest rate is calculated as the actual interest income recognized in 2015, using the interest method, annualized and divided by the average amortized cost basis of the investment during 2015. The contractual interest rates and annualized effective interest rates presented are as of March 31, 2015.
[6]	The borrower under this note is a wholly owned subsidiary of the Irvine Company. Donald Bren, who is the brother of Peter Bren (one of the Company’s executive officers and sponsors), is the chairman of the Irvine Company. During the three months ended March 31, 2015, the Company recognized $0.5 million of interest income related to its investment in this loan.

REAL ESTATE LOANS RECEIVABLE (Schedule of Activity Related to Real Estate Loans Receivable) (Details) (USD $)
In Thousands, unless otherwise specified

3 Months Ended

Mar. 31, 2015

Mar. 31, 2014

Real estate loans receivable, net - December 31, 2014

$ 28,922

^[1]

Principal repayments received on real estate loans receivable

(27)

Accretion of discounts on purchased real estate loans receivable

248

Amortization of origination fees and costs on purchased and originated real estate loans receivable

(8)

(9)

Real estate loans receivable, net - March 31, 2015

$ 29,135

^[1]

[1]	Book value represents outstanding principal balance, adjusted for unamortized acquisition discounts, origination fees and direct origination and acquisition costs. Loan balances are presented gross of any asset-specific reserves.

The net increase(decrease) in interest income during the period representing the allocation of deferred loan origination fees less deferred loan origination costs using the effective interest method over the term of the debt arrangement to which they pertain taking into account the effect of prepayments.

+ References+ Details

REAL ESTATE LOANS RECEIVABLE (Schedule of Interest Income from Real Estate Loans Receivable) (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Real Estate Properties [Line Items]
Contractual interest income	$ 486,000	$ 553,000
Interest accretion	248,000	257,000
Amortization of origination fees and costs	(8,000)	(9,000)
Interest income from real estate loans receivable	726,000	801,000
Sandmar Mezzanine Loan [Member]
Real Estate Properties [Line Items]
Interest income related to impaired loans		$ 100,000

Mortgage Loans on Real Estate [Line Items]

The net increase(decrease) in interest income during the period representing the allocation of deferred loan origination fees less deferred loan origination costs using the effective interest method over the term of the debt arrangement to which they pertain taking into account the effect of prepayments.

+ References+ Details

REAL ESTATE LOANS RECEIVABLE (Reserve for Loan Losses) (Details) (USD $)

Mar. 31, 2015

Dec. 31, 2014

Reserve for loan losses

$ 3,994,000

^[1],[2]

$ 3,994,000

^[1],[2]

Sandmar Mezzanine Loan [Member]

Mortgage Loans on Real Estate [Line Items]

Reserve for loan losses

4,000,000

Mortgage loans on real estate, amortized cost basis

$ 5,200,000

[1]	Book value represents outstanding principal balance, adjusted for unamortized acquisition discounts, origination fees and direct origination and acquisition costs. Loan balances are presented gross of any asset-specific reserves.
[2]	See “—Reserve for Loan Losses.”

REAL ESTATE HELD FOR SALE AND DISCONTINUED OPERATIONS (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2015 property	Dec. 31, 2014 property	Sep. 01, 2011 property
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of real estate properties disposed	4	16
Number of real estate properties with terminated leasehold interest		3
Number of real estate properties	397us-gaap_NumberOfRealEstateProperties
Real estate held for sale, net	0us-gaap_RealEstateHeldforsale	78,900us-gaap_RealEstateHeldforsale
GKK Properties [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of real estate properties disposed	2	11
Additional number of real estate properties disposed		2
Real estate properties transferred in connection with foreclosure		2
Number of real estate properties			867
Historical Real Estate [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of real estate properties disposed	2	4
Historical Real Estate [Member] \| GKK Properties [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of real estate properties disposed	1
Held-for-Investment [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of real estate properties disposed		5

REAL ESTATE HELD FOR SALE AND DISCONTINUED OPERATIONS (Schedule of Major Components of Real Estate Held for Sale and Liabilities Related to Real Estate Held for Sale) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Discontinued Operations and Disposal Groups [Abstract]
Total real estate, at cost and net of impairment charges	$ 0kbsreiti_RealEstateHeldForSaleAtCost	$ 84,847kbsreiti_RealEstateHeldForSaleAtCost
Accumulated depreciation and amortization	0	(5,947)
Real estate held for sale, net	0us-gaap_RealEstateHeldforsale	78,900us-gaap_RealEstateHeldforsale
Other assets	0	6,918
Total assets related to real estate held for sale	0kbsreiti_RealEstateHeldForSaleTotal	85,818kbsreiti_RealEstateHeldForSaleTotal
Notes payable	0	16,575
Other liabilities	0	308
Total liabilities related to real estate held for sale	$ 0	$ 16,883

REAL ESTATE HELD FOR SALE AND DISCONTINUED OPERATIONS REAL ESTATE HELD FOR SALE AND DISCONTINUED OPERATIONS (Revenue and Expenses) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Revenues
Rental income	$ 35,365	$ 39,143
Tenant reimbursements and other operating income	12,554us-gaap_TenantReimbursements	13,058us-gaap_TenantReimbursements
Total revenues	49,577us-gaap_Revenues	54,006us-gaap_Revenues
Expenses
Operating, maintenance, and management	21,989us-gaap_CostOfRealEstateRevenue	21,400us-gaap_CostOfRealEstateRevenue
Real estate taxes and insurance	6,781us-gaap_RealEstateTaxesAndInsurance	7,440us-gaap_RealEstateTaxesAndInsurance
Asset management fees to affiliate	2,420us-gaap_AssetManagementCosts	2,499us-gaap_AssetManagementCosts
General and administrative expenses	2,220us-gaap_GeneralAndAdministrativeExpense	3,644us-gaap_GeneralAndAdministrativeExpense
Depreciation and amortization	15,605	17,923
Interest expense	8,733us-gaap_InterestExpense	13,545us-gaap_InterestExpense
Impairment of real estate	0us-gaap_ImpairmentOfRealEstate	1,257us-gaap_ImpairmentOfRealEstate
Total expenses	57,748us-gaap_CostsAndExpenses	67,708us-gaap_CostsAndExpenses
Two Properties [Member]
Revenues
Rental income	2,196	5,379
Tenant reimbursements and other operating income	668	1,057
Total revenues	2,864	6,436
Expenses
Operating, maintenance, and management	1,125	1,377
Real estate taxes and insurance	260	831
Asset management fees to affiliate	98	195
General and administrative expenses	0	7
Depreciation and amortization	220	2,394
Interest expense	194	2,493
Impairment of real estate	0	1,257
Total expenses	$ 1,897	$ 8,554

REAL ESTATE HELD FOR SALE AND DISCONTINUED OPERATIONS (Schedule of Operating Income from Discontinued Operations) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Discontinued Operations and Disposal Groups [Abstract]
Total revenues and other income	$ 33	$ 692
Total expenses	(11)	456
Income from discontinued operations before gain on sales of real estate, net and impairment charge	44	236
Gain on sales of real estate, net	124	2,916
Total income from discontinued operations	$ 168	$ 3,152

Amount after tax of income (loss) from a discontinued operation including the portion attributable to the noncontrolling interest. Includes, but is not limited to, the income (loss) from operations during the phase-out period, gain (loss) on disposal, gain (loss) for reversal of write-down (write-down) to fair value, less cost to sell, and adjustments to a prior period gain (loss) on disposal.

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Regulation S-X (SX)

-Number 210

-Section 03

-Paragraph 15

-Article 5

Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 205

-SubTopic 20

-Section 45

-Paragraph 3B

-URI http://asc.fasb.org/extlink&oid=51716988&loc=SL51721525-107759

Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 205

-SubTopic 20

-Section 45

-Paragraph 3A

-URI http://asc.fasb.org/extlink&oid=51716988&loc=SL51721523-107759

Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 205

-SubTopic 20

-Section 50

-Paragraph 1

-Subparagraph (b)

-URI http://asc.fasb.org/extlink&oid=51717284&loc=d3e1361-107760

Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 205

-SubTopic 20

-Section 50

-Paragraph 5C

-Subparagraph (b)(2)

-URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721675-107760

Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 205

-SubTopic 20

-Section 45

-Paragraph 4

-URI http://asc.fasb.org/extlink&oid=51716988&loc=d3e1012-107759

Reference 7: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 205

-SubTopic 20

-Section 45

-Paragraph 3

-URI http://asc.fasb.org/extlink&oid=51716988&loc=d3e957-107759

Reference 8: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 944

-SubTopic 225

-Section S99

-Paragraph 1

-Subparagraph (SX 210.7-04.12)

-URI http://asc.fasb.org/extlink&oid=6879464&loc=d3e573970-122913

Reference 9: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Regulation S-X (SX)

-Number 210

-Section 04

-Paragraph 13

-Article 7

Reference 10: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 225

-SubTopic 10

-Section S99

-Paragraph 2

-Subparagraph (SX 210.5-03.14)

-URI http://asc.fasb.org/extlink&oid=26872669&loc=d3e20235-122688

+ Details

FORECLOSED REAL ESTATE HELD FOR SALE (Details) (USD $)	3 Months Ended		24 Months Ended
FORECLOSED REAL ESTATE HELD FOR SALE (Details) (USD $)	Mar. 31, 2015 Units	Mar. 31, 2014	Dec. 31, 2007 Investments	Dec. 31, 2014	Feb. 19, 2010
Real Estate Properties [Line Items]
Number of debt investments			3kbsreiti_NumberOfDebtInvestments
Foreclosed real estate held for sale	$ 0			$ 12,045,000
Number of Residential Units Sold, Included in Disposition Fees	2
Gain on sales of foreclosed real estate held for sale	2,509,000	0
Tribeca Building [Member]
Real Estate Properties [Line Items]
Number of units in real estate property			62
Right of ownership interest after foreclosure, percentage					100.00%
Number of units in condominium building				2
Foreclosed real estate held for sale				12,000,000
Disposition Fees	200,000
Foreclosed real estate expense	200,000
Tribeca Building [Member] \| Retail Space [Member]
Real Estate Properties [Line Items]
Expense related to foreclosed real estate held-for-sale		$ 300,000

NOTES PAYABLE (Narrative) (Details) (USD $)	3 Months Ended
NOTES PAYABLE (Narrative) (Details) (USD $)	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Debt Instrument [Line Items]
Deferred financing costs	$ 1,600,000		$ 1,900,000
Interest expense	8,733,000us-gaap_InterestExpense	13,545,000us-gaap_InterestExpense
Amortization of financing cost, net of discontinued operations	500,000	300,000
Amortization of discounts and premiums on notes payable, net	511,000	639,000
Interest payable	2,600,000		1,900,000
Notes Payable [Member]
Debt Instrument [Line Items]
Amortization of discounts and premiums on notes payable, net	$ 500,000	$ 600,000

NOTES PAYABLE (Schedule of Long-term Debt Instruments) (Details) (USD $)
In Thousands, unless otherwise specified

3 Months Ended

Mar. 31, 2015

Dec. 31, 2014

$ 645,366

Total notes payable, net

639,346

658,098

Notes Payable [Member]

Discount on notes payable, net

645,366

664,628

(6,020)

^[1]

(6,530)

^[1]

Fixed Rate [Member]

Fixed Rate [Member] | Notes Payable [Member]

5.90%

^[2]

Fixed Rate [Member] | GKK Properties [Member]

441,235

443,379

Fixed Rate [Member] | GKK Properties [Member] | Notes Payable [Member]

5.90%

^[2]

Contractual interest rate, minimum

379,035

381,179

5.30%

^[2]

Contractual interest rate, maximum

6.80%

^[2]

3 years 8 months 12 days

^[3]

Variable Rate [Member]

Variable Rate [Member] | Notes Payable [Member]

2.00%

^[2]

Variable Rate [Member] | GKK Properties [Member]

204,131

221,249

Variable Rate [Member] | GKK Properties [Member] | Notes Payable [Member]

3.20%

^[2]

40,000

Variable Rate [Member] | GKK Properties [Member] | Notes Payable [Member] | One-month LIBOR [Member]

2 years 2 months 12 days

^[3]

Mortgages [Member] | Fixed Rate [Member]

Variable rate

3.00%

Contractual interest rate, minimum

5.90%

^[2]

Mortgages [Member] | Fixed Rate [Member] | Notes Payable [Member]

62,200

Mortgages [Member] | Variable Rate [Member] | Notes Payable [Member]

1 year 6 months

^[3]

$ 164,131

$ 181,249

Mortgages [Member] | Variable Rate [Member] | Notes Payable [Member] | One-month LIBOR [Member]

9 months 18 days

^[3]

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Variable rate

1.80%

[1]	Represents the unamortized discounts and premiums on notes payable due to the above- and below-market interest rates when the loans were assumed. The discounts and premiums are amortized over the remaining life of the respective loan.
[2]	Contractual interest rates as of March 31, 2015 represent the range of interest rates in effect under these loans as of March 31, 2015. Weighted-average interest rates as of March 31, 2015 are calculated as the actual interest rates in effect under these loans as of March 31, 2015 (consisting of the contractual interest rates), using interest rate indices as of March 31, 2015, where applicable.
[3]	Weighted-average remaining term in years represents the initial maturity dates or the maturity dates as extended as of March 31, 2015; subject to certain conditions, the maturity dates of certain loans may be further extended.

NOTES PAYABLE (Schedule of Maturities of Long-Term Debt) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015
Notes Payable [Abstract]
April 1, 2015 through December 31, 2015	$ 13,346
2016	304,640
2017	159,175
2018	8,651
2019	126,044
Thereafter	33,510
Notes payable outstanding	$ 645,366us-gaap_DebtInstrumentCarryingAmount

NOTES PAYABLE (Schedule of Activity Related to Notes Payable) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Activity Related to Notes Payable [Roll Forward]
Total notes payable, net - December 31, 2014	$ 658,098us-gaap_NotesAndLoansPayable
Principal repayments	(19,263)
Amortization of discounts and premiums on notes payable, net	511	639
Total notes payable, net - March 31, 2015	$ 639,346us-gaap_NotesAndLoansPayable

FAIR VALUE DISCLOSURES (Schedule of Face Value, Carrying Amounts and Fair Value) (Details) (USD $)
In Thousands, unless otherwise specified

Mar. 31, 2015

Dec. 31, 2014

Real estate loans receivable, Face Value

$ 35,938

^[1]

$ 35,966

^[1]

Notes payable, Face Value

Carrying Amount [Member]

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Real estate loans receivable, Value

^[1]

^[1]

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Real estate loans receivable, Value

^[1]

^[1]

[1]	Carrying amount of real estate loans receivable includes loan loss reserves.

RELATED PARTY TRANSACTIONS (Details) (USD $)

3 Months Ended

Mar. 31, 2015

Mar. 31, 2014

Dec. 31, 2014

Payable

$ 696,000

$ 444,000

Asset management cost from discontinued operations

100,000

Administrative fees, amount paid

45,000

49,000

Advisor and Dealer Manager [Member]

Advisor and Dealer Manager [Member] | Expensed [Member] | Asset Management Fees [Member]

^[1]

^[1]

^[1]

^[1]

Advisor and Dealer Manager [Member] | Expensed [Member] | Reimbursement of Operating Expenses [Member]

^[2]

^[2]

^[2]

^[2]

Advisor and Dealer Manager [Member] | Expensed [Member] | Dispositon Fees [Member]

^[3]

^[3]

^[3]

^[3]

[1]	Amounts include asset management fees from discontinued operations totaling $0.1 million for the three months ended March 31, 2014.
[2]	The Advisor may seek reimbursement for certain employee costs under the Advisory Agreement. The Company reimburses the Advisor for the Company’s allocable portion of the salaries, benefits and overhead of internal audit department personnel providing services to the Company. These amounts totaled $45,000 and $49,000 for the three months ended March 31, 2015 and 2014, respectively. These were the only type of employee costs reimbursed under the Advisory Agreement for the three months ended March 31, 2015 and 2014. The Company will not reimburse for employee costs in connection with services for which the Advisor earns disposition fees (other than reimbursement of travel and communication expenses) or for the salaries or benefits the Advisor or its affiliates may pay to the Company’s executive officers.
[3]	Disposition fees with respect to real estate sold are included in the gain (loss) on sales of real estate in the accompanying consolidated statements of operations.

RELATED PARTY TRANSACTIONS (Narrative) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended	0 Months Ended
	Mar. 31, 2015 property	May 18, 2012	Jan. 15, 2015
Related Party Transaction [Line Items]
Disposition fee as percent			1.00%
KBS Capital Advisors LLC [Member]
Related Party Transaction [Line Items]
Disposition fee as percent			1.00%
Selling commissions fees paid, percent of sales price			6.00%
GKK Properties [Member]
Related Party Transaction [Line Items]
Number of real estate properties sold	159
Sales of real estate	$ 212.3
GKK Properties [Member] \| KBS Capital Advisors LLC [Member]
Related Party Transaction [Line Items]
Disposition fee as percent	1.00%		1.00%
KBS Strategic Opportunity REIT, Inc. [Member]
Related Party Transaction [Line Items]
Investment in joint venture		$ 8.0

SUPPLEMENTAL CASH FLOW AND SIGNIFICANT NONCASH TRANSACTION DISCLOSURES (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Supplemental Disclosure of Cash Flow Information:
Interest paid	$ 7,086us-gaap_InterestPaid	$ 11,857us-gaap_InterestPaid
Supplemental Disclosure of Significant Noncash Transactions:
Mortgage loans extinguished in connection with foreclosures and deed in lieu of foreclosure	0	6,134
Increase in lease incentives payable	$ 0	$ 143

SEGMENT INFORMATION (Schedule of Segment Reporting Information, by Segment) (Details) (USD $)
In Thousands, unless otherwise specified

3 Months Ended

Mar. 31, 2015

segments

States

Mar. 31, 2014

Dec. 31, 2014

Dec. 31, 2013

Number of reportable segments

3

Number of states in which entity operates

Real estate held for sale

^[1]

^[1]

Foreclosed real estate held for sale

78,900

Cash and cash equivalents

Real Estate Segment [Member]

^[1]

^[1]

^[1]

^[1]

Real Estate-Related Segment [Member]

^[1]

^[1]

GKK Properties Segment [Member]

Number of states in which entity operates

^[1]

^[1]

^[1]

^[1]

Operating Segments [Member]

^[1]

^[1]

Real estate held for sale

Assets

1,294,182

1,243,513

Corporate-Level [Member]

Cash and cash equivalents

^[2]

^[2]

^[3]

^[3]

$ 56,700

$ 34,200

[1]	Amounts include certain properties in continuing operations that were sold as of March 31, 2015. See Note 6, “Real Estate Held for Sale and Discontinued Operations” for more information.
[2]	Total corporate-level assets consisted primarily of cash and cash equivalents of approximately $56.7 million and $34.2 million as of March 31, 2015 and December 31, 2014, respectively.
[3]	As of March 31, 2015, corporate-level liabilities consisted primarily of accounts payable and accrued liabilities for general and administrative expenses. As of December 31, 2014, corporate-level liabilities consisted primarily of distributions payable.

SEGMENT INFORMATION (Reconciliation of Net Income (Loss) to Net Operating Income (Loss)) (Details) (USD $)
In Thousands, unless otherwise specified

3 Months Ended

12 Months Ended

Mar. 31, 2015

Mar. 31, 2014

Dec. 31, 2014

Segment Reporting [Abstract]

Gain on sales of real estate

(13,967)

Gain on sales of real estate securities

Gain from extinguishment of debt

(3,748)

Gain on sales of foreclosed real estate held for sale

(1,815)

(2,509)

Other income and interest income

(116)

(472)

Asset management fees to affiliate

2,420

2,499

General and administrative expenses

2,220

3,644

Depreciation and amortization

15,605

17,923

Impairment charge on real estate held for investment