%PDF-1.5 1 0 obj <> endobj 3 0 obj <>] /Rotate 0 /Contents 4 0 R>> endobj 4 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 18.00 Tf ET q 0 0 0 rg BT 235.55 743.85 Td (UNITED ST) Tj ET Q q 0 0 0 rg BT 330.74 743.85 Td (A) Tj ET Q q 0 0 0 rg BT 342.41 743.85 Td (TES) Tj ET Q BT /F2 18.00 Tf ET q 0 0 0 rg BT 112.70 722.25 Td (SECURITIES ) Tj ET Q q 0 0 0 rg BT 225.25 722.25 Td (AND EXCHANGE COMMISSION) Tj ET Q BT /F2 12.00 Tf ET q 0 0 0 rg BT 244.15 707.85 Td (W) Tj ET Q q 0 0 0 rg BT 255.49 707.85 Td (ashington, D.C. 20549) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 306.00 691.85 Td ( ) Tj ET Q BT /F2 18.00 Tf ET q 0 0 0 rg BT 257.25 665.25 Td (FORM 10-Q) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 354.73 665.25 Td ( ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 36.00 648.25 Td (\(Mark One\)) Tj ET Q /GS0 gs q 12.72 0 0 11.71 39.00 623.54 cm /I1 Do Q BT /F2 12.00 Tf ET q 0 0 0 rg BT 69.00 627.12 Td (QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15\(d\) OF THE SECURITIES) Tj ET Q BT /F2 12.00 Tf ET q 0 0 0 rg BT 69.00 615.12 Td (EXCHANGE ACT OF 1934) Tj ET Q BT /F1 10.00 Tf ET BT /F2 10.00 Tf ET q 0 0 0 rg BT 205.35 593.25 Td (For) Tj ET Q q 0 0 0 rg BT 220.72 593.25 Td ( the quarterly period ended ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 340.43 593.25 Td (Mar) Tj ET Q q 0 0 0 rg BT 359.13 593.25 Td (ch 31, 2016) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 406.63 593.25 Td ( ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 298.50 576.25 Td (OR) Tj ET Q /GS0 gs q 10.69 0 0 11.71 39.00 551.54 cm /I2 Do Q BT /F2 12.00 Tf ET q 0 0 0 rg BT 69.00 555.12 Td (TRANSITION REPORT PURSUANT TO SECTION 13 OR 15\(d\) OF THE SECURITIES) Tj ET Q BT /F2 12.00 Tf ET q 0 0 0 rg BT 69.00 543.12 Td (EXCHANGE ACT OF 1934) Tj ET Q BT /F1 10.00 Tf ET BT /F2 10.00 Tf ET q 0 0 0 rg BT 219.80 521.25 Td (For) Tj ET Q q 0 0 0 rg BT 235.17 521.25 Td ( the transition period fr) Tj ET Q q 0 0 0 rg BT 335.53 521.25 Td (om ) Tj ET Q BT /F2 10.00 Tf ET 0 0 0 RG /GS0 gs 0.95 w 0 i [] 0 d 1 J 1 j 3 M 351.3625 519.68505859375 m 381.3625 519.68505859375 l s q 0 0 0 rg BT 351.36 521.25 Td ( ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 381.36 521.25 Td ( to ) Tj ET Q BT /F2 10.00 Tf ET 0 0 0 RG /GS0 gs 0.95 w 0 i [] 0 d 1 J 1 j 3 M 394.692578125 519.68505859375 m 424.692578125 519.68505859375 l s q 0 0 0 rg BT 394.69 521.25 Td ( ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 230.65 504.25 Td (Commission file number) Tj ET Q q 0 0 0 rg BT 335.47 504.25 Td ( 000-52606) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 306.00 488.25 Td ( ) Tj ET Q BT /F2 18.00 Tf ET q 0 0 0 rg BT 107.50 461.65 Td (KBS REAL) Tj ET Q q 0 0 0 rg BT 197.03 461.65 Td ( EST) Tj ET Q q 0 0 0 rg BT 234.22 461.65 Td (A) Tj ET Q q 0 0 0 rg BT 245.88 461.65 Td (TE INVESTMENT) Tj ET Q q 0 0 0 rg BT 395.10 461.65 Td ( ) Tj ET Q q 0 0 0 rg BT 399.27 461.65 Td (TRUST) Tj ET Q q 0 0 0 rg BT 457.96 461.65 Td (, INC.) Tj ET Q BT /F2 18.00 Tf ET q 0 0 0 rg BT 504.46 461.65 Td ( ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 190.45 449.65 Td (\(Exact Name of Registrant as Specified in Its Charter\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 306.00 433.65 Td ( ) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 36.00 422.85 Td ( ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 144.60 403.08 Td (Maryland) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 299.00 403.60 Td ( ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 421.80 403.08 Td (20-2985918) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 114.35 391.43 Td (\(State or) Tj ET Q q 0 0 0 rg BT 143.75 391.43 Td ( Other) Tj ET Q q 0 0 0 rg BT 166.04 391.43 Td ( Jurisdiction of) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 112.25 383.43 Td (Incorporation or) Tj ET Q q 0 0 0 rg BT 169.66 383.43 Td ( Organization\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 299.00 383.60 Td ( ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 417.15 391.43 Td (\(I.R.S. Employer) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 414.65 383.43 Td (Identification No.\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 87.45 366.08 Td (800 Newport Center) Tj ET Q q 0 0 0 rg BT 173.91 366.08 Td ( Drive, Suite 700) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 108.60 356.08 Td (Newport Beach, California) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 299.00 356.60 Td ( ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 433.50 357.03 Td (92660) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 97.60 344.43 Td (\(Address of Principal Executive Offices\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 299.00 344.30 Td ( ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 427.40 344.43 Td (\(Zip Code\)) Tj ET Q BT /F1 10.00 Tf ET BT /F2 10.00 Tf ET q 0 0 0 rg BT 274.75 319.85 Td (\(949\) 417-6500) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 211.90 310.25 Td (\(Registrant’) Tj ET Q q 0 0 0 rg BT 252.92 310.25 Td (s ) Tj ET Q q 0 0 0 rg BT 257.89 310.25 Td (T) Tj ET Q q 0 0 0 rg BT 262.49 310.25 Td (elephone Number) Tj ET Q q 0 0 0 rg BT 322.42 310.25 Td (, Including ) Tj ET Q q 0 0 0 rg BT 360.89 310.25 Td (Ar) Tj ET Q q 0 0 0 rg BT 370.07 310.25 Td (ea Code\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 131.00 298.25 Td (______________________________________________________________________ ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 60.00 281.25 Td (Indicate by check mark whether the registrant: \(1\) has filed all reports required to be filed by Section 13 or 15\(d\) of the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 36.00 269.25 Td (Securities Exchange ) Tj ET Q q 0 0 0 rg BT 119.31 269.25 Td (Act of 1934 during the preceding 12 months \(or for such shorter period that the registrant was required to file ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 36.00 257.25 Td (such reports\), and \(2\) has been subject to such filing requirements for the past 90 days. ) Tj ET Q q 0 0 0 rg BT 392.48 257.25 Td (Y) Tj ET Q q 0 0 0 rg BT 398.70 257.25 Td (es ) Tj ET Q /GS0 gs q 10.60 0 0 10.09 412.03 255.09 cm /I3 Do Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 422.63 257.25 Td ( No ) Tj ET Q /GS0 gs q 8.91 0 0 10.09 449.85 255.09 cm /I4 Do Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 60.00 236.25 Td (Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any) Tj ET Q q 0 0 0 rg BT 528.63 236.25 Td (, every ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 36.00 224.25 Td (Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T) Tj ET Q q 0 0 0 rg BT 424.34 224.25 Td ( \(§232.405 of this chapter\) during the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 36.00 212.25 Td (preceding 12 months \(or for such shorter period that the registrant was required to submit and post such files\). ) Tj ET Q q 0 0 0 rg BT 485.80 212.25 Td (Y) Tj ET Q q 0 0 0 rg BT 492.02 212.25 Td (es ) Tj ET Q /GS0 gs q 10.60 0 0 10.09 505.35 210.09 cm /I5 Do Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 515.95 212.25 Td ( No ) Tj ET Q /GS0 gs q 8.91 0 0 10.09 540.67 210.09 cm /I6 Do Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 60.00 191.25 Td (Indicate by check mark whether the registrant is a lar) Tj ET Q q 0 0 0 rg BT 272.23 191.25 Td (ge accelerated filer) Tj ET Q q 0 0 0 rg BT 347.88 191.25 Td (, an accelerated filer) Tj ET Q q 0 0 0 rg BT 428.53 191.25 Td (, a non-accelerated filer or a smaller ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 36.00 179.25 Td (reporting company) Tj ET Q q 0 0 0 rg BT 111.16 179.25 Td (. See the definitions of “lar) Tj ET Q q 0 0 0 rg BT 218.72 179.25 Td (ge accelerated filer) Tj ET Q q 0 0 0 rg BT 294.37 179.25 Td (,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 36.00 167.25 Td (of the Exchange ) Tj ET Q q 0 0 0 rg BT 102.92 167.25 Td (Act. \(Check one\):) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 36.00 156.45 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 39.00 136.52 Td (Large Accelerated Filer) Tj ET Q /GS0 gs q 8.91 0 0 9.76 162.00 133.69 cm /I7 Do Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 387.00 136.20 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 439.00 136.52 Td (Accelerated Filer) Tj ET Q /GS0 gs q 8.91 0 0 9.76 562.00 133.69 cm /I8 Do Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 39.00 104.62 Td (Non-Accelerated Filer) Tj ET Q /GS0 gs q 10.60 0 0 9.76 162.00 102.49 cm /I9 Do Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 179.00 104.62 Td (\(Do not check if a smaller reporting company\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 387.00 104.20 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 439.00 104.62 Td (Smaller reporting company) Tj ET Q /GS0 gs q 8.91 0 0 9.76 562.00 102.49 cm /I10 Do Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 36.00 79.45 Td (Indicate by check mark whether the registrant is a shell company \(as defined in Rule 12b-2 of the Exchange ) Tj ET Q q 0 0 0 rg BT 469.46 79.45 Td (Act\). ) Tj ET Q q 0 0 0 rg BT 499.36 79.45 Td (Y) Tj ET Q q 0 0 0 rg BT 505.58 79.45 Td (es ) Tj ET Q /GS0 gs q 8.91 0 0 10.09 518.91 77.29 cm /I11 Do Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.82 79.45 Td ( No ) Tj ET Q /GS0 gs q 10.60 0 0 10.09 555.04 77.29 cm /I12 Do Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 36.00 58.45 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 60.44 58.45 Td (May 4, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 111.27 58.45 Td (, there were ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 160.69 58.45 Td (185,878,530) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 210.69 58.45 Td ( outstanding shares of common stock of KBS Real Estate Investment ) Tj ET Q q 0 0 0 rg BT 489.07 58.45 Td (T) Tj ET Q q 0 0 0 rg BT 494.83 58.45 Td (rust, Inc.) Tj ET Q endstream endobj 5 0 obj <><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><>] /Rotate 0 /Contents 6 0 R>> endobj 6 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F1 10.00 Tf ET q 0 0 0 rg BT 303.50 31.60 Td (1) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 195.70 742.25 Td (KBS REAL) Tj ET Q q 0 0 0 rg BT 245.44 742.25 Td ( EST) Tj ET Q q 0 0 0 rg BT 266.10 742.25 Td (A) Tj ET Q q 0 0 0 rg BT 272.58 742.25 Td (TE INVESTMENT) Tj ET Q q 0 0 0 rg BT 355.48 742.25 Td ( ) Tj ET Q q 0 0 0 rg BT 357.79 742.25 Td (TRUST) Tj ET Q q 0 0 0 rg BT 390.40 742.25 Td (, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 278.90 724.25 Td (FORM 10-Q) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 272.90 706.25 Td (Mar) Tj ET Q q 0 0 0 rg BT 291.60 706.25 Td (ch 31, 2016) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 339.10 706.25 Td ( ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 289.85 688.25 Td (INDEX) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 50.00 671.45 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 56.40 651.52 Td (PART I.) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 98 650.1833984375 m 222.9072265625 650.1833984375 l s q 0 0 1 rg BT 98.00 651.52 Td (FINANCIAL) Tj ET Q q 0 0 1 rg BT 151.52 651.52 Td ( INFORMA) Tj ET Q q 0 0 1 rg BT 199.03 651.52 Td (TION) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F1 10.00 Tf ET q 0 0 0 rg BT 98.00 636.52 Td (Item 1.) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 143 635.1833984375 m 226.59375 635.1833984375 l s q 0 0 1 rg BT 143.00 636.52 Td (Financial Statements) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 143 620.1833984375 m 493.458984375 620.1833984375 l s q 0 0 1 rg BT 143.00 621.52 Td (Consolidated Balance Sheets as of March 31, 2016 \(unaudited\) and December 31, 2015) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 143 605.1833984375 m 509.6748046875 605.1833984375 l s q 0 0 1 rg BT 143.00 606.52 Td (Consolidated Statements of Operations \(unaudited\) for the ) Tj ET Q q 0 0 1 rg BT 379.15 606.52 Td (Three Months Ended March 31, ) Tj ET Q BT /F1 10.00 Tf ET 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 143 595.1833984375 m 202.4384765625 595.1833984375 l s q 0 0 1 rg BT 143.00 596.52 Td (2016 and 2015) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 143 580.1833984375 m 517.4580078125 580.1833984375 l s q 0 0 1 rg BT 143.00 581.52 Td (Consolidated Statements of Stockholders’) Tj ET Q q 0 0 1 rg BT 310.29 581.52 Td ( Equity for the ) Tj ET Q q 0 0 1 rg BT 370.46 581.52 Td (Y) Tj ET Q q 0 0 1 rg BT 376.68 581.52 Td (ear Ended December 31, 2015 and ) Tj ET Q BT /F1 10.00 Tf ET 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 143 570.1833984375 m 356.65234375 570.1833984375 l s q 0 0 1 rg BT 143.00 571.52 Td (the ) Tj ET Q q 0 0 1 rg BT 157.54 571.52 Td (Three Months Ended March 31, 2016 \(unaudited\)) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 143 555.1833984375 m 512.7509765625 555.1833984375 l s q 0 0 1 rg BT 143.00 556.52 Td (Consolidated Statements of Cash Flows \(unaudited\) for the ) Tj ET Q q 0 0 1 rg BT 382.23 556.52 Td (Three Months Ended March 31, ) Tj ET Q BT /F1 10.00 Tf ET 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 143 545.1833984375 m 202.4384765625 545.1833984375 l s q 0 0 1 rg BT 143.00 546.52 Td (2016 and 2015) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 143 530.1833984375 m 501.2666015625 530.1833984375 l s q 0 0 1 rg BT 143.00 531.52 Td (Condensed Notes to Consolidated Financial Statements as of March 31, 2016 \(unaudited\)) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F1 10.00 Tf ET q 0 0 0 rg BT 98.00 516.52 Td (Item 2.) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 143 515.1833984375 m 501.291015625 515.1833984375 l s q 0 0 1 rg BT 143.00 516.52 Td (Management’) Tj ET Q q 0 0 1 rg BT 197.98 516.52 Td (s Discussion and ) Tj ET Q q 0 0 1 rg BT 267.15 516.52 Td (Analysis of Financial Condition and Results of Operations) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F1 10.00 Tf ET q 0 0 0 rg BT 98.00 501.52 Td (Item 3.) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 143 500.1833984375 m 382.3896484375 500.1833984375 l s q 0 0 1 rg BT 143.00 501.52 Td (Quantitative and Qualitative Disclosures about Market Risk) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F1 10.00 Tf ET q 0 0 0 rg BT 98.00 486.52 Td (Item 4.) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 143 485.1833984375 m 241.3154296875 485.1833984375 l s q 0 0 1 rg BT 143.00 486.52 Td (Controls and Procedures) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F1 10.00 Tf ET q 0 0 0 rg BT 54.70 471.52 Td (PART II.) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 98 470.1833984375 m 202.7216796875 470.1833984375 l s q 0 0 1 rg BT 98.00 471.52 Td (OTHER INFORMA) Tj ET Q q 0 0 1 rg BT 178.84 471.52 Td (TION) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F1 10.00 Tf ET q 0 0 0 rg BT 98.00 456.52 Td (Item 1.) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 143 455.1833984375 m 217.140625 455.1833984375 l s q 0 0 1 rg BT 143.00 456.52 Td (Legal Proceedings) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F1 10.00 Tf ET q 0 0 0 rg BT 98.00 441.52 Td (Item 1A.) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 143 440.1833984375 m 193.2783203125 440.1833984375 l s q 0 0 1 rg BT 143.00 441.52 Td (Risk Factors) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F1 10.00 Tf ET q 0 0 0 rg BT 98.00 426.52 Td (Item 2.) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 143 425.1833984375 m 384.6015625 425.1833984375 l s q 0 0 1 rg BT 143.00 426.52 Td (Unregistered Sales of Equity Securities and Use of Proceeds) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F1 10.00 Tf ET q 0 0 0 rg BT 98.00 411.52 Td (Item 3.) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 143 410.1833984375 m 269.9189453125 410.1833984375 l s q 0 0 1 rg BT 143.00 411.52 Td (Defaults upon Senior Securities) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F1 10.00 Tf ET q 0 0 0 rg BT 98.00 396.52 Td (Item 4.) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 143 395.1833984375 m 241.3154296875 395.1833984375 l s q 0 0 1 rg BT 143.00 396.52 Td (Mine Safety Disclosures) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F1 10.00 Tf ET q 0 0 0 rg BT 98.00 381.52 Td (Item 5.) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 143 380.1833984375 m 216.0322265625 380.1833984375 l s q 0 0 1 rg BT 143.00 381.52 Td (Other Information) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F1 10.00 Tf ET q 0 0 0 rg BT 98.00 366.52 Td (Item 6.) 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482.5 232.75 m 562.5 232.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 398.5 219.75 m 478.5 219.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 482.5 219.75 m 562.5 219.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 398.5 122.75 m 478.5 122.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 482.5 122.75 m 562.5 122.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 398.5 109.75 m 478.5 109.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 482.5 109.75 m 562.5 109.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 398.5 97.75 m 478.5 97.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 398.5 95.75 m 478.5 95.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 482.5 97.75 m 562.5 97.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 482.5 95.75 m 562.5 95.75 l s BT /F2 7.00 Tf ET q 0 0 0 rg BT 414.80 639.81 Td (March 31, 2016) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 493.75 639.81 Td (December 31, 2015) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 53.00 626.80 Td ( ) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 420.45 626.81 Td (\(unaudited\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 485.00 626.80 Td ( ) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 53.00 613.80 Td (Assets) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 71.00 600.80 Td (Real estate held for investment:) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 89.00 587.80 Td (Land) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 401.00 587.80 Td ($) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 452.90 587.80 Td (178,872) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 485.00 587.80 Td ($) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 536.90 587.80 Td (181,051) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 89.00 574.80 Td (Buildings and improvements) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 452.90 574.80 Td (609,591) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 536.90 574.80 Td (618,644) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 89.00 561.80 Td (Tenant origination and absorption costs) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 456.40 561.80 Td (42,928) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 540.40 561.80 Td (44,560) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 71.00 548.80 Td (Total real estate held for investment, at cost and net of impairment charges) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 452.90 548.80 Td (831,391) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 536.90 548.80 Td (844,255) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 89.00 535.80 Td (Less accumulated depreciation and amortization) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 450.55 535.85 Td (\(132,880) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 475.65 535.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 534.55 535.85 Td (\(130,135) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 559.65 535.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 71.00 522.80 Td (Total real estate held for investment, net) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 452.90 522.80 Td (698,511) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 536.90 522.80 Td (714,120) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 71.00 509.80 Td (Real estate held for sale, net) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 452.90 509.80 Td (128,511) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 536.90 509.80 Td (146,760) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 71.00 496.80 Td (Total real estate, net) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 452.90 496.80 Td (827,022) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 536.90 496.80 Td (860,880) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 71.00 483.80 Td (Real estate loans receivable, net) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 456.40 483.80 Td (27,517) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 540.40 483.80 Td (27,281) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 71.00 470.80 Td (Total real estate and real estate-related investments, net) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 452.90 470.80 Td (854,539) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 536.90 470.80 Td (888,161) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 71.00 457.80 Td (Cash and cash equivalents) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 456.40 457.80 Td (75,392) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 540.40 457.80 Td (46,605) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 71.00 444.80 Td (Restricted cash) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 456.40 444.80 Td (38,596) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 540.40 444.80 Td (39,874) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 71.00 431.80 Td (Rents and other receivables, net) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 456.40 431.80 Td (31,205) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 540.40 431.80 Td (31,452) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 71.00 418.80 Td (Above-market leases, net) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 459.90 418.80 Td (4,951) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 543.90 418.80 Td (5,417) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 71.00 405.80 Td (Assets related to real estate held for sale) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 456.40 405.80 Td (18,243) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 540.40 405.80 Td (18,855) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 71.00 392.80 Td (Due from affiliate) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 465.15 392.80 Td (112) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 552.65 392.80 Td (—) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 71.00 379.80 Td (Prepaid expenses and other assets, net) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 456.40 379.80 Td (30,436) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 540.40 379.80 Td (24,501) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 53.00 366.80 Td (Total assets) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 401.00 366.80 Td ($) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 447.65 366.80 Td (1,053,474) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 485.00 366.80 Td ($) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 531.65 366.80 Td (1,054,865) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 53.00 353.80 Td (Liabilities and equity) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 71.00 340.80 Td (Notes payable:) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 401.00 340.80 Td () Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 485.00 340.80 Td () Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 89.00 327.80 Td (Notes payable, net) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 401.00 327.80 Td ($) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 452.90 327.80 Td (308,476) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 485.00 327.80 Td ($) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 536.90 327.80 Td (308,630) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 89.00 314.80 Td (Notes payable related to real estate held for sale, net) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 452.90 314.80 Td (118,982) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 536.90 314.80 Td (119,592) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 71.00 301.80 Td (Total notes payable, net) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 452.90 301.80 Td (427,458) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 536.90 301.80 Td (428,222) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 71.00 288.80 Td (Accounts payable and accrued liabilities) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 456.40 288.80 Td (18,514) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 540.40 288.80 Td (19,152) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 71.00 275.80 Td (Due to affiliates) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 468.65 275.80 Td (46) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 552.65 275.80 Td (68) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 71.00 262.80 Td (Below-market leases, net) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 456.40 262.80 Td (20,138) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 540.40 262.80 Td (22,047) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 71.00 249.80 Td (Liabilities related to real estate held for sale) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 459.90 249.80 Td (3,496) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 543.90 249.80 Td (5,164) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 71.00 236.80 Td (Other liabilities) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 456.40 236.80 Td (49,242) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 540.40 236.80 Td (50,549) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 53.00 223.80 Td (Total liabilities) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 452.90 223.80 Td (518,894) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 536.90 223.80 Td (525,202) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 53.00 210.80 Td (Commitments and contingencies \(Note 11\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 53.00 197.80 Td (Redeemable common stock) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 459.90 197.80 Td (8,753) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 540.40 197.80 Td (10,000) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 53.00 184.80 Td (Stockholders’ equity) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 71.00 171.80 Td (Preferred stock, $.01 par value; 10,000,000 shares authorized, no shares issued and outstanding) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 468.65 171.80 Td (—) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 552.65 171.80 Td (—) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 71.00 159.80 Td (Common stock, $.01 par value; 1,000,000,000 shares authorized, 186,097,528 and 186,414,147 shares issued and) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 80.00 152.80 Td (outstanding as of March 31, 2016 and December 31, 2015, respectively) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 459.90 152.80 Td (1,861) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 543.90 152.80 Td (1,864) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 71.00 139.80 Td (Additional paid-in capital) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 447.65 139.80 Td (1,656,140) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 531.65 139.80 Td (1,656,137) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 71.00 126.80 Td (Cumulative distributions and net losses) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 445.30 126.85 Td (\(1,132,174) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 475.65 126.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 529.30 126.85 Td (\(1,138,338) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 559.65 126.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 53.00 113.80 Td (Total stockholders’ equity) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 452.90 113.80 Td (525,827) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 536.90 113.80 Td (519,663) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 53.00 100.80 Td (Total liabilities and stockholders’ equity) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 401.00 100.80 Td ($) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 447.65 100.80 Td (1,053,474) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 485.00 100.80 Td ($) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 531.65 100.80 Td (1,054,865) Tj ET Q BT /F1 10.00 Tf ET BT /F3 10.00 Tf ET q 0 0 0 rg BT 159.90 79.25 Td (See accompanying condensed notes to consolidated financial statements.) Tj ET Q endstream endobj 9 0 obj <>] /Rotate 0 /Contents 10 0 R>> endobj 10 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 1. Financial Statements \(continued\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 303.50 31.60 Td (3) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 195.70 713.25 Td (KBS REAL) Tj ET Q q 0 0 0 rg BT 245.44 713.25 Td ( EST) Tj ET Q q 0 0 0 rg BT 266.10 713.25 Td (A) Tj ET Q q 0 0 0 rg BT 272.58 713.25 Td (TE INVESTMENT) Tj ET Q q 0 0 0 rg BT 355.48 713.25 Td ( ) Tj ET Q q 0 0 0 rg BT 357.79 713.25 Td (TRUST) Tj ET Q q 0 0 0 rg BT 390.40 713.25 Td (, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 416.23 713.25 Td ( ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 189.15 695.25 Td (CONSOLIDA) Tj ET Q q 0 0 0 rg BT 248.97 695.25 Td (TED ST) Tj ET Q q 0 0 0 rg BT 283.52 695.25 Td (A) Tj ET Q q 0 0 0 rg BT 290.00 695.25 Td (TEMENTS OF) Tj ET Q q 0 0 0 rg BT 354.92 695.25 Td ( OPERA) Tj ET Q q 0 0 0 rg BT 391.68 695.25 Td (TIONS) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 282.95 677.25 Td (\(unaudited\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 204.05 662.25 Td (\(in thousands, except share and per share amounts\)) Tj ET Q 0.8 0.9333333333333333 1 rg /GS0 gs 50.50 618.75 338.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 388.50 618.75 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.50 618.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 477.50 618.75 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.50 590.75 338.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 388.50 590.75 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.50 590.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 477.50 590.75 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.50 562.75 338.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 388.50 562.75 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.50 562.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 477.50 562.75 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.50 534.75 338.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 388.50 534.75 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.50 534.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 477.50 534.75 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.50 506.75 338.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 388.50 506.75 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.50 506.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 477.50 506.75 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.50 478.75 338.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 388.50 478.75 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.50 478.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 477.50 478.75 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.50 450.75 338.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 388.50 450.75 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.50 450.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 477.50 450.75 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.50 422.75 338.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 388.50 422.75 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.50 422.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 477.50 422.75 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.50 394.75 338.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 388.50 394.75 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.50 394.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 477.50 394.75 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.50 366.75 338.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 388.50 366.75 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.50 366.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 477.50 366.75 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.50 338.75 338.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 388.50 338.75 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.50 338.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 477.50 338.75 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.50 310.75 338.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 388.50 310.75 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.50 310.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 477.50 310.75 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.50 282.75 338.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 388.50 282.75 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.50 282.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 477.50 282.75 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.50 254.75 338.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 388.50 254.75 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.50 254.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 477.50 254.75 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.50 226.75 338.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 388.50 226.75 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.50 226.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 477.50 226.75 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.50 198.75 338.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 388.50 198.75 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.50 198.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 477.50 198.75 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.50 170.75 338.00 -21.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 388.50 170.75 85.00 -21.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.50 170.75 4.00 -21.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 477.50 170.75 85.00 -21.00 re f /GS0 gs 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 388.5 632.75 m 473.5 632.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473.5 632.75 m 477.5 632.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 632.75 m 562.5 632.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 388.5 632.75 m 473.5 632.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 388.5 618.75 m 473.5 618.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473.5 632.75 m 477.5 632.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 632.75 m 562.5 632.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 618.75 m 562.5 618.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 388.5 548.75 m 473.5 548.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 548.75 m 562.5 548.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 388.5 548.75 m 473.5 548.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 388.5 534.75 m 473.5 534.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 548.75 m 562.5 548.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 534.75 m 562.5 534.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 388.5 422.75 m 473.5 422.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 388.5 408.75 m 473.5 408.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 422.75 m 562.5 422.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 408.75 m 562.5 408.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 388.5 324.75 m 473.5 324.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 324.75 m 562.5 324.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 388.5 324.75 m 473.5 324.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 388.5 310.75 m 473.5 310.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 324.75 m 562.5 324.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 310.75 m 562.5 310.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 388.5 310.75 m 473.5 310.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 310.75 m 562.5 310.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 388.5 254.75 m 473.5 254.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 254.75 m 562.5 254.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 388.5 240.75 m 473.5 240.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 388.5 227.75 m 473.5 227.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 388.5 225.75 m 473.5 225.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 240.75 m 562.5 240.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 227.75 m 562.5 227.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 225.75 m 562.5 225.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 388.5 184.75 m 473.5 184.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 184.75 m 562.5 184.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 388.5 171.75 m 473.5 171.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 388.5 169.75 m 473.5 169.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 171.75 m 562.5 171.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 169.75 m 562.5 169.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 388.5 169.75 m 473.5 169.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 388.5 171.75 m 473.5 171.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 388.5 150.75 m 473.5 150.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 388.5 148.75 m 473.5 148.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 169.75 m 562.5 169.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 171.75 m 562.5 171.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 150.75 m 562.5 150.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 477.5 148.75 m 562.5 148.75 l s BT /F1 8.00 Tf ET q 0 0 0 rg BT 53.00 637.00 Td ( ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 420.10 636.98 Td (Three Months Ended March 31,) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 53.00 623.00 Td ( ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 422.50 622.98 Td (2016) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 511.50 622.98 Td (2015) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 53.00 609.00 Td (Revenues:) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 71.00 595.00 Td (Rental income) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 391.00 595.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 448.30 595.00 Td (29,396) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 480.00 595.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 537.30 595.00 Td (35,365) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 71.00 581.00 Td (Tenant reimbursements) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 448.30 581.00 Td (10,247) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 537.30 581.00 Td (12,554) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 71.00 567.00 Td (Interest income from real estate loans receivable) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 458.30 567.00 Td (810) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 547.30 567.00 Td (726) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 71.00 553.00 Td (Parking revenues and other operating income) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 458.30 553.00 Td (672) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 547.30 553.00 Td (932) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 53.00 539.00 Td (Total revenues) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 448.30 539.00 Td (41,125) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 537.30 539.00 Td (49,577) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 53.00 525.00 Td (Expenses:) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 71.00 511.00 Td (Operating, maintenance, and management) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 448.30 511.00 Td (15,854) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 537.30 511.00 Td (21,989) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 71.00 497.00 Td (Real estate taxes, property-related taxes, and insurance) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 452.30 497.00 Td (5,462) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 541.30 497.00 Td (6,781) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 71.00 483.00 Td (Asset management fees to affiliate) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 452.30 483.00 Td (2,348) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 541.30 483.00 Td (2,420) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 71.00 469.00 Td (General and administrative expenses) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 452.30 469.00 Td (3,372) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 541.30 469.00 Td (2,220) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 71.00 455.00 Td (Depreciation and amortization) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 448.30 455.00 Td (10,998) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 537.30 455.00 Td (15,605) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 71.00 441.00 Td (Interest expense) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 452.30 441.00 Td (5,229) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 541.30 441.00 Td (8,733) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 71.00 427.00 Td (Impairment charges on real estate) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 448.30 427.00 Td (10,864) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 551.30 427.00 Td (—) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 53.00 413.00 Td (Total expenses) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 448.30 413.00 Td (54,127) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 537.30 413.00 Td (57,748) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 53.00 399.00 Td (Other income and loss) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 71.00 385.00 Td (Gain on sales of real estate, net) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 448.30 385.00 Td (23,586) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 537.30 385.00 Td (13,967) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 71.00 371.00 Td (Gain on sales of foreclosed real estate held for sale) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 462.30 371.00 Td (—) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 541.30 371.00 Td (2,509) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 71.00 357.00 Td (Loss from extinguishment of debt) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 463.60 357.00 Td (\(3) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 470.30 357.00 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 551.30 357.00 Td (—) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 71.00 343.00 Td (Other interest income) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 458.30 343.00 Td (137) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 547.30 343.00 Td (116) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 71.00 329.00 Td (Other income) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 458.30 329.00 Td (106) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 551.30 329.00 Td (—) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 53.00 315.00 Td (Total other income) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 448.30 315.00 Td (23,826) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 537.30 315.00 Td (16,592) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 53.00 301.00 Td (Loss from continuing operations) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 448.30 301.00 Td (10,824) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 541.30 301.00 Td (8,421) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 53.00 287.00 Td (Discontinued operations:) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 71.00 273.00 Td (Gain on sales of real estate, net) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 462.30 273.00 Td (—) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 547.30 273.00 Td (124) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 71.00 259.00 Td (\(Loss\) income from discontinued operations) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 463.60 259.00 Td (\(5) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 470.30 259.00 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 551.30 259.00 Td (44) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 53.00 245.00 Td (Total \(loss\) income from discontinued operations) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 463.60 245.00 Td (\(5) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 470.30 245.00 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 547.30 245.00 Td (168) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 53.00 231.00 Td (Net income) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 391.00 231.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 448.30 231.00 Td (10,819) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 480.00 231.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 541.30 231.00 Td (8,589) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 53.00 217.00 Td (Basic and diluted income per common share:) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 71.00 203.00 Td (Continuing operations) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 391.00 203.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 456.30 203.00 Td (0.06) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 480.00 203.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 545.30 203.00 Td (0.05) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 71.00 189.00 Td (Discontinued operations) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 462.30 189.00 Td (—) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 551.30 189.00 Td (—) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 53.00 175.00 Td (Net income per common share) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 391.00 175.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 456.30 175.00 Td (0.06) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 480.00 175.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 545.30 175.00 Td (0.05) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 53.00 162.00 Td (W) Tj ET Q q 0 0 0 rg BT 59.91 162.00 Td (eighted-average number of common shares outstanding, ) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 71.00 154.00 Td (basic and diluted) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 430.30 154.00 Td (186,299,622) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 519.30 154.00 Td (187,718,362) Tj ET Q BT /F1 10.00 Tf ET BT /F3 10.00 Tf ET q 0 0 0 rg BT 159.90 132.25 Td (See accompanying condensed notes to consolidated financial statements.) Tj ET Q endstream endobj 11 0 obj <>] /Rotate 0 /Contents 12 0 R>> endobj 12 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 1. Financial Statements \(continued\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 303.50 33.60 Td (4) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 195.70 713.25 Td (KBS REAL) Tj ET Q q 0 0 0 rg BT 245.44 713.25 Td ( EST) Tj ET Q q 0 0 0 rg BT 266.10 713.25 Td (A) Tj ET Q q 0 0 0 rg BT 272.58 713.25 Td (TE INVESTMENT) Tj ET Q q 0 0 0 rg BT 355.48 713.25 Td ( ) Tj ET Q q 0 0 0 rg BT 357.79 713.25 Td (TRUST) Tj ET Q q 0 0 0 rg BT 390.40 713.25 Td (, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 416.23 713.25 Td ( ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 157.90 695.25 Td (CONSOLIDA) Tj ET Q q 0 0 0 rg BT 217.72 695.25 Td (TED ST) Tj ET Q q 0 0 0 rg BT 252.28 695.25 Td (A) Tj ET Q q 0 0 0 rg BT 258.75 695.25 Td (TEMENTS OF) Tj ET Q q 0 0 0 rg BT 323.67 695.25 Td ( ST) Tj ET Q q 0 0 0 rg BT 338.22 695.25 Td (OCKHOLDERS’) Tj ET Q q 0 0 0 rg BT 412.49 695.25 Td ( EQUITY) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 110.30 677.25 Td (For the ) Tj ET Q q 0 0 0 rg BT 141.04 677.25 Td (Y) Tj ET Q q 0 0 0 rg BT 147.26 677.25 Td (ear Ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 190.01 677.25 Td (December 31, 2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 268.60 677.25 Td ( and the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 302.57 677.25 Td (Three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 325.89 677.25 Td ( Months Ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 389.49 677.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 453.09 677.25 Td ( \(unaudited\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 262.65 659.25 Td (\(dollars in thousands\)) Tj ET Q 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 597.75 172.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 222.00 597.75 65.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 287.00 597.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 291.00 597.75 65.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 356.00 597.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 360.00 597.75 65.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 425.00 597.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 429.00 597.75 65.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 494.00 597.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 498.00 597.75 65.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 569.75 172.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 222.00 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gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 287 617.75 m 291 617.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 291 617.75 m 356 617.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 222 597.75 m 287 597.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 291 597.75 m 356 597.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 360 597.75 m 425 597.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 429 597.75 m 494 597.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 498 597.75 m 563 597.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 222 597.75 m 287 597.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 291 597.75 m 356 597.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 360 597.75 m 425 597.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 429 597.75 m 494 597.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 222 541.75 m 287 541.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 291 541.75 m 356 541.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 360 541.75 m 425 541.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 429 541.75 m 494 541.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 498 541.75 m 563 541.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 222 471.75 m 287 471.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 291 471.75 m 356 471.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 360 471.75 m 425 471.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 429 471.75 m 494 471.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 222 471.75 m 287 471.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 222 458.75 m 287 458.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 222 456.75 m 287 456.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 291 471.75 m 356 471.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 291 458.75 m 356 458.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 291 456.75 m 356 456.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 360 471.75 m 425 471.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 360 458.75 m 425 458.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 360 456.75 m 425 456.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 429 471.75 m 494 471.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 429 458.75 m 494 458.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 429 456.75 m 494 456.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 498 471.75 m 563 471.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 498 458.75 m 563 458.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 498 456.75 m 563 456.75 l s BT /F1 7.00 Tf ET q 0 0 0 rg BT 52.50 621.80 Td ( ) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 265.45 621.81 Td (Common Stock) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 376.05 617.81 Td (Additional) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 381.10 609.81 Td (Paid-in) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 380.90 601.81 Td (Capital) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 443.50 630.81 Td (Cumulative) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 441.35 623.81 Td (Distributions) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 455.35 616.81 Td (and) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 443.75 609.81 Td (Net Income) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 451.85 601.81 Td (\(Loss\)) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 522.30 617.81 Td (T) Tj ET Q q 0 0 0 rg BT 526.33 617.81 Td (otal) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 509.60 609.81 Td (Stockholders’) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 519.85 601.81 Td (Equity) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 52.50 601.80 Td ( ) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 243.95 601.81 Td (Shares) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 309.35 601.81 Td (Amounts) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 52.50 587.80 Td (Balance, December 31, 2014) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 249.15 587.80 Td (187,845,515) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 293.50 587.80 Td ($) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 337.40 587.80 Td (1,879) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 362.50 587.80 Td ($) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 394.15 587.80 Td (1,662,483) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 431.50 587.80 Td ($) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 460.80 587.85 Td (\(1,061,589) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 491.15 587.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 500.50 587.80 Td ($) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 537.40 587.80 Td (602,773) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 52.50 573.80 Td (Net loss) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 277.15 573.80 Td (—) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 346.15 573.80 Td (—) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 415.15 573.80 Td (—) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 469.55 573.85 Td (\(11,387) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 491.15 573.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 538.55 573.85 Td (\(11,387) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 560.15 573.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 52.50 559.80 Td (Redemptions of common stock) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 253.80 559.80 Td (\(1,431,368) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 284.15 559.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 343.80 559.85 Td (\(15) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 353.15 559.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 404.05 559.85 Td (\(6,346) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 422.15 559.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 484.15 559.80 Td (—) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 542.05 559.85 Td (\(6,361) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 560.15 559.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 52.50 545.80 Td (Distributions declared) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 277.15 545.80 Td (—) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 346.15 545.80 Td (—) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 415.15 545.80 Td (—) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 469.55 545.85 Td (\(65,362) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 491.15 545.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 538.55 545.85 Td (\(65,362) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 560.15 545.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 52.50 531.80 Td (Balance, December 31, 2015) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 249.15 531.80 Td (186,414,147) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 293.50 531.80 Td ($) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 337.40 531.80 Td (1,864) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 362.50 531.80 Td ($) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 394.15 531.80 Td (1,656,137) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 431.50 531.80 Td ($) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 460.80 531.85 Td (\(1,138,338) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 491.15 531.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 500.50 531.80 Td ($) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 537.40 531.80 Td (519,663) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 52.50 517.80 Td (Net income) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 277.15 517.80 Td (—) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 346.15 517.80 Td (—) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 415.15 517.80 Td (—) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 471.90 517.80 Td (10,819) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 540.90 517.80 Td (10,819) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 52.50 503.80 Td (Redemptions of common stock) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 259.05 503.80 Td (\(316,619) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 284.15 503.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 347.30 503.85 Td (\(3) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 353.15 503.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 404.05 503.85 Td (\(1,244) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 422.15 503.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 484.15 503.80 Td (—) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 542.05 503.85 Td (\(1,247) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 560.15 503.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 52.50 489.80 Td (Transfers from redeemable common stock) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 277.15 489.80 Td (—) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 346.15 489.80 Td (—) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 406.40 489.80 Td (1,247) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 484.15 489.80 Td (—) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 544.40 489.80 Td (1,247) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 52.50 475.80 Td (Distributions declared) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 277.15 475.80 Td (—) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 346.15 475.80 Td (—) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 415.15 475.80 Td (—) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 473.05 475.85 Td (\(4,655) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 491.15 475.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 542.05 475.85 Td (\(4,655) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 560.15 475.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 52.50 461.80 Td (Balance, March 31, 2016) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 249.15 461.80 Td (186,097,528) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 293.50 461.80 Td ($) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 337.40 461.80 Td (1,861) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 362.50 461.80 Td ($) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 394.15 461.80 Td (1,656,140) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 431.50 461.80 Td ($) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 460.80 461.85 Td (\(1,132,174) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 491.15 461.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 500.50 461.80 Td ($) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 537.40 461.80 Td (525,827) Tj ET Q BT /F1 10.00 Tf ET BT /F3 10.00 Tf ET q 0 0 0 rg BT 159.90 440.25 Td (See accompanying condensed notes to consolidated financial statements.) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 49.50 418.65 Td ( ) Tj ET Q endstream endobj 13 0 obj <>] /Rotate 0 /Contents 14 0 R>> endobj 14 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 1. Financial Statements \(continued\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 303.50 24.60 Td (5) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 195.70 713.25 Td (KBS REAL) Tj ET Q q 0 0 0 rg BT 245.44 713.25 Td ( EST) Tj ET Q q 0 0 0 rg BT 266.10 713.25 Td (A) Tj ET Q q 0 0 0 rg BT 272.58 713.25 Td (TE INVESTMENT) Tj ET Q q 0 0 0 rg BT 355.48 713.25 Td ( ) Tj ET Q q 0 0 0 rg BT 357.79 713.25 Td (TRUST) Tj ET Q q 0 0 0 rg BT 390.40 713.25 Td (, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 416.23 713.25 Td ( ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 188.65 695.25 Td (CONSOLIDA) Tj ET Q q 0 0 0 rg BT 248.47 695.25 Td (TED ST) Tj ET Q q 0 0 0 rg BT 283.02 695.25 Td (A) Tj ET Q q 0 0 0 rg BT 289.50 695.25 Td (TEMENTS OF) Tj ET Q q 0 0 0 rg BT 354.42 695.25 Td ( CASH FLOWS) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 282.95 677.25 Td (\(unaudited\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 277.50 662.25 Td (\(in thousands\)) Tj ET Q 0.8 0.9333333333333333 1 rg /GS0 gs 50.50 621.75 368.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 418.50 621.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 488.50 621.75 4.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 492.50 621.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.50 597.75 368.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 418.50 597.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 488.50 597.75 4.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 492.50 597.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.50 573.75 368.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 418.50 573.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 488.50 573.75 4.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 492.50 573.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.50 549.75 368.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 418.50 549.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 488.50 549.75 4.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 492.50 549.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.50 525.75 368.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 418.50 525.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 488.50 525.75 4.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 492.50 525.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.50 501.75 368.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 418.50 501.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 488.50 501.75 4.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 492.50 501.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.50 477.75 368.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 418.50 477.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 488.50 477.75 4.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 492.50 477.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.50 453.75 368.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 418.50 453.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 488.50 453.75 4.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 492.50 453.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.50 429.75 368.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 418.50 429.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 488.50 429.75 4.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 492.50 429.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.50 405.75 368.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 418.50 405.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 488.50 405.75 4.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 492.50 405.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.50 381.75 368.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 418.50 381.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 488.50 381.75 4.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 492.50 381.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.50 357.75 368.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 418.50 357.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 488.50 357.75 4.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 492.50 357.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.50 333.75 368.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 418.50 333.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 488.50 333.75 4.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 492.50 333.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.50 309.75 368.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 418.50 309.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 488.50 309.75 4.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 492.50 309.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.50 285.75 368.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 418.50 285.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 488.50 285.75 4.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 492.50 285.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.50 261.75 368.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 418.50 261.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 488.50 261.75 4.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 492.50 261.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.50 237.75 368.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 418.50 237.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 488.50 237.75 4.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 492.50 237.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.50 213.75 368.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 418.50 213.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 488.50 213.75 4.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 492.50 213.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.50 189.75 368.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 418.50 189.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 488.50 189.75 4.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 492.50 189.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.50 165.75 368.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 418.50 165.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 488.50 165.75 4.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 492.50 165.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.50 141.75 368.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 418.50 141.75 70.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 488.50 141.75 4.00 -12.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 492.50 141.75 70.00 -12.00 re f /GS0 gs 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 418.5 633.75 m 488.5 633.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 488.5 633.75 m 492.5 633.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 633.75 m 562.5 633.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 418.5 633.75 m 488.5 633.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 418.5 621.75 m 488.5 621.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 633.75 m 562.5 633.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 621.75 m 562.5 621.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 418.5 345.75 m 488.5 345.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 345.75 m 562.5 345.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 418.5 333.75 m 488.5 333.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 333.75 m 562.5 333.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 418.5 261.75 m 488.5 261.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 261.75 m 562.5 261.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 418.5 249.75 m 488.5 249.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 261.75 m 562.5 261.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 249.75 m 562.5 249.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 418.5 189.75 m 488.5 189.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 189.75 m 562.5 189.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 418.5 177.75 m 488.5 177.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 177.75 m 562.5 177.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 418.5 177.75 m 488.5 177.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 177.75 m 562.5 177.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 418.5 153.75 m 488.5 153.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 153.75 m 562.5 153.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 418.5 142.75 m 488.5 142.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 418.5 140.75 m 488.5 140.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 142.75 m 562.5 142.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 140.75 m 562.5 140.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 418.5 118.75 m 488.5 118.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 418.5 116.75 m 488.5 116.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 118.75 m 562.5 118.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 492.5 116.75 m 562.5 116.75 l s BT /F1 7.00 Tf ET q 0 0 0 rg BT 53.00 637.80 Td ( ) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 442.00 637.81 Td (Three Months Ended March 31,) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 53.00 625.80 Td ( ) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 446.00 625.81 Td (2016) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 520.00 625.81 Td (2015) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 53.00 613.80 Td (Cash Flows from Operating Activities:) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 71.00 601.80 Td (Net income) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 421.00 601.80 Td ($) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 466.40 601.80 Td (10,819) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 495.00 601.80 Td ($) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 543.55 601.80 Td (8,589) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 71.00 589.80 Td (Adjustments to reconcile net income to net cash provided by operating activities:) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 101.00 577.80 Td (Depreciation and amortization) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 466.40 577.80 Td (10,998) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 540.05 577.80 Td (15,605) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 101.00 565.80 Td (Impairment charges on real estate) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 466.40 565.80 Td (10,864) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 552.30 565.80 Td (—) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 101.00 553.80 Td (Loss due to property damages) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 469.90 553.80 Td (1,030) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 551.30 553.70 Td (—) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 101.00 541.80 Td (Noncash interest income on real estate-related investments) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 472.80 541.85 Td (\(271) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 485.65 541.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 546.45 541.80 Td (\(240) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 559.30 541.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 101.00 529.80 Td (Deferred rent) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 478.65 529.80 Td (68) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 546.45 529.80 Td (\(495) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 559.30 529.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 101.00 517.80 Td (Bad debt expense) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 478.65 517.80 Td (—) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 548.80 517.80 Td (334) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 101.00 505.80 Td (Amortization of deferred financing costs) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 478.65 505.80 Td (88) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 548.80 505.80 Td (476) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 101.00 493.80 Td (Amortization of above- and below-market leases, net) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 467.55 493.85 Td (\(1,312) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 485.65 493.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 541.20 493.80 Td (\(1,790) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 559.30 493.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 101.00 481.80 Td (Gain on sales of foreclosed real estate held for sale) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 478.65 481.80 Td (—) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 541.20 481.80 Td (\(2,509) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 559.30 481.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 101.00 469.80 Td (Gain on sales of real estate, net) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 464.05 469.85 Td (\(23,586) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 485.65 469.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 537.70 469.80 Td (\(14,191) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 559.30 469.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 101.00 457.80 Td (Loss on extinguishment of debt) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 482.15 457.80 Td (3) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 552.30 457.80 Td (—) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 101.00 445.80 Td (Amortization of discounts and premiums on notes payable, net) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 475.15 445.80 Td (188) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 548.80 445.80 Td (511) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 89.00 433.80 Td (Changes in operating assets and liabilities:) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 101.00 421.80 Td (Restricted cash for operational expenditures) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 469.90 421.80 Td (1,775) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 543.55 421.80 Td (2,949) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 101.00 409.80 Td (Rents and other receivables) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 475.15 409.80 Td (634) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 541.20 409.80 Td (\(1,880) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 559.30 409.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 101.00 397.80 Td (Prepaid expenses and other assets) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 467.55 397.85 Td (\(6,350) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 485.65 397.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 541.20 397.80 Td (\(3,615) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 559.30 397.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 101.00 385.80 Td (Accounts payable and accrued liabilities) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 469.90 385.80 Td (1,129) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 543.55 385.80 Td (3,894) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 101.00 373.80 Td (Due from affiliate) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 472.80 373.85 Td (\(112) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 485.65 373.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 552.30 373.80 Td (—) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 101.00 361.80 Td (Due to affiliates) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 476.30 361.85 Td (\(22) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 485.65 361.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 548.80 361.80 Td (651) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 101.00 349.80 Td (Other liabilities) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 467.55 349.85 Td (\(1,290) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 485.65 349.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 541.20 349.80 Td (\(1,480) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 559.30 349.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 119.00 337.80 Td (Net cash provided by operating activities) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 469.90 337.80 Td (4,653) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 543.55 337.80 Td (6,809) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 53.00 325.80 Td (Cash Flows from Investing Activities:) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 71.00 313.80 Td (Improvements to real estate) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 467.55 313.85 Td (\(8,344) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 485.65 313.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 537.70 313.80 Td (\(11,903) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 559.30 313.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 71.00 301.80 Td (Proceeds from sales of real estate, net) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 466.40 301.80 Td (39,882) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 540.05 301.80 Td (99,915) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 71.00 289.80 Td (Proceeds from sales of foreclosed real estate held for sale) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 478.65 289.80 Td (—) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 540.05 289.80 Td (14,155) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 71.00 277.80 Td (Principal repayments on real estate loans receivable) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 478.65 277.80 Td (35) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 552.30 277.80 Td (27) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 71.00 265.80 Td (Net change in restricted cash for capital expenditures) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 472.80 265.85 Td (\(122) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 485.65 265.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 543.55 265.80 Td (4,111) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 119.00 253.80 Td (Net cash provided by investing activities) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 466.40 253.80 Td (31,451) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 536.55 253.80 Td (106,305) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 53.00 241.80 Td (Cash Flows from Financing Activities:) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 71.00 229.80 Td (Principal payments on notes payable) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 467.55 229.85 Td (\(1,040) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 485.65 229.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 537.70 229.80 Td (\(19,263) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 559.30 229.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 71.00 217.80 Td (Net change in restricted cash for debt service obligations) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 472.80 217.85 Td (\(375) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 485.65 217.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 548.80 217.80 Td (276) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 71.00 205.80 Td (Payments to redeem common stock) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 467.55 205.85 Td (\(1,247) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 485.65 205.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 541.20 205.80 Td (\(1,558) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 559.30 205.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 71.00 193.80 Td (Distributions paid to common stockholders) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 467.55 193.85 Td (\(4,655) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 485.65 193.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 541.20 193.80 Td (\(9,389) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 559.30 193.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 119.00 181.80 Td (Net cash used in financing activities) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 467.55 181.85 Td (\(7,317) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 485.65 181.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 537.70 181.80 Td (\(29,934) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 559.30 181.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 53.00 169.80 Td (Net increase in cash and cash equivalents) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 466.40 169.80 Td (28,787) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 540.05 169.80 Td (83,180) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 53.00 157.80 Td (Cash and cash equivalents, beginning of period) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 466.40 157.80 Td (46,605) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 540.05 157.80 Td (58,675) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 53.00 145.80 Td (Cash and cash equivalents, end of period) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 421.00 145.80 Td ($) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 466.40 145.80 Td (75,392) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 495.00 145.80 Td ($) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 536.55 145.80 Td (141,855) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 53.00 133.80 Td (Supplemental Disclosure of Cash Flow Information:) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 71.00 121.80 Td (Interest paid) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 421.00 121.80 Td ($) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 469.90 121.80 Td (4,443) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 495.00 121.80 Td ($) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 543.55 121.80 Td (7,086) Tj ET Q BT /F1 10.00 Tf ET BT /F3 10.00 Tf ET q 0 0 0 rg BT 159.90 100.25 Td (See accompanying condensed notes to consolidated financial statements.) Tj ET Q endstream endobj 15 0 obj <>] /Rotate 0 /Contents 16 0 R>> endobj 16 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 1. Financial Statements \(continued\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 195.70 712.60 Td (KBS REAL) Tj ET Q q 0 0 0 rg BT 245.44 712.60 Td ( EST) Tj ET Q q 0 0 0 rg BT 266.10 712.60 Td (A) Tj ET Q q 0 0 0 rg BT 272.58 712.60 Td (TE INVESTMENT) Tj ET Q q 0 0 0 rg BT 355.48 712.60 Td ( ) Tj ET Q q 0 0 0 rg BT 357.79 712.60 Td (TRUST) Tj ET Q q 0 0 0 rg BT 390.40 712.60 Td (, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 142.65 694.60 Td (CONDENSED NOTES ) Tj ET Q q 0 0 0 rg BT 244.16 694.60 Td (T) Tj ET Q q 0 0 0 rg BT 250.65 694.60 Td (O CONSOLIDA) Tj ET Q q 0 0 0 rg BT 320.75 694.60 Td (TED FINANCIAL) Tj ET Q q 0 0 0 rg BT 399.93 694.60 Td ( ST) Tj ET Q q 0 0 0 rg BT 413.92 694.60 Td (A) Tj ET Q q 0 0 0 rg BT 420.40 694.60 Td (TEMENTS) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 274.20 676.60 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 282.95 661.60 Td (\(unaudited\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 303.50 33.60 Td (6) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 629.10 Td (1. ) Tj ET Q q 0 0 0 rg BT 72.00 629.10 Td (ORGANIZA) Tj ET Q q 0 0 0 rg BT 126.26 629.10 Td (TION) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 611.10 Td (KBS Real Estate Investment ) Tj ET Q q 0 0 0 rg BT 189.96 611.10 Td (T) Tj ET Q q 0 0 0 rg BT 195.72 611.10 Td (rust, Inc. \(the “Company”\) was formed on June 13, 2005 as a Maryland corporation and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 599.10 Td (has elected to be taxed as a real estate investment trust \(“REIT”\). Substantially all of the Company’) Tj ET Q q 0 0 0 rg BT 449.37 599.10 Td (s assets are held by) Tj ET Q q 0 0 0 rg BT 525.37 599.10 Td (, and the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 587.10 Td (Company conducts substantially all of its operations through, KBS Limited Partnership, a Delaware limited partnership ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 575.10 Td (\(the “Operating Partnership”\), and its subsidiaries. ) Tj ET Q q 0 0 0 rg BT 256.21 575.10 Td (The Company is the sole general partner of and directly owns a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 512.24 575.10 Td (99%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 530.57 575.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 563.10 Td (partnership interest in the Operating Partnership. ) Tj ET Q q 0 0 0 rg BT 249.27 563.10 Td (The Company’) Tj ET Q q 0 0 0 rg BT 308.98 563.10 Td (s wholly owned subsidiary) Tj ET Q q 0 0 0 rg BT 415.27 563.10 Td (, KBS REIT) Tj ET Q q 0 0 0 rg BT 464.26 563.10 Td ( Holdings LLC, a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 551.10 Td (Delaware limited liability company \(“KBS REIT) Tj ET Q q 0 0 0 rg BT 245.66 551.10 Td ( Holdings”\), owns the remaining ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 378.97 551.10 Td (1%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 392.30 551.10 Td ( partnership interest in the Operating ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 539.10 Td (Partnership and is its sole limited partner) Tj ET Q q 0 0 0 rg BT 212.81 539.10 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 521.10 Td (The Company invested in a diverse portfolio of real estate and real estate-related investments. ) Tj ET Q q 0 0 0 rg BT 453.37 521.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 477.81 521.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.41 521.10 Td (, the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 509.10 Td (Company owned or) Tj ET Q q 0 0 0 rg BT 127.98 509.10 Td (, with respect to a limited number of properties, held a leasehold interest in, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 432.61 509.10 Td (350) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 447.61 509.10 Td ( real estate properties \(of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 497.10 Td (which ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 76.44 497.10 Td (77) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 86.44 497.10 Td ( properties were held for sale, all of which were GKK Properties\), including the GKK Properties \(defined below\). In ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 485.10 Td (addition, as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 108.93 485.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 172.53 485.10 Td (, the Company owned ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 262.80 485.10 Td (four) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 279.46 485.10 Td ( real estate loans receivable and a participation interest with respect to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 473.10 Td (a real estate joint venture.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 455.10 Td (On September 1, 201) Tj ET Q q 0 0 0 rg BT 158.11 455.10 Td (1, the Company) Tj ET Q q 0 0 0 rg BT 221.07 455.10 Td (, through indirect wholly owned subsidiaries \(collectively) Tj ET Q q 0 0 0 rg BT 451.20 455.10 Td (, “KBS”\), entered into a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 443.10 Td (Collateral ) Tj ET Q q 0 0 0 rg BT 91.25 443.10 Td (T) Tj ET Q q 0 0 0 rg BT 97.00 443.10 Td (ransfer and Settlement ) Tj ET Q q 0 0 0 rg BT 188.92 443.10 Td (Agreement \(the “Settlement ) Tj ET Q q 0 0 0 rg BT 303.04 443.10 Td (Agreement”\) with, among other parties, GKK Stars ) Tj ET Q q 0 0 0 rg BT 511.05 443.10 Td (Acquisition ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 431.10 Td (LLC \(“GKK Stars”\), the wholly owned subsidiary of Gramercy Property ) Tj ET Q q 0 0 0 rg BT 343.42 431.10 Td (T) Tj ET Q q 0 0 0 rg BT 349.17 431.10 Td (rust, Inc. \(“Gramercy”\) that indirectly owned the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 419.10 Td (Gramercy real estate portfolio, to ef) Tj ET Q q 0 0 0 rg BT 192.59 419.10 Td (fect the orderly transfer of certain assets and liabilities of the Gramercy real estate portfolio ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 407.10 Td (to KBS in satisfaction of certain debt obligations under a mezzanine loan owed by wholly owned subsidiaries of Gramercy to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 395.10 Td (KBS \(the “GKK Mezzanine Loan”\). ) Tj ET Q q 0 0 0 rg BT 200.10 395.10 Td (The Settlement ) Tj ET Q q 0 0 0 rg BT 262.86 395.10 Td (Agreement resulted in the transfer of the equity interests in certain ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 383.10 Td (subsidiaries of Gramercy \(the “Equity Interests”\) that indirectly owned or) Tj ET Q q 0 0 0 rg BT 343.72 383.10 Td (, with respect to a limited number of properties, held a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 371.10 Td (leasehold interest in, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 134.48 371.10 Td (867) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 149.48 371.10 Td ( properties \(the “GKK Properties”\), consisting of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 348.31 371.10 Td (576) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 363.31 371.10 Td ( bank branch properties and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 476.88 371.10 Td (291) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 491.88 371.10 Td ( of) Tj ET Q q 0 0 0 rg BT 502.53 371.10 Td (fice buildings, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 359.10 Td (operations centers and other properties. ) Tj ET Q q 0 0 0 rg BT 211.39 359.10 Td (As of December 15, 201) Tj ET Q q 0 0 0 rg BT 309.05 359.10 Td (1, GKK Stars had transferred all of the Equity Interests to the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 347.10 Td (Company) Tj ET Q q 0 0 0 rg BT 87.74 347.10 Td (, giving the Company title to or) Tj ET Q q 0 0 0 rg BT 213.16 347.10 Td (, with respect to a limited number of GKK Properties, a leasehold interest in, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.80 347.10 Td (867) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.80 347.10 Td ( GKK ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 335.10 Td (Properties as of that date. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 317.10 Td (Subject to certain restrictions and limitations, the business of the Company is managed by KBS Capital ) Tj ET Q q 0 0 0 rg BT 488.71 317.10 Td (Advisors LLC ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 305.10 Td (\(the “Advisor”\), an af) Tj ET Q q 0 0 0 rg BT 136.50 305.10 Td (filiate of the Company) Tj ET Q q 0 0 0 rg BT 226.11 305.10 Td (, pursuant to an advisory agreement with the Company \(the “Advisory ) Tj ET Q q 0 0 0 rg BT 509.38 305.10 Td (Agreement”\) ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 293.10 Td (in ef) Tj ET Q q 0 0 0 rg BT 67.37 293.10 Td (fect through November 8, 2016. ) Tj ET Q q 0 0 0 rg BT 200.49 293.10 Td (The ) Tj ET Q q 0 0 0 rg BT 217.98 293.10 Td (Advisory ) Tj ET Q q 0 0 0 rg BT 257.15 293.10 Td (Agreement may be renewed for an unlimited number of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 482.90 293.10 Td (one) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 497.34 293.10 Td (-year periods ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 281.10 Td (upon the mutual consent of the ) Tj ET Q q 0 0 0 rg BT 175.03 281.10 Td (Advisor and the Company) Tj ET Q q 0 0 0 rg BT 279.65 281.10 Td (. Either party may terminate the ) Tj ET Q q 0 0 0 rg BT 411.27 281.10 Td (Advisory ) Tj ET Q q 0 0 0 rg BT 450.44 281.10 Td (Agreement upon ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 519.86 281.10 Td (60) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 529.86 281.10 Td ( days ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 269.10 Td (written notice. ) Tj ET Q q 0 0 0 rg BT 112.08 269.10 Td (The ) Tj ET Q q 0 0 0 rg BT 129.57 269.10 Td (Advisor owns ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 187.91 269.10 Td (20,000) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 215.41 269.10 Td ( shares of the Company’) Tj ET Q q 0 0 0 rg BT 312.61 269.10 Td (s common stock.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 251.10 Td (Upon commencing its initial public of) Tj ET Q q 0 0 0 rg BT 225.79 251.10 Td (fering \(the “Of) Tj ET Q q 0 0 0 rg BT 285.03 251.10 Td (fering”\), the Company retained KBS Capital Markets Group LLC ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 239.10 Td (\(the “Dealer Manager”\), an af) Tj ET Q q 0 0 0 rg BT 168.96 239.10 Td (filiate of the ) Tj ET Q q 0 0 0 rg BT 219.78 239.10 Td (Advisor) Tj ET Q q 0 0 0 rg BT 251.60 239.10 Td (, to serve as the dealer manager of the Of) Tj ET Q q 0 0 0 rg BT 415.79 239.10 Td (fering pursuant to a dealer manager ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 227.10 Td (agreement dated January 27, 2006 \(the “Dealer Manager ) Tj ET Q q 0 0 0 rg BT 278.01 227.10 Td (Agreement”\). ) Tj ET Q q 0 0 0 rg BT 337.52 227.10 Td (The Company ceased of) Tj ET Q q 0 0 0 rg BT 434.25 227.10 Td (fering shares of common stock ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 215.10 Td (in its primary of) Tj ET Q q 0 0 0 rg BT 114.03 215.10 Td (fering on May 30, 2008. ) Tj ET Q q 0 0 0 rg BT 216.06 215.10 Td (The Company terminated its dividend reinvestment plan ef) Tj ET Q q 0 0 0 rg BT 451.65 215.10 Td (fective ) Tj ET Q q 0 0 0 rg BT 480.80 215.10 Td (April 10, 2012.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 197.10 Td (The Company sold ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 152.10 197.10 Td (171,109,494) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 202.10 197.10 Td ( shares of common stock in its primary of) Tj ET Q q 0 0 0 rg BT 368.56 197.10 Td (fering for gross of) Tj ET Q q 0 0 0 rg BT 440.86 197.10 Td (fering proceeds of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 516.10 197.10 Td ($1.7 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 185.10 Td (billion) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.61 185.10 Td (. ) Tj ET Q q 0 0 0 rg BT 82.93 185.10 Td (The Company sold ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 161.54 185.10 Td (28,306,086) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 206.54 185.10 Td ( shares of common stock under its dividend reinvestment plan for gross of) Tj ET Q q 0 0 0 rg BT 502.96 185.10 Td (fering ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 173.10 Td (proceeds of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 98.37 173.10 Td ($233.7 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 157.26 173.10 Td (. ) Tj ET Q q 0 0 0 rg BT 164.21 173.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 188.65 173.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 252.25 173.10 Td (, the Company had redeemed ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 371.65 173.10 Td (13,338,052) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.65 173.10 Td ( of the shares sold in the Of) Tj ET Q q 0 0 0 rg BT 526.73 173.10 Td (fering ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 161.10 Td (for ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 63.66 161.10 Td ($93.0 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 117.55 161.10 Td (.) Tj ET Q endstream endobj 17 0 obj <>] /Rotate 0 /Contents 18 0 R>> endobj 18 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 1. Financial Statements \(continued\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 195.70 712.60 Td (KBS REAL) Tj ET Q q 0 0 0 rg BT 245.44 712.60 Td ( EST) Tj ET Q q 0 0 0 rg BT 266.10 712.60 Td (A) Tj ET Q q 0 0 0 rg BT 272.58 712.60 Td (TE INVESTMENT) Tj ET Q q 0 0 0 rg BT 355.48 712.60 Td ( ) Tj ET Q q 0 0 0 rg BT 357.79 712.60 Td (TRUST) Tj ET Q q 0 0 0 rg BT 390.40 712.60 Td (, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 107.50 694.60 Td (CONDENSED NOTES ) Tj ET Q q 0 0 0 rg BT 209.01 694.60 Td (T) Tj ET Q q 0 0 0 rg BT 215.50 694.60 Td (O CONSOLIDA) Tj ET Q q 0 0 0 rg BT 285.60 694.60 Td (TED FINANCIAL) Tj ET Q q 0 0 0 rg BT 364.78 694.60 Td ( ST) Tj ET Q q 0 0 0 rg BT 378.77 694.60 Td (A) Tj ET Q q 0 0 0 rg BT 385.25 694.60 Td (TEMENTS \(CONTINUED\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 274.20 676.60 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 282.95 661.60 Td (\(unaudited\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 303.50 33.60 Td (7) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 632.25 Td (Asset Management Services ) Tj ET Q q 0 0 0 rg BT 170.31 632.25 Td (Agr) Tj ET Q q 0 0 0 rg BT 186.79 632.25 Td (eement Related to the GKK Pr) Tj ET Q q 0 0 0 rg BT 317.95 632.25 Td (operties) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 614.25 Td (On December 19, 2013, the Company) Tj ET Q q 0 0 0 rg BT 224.76 614.25 Td (, through an indirect wholly owned subsidiary \(“KBS ) Tj ET Q q 0 0 0 rg BT 440.57 614.25 Td (Acquisition Sub”\), entered ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 602.25 Td (into an amended and restated asset management services agreement \(the “Amended Services ) Tj ET Q q 0 0 0 rg BT 422.68 602.25 Td (Agreement”\) with GKK Realty ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 590.25 Td (Advisors LLC \(the “Property Manager”\), an af) Tj ET Q q 0 0 0 rg BT 236.76 590.25 Td (filiate of Gramercy) Tj ET Q q 0 0 0 rg BT 312.73 590.25 Td (, with respect to the GKK Properties. ) Tj ET Q q 0 0 0 rg BT 465.85 590.25 Td (The ef) Tj ET Q q 0 0 0 rg BT 491.49 590.25 Td (fective date of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 578.25 Td (the ) Tj ET Q q 0 0 0 rg BT 63.67 578.25 Td (Amended Services ) Tj ET Q q 0 0 0 rg BT 140.87 578.25 Td (Agreement was December 1, 2013. Pursuant to the ) Tj ET Q q 0 0 0 rg BT 348.87 578.25 Td (Amended Services ) Tj ET Q q 0 0 0 rg BT 426.07 578.25 Td (Agreement, the Property ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 566.25 Td (Manager agreed to provide, among other services: standard asset management services, assistance related to dispositions, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 554.25 Td (accounting services and budgeting and business plans for the GKK Properties \(the “Services”\). ) Tj ET Q q 0 0 0 rg BT 434.49 554.25 Td (The Property Manager is not ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 542.25 Td (af) Tj ET Q q 0 0 0 rg BT 57.09 542.25 Td (filiated with the Company or KBS ) Tj ET Q q 0 0 0 rg BT 196.52 542.25 Td (Acquisition Sub. ) Tj ET Q q 0 0 0 rg BT 268.20 542.25 Td (As compensation for the Services, the Company agreed to pay the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 530.25 Td (Property Manager: \(i\) an annual fee of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 205.82 530.25 Td ($7.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 254.71 530.25 Td ( plus all GKK Property-related expenses incurred by the Property Manager) Tj ET Q q 0 0 0 rg BT 554.22 530.25 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 518.25 Td (\(ii\) subject to certain terms and conditions in the ) Tj ET Q q 0 0 0 rg BT 245.29 518.25 Td (Amended Services ) Tj ET Q q 0 0 0 rg BT 322.49 518.25 Td (Agreement, a profit participation interest based on a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 506.25 Td (percentage \(ranging from ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 153.62 506.25 Td (10%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 171.95 506.25 Td ( to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 184.72 506.25 Td (30%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 203.05 506.25 Td (\) of the amount by which the gross fair market value or gross sales price of certain ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 494.25 Td (identified portfolios of GKK Properties exceeds the sum of \(a\) an agreed-upon baseline value for such GKK Property portfolios ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 482.25 Td (plus \(b\) new capital expended to increase the value of GKK Properties within the portfolios and expenditures made to pay for ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 470.25 Td (tenant improvements and leasing commissions related to these GKK Properties as of the measurement date, and \(iii\) a monthly ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 458.25 Td (construction oversight fee equal to a percentage of construction costs for certain construction projects at the GKK Properties ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 446.25 Td (overseen by the Property Manager) Tj ET Q q 0 0 0 rg BT 186.68 446.25 Td (. ) Tj ET Q q 0 0 0 rg BT 193.63 446.25 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 218.07 446.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 281.67 446.25 Td (, the Company accrued ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 376.36 446.25 Td ($21.4 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 430.25 446.25 Td ( of estimated profit participation ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 434.25 Td (interest related to the GKK Properties under the ) Tj ET Q q 0 0 0 rg BT 242.78 434.25 Td (Amended Services ) Tj ET Q q 0 0 0 rg BT 319.98 434.25 Td (Agreement.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 416.25 Td (The ) Tj ET Q q 0 0 0 rg BT 91.00 416.25 Td (Amended Services ) Tj ET Q q 0 0 0 rg BT 168.20 416.25 Td (Agreement will terminate on December 31, 2016, with a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 396.74 416.25 Td (one) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 411.18 416.25 Td (-year extension option at the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 404.25 Td (Company’) Tj ET Q q 0 0 0 rg BT 91.17 404.25 Td (s option, subject to certain terms and conditions contained in the ) Tj ET Q q 0 0 0 rg BT 350.55 404.25 Td (Amended Services ) Tj ET Q q 0 0 0 rg BT 427.76 404.25 Td (Agreement. ) Tj ET Q q 0 0 0 rg BT 479.50 404.25 Td (The ) Tj ET Q q 0 0 0 rg BT 497.00 404.25 Td (Amended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 392.25 Td (Services ) Tj ET Q q 0 0 0 rg BT 85.33 392.25 Td (Agreement supersedes and replaces all prior agreements related to the Services among the Company and its af) Tj ET Q q 0 0 0 rg BT 526.10 392.25 Td (filiates ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 380.25 Td (and the Property Manager and its af) Tj ET Q q 0 0 0 rg BT 192.61 380.25 Td (filiates.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 356.25 Td (2. ) Tj ET Q q 0 0 0 rg BT 72.00 356.25 Td (SUMMAR) Tj ET Q q 0 0 0 rg BT 117.75 356.25 Td (Y) Tj ET Q q 0 0 0 rg BT 124.60 356.25 Td ( OF) Tj ET Q q 0 0 0 rg BT 140.62 356.25 Td ( SIGNIFICANT) Tj ET Q q 0 0 0 rg BT 209.62 356.25 Td ( ) Tj ET Q q 0 0 0 rg BT 211.57 356.25 Td (ACCOUNTING POLICIES) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 338.25 Td (There have been no significant changes to the Company’) Tj ET Q q 0 0 0 rg BT 300.65 338.25 Td (s accounting policies since it filed its audited financial ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 326.25 Td (statements in its ) Tj ET Q q 0 0 0 rg BT 115.89 326.25 Td (Annual Report on Form 10-K for the year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.22 326.25 Td (December 31, 2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 390.81 326.25 Td (. For further information about the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 314.25 Td (Company’) Tj ET Q q 0 0 0 rg BT 91.17 314.25 Td (s accounting policies, refer to the Company’) Tj ET Q q 0 0 0 rg BT 268.06 314.25 Td (s consolidated financial statements and notes thereto for the year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 302.25 Td (December 31, 2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 128.08 302.25 Td ( included in the Company’) Tj ET Q q 0 0 0 rg BT 234.18 302.25 Td (s ) Tj ET Q q 0 0 0 rg BT 240.02 302.25 Td (Annual Report on Form 10-K filed with the Securities and Exchange ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 290.25 Td (Commission \(“SEC”\).) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 272.25 Td (Principles of Consolidation and Basis of Pr) Tj ET Q q 0 0 0 rg BT 232.12 272.25 Td (esentation) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 254.25 Td (The accompanying unaudited consolidated financial statements and condensed notes thereto have been prepared in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 242.25 Td (accordance with U.S. generally accepted accounting principles \(“GAAP”\) for interim financial information as contained within ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 230.25 Td (the Financial ) Tj ET Q q 0 0 0 rg BT 103.38 230.25 Td (Accounting Standards Board \(“F) Tj ET Q q 0 0 0 rg BT 234.00 230.25 Td (ASB”\) ) Tj ET Q q 0 0 0 rg BT 263.17 230.25 Td (Accounting Standards Codification \(“ASC”\) and the rules and regulations ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 218.25 Td (of the SEC, including the instructions to Form 10-Q and ) Tj ET Q q 0 0 0 rg BT 276.43 218.25 Td (Article 10 of Regulation S-X. ) Tj ET Q q 0 0 0 rg BT 399.47 218.25 Td (Accordingly) Tj ET Q q 0 0 0 rg BT 448.80 218.25 Td (, the unaudited consolidated ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 206.25 Td (financial statements do not include all of the information and footnotes required by GAAP) Tj ET Q q 0 0 0 rg BT 410.98 206.25 Td ( for audited financial statements. In ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 194.25 Td (the opinion of management, the financial statements for the unaudited interim periods presented include all adjustments, which ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 182.25 Td (are of a normal and recurring nature, necessary for a fair and consistent presentation of the results for such periods. Operating ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 170.25 Td (results for the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 106.99 170.25 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 126.97 170.25 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 187.80 170.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 251.39 170.25 Td ( are not necessarily indicative of the results that may be expected for the year ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 158.25 Td (ending ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 79.22 158.25 Td (December 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 157.80 158.25 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 140.25 Td (The unaudited consolidated financial statements include the accounts of the Company) Tj ET Q q 0 0 0 rg BT 416.63 140.25 Td (, KBS REIT) Tj ET Q q 0 0 0 rg BT 465.62 140.25 Td ( Holdings, the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 128.25 Td (Operating Partnership and their direct and indirect wholly owned subsidiaries. ) Tj ET Q q 0 0 0 rg BT 366.64 128.25 Td (All significant intercompany balances and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 116.25 Td (transactions are eliminated in consolidation.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 98.25 Td (Use of Estimates) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 80.25 Td (The preparation of the unaudited consolidated financial statements and condensed notes thereto in conformity with GAAP) Tj ET Q q 0 0 0 rg BT 562.16 80.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 68.25 Td (requires management to make estimates and assumptions that af) Tj ET Q q 0 0 0 rg BT 305.91 68.25 Td (fect the amounts reported in the unaudited consolidated ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 56.25 Td (financial statements and condensed notes. ) Tj ET Q q 0 0 0 rg BT 221.39 56.25 Td (Actual results could materially dif) Tj ET Q q 0 0 0 rg BT 357.84 56.25 Td (fer from those estimates.) Tj ET Q endstream endobj 19 0 obj <>] /Rotate 0 /Contents 20 0 R>> endobj 20 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 1. Financial Statements \(continued\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 195.70 712.60 Td (KBS REAL) Tj ET Q q 0 0 0 rg BT 245.44 712.60 Td ( EST) Tj ET Q q 0 0 0 rg BT 266.10 712.60 Td (A) Tj ET Q q 0 0 0 rg BT 272.58 712.60 Td (TE INVESTMENT) Tj ET Q q 0 0 0 rg BT 355.48 712.60 Td ( ) Tj ET Q q 0 0 0 rg BT 357.79 712.60 Td (TRUST) Tj ET Q q 0 0 0 rg BT 390.40 712.60 Td (, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 107.50 694.60 Td (CONDENSED NOTES ) Tj ET Q q 0 0 0 rg BT 209.01 694.60 Td (T) Tj ET Q q 0 0 0 rg BT 215.50 694.60 Td (O CONSOLIDA) Tj ET Q q 0 0 0 rg BT 285.60 694.60 Td (TED FINANCIAL) Tj ET Q q 0 0 0 rg BT 364.78 694.60 Td ( ST) Tj ET Q q 0 0 0 rg BT 378.77 694.60 Td (A) Tj ET Q q 0 0 0 rg BT 385.25 694.60 Td (TEMENTS \(CONTINUED\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 274.20 676.60 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 282.95 661.60 Td (\(unaudited\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 303.50 33.60 Td (8) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 632.25 Td (Reclassifications) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 614.25 Td (Certain amounts in the Company’) Tj ET Q q 0 0 0 rg BT 208.48 614.25 Td (s prior period consolidated financial statements have been reclassified to conform to the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 602.25 Td (current period presentation. ) Tj ET Q q 0 0 0 rg BT 164.55 602.25 Td (These reclassifications have not changed the results of operations of prior periods. During the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.38 602.25 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 561.37 602.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 590.25 Td (months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 107.83 590.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 171.42 590.25 Td (, the Company sold ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 251.70 590.25 Td (14) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 261.70 590.25 Td ( properties \(all of which were GKK Properties\). ) Tj ET Q q 0 0 0 rg BT 457.20 590.25 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 481.64 590.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 545.24 590.25 Td (, the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 578.25 Td (Company had classified ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 148.09 578.25 Td (77) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 158.09 578.25 Td ( properties as held for sale, all of which were GKK Properties. ) Tj ET Q q 0 0 0 rg BT 412.18 578.25 Td (As a result, certain assets and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 566.25 Td (liabilities were reclassified to held for sale on the consolidated balance sheets for all periods presented. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 548.25 Td (Per) Tj ET Q q 0 0 0 rg BT 64.30 548.25 Td ( Shar) Tj ET Q q 0 0 0 rg BT 87.19 548.25 Td (e Data) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 530.25 Td (Basic net income \(loss\) per share of common stock is calculated by dividing net income \(loss\) by the weighted-average ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 518.25 Td (number of shares of common stock issued and outstanding during such period. Diluted net income \(loss\) per share of common ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 506.25 Td (stock equals basic net income \(loss\) per share of common stock, as there were no potentially dilutive securities outstanding ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 494.25 Td (during the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 92.83 494.25 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.81 494.25 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 173.64 494.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 237.23 494.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 256.67 494.25 Td (2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 276.67 494.25 Td (, respectively) Tj ET Q q 0 0 0 rg BT 329.33 494.25 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 476.25 Td (Distributions declared per share of common stock were ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 297.32 476.25 Td ($0.025) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 324.82 476.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 344.26 476.25 Td ($0.025) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 371.76 476.25 Td ( for the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 403.13 476.25 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 423.12 476.25 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 483.94 476.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 547.54 476.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 464.25 Td (and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 66.44 464.25 Td (2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 86.44 464.25 Td (, respectively) Tj ET Q q 0 0 0 rg BT 139.10 464.25 Td (. Distributions per share of common stock were based on a quarterly record date for each quarter ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 452.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 113.10 452.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 132.54 452.25 Td (2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 152.54 452.25 Td (, respectively) Tj ET Q q 0 0 0 rg BT 205.20 452.25 Td (. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 434.25 Td (Segments) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 416.25 Td (The Company’) Tj ET Q q 0 0 0 rg BT 133.21 416.25 Td (s segments are based on the Company’) Tj ET Q q 0 0 0 rg BT 288.18 416.25 Td (s method of internal reporting, which classifies its operations by ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 404.25 Td (investment type: \(i\) real estate, \(ii\) real estate-related and \(iii\) commercial properties primarily leased to financial institutions ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 392.25 Td (received under the Settlement ) Tj ET Q q 0 0 0 rg BT 170.56 392.25 Td (Agreement, the GKK Properties. For financial data by segment, see Note 10, “Segment ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 380.25 Td (Information.”) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 362.25 Td (Recently Issued ) Tj ET Q q 0 0 0 rg BT 118.39 362.25 Td (Accounting Standards Update) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 344.25 Td (In May 2014, the F) Tj ET Q q 0 0 0 rg BT 148.20 344.25 Td (ASB issued ) Tj ET Q q 0 0 0 rg BT 197.10 344.25 Td (ASU No. 2014-09, ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 275.15 344.25 Td (Revenue fr) Tj ET Q q 0 0 0 rg BT 317.82 344.25 Td (om Contracts with Customers \(T) Tj ET Q q 0 0 0 rg BT 447.47 344.25 Td (opic 606\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 485.52 344.25 Td ( \(“ASU No. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 332.25 Td (2014-09”\). ) Tj ET Q q 0 0 0 rg BT 97.55 332.25 Td (ASU No. 2014-09 requires an entity to recognize the revenue to depict the transfer of promised goods or services to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 320.25 Td (customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 308.25 Td (services. ) Tj ET Q q 0 0 0 rg BT 88.66 308.25 Td (ASU No. 2014-09 supersedes the revenue requirements in ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 323.88 308.25 Td (Revenue Recognition \(T) Tj ET Q q 0 0 0 rg BT 419.03 308.25 Td (opic 605\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 457.08 308.25 Td ( and most industry-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 296.25 Td (specific guidance throughout the Industry ) Tj ET Q q 0 0 0 rg BT 218.44 296.25 Td (T) Tj ET Q q 0 0 0 rg BT 223.85 296.25 Td (opics of the Codification. ) Tj ET Q q 0 0 0 rg BT 329.94 296.25 Td (ASU No. 2014-09 does not apply to lease contracts ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 284.25 Td (within the scope of) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 125.87 284.25 Td ( Leases \(T) Tj ET Q q 0 0 0 rg BT 166.07 284.25 Td (opic 840\). ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 211.61 284.25 Td (ASU No. 2014-09 was to be ef) Tj ET Q q 0 0 0 rg BT 335.03 284.25 Td (fective for fiscal years, and interim periods within those ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 272.25 Td (years, beginning after December 15, 2016, and is to be applied retrospectively) Tj ET Q q 0 0 0 rg BT 361.52 272.25 Td (, with early application not permitted. In ) Tj ET Q q 0 0 0 rg BT 527.59 272.25 Td (August ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 260.25 Td (2015, the F) Tj ET Q q 0 0 0 rg BT 94.04 260.25 Td (ASB issued ) Tj ET Q q 0 0 0 rg BT 142.94 260.25 Td (ASU No. 2015-14, ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 220.99 260.25 Td (Revenue fr) Tj ET Q q 0 0 0 rg BT 263.66 260.25 Td (om Contracts with Customers \(T) Tj ET Q q 0 0 0 rg BT 393.31 260.25 Td (opic 606\): Deferral of the Effective Date ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 248.25 Td (\(“ASU No. 2015-14”\), which defers the ef) Tj ET Q q 0 0 0 rg BT 219.27 248.25 Td (fective date of ) Tj ET Q q 0 0 0 rg BT 278.40 248.25 Td (ASU No. 2014-09 by one year) Tj ET Q q 0 0 0 rg BT 400.05 248.25 Td (. Early adoption is permitted but not ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 236.25 Td (before the original ef) Tj ET Q q 0 0 0 rg BT 133.45 236.25 Td (fective date. ) Tj ET Q q 0 0 0 rg BT 187.12 236.25 Td (The Company is still evaluating the impact of adopting ) Tj ET Q q 0 0 0 rg BT 409.58 236.25 Td (ASU No. 2014-09 on its financial ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 224.25 Td (statements, but does not expect the adoption of ) Tj ET Q q 0 0 0 rg BT 239.18 224.25 Td (ASU No. 2014-09 to have a material impact on its financial statements.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 206.25 Td (In ) Tj ET Q q 0 0 0 rg BT 82.28 206.25 Td (August 2014, the F) Tj ET Q q 0 0 0 rg BT 158.21 206.25 Td (ASB issued ) Tj ET Q q 0 0 0 rg BT 207.11 206.25 Td (ASU No. 2014-15, ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 285.16 206.25 Td (Pr) Tj ET Q q 0 0 0 rg BT 294.79 206.25 Td (esentation of Financial Statements \(Subtopic 205-40\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 508.37 206.25 Td (, ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 513.37 206.25 Td (Disclosur) Tj ET Q q 0 0 0 rg BT 551.89 206.25 Td (e ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 49.50 194.25 Td (of Uncertainties about an Entity’) Tj ET Q q 0 0 0 rg BT 180.41 194.25 Td (s ) Tj ET Q q 0 0 0 rg BT 186.62 194.25 Td (Ability to Continue as a Going Concern ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 348.56 194.25 Td (\(“ASU No. 2014-15”\). ) Tj ET Q q 0 0 0 rg BT 444.47 194.25 Td (The amendments in ) Tj ET Q q 0 0 0 rg BT 525.29 194.25 Td (ASU ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 182.25 Td (No. 2014-15 require management to evaluate, for each annual and interim reporting period, whether there are conditions or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 170.25 Td (events, considered in the aggregate, that raise substantial doubt about an entity’) Tj ET Q q 0 0 0 rg BT 366.35 170.25 Td (s ability to continue as a going concern within ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 158.25 Td (one year after the date that the financial statements are issued \(or are available to be issued when applicable\) and, if so, provide ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 146.25 Td (related disclosures. ) Tj ET Q q 0 0 0 rg BT 130.59 146.25 Td (ASU No. 2014-15 is ef) Tj ET Q q 0 0 0 rg BT 222.90 146.25 Td (fective for annual periods ending after December 15, 2016, and interim periods ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 134.25 Td (within annual periods beginning after December 15, 2016. Early adoption is permitted for annual or interim reporting periods ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 122.25 Td (for which the financial statements have not previously been issued. ) Tj ET Q q 0 0 0 rg BT 322.58 122.25 Td (The Company does not expect the adoption of ) Tj ET Q q 0 0 0 rg BT 509.20 122.25 Td (ASU No. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 110.25 Td (2014-15 to have a significant impact on its financial statements.) Tj ET Q endstream endobj 21 0 obj <>] /Rotate 0 /Contents 22 0 R>> endobj 22 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 1. Financial Statements \(continued\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 195.70 712.60 Td (KBS REAL) Tj ET Q q 0 0 0 rg BT 245.44 712.60 Td ( EST) Tj ET Q q 0 0 0 rg BT 266.10 712.60 Td (A) Tj ET Q q 0 0 0 rg BT 272.58 712.60 Td (TE INVESTMENT) Tj ET Q q 0 0 0 rg BT 355.48 712.60 Td ( ) Tj ET Q q 0 0 0 rg BT 357.79 712.60 Td (TRUST) Tj ET Q q 0 0 0 rg BT 390.40 712.60 Td (, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 107.50 694.60 Td (CONDENSED NOTES ) Tj ET Q q 0 0 0 rg BT 209.01 694.60 Td (T) Tj ET Q q 0 0 0 rg BT 215.50 694.60 Td (O CONSOLIDA) Tj ET Q q 0 0 0 rg BT 285.60 694.60 Td (TED FINANCIAL) Tj ET Q q 0 0 0 rg BT 364.78 694.60 Td ( ST) Tj ET Q q 0 0 0 rg BT 378.77 694.60 Td (A) Tj ET Q q 0 0 0 rg BT 385.25 694.60 Td (TEMENTS \(CONTINUED\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 274.20 676.60 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 282.95 661.60 Td (\(unaudited\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 303.50 33.60 Td (9) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 632.10 Td (In January 2016, the F) Tj ET Q q 0 0 0 rg BT 160.96 632.10 Td (ASB issued ) Tj ET Q q 0 0 0 rg BT 209.87 632.10 Td (ASU No. 2016-01, ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 287.92 632.10 Td (Financial Instruments - Overall \(Subtopic 825-10\): Recognition and ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 49.50 620.10 Td (Measur) Tj ET Q q 0 0 0 rg BT 79.68 620.10 Td (ement of Financial ) Tj ET Q q 0 0 0 rg BT 157.54 620.10 Td (Assets and Financial Liabilities ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 286.98 620.10 Td (\(“ASU No. 2016-01”\). ) Tj ET Q q 0 0 0 rg BT 382.89 620.10 Td (The amendments in ) Tj ET Q q 0 0 0 rg BT 463.71 620.10 Td (ASU No. 2016-01 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 608.10 Td (address certain aspects of recognition, measurement, presentation and disclosure of financial instruments. ) Tj ET Q q 0 0 0 rg BT 476.03 608.10 Td (ASU No. 2016-01 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 596.10 Td (primarily af) Tj ET Q q 0 0 0 rg BT 96.80 596.10 Td (fects accounting for equity investments and financial liabilities where the fair value option has been elected. ) Tj ET Q q 0 0 0 rg BT 533.31 596.10 Td (ASU ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 584.10 Td (No. 2016-01 also requires entities to present financial assets and financial liabilities separately) Tj ET Q q 0 0 0 rg BT 426.23 584.10 Td (, grouped by measurement ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 572.10 Td (category and form of financial asset in the balance sheet or in the accompanying notes to the financial statements. ) Tj ET Q q 0 0 0 rg BT 508.50 572.10 Td (ASU No. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 560.10 Td (2016-01 is ef) Tj ET Q q 0 0 0 rg BT 102.09 560.10 Td (fective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 548.10 Td (Early application is permitted for financial statements that have not been previously issued. ) Tj ET Q q 0 0 0 rg BT 419.49 548.10 Td (The Company does not expect the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 536.10 Td (adoption of ) Tj ET Q q 0 0 0 rg BT 97.27 536.10 Td (ASU No. 2016-01 to have a significant impact on its financial statements.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 518.10 Td (In February 2016, the F) Tj ET Q q 0 0 0 rg BT 165.96 518.10 Td (ASB issued ) Tj ET Q q 0 0 0 rg BT 214.87 518.10 Td (ASU No. 2016-02, ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 292.92 518.10 Td (Leases \(T) Tj ET Q q 0 0 0 rg BT 330.62 518.10 Td (opic 842\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 368.67 518.10 Td ( \(“ASU No. 2016-02”\). ) Tj ET Q q 0 0 0 rg BT 467.08 518.10 Td (The amendments in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 506.10 Td (ASU No. 2016-02 change the existing accounting standards for lease accounting, including requiring lessees to recognize most ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 494.10 Td (leases on their balance sheets and making tar) Tj ET Q q 0 0 0 rg BT 228.97 494.10 Td (geted changes to lessor accounting. ) Tj ET Q q 0 0 0 rg BT 372.26 494.10 Td (ASU No. 2016-02 is ef) Tj ET Q q 0 0 0 rg BT 464.58 494.10 Td (fective for annual ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 482.10 Td (periods beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption of ) Tj ET Q q 0 0 0 rg BT 508.27 482.10 Td (ASU No. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 470.10 Td (2016-02 as of its issuance is permitted. ) Tj ET Q q 0 0 0 rg BT 210.13 470.10 Td (The new leases standard requires a modified retrospective transition approach for all ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 458.10 Td (leases existing at, or entered into after) Tj ET Q q 0 0 0 rg BT 200.98 458.10 Td (, the date of initial application, with an option to use certain transition relief. ) Tj ET Q q 0 0 0 rg BT 510.72 458.10 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 446.10 Td (Company is currently evaluating the impact of adopting the new leases standard on its consolidated financial statements.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 422.10 Td (3. ) Tj ET Q q 0 0 0 rg BT 72.00 422.10 Td (REAL) Tj ET Q q 0 0 0 rg BT 99.23 422.10 Td ( EST) Tj ET Q q 0 0 0 rg BT 119.89 422.10 Td (A) Tj ET Q q 0 0 0 rg BT 126.37 422.10 Td (TE HELD FOR INVESTMENT) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 404.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 97.94 404.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 161.54 404.10 Td (, the Company’) Tj ET Q q 0 0 0 rg BT 222.92 404.10 Td (s portfolio of real estate held for investment, including the GKK Properties, was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 392.10 Td (composed of approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 163.64 392.10 Td (6.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 207.53 392.10 Td ( rentable square feet and was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 325.80 392.10 Td (86%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 344.13 392.10 Td ( occupied. ) Tj ET Q q 0 0 0 rg BT 390.05 392.10 Td (These properties are located in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 515.27 392.10 Td (29) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 525.27 392.10 Td ( states ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 380.10 Td (and include of) Tj ET Q q 0 0 0 rg BT 106.52 380.10 Td (fice properties, industrial properties and bank branch properties. Included in the Company’) Tj ET Q q 0 0 0 rg BT 471.97 380.10 Td (s portfolio of real ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 368.10 Td (estate held for investment was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 173.07 368.10 Td (3.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 216.97 368.10 Td ( rentable square feet related to the GKK Properties held for investment, which were ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 356.10 Td (85%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 67.83 356.10 Td ( occupied as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 130.58 356.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 194.18 356.10 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 338.10 Td (The following table summarizes the Company’) Tj ET Q q 0 0 0 rg BT 261.51 338.10 Td (s investments in real estate as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 392.87 338.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 456.46 338.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.90 338.10 Td (December 31, 2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 554.49 338.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 326.10 Td (\(in thousands\): ) Tj ET Q 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 280.60 254.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 304.00 280.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 308.00 280.60 50.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 358.00 280.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 362.00 280.60 61.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 423.00 280.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 427.00 280.60 66.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 493.00 280.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 497.00 280.60 66.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 252.60 254.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 304.00 252.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 308.00 252.60 50.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 358.00 252.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 362.00 252.60 61.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 423.00 252.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 427.00 252.60 66.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 493.00 252.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 497.00 252.60 66.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 224.60 254.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 304.00 224.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 308.00 224.60 50.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 358.00 224.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 362.00 224.60 61.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 423.00 224.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 427.00 224.60 66.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 493.00 224.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 497.00 224.60 66.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 196.60 254.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 304.00 196.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 308.00 196.60 50.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 358.00 196.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 362.00 196.60 61.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 423.00 196.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 427.00 196.60 66.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 493.00 196.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 497.00 196.60 66.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 168.60 254.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 304.00 168.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 308.00 168.60 50.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 358.00 168.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 362.00 168.60 61.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 423.00 168.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 427.00 168.60 66.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 493.00 168.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 497.00 168.60 66.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 140.60 254.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 304.00 140.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 308.00 140.60 50.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 358.00 140.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 362.00 140.60 61.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 423.00 140.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 427.00 140.60 66.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 493.00 140.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 497.00 140.60 66.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 112.60 254.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 304.00 112.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 308.00 112.60 50.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 358.00 112.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 362.00 112.60 61.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 423.00 112.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 427.00 112.60 66.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 493.00 112.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 497.00 112.60 66.00 -14.00 re f /GS0 gs 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 308 280.6 m 358 280.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 362 280.6 m 423 280.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 427 280.6 m 493 280.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 497 280.6 m 563 280.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 308 224.60000000000002 m 358 224.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 362 224.60000000000002 m 423 224.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 427 224.60000000000002 m 493 224.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 497 224.60000000000002 m 563 224.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 308 196.60000000000002 m 358 196.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 362 196.60000000000002 m 423 196.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 427 196.60000000000002 m 493 196.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 497 196.60000000000002 m 563 196.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 308 183.60000000000002 m 358 183.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 308 181.60000000000002 m 358 181.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 362 183.60000000000002 m 423 183.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 362 181.60000000000002 m 423 181.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 427 183.60000000000002 m 493 183.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 427 181.60000000000002 m 493 181.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 497 183.60000000000002 m 563 183.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 497 181.60000000000002 m 563 181.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 308 126.60000000000002 m 358 126.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 362 126.60000000000002 m 423 126.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 427 126.60000000000002 m 493 126.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 497 126.60000000000002 m 563 126.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 308 98.60000000000002 m 358 98.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 362 98.60000000000002 m 423 98.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 427 98.60000000000002 m 493 98.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 497 98.60000000000002 m 563 98.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 308 85.60000000000002 m 358 85.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 308 83.60000000000002 m 358 83.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 362 85.60000000000002 m 423 85.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 362 83.60000000000002 m 423 83.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 427 85.60000000000002 m 493 85.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 427 83.60000000000002 m 493 83.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 497 85.60000000000002 m 563 85.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 497 83.60000000000002 m 563 83.60000000000002 l s BT /F2 8.00 Tf ET q 0 0 0 rg BT 323.35 284.83 Td (Land) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 368.30 292.83 Td (Buildings and) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 367.15 284.83 Td (Impr) Tj ET Q q 0 0 0 rg BT 384.78 284.83 Td (ovements) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 447.60 300.83 Td (T) Tj ET Q q 0 0 0 rg BT 452.20 300.83 Td (enant ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 432.00 292.83 Td (Origination and ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 429.80 284.83 Td (Absorption Costs) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 500.30 300.83 Td (T) Tj ET Q q 0 0 0 rg BT 504.90 300.83 Td (otal Real Estate) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 515.20 292.83 Td (Held for) Tj ET Q q 0 0 0 rg BT 543.72 292.83 Td ( ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 510.35 284.83 Td (Investment) Tj ET Q BT /F3 8.00 Tf ET q 0 0 0 rg BT 52.50 270.85 Td (As of March 31, 2016:) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 58.50 256.85 Td (Office) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 310.50 256.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 332.75 256.85 Td (61,335) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 364.50 256.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 393.80 256.85 Td (355,881) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 429.50 256.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 477.80 256.85 Td (566) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 499.50 256.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 533.80 256.85 Td (417,782) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 58.50 242.85 Td (Industrial) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 332.75 242.85 Td (14,651) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 397.80 242.85 Td (73,737) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 471.80 242.85 Td (2,244) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 537.80 242.85 Td (90,632) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 58.50 228.85 Td (GKK Properties) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 328.75 228.85 Td (102,886) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 393.80 228.85 Td (179,973) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 467.80 228.85 Td (40,118) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 533.80 228.85 Td (322,977) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 64.50 214.85 Td (Real estate held for investment, at cost and net of impairment charges) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 328.75 214.85 Td (178,872) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 393.80 214.85 Td (609,591) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 467.80 214.85 Td (42,928) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 533.80 214.85 Td (831,391) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 58.50 200.85 Td (Accumulated depreciation/amortization) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 346.80 200.85 Td (—) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 391.10 200.85 Td (\(108,430) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 419.80 200.85 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 465.10 200.85 Td (\(24,450) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 489.80 200.85 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 531.10 200.85 Td (\(132,880) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 559.80 200.85 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 64.50 186.85 Td (Real estate held for investment, net) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 310.50 186.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 328.75 186.85 Td (178,872) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 364.50 186.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 393.80 186.85 Td (501,161) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 429.50 186.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 467.80 186.85 Td (18,478) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 499.50 186.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 533.80 186.85 Td (698,511) Tj ET Q BT /F3 8.00 Tf ET q 0 0 0 rg BT 52.50 172.85 Td (As of December 31, 2015:) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 58.50 158.85 Td (Office) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 310.50 158.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 332.75 158.85 Td (61,986) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 364.50 158.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 393.80 158.85 Td (357,524) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 429.50 158.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 477.80 158.85 Td (565) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 499.50 158.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 533.80 158.85 Td (420,075) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 58.50 144.85 Td (Industrial) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 332.75 144.85 Td (14,651) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 397.80 144.85 Td (73,411) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 471.80 144.85 Td (2,244) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 537.80 144.85 Td (90,306) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 58.50 130.85 Td (GKK Properties) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 328.75 130.85 Td (104,414) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 393.80 130.85 Td (187,709) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 467.80 130.85 Td (41,751) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 533.80 130.85 Td (333,874) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 64.50 116.85 Td (Real estate held for investment, at cost and net of impairment charges) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 328.75 116.85 Td (181,051) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 393.80 116.85 Td (618,644) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 467.80 116.85 Td (44,560) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 533.80 116.85 Td (844,255) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 58.50 102.85 Td (Accumulated depreciation/amortization) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 346.80 102.85 Td (—) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 391.10 102.85 Td (\(105,551) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 419.80 102.85 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 465.10 102.85 Td (\(24,584) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 489.80 102.85 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 531.10 102.85 Td (\(130,135) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 559.80 102.85 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 64.50 88.85 Td (Real estate held for investment, net) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 310.50 88.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 328.75 88.85 Td (181,051) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 364.50 88.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 393.80 88.85 Td (513,093) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 429.50 88.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 467.80 88.85 Td (19,976) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 499.50 88.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 533.80 88.85 Td (714,120) Tj ET Q BT /F1 10.00 Tf ET endstream endobj 23 0 obj <>] /Rotate 0 /Contents 24 0 R>> endobj 24 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 1. Financial Statements \(continued\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 195.70 712.60 Td (KBS REAL) Tj ET Q q 0 0 0 rg BT 245.44 712.60 Td ( EST) Tj ET Q q 0 0 0 rg BT 266.10 712.60 Td (A) Tj ET Q q 0 0 0 rg BT 272.58 712.60 Td (TE INVESTMENT) Tj ET Q q 0 0 0 rg BT 355.48 712.60 Td ( ) Tj ET Q q 0 0 0 rg BT 357.79 712.60 Td (TRUST) Tj ET Q q 0 0 0 rg BT 390.40 712.60 Td (, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 107.50 694.60 Td (CONDENSED NOTES ) Tj ET Q q 0 0 0 rg BT 209.01 694.60 Td (T) Tj ET Q q 0 0 0 rg BT 215.50 694.60 Td (O CONSOLIDA) Tj ET Q q 0 0 0 rg BT 285.60 694.60 Td (TED FINANCIAL) Tj ET Q q 0 0 0 rg BT 364.78 694.60 Td ( ST) Tj ET Q q 0 0 0 rg BT 378.77 694.60 Td (A) Tj ET Q q 0 0 0 rg BT 385.25 694.60 Td (TEMENTS \(CONTINUED\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 274.20 676.60 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 282.95 661.60 Td (\(unaudited\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.00 33.60 Td (10) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 632.25 Td (Operating Leases) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 614.25 Td (The Company’) Tj ET Q q 0 0 0 rg BT 133.21 614.25 Td (s real estate assets are leased to tenants under operating leases for which the terms and expirations vary) Tj ET Q q 0 0 0 rg BT 544.91 614.25 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 602.25 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.94 602.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 137.54 602.25 Td (, the Company’) Tj ET Q q 0 0 0 rg BT 198.92 602.25 Td (s leases, including the GKK Properties held for investment and excluding options to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 590.25 Td (extend, had remaining terms of up to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 199.46 590.25 Td (14.3) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 216.96 590.25 Td ( years with a weighted-average remaining term of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 418.54 590.25 Td (4.0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 431.04 590.25 Td ( years. ) Tj ET Q q 0 0 0 rg BT 461.59 590.25 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 486.03 590.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 549.63 590.25 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 578.25 Td (leases related to the GKK Properties, excluding options to extend, had remaining terms of up to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 434.41 578.25 Td (10.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 451.91 578.25 Td ( years with a weighted-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 566.25 Td (average remaining term of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 157.78 566.25 Td (3.8) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 170.28 566.25 Td ( years. Some of the Company’) Tj ET Q q 0 0 0 rg BT 293.87 566.25 Td (s leases have provisions to extend the term of the leases, options ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 554.25 Td (for early termination for all or a part of the leased premises after paying a specified penalty) Tj ET Q q 0 0 0 rg BT 413.14 554.25 Td (, rights of first refusal to purchase ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 542.25 Td (the property at competitive market rates, and other terms and conditions as negotiated. ) Tj ET Q q 0 0 0 rg BT 399.76 542.25 Td (The Company retains substantially all of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 530.25 Td (the risks and benefits of ownership of the real estate assets leased to tenants. Generally) Tj ET Q q 0 0 0 rg BT 398.18 530.25 Td (, upon the execution of a lease, the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 518.25 Td (Company requires a security deposit from the tenant in the form of a cash deposit and/or a letter of credit. ) Tj ET Q q 0 0 0 rg BT 476.96 518.25 Td (The amount required ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 506.25 Td (as a security deposit varies depending upon the terms of the respective lease and the creditworthiness of the tenant, but ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 494.25 Td (generally is not a significant amount. ) Tj ET Q q 0 0 0 rg BT 202.62 494.25 Td (Therefore, exposure to credit risk exists to the extent that a receivable from a tenant ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 482.25 Td (exceeds the amount of its security deposit. Security deposits received in cash related to tenant leases are included in other ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 470.25 Td (liabilities in the accompanying consolidated balance sheets and totaled ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 334.69 470.25 Td ($3.3 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.58 470.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 403.02 470.25 Td ($3.2 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 451.91 470.25 Td ( as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 476.07 470.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 539.67 470.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 458.25 Td (December 31, 2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 128.08 458.25 Td (, respectively) Tj ET Q q 0 0 0 rg BT 180.75 458.25 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 440.25 Td (During the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 119.05 440.25 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 139.03 440.25 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 199.86 440.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 263.46 440.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 282.89 440.25 Td (2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 302.89 440.25 Td (, the Company recognized deferred rent from tenants of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 428.25 Td ($\(0.1\) million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 105.05 428.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 124.49 428.25 Td ($0.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 173.38 428.25 Td (, respectively) Tj ET Q q 0 0 0 rg BT 226.04 428.25 Td (. ) Tj ET Q q 0 0 0 rg BT 233.36 428.25 Td (These amounts for the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 325.00 428.25 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 344.99 428.25 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 405.81 428.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.41 428.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 488.85 428.25 Td (2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 508.85 428.25 Td ( were net of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 416.25 Td ($0.3 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 98.39 416.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 117.83 416.25 Td ($0.4 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 166.72 416.25 Td ( of lease incentive amortization, respectively) Tj ET Q q 0 0 0 rg BT 344.89 416.25 Td (. ) Tj ET Q q 0 0 0 rg BT 351.83 416.25 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 376.28 416.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 439.88 416.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 459.31 416.25 Td (December 31, 2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.90 416.25 Td (, the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 404.25 Td (cumulative deferred rent balance was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 201.37 404.25 Td ($25.4 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 255.26 404.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 274.70 404.25 Td ($24.8 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 328.59 404.25 Td (, respectively) Tj ET Q q 0 0 0 rg BT 381.25 404.25 Td (, and is included in rents and other ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 392.25 Td (receivables on the accompanying balance sheets. ) Tj ET Q q 0 0 0 rg BT 247.29 392.25 Td (The cumulative deferred rent balance included ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 436.08 392.25 Td ($6.2 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 484.97 392.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 504.41 392.25 Td ($5.8 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.30 392.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 380.25 Td (of unamortized lease incentives as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 200.00 380.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 263.60 380.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 283.04 380.25 Td (December 31, 2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 361.62 380.25 Td (, respectively) Tj ET Q q 0 0 0 rg BT 414.28 380.25 Td (. ) Tj ET Q q 0 0 0 rg BT 421.60 380.25 Td (The Company records property ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 368.25 Td (operating expense reimbursements due from tenants for common area maintenance, real estate taxes and other recoverable costs ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 356.25 Td (in the period the related expenses are incurred.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 338.25 Td (The future minimum rental income from the Company’) Tj ET Q q 0 0 0 rg BT 294.83 338.25 Td (s properties under non-cancelable operating leases, including ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 326.25 Td (leases subject to shedding rights and excluding options to extend, as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 335.28 326.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 398.88 326.25 Td ( for the years ending December 31 is as ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 314.25 Td (follows \(in thousands\):) Tj ET Q 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 297.75 398.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 448.00 297.75 115.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 269.75 398.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 448.00 269.75 115.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 241.75 398.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 448.00 241.75 115.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 213.75 398.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 448.00 213.75 115.00 -14.00 re f /GS0 gs 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 448 213.75 m 563 213.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 448 200.75 m 563 200.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 448 198.75 m 563 198.75 l s BT /F1 9.00 Tf ET q 0 0 0 rg BT 52.50 288.21 Td (April 1, 2016 through December 31, 2016) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 450.50 288.21 Td ($) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 534.75 288.21 Td (71,663) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 52.50 274.21 Td (2017) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 534.75 274.21 Td (87,031) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 52.50 260.21 Td (2018) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 534.75 260.21 Td (76,670) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 52.50 246.21 Td (2019) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 534.75 246.21 Td (66,707) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 52.50 232.21 Td (2020) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 534.75 232.21 Td (52,272) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 52.50 218.21 Td (Thereafter) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 530.25 218.21 Td (140,532) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 450.50 204.21 Td ($) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 530.25 204.21 Td (494,875) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 176.25 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 97.94 176.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 161.54 176.25 Td (, the Company’) Tj ET Q q 0 0 0 rg BT 222.92 176.25 Td (s highest tenant industry concentration \(greater than 10% of annualized base rent\) ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 164.25 Td (was as follows:) Tj ET Q 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 117.75 238.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 288.00 117.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 292.00 117.75 57.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 349.00 117.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 353.00 117.75 100.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 453.00 117.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 457.00 117.75 106.00 -14.00 re f /GS0 gs 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 50 117.75 m 288 117.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 292 117.75 m 349 117.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 353 117.75 m 453 117.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 457 117.75 m 563 117.75 l s BT /F2 9.00 Tf ET q 0 0 0 rg BT 52.50 122.20 Td (Industry) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 299.20 131.20 Td (Number) Tj ET Q q 0 0 0 rg BT 331.03 131.20 Td ( of) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 304.90 122.20 Td (T) Tj ET Q q 0 0 0 rg BT 310.08 122.20 Td (enants) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 380.45 139.15 Td (Annualized) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 378.55 130.15 Td (Base Rent ) Tj ET Q BT /F2 9.00 Tf ET BT /F2 5.85 Tf ET q 0 0 0 rg BT 419.55 134.23 Td (\(1\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 375.10 121.15 Td (\(in thousands\)) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 483.45 131.20 Td (Per) Tj ET Q q 0 0 0 rg BT 496.77 131.20 Td (centage of) Tj ET Q BT /F2 9.00 Tf ET q 0 0 0 rg BT 466.95 122.20 Td (Annualized Base Rent) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 52.50 108.21 Td (Finance) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 315.50 108.21 Td (51) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 355.50 108.21 Td ($) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 424.75 108.21 Td (34,935) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 539.25 108.21 Td (37.6) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 555.00 108.21 Td (%) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 92.25 Td (_____________________) Tj ET Q BT /F1 8.00 Tf ET BT /F1 5.20 Tf ET q 0 0 0 rg BT 49.50 83.27 Td (\(1\) ) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 58.16 79.65 Td (Annualized base rent represents annualized contractual base rental income as of ) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 315.60 79.65 Td (March 31, 2016) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 366.48 79.65 Td (, adjusted to straight-line any contractual tenant concessions ) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 49.50 70.05 Td (\(including free rent\), rent increases and rent decreases from the lease's inception through the balance of the lease term. ) Tj ET Q endstream endobj 25 0 obj <>] /Rotate 0 /Contents 26 0 R>> endobj 26 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 1. Financial Statements \(continued\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 195.70 712.60 Td (KBS REAL) Tj ET Q q 0 0 0 rg BT 245.44 712.60 Td ( EST) Tj ET Q q 0 0 0 rg BT 266.10 712.60 Td (A) Tj ET Q q 0 0 0 rg BT 272.58 712.60 Td (TE INVESTMENT) Tj ET Q q 0 0 0 rg BT 355.48 712.60 Td ( ) Tj ET Q q 0 0 0 rg BT 357.79 712.60 Td (TRUST) Tj ET Q q 0 0 0 rg BT 390.40 712.60 Td (, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 107.50 694.60 Td (CONDENSED NOTES ) Tj ET Q q 0 0 0 rg BT 209.01 694.60 Td (T) Tj ET Q q 0 0 0 rg BT 215.50 694.60 Td (O CONSOLIDA) Tj ET Q q 0 0 0 rg BT 285.60 694.60 Td (TED FINANCIAL) Tj ET Q q 0 0 0 rg BT 364.78 694.60 Td ( ST) Tj ET Q q 0 0 0 rg BT 378.77 694.60 Td (A) Tj ET Q q 0 0 0 rg BT 385.25 694.60 Td (TEMENTS \(CONTINUED\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 274.20 676.60 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 282.95 661.60 Td (\(unaudited\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.15 33.60 Td (1) Tj ET Q q 0 0 0 rg BT 305.78 33.60 Td (1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 632.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 97.94 632.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 161.54 632.10 Td (, no other tenant industries accounted for more than 10% of the Company’) Tj ET Q q 0 0 0 rg BT 458.41 632.10 Td (s annualized base rent. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 620.10 Td (The Company currently has over ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 183.63 620.10 Td (250) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 198.63 620.10 Td ( tenants over a diverse range of industries and geographical regions.) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL q 1 0 0 rg BT 470.48 620.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL q 0 0 0 rg BT 474.92 620.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 499.37 620.10 Td (March 31, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 608.10 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.50 608.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 88.94 608.10 Td (December 31, 2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 167.52 608.10 Td (, the Company had a bad debt expense reserve of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 366.06 608.10 Td ($0.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 414.95 608.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 434.39 608.10 Td ($0.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 483.28 608.10 Td (, respectively) Tj ET Q q 0 0 0 rg BT 535.95 608.10 Td (.) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL q 1 0 0 rg BT 538.45 608.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL q 0 0 0 rg BT 540.95 608.10 Td ( ) Tj ET Q q 0 0 0 rg BT 543.26 608.10 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 596.10 Td (Company’) Tj ET Q q 0 0 0 rg BT 91.17 596.10 Td (s bad debt expense reserve as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 221.95 596.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 285.54 596.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 304.98 596.10 Td (December 31, 2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.57 596.10 Td ( included ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 423.00 596.10 Td ($0.4 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 471.89 596.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 491.33 596.10 Td ($0.4 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 540.22 596.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 584.10 Td (related to the GKK Properties, respectively) Tj ET Q q 0 0 0 rg BT 221.57 584.10 Td (. During the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 274.62 584.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 294.60 584.10 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 355.43 584.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 419.03 584.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 438.46 584.10 Td (2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.46 584.10 Td (, the Company recorded ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 572.10 Td (bad debt expense related to its tenant receivables of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 258.03 572.10 Td ($0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 268.03 572.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 287.46 572.10 Td ($0.4 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 336.36 572.10 Td (, respectively) Tj ET Q q 0 0 0 rg BT 389.02 572.10 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 554.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 97.94 554.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 161.54 554.10 Td (, the Company had a concentration of credit risk related to leases with the following tenant that ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 542.10 Td (represented more than 10% of the Company’) Tj ET Q q 0 0 0 rg BT 228.89 542.10 Td (s annualized base rent:) Tj ET Q 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 477.60 82.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 132.00 477.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 136.00 477.60 37.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 173.00 477.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 177.00 477.60 46.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 223.00 477.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 227.00 477.60 47.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 274.00 477.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 278.00 477.60 56.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 334.00 477.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 338.00 477.60 55.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 393.00 477.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 397.00 477.60 55.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 452.00 477.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 456.00 477.60 55.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 511.00 477.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 515.00 477.60 48.00 -14.00 re f /GS0 gs 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 338 512.6 m 393 512.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393 512.6 m 397 512.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 397 512.6 m 452 512.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 452 512.6 m 456 512.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 456 512.6 m 511 512.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 50 477.6 m 132 477.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 136 477.6 m 173 477.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 177 477.6 m 223 477.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 227 477.6 m 274 477.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 278 477.6 m 334 477.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 338 477.6 m 393 477.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 397 477.6 m 452 477.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 456 477.6 m 511 477.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 515 477.6 m 563 477.6 l s BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 516.85 Td ( ) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 138.50 516.85 Td ( ) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 179.50 516.85 Td ( ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 369.85 516.83 Td (Annualized Base Rent Statistics) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 517.50 516.85 Td ( ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 78.60 481.83 Td (Tenant) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 138.70 481.83 Td (Property) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 187.60 489.83 Td (T) Tj ET Q q 0 0 0 rg BT 192.20 489.83 Td (enant) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 184.60 481.83 Td (Industry) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 234.65 489.83 Td (Rentable) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 229.50 481.83 Td (Square Feet) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 297.15 504.68 Td (% of) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 290.35 496.68 Td (Portfolio ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 290.15 488.68 Td (Rentable ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 285.00 480.68 Td (Squar) Tj ET Q q 0 0 0 rg BT 305.75 480.68 Td (e Feet) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 345.40 497.83 Td (Annualized ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 343.70 489.83 Td (Base Rent ) Tj ET Q BT /F2 8.00 Tf ET BT /F2 5.20 Tf ET q 0 0 0 rg BT 380.14 493.46 Td (\(1\)) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 340.65 481.83 Td (\(in thousands\)) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 399.55 497.83 Td (% of Portfolio) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 404.40 489.83 Td (Annualized) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 406.75 481.83 Td (Base Rent) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 463.40 497.83 Td (Annualized) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 459.05 489.83 Td (Base Rent per) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 462.05 481.83 Td (Square Foot) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 528.70 489.83 Td (Lease) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 518.45 481.83 Td (Expirations) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 467.85 Td (Bank of America, N.A.) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 141.75 467.85 Td (Various) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 186.80 467.85 Td (Finance) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 234.00 467.85 Td (1,761,364) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 312.80 467.85 Td (31.1) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 326.80 467.85 Td (%) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 340.50 467.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 367.80 467.85 Td (14,818) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 430.80 467.85 Td (15.9) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 444.80 467.85 Td (%) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 458.50 467.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 493.80 467.85 Td (8.41) Tj ET Q BT /F1 5.20 Tf ET q 0 0 0 rg BT 535.45 471.96 Td (\(2\)) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 452.10 Td (_____________________) Tj ET Q BT /F1 7.50 Tf ET BT /F1 4.87 Tf ET q 0 0 0 rg BT 49.50 443.50 Td (\(1\)) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 55.18 440.10 Td ( ) Tj ET Q q 0 0 0 rg BT 56.65 440.10 Td (Annualized base rent represents annualized contractual base rental income as of ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 298.01 440.10 Td (March 31, 2016) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 345.71 440.10 Td (, adjusted to straight-line any contractual tenant concessions \(including ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 49.50 431.10 Td (free rent\), rent increases and rent decreases from the lease’) Tj ET Q q 0 0 0 rg BT 225.25 431.10 Td (s inception through the balance of the lease term. ) Tj ET Q BT /F1 7.50 Tf ET BT /F1 4.87 Tf ET q 0 0 0 rg BT 49.50 422.50 Td (\(2\)) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 55.18 419.10 Td ( ) Tj ET Q q 0 0 0 rg BT 56.65 419.10 Td (As of ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 74.98 419.10 Td (March 31, 2016) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 122.68 419.10 Td (, lease expiration dates ranged from 2019 through 2023 with a weighted-average remaining term of ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 422.17 419.10 Td (4.2) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 431.55 419.10 Td ( years. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 395.10 Td (No other tenant represented more than 10% of the Company’) Tj ET Q q 0 0 0 rg BT 317.59 395.10 Td (s annualized base rent.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 377.10 Td (Bank of ) Tj ET Q q 0 0 0 rg BT 107.39 377.10 Td (America Corporation is the guarantor of various leases that its subsidiary) Tj ET Q q 0 0 0 rg BT 398.89 377.10 Td (, Bank of ) Tj ET Q q 0 0 0 rg BT 437.77 377.10 Td (America, N.A., has with the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 365.10 Td (Company) Tj ET Q q 0 0 0 rg BT 87.74 365.10 Td (. ) Tj ET Q q 0 0 0 rg BT 95.06 365.10 Td (The condensed consolidated financial information of Bank of ) Tj ET Q q 0 0 0 rg BT 342.76 365.10 Td (America Corporation has been included herein ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 353.10 Td (because of the significant credit concentration the Company has with this guarantor) Tj ET Q q 0 0 0 rg BT 383.01 353.10 Td (. Bank of ) Tj ET Q q 0 0 0 rg BT 424.40 353.10 Td (America Corporation currently ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 341.10 Td (files its financial statements in reports filed with the SEC, and the following unaudited summary financial data regarding Bank ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 329.10 Td (of ) Tj ET Q q 0 0 0 rg BT 59.78 329.10 Td (America Corporation is taken from its previously filed public reports. For more detailed financial information regarding ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 317.10 Td (Bank of ) Tj ET Q q 0 0 0 rg BT 83.39 317.10 Td (America Corporation, please refer to its financial statements, which are publicly available with the SEC at ) Tj ET Q BT /F3 10.00 Tf ET 0 0 0 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 510.466796875 315.7669921875 m 537.41015625 315.7669921875 l s q 0 0 0 rg BT 510.47 317.10 Td (http:// ) Tj ET Q BT /F3 10.00 Tf ET 0 0 0 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 49.5 303.7669921875 m 100.603515625 303.7669921875 l s q 0 0 0 rg BT 49.50 305.10 Td (www) Tj ET Q q 0 0 0 rg BT 68.77 305.10 Td (.sec.gov) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 100.23 305.10 Td (.) Tj ET Q 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 260.60 339.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 389.00 260.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 474.00 260.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 478.00 260.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 232.60 339.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 389.00 232.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 474.00 232.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 478.00 232.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 169.60 339.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 389.00 169.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 474.00 169.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 478.00 169.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 141.60 339.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 389.00 141.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 474.00 141.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 478.00 141.60 85.00 -14.00 re f /GS0 gs 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 274.6 m 474 274.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 260.6 m 474 260.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 474 274.6 m 478 274.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 274.6 m 563 274.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 260.6 m 563 260.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 260.6 m 474 260.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 183.60000000000002 m 474 183.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 474 183.60000000000002 m 478 183.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 183.60000000000002 m 563 183.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 169.60000000000002 m 474 169.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 169.60000000000002 m 563 169.60000000000002 l s BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 278.85 Td ( ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 420.60 278.83 Td (Three Months Ended March 31,) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 264.85 Td ( ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 423.00 264.83 Td (2016) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 512.00 264.83 Td (2015) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 52.50 250.83 Td (Consolidated Statements of Income \(in millions\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 236.85 Td (Total revenue, net of interest expense) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 391.50 236.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 448.80 236.85 Td (19,512) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 480.50 236.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 537.80 236.85 Td (20,914) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 222.85 Td (Income before income taxes) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 452.80 222.85 Td (3,699) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 541.80 222.85 Td (4,322) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 208.85 Td (Net income) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 452.80 208.85 Td (2,680) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 541.80 208.85 Td (3,097) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 466.70 187.83 Td (As of) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 404.50 173.83 Td (March 31, 2016) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 487.75 173.83 Td (December 31, 2015) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 52.50 159.83 Td (Consolidated Balance Sheets \(in millions\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 145.85 Td (Total assets) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 438.80 145.85 Td (2,185,498) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 480.50 145.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 527.80 145.85 Td (2,144,316) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 131.85 Td (Total liabilities) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 438.80 131.85 Td (1,922,722) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 527.80 131.85 Td (1,888,111) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 117.85 Td (Total stockholders’ equity) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 391.50 117.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 444.80 117.85 Td (262,776) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 533.80 117.85 Td (256,205) Tj ET Q BT /F1 10.00 Tf ET endstream endobj 27 0 obj <>] /Rotate 0 /Contents 28 0 R>> endobj 28 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 1. Financial Statements \(continued\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 195.70 712.60 Td (KBS REAL) Tj ET Q q 0 0 0 rg BT 245.44 712.60 Td ( EST) Tj ET Q q 0 0 0 rg BT 266.10 712.60 Td (A) Tj ET Q q 0 0 0 rg BT 272.58 712.60 Td (TE INVESTMENT) Tj ET Q q 0 0 0 rg BT 355.48 712.60 Td ( ) Tj ET Q q 0 0 0 rg BT 357.79 712.60 Td (TRUST) Tj ET Q q 0 0 0 rg BT 390.40 712.60 Td (, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 107.50 694.60 Td (CONDENSED NOTES ) Tj ET Q q 0 0 0 rg BT 209.01 694.60 Td (T) Tj ET Q q 0 0 0 rg BT 215.50 694.60 Td (O CONSOLIDA) Tj ET Q q 0 0 0 rg BT 285.60 694.60 Td (TED FINANCIAL) Tj ET Q q 0 0 0 rg BT 364.78 694.60 Td ( ST) Tj ET Q q 0 0 0 rg BT 378.77 694.60 Td (A) Tj ET Q q 0 0 0 rg BT 385.25 694.60 Td (TEMENTS \(CONTINUED\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 274.20 676.60 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 282.95 661.60 Td (\(unaudited\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.00 33.60 Td (12) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 632.25 Td (Geographic Concentration Risk) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 614.25 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 97.94 614.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 161.54 614.25 Td (, the Company’) Tj ET Q q 0 0 0 rg BT 222.92 614.25 Td (s net investments in real estate in ) Tj ET Q q 0 0 0 rg BT 357.43 614.25 Td (V) Tj ET Q q 0 0 0 rg BT 364.05 614.25 Td (ir) Tj ET Q q 0 0 0 rg BT 369.98 614.25 Td (ginia represented ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 441.06 614.25 Td (1) Tj ET Q q 0 0 0 rg BT 445.69 614.25 Td (1.6%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.52 614.25 Td ( of the Company’) Tj ET Q q 0 0 0 rg BT 536.23 614.25 Td (s total ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 602.25 Td (assets. ) Tj ET Q q 0 0 0 rg BT 79.78 602.25 Td (As a result, the geographic concentration of the Company’) Tj ET Q q 0 0 0 rg BT 313.32 602.25 Td (s portfolio makes it particularly susceptible to adverse ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 590.25 Td (economic developments in ) Tj ET Q q 0 0 0 rg BT 159.01 590.25 Td (V) Tj ET Q q 0 0 0 rg BT 165.63 590.25 Td (ir) Tj ET Q q 0 0 0 rg BT 171.56 590.25 Td (ginia’) Tj ET Q q 0 0 0 rg BT 194.33 590.25 Td (s real estate market. ) Tj ET Q q 0 0 0 rg BT 278.19 590.25 Td (Any adverse economic or real estate developments in this market, such ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 578.25 Td (as business layof) Tj ET Q q 0 0 0 rg BT 117.09 578.25 Td (fs or downsizing, industry slowdowns, relocations of businesses, changing demographics and other factors, or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 566.25 Td (any decrease in demand for of) Tj ET Q q 0 0 0 rg BT 170.10 566.25 Td (fice or bank branch space resulting from the local business climate, could adversely af) Tj ET Q q 0 0 0 rg BT 514.79 566.25 Td (fect the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 554.25 Td (Company’) Tj ET Q q 0 0 0 rg BT 91.17 554.25 Td (s operating results.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 536.25 Td (Impairment of Real Estate) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 518.25 Td (During the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 119.05 518.25 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 139.03 518.25 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 199.86 518.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 263.46 518.25 Td (, the Company recorded non-cash impairment char) Tj ET Q q 0 0 0 rg BT 466.26 518.25 Td (ges of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 492.92 518.25 Td ($10.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 546.81 518.25 Td (, of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 506.25 Td (which ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 76.44 506.25 Td ($10.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 130.33 506.25 Td ( relates to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 171.70 506.25 Td (20) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 181.70 506.25 Td ( properties classified as real estate held for investment \(including ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 444.39 506.25 Td (18) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 454.39 506.25 Td ( GKK Properties\), to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 494.25 Td (write-down the carrying values of these real estate investments to their estimated fair values and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 436.86 494.25 Td ($0.3 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 485.75 494.25 Td ( with respect to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 482.25 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.49 482.25 Td ( GKK Properties that were held for sale to write-down the carrying values of these real estate investments to their ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 470.25 Td (estimated sales price less estimated costs to sell. See Note 6, “Real Estate Held for Sale and Discontinued Operations,” for ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 458.25 Td (information regarding impairments of assets related to real estate held for sale. ) Tj ET Q q 0 0 0 rg BT 366.15 458.25 Td (The facts and circumstances leading to the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 446.25 Td (impairments on the Company’) Tj ET Q q 0 0 0 rg BT 170.87 446.25 Td (s real estate held for investment are as follows:) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 49.50 428.25 Td (City Gate Plaza) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 410.25 Td (The Company recognized an impairment char) Tj ET Q q 0 0 0 rg BT 255.36 410.25 Td (ge during the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 310.62 410.25 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 330.61 410.25 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 391.43 410.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 455.03 410.25 Td ( of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 468.36 410.25 Td ($2.7 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 517.25 410.25 Td ( to reduce ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 398.25 Td (the carrying value of the Company's investment in City Gate Plaza, an of) Tj ET Q q 0 0 0 rg BT 341.32 398.25 Td (fice property located in Sacramento, California, to its ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 386.25 Td (estimated fair value. During the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 181.40 386.25 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 201.38 386.25 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 262.21 386.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 325.81 386.25 Td (, the Company revised its cash flow projections to account ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 374.25 Td (for higher projected leasing costs to stabilize the property) Tj ET Q q 0 0 0 rg BT 278.78 374.25 Td (. ) Tj ET Q q 0 0 0 rg BT 283.60 374.25 Td (The continued lack of demand in the Sacramento of) Tj ET Q q 0 0 0 rg BT 490.56 374.25 Td (fice rental market ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 362.25 Td (also resulted in higher capitalization rates. ) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 49.50 344.25 Td (University Park Buildings) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 326.25 Td (The Company recognized an impairment char) Tj ET Q q 0 0 0 rg BT 256.86 326.25 Td (ge during the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.12 326.25 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 332.11 326.25 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 392.93 326.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 456.53 326.25 Td ( of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.86 326.25 Td ($1.2 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 518.75 326.25 Td ( to reduce ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 314.25 Td (the carrying value of the Company's investment in the University Park Buildings, an of) Tj ET Q q 0 0 0 rg BT 397.72 314.25 Td (fice property located in Sacramento, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 302.25 Td (California, to its estimated fair value. ) Tj ET Q q 0 0 0 rg BT 200.94 302.25 Td (The Company revised its cash flow projections primarily to account for higher projected ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 290.25 Td (capital costs for general building upgrades and to address certain maintenance issues. ) Tj ET Q q 0 0 0 rg BT 395.32 290.25 Td (The continued lack of demand in the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 278.25 Td (Sacramento of) Tj ET Q q 0 0 0 rg BT 107.35 278.25 Td (fice rental market also resulted in higher capitalization rates. ) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 49.50 260.25 Td (GKK Properties) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 49.50 242.25 Td (Citizens Bank Portfolio ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 224.25 Td (The Company recognized an impairment char) Tj ET Q q 0 0 0 rg BT 255.36 224.25 Td (ge during the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 310.62 224.25 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 330.61 224.25 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 391.43 224.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 455.03 224.25 Td ( of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 468.36 224.25 Td ($5.3 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 517.25 224.25 Td ( relating to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 212.25 Td (13) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 59.50 212.25 Td ( properties in the Citizens Bank Portfolio due to a decrease in cash flow projections primarily due to an increase in projected ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 200.25 Td (vacancy) Tj ET Q q 0 0 0 rg BT 81.60 200.25 Td (, thus decreasing the projected cash flows the properties would generate. ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 49.50 182.25 Td (Other Pr) Tj ET Q q 0 0 0 rg BT 84.96 182.25 Td (operties) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 76.50 164.25 Td (The Company recognized an impairment char) Tj ET Q q 0 0 0 rg BT 259.86 164.25 Td (ge during the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 315.12 164.25 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 335.11 164.25 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 395.93 164.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 459.53 164.25 Td ( of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.86 164.25 Td ($1.4 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 521.75 164.25 Td ( relating ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 152.25 Td (to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 59.78 152.25 Td (five) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.33 152.25 Td ( other GKK Properties classified as held for investment. No impairment char) Tj ET Q q 0 0 0 rg BT 382.28 152.25 Td (ge related to any individual property was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 140.25 Td (greater than ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 99.47 140.25 Td ($600,000) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 136.97 140.25 Td (. ) Tj ET Q q 0 0 0 rg BT 144.29 140.25 Td (These impairments generally resulted from changes in the projected hold periods or changes in lease ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 128.25 Td (projections including longer estimated lease-up periods and lower projected rental rates, thus decreasing the projected cash ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 116.25 Td (flows the properties would generate. ) Tj ET Q endstream endobj 29 0 obj <>] /Rotate 0 /Contents 30 0 R>> endobj 30 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 1. Financial Statements \(continued\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 195.70 712.60 Td (KBS REAL) Tj ET Q q 0 0 0 rg BT 245.44 712.60 Td ( EST) Tj ET Q q 0 0 0 rg BT 266.10 712.60 Td (A) Tj ET Q q 0 0 0 rg BT 272.58 712.60 Td (TE INVESTMENT) Tj ET Q q 0 0 0 rg BT 355.48 712.60 Td ( ) Tj ET Q q 0 0 0 rg BT 357.79 712.60 Td (TRUST) Tj ET Q q 0 0 0 rg BT 390.40 712.60 Td (, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 107.50 694.60 Td (CONDENSED NOTES ) Tj ET Q q 0 0 0 rg BT 209.01 694.60 Td (T) Tj ET Q q 0 0 0 rg BT 215.50 694.60 Td (O CONSOLIDA) Tj ET Q q 0 0 0 rg BT 285.60 694.60 Td (TED FINANCIAL) Tj ET Q q 0 0 0 rg BT 364.78 694.60 Td ( ST) Tj ET Q q 0 0 0 rg BT 378.77 694.60 Td (A) Tj ET Q q 0 0 0 rg BT 385.25 694.60 Td (TEMENTS \(CONTINUED\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 274.20 676.60 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 282.95 661.60 Td (\(unaudited\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.00 33.60 Td (13) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 632.25 Td (4. ) Tj ET Q q 0 0 0 rg BT 72.00 632.25 Td (TENANT) Tj ET Q q 0 0 0 rg BT 113.49 632.25 Td ( ORIGINA) Tj ET Q q 0 0 0 rg BT 160.26 632.25 Td (TION ) Tj ET Q q 0 0 0 rg BT 187.77 632.25 Td (AND ) Tj ET Q q 0 0 0 rg BT 211.38 632.25 Td (ABSORPTION COSTS, ) Tj ET Q q 0 0 0 rg BT 317.24 632.25 Td (ABOVE-MARKET) Tj ET Q q 0 0 0 rg BT 400.96 632.25 Td ( LEASE ) Tj ET Q q 0 0 0 rg BT 438.20 632.25 Td (ASSETS ) Tj ET Q q 0 0 0 rg BT 477.39 632.25 Td (AND BELOW) Tj ET Q q 0 0 0 rg BT 538.97 632.25 Td (-) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 72.00 620.25 Td (MARKET) Tj ET Q q 0 0 0 rg BT 116.82 620.25 Td ( LEASE LIABILITIES) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 602.25 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 97.94 602.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 161.54 602.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 180.98 602.25 Td (December 31, 2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 259.56 602.25 Td (, the Company’) Tj ET Q q 0 0 0 rg BT 320.95 602.25 Td (s tenant origination and absorption costs, above-market ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 590.25 Td (lease assets, and below-market lease liabilities \(excluding fully amortized assets and liabilities and accumulated amortization\) ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 578.25 Td (were as follows \(in thousands\):) Tj ET Q 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 521.75 162.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 212.00 521.75 55.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 267.00 521.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 271.00 521.75 56.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 327.00 521.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 331.00 521.75 55.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 386.00 521.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 390.00 521.75 55.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 445.00 521.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 449.00 521.75 55.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 504.00 521.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 508.00 521.75 55.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 493.75 162.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 212.00 493.75 55.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 267.00 493.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 271.00 493.75 56.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 327.00 493.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 331.00 493.75 55.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 386.00 493.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 390.00 493.75 55.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 445.00 493.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 449.00 493.75 55.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 504.00 493.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 508.00 493.75 55.00 -14.00 re f /GS0 gs 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 212 541.75 m 267 541.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 267 541.75 m 271 541.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 271 541.75 m 327 541.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 331 541.75 m 386 541.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 386 541.75 m 390 541.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 390 541.75 m 445 541.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 449 541.75 m 504 541.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 504 541.75 m 508 541.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 508 541.75 m 563 541.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 212 541.75 m 267 541.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 212 521.75 m 267 521.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 271 541.75 m 327 541.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 271 521.75 m 327 521.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 331 541.75 m 386 541.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 331 521.75 m 386 521.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 390 541.75 m 445 541.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 390 521.75 m 445 521.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 449 541.75 m 504 541.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 449 521.75 m 504 521.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 508 541.75 m 563 541.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 508 521.75 m 563 521.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 212 493.75 m 267 493.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 271 493.75 m 327 493.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 331 493.75 m 386 493.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 390 493.75 m 445 493.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 449 493.75 m 504 493.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 508 493.75 m 563 493.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 212 480.75 m 267 480.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 212 478.75 m 267 478.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 271 480.75 m 327 480.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 271 478.75 m 327 478.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 331 480.75 m 386 480.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 331 478.75 m 386 478.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 390 480.75 m 445 480.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 390 478.75 m 445 478.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 449 480.75 m 504 480.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 449 478.75 m 504 478.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 508 480.75 m 563 480.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 508 478.75 m 563 478.75 l s BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 546.00 Td ( ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 228.65 553.83 Td (T) Tj ET Q q 0 0 0 rg BT 233.25 553.83 Td (enant Origination and) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 239.30 545.83 Td (Absorption Costs) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 362.35 553.83 Td (Above-Market) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 366.25 545.83 Td (Lease ) Tj ET Q q 0 0 0 rg BT 387.36 545.83 Td (Assets) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 480.80 553.83 Td (Below-Market) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 477.60 545.83 Td (Lease Liabilities) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 526.00 Td ( ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 221.50 533.83 Td (March 31,) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 231.00 525.83 Td (2016) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 275.25 533.83 Td (December 31,) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 290.50 525.83 Td (2015) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 340.50 533.83 Td (March 31,) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 350.00 525.83 Td (2016) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 393.75 533.83 Td (December 31,) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 409.00 525.83 Td (2015) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 458.50 533.83 Td (March 31,) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 468.00 525.83 Td (2016) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 511.75 533.83 Td (December 31,) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 527.00 525.83 Td (2015) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 512.00 Td (Cost, net of impairments) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 214.50 512.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 241.80 512.00 Td (42,928) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 273.50 512.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 301.80 512.00 Td (44,560) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 333.50 512.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 360.80 512.00 Td (13,624) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 392.50 512.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 419.80 512.00 Td (13,624) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 451.50 512.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 476.10 512.00 Td (\(57,820) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 500.80 512.00 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 510.50 512.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 535.10 512.00 Td (\(57,844) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 559.80 512.00 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 498.00 Td (Accumulated amortization) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 239.10 498.00 Td (\(24,450) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 263.80 498.00 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 299.10 498.00 Td (\(24,584) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 323.80 498.00 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 362.10 498.00 Td (\(8,673) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 382.80 498.00 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 421.10 498.00 Td (\(8,207) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 441.80 498.00 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 478.80 498.00 Td (37,682) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 537.80 498.00 Td (35,797) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 484.00 Td (Net amount) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 214.50 484.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 241.80 484.00 Td (18,478) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 273.50 484.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 301.80 484.00 Td (19,976) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 333.50 484.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 364.80 484.00 Td (4,951) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 392.50 484.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 423.80 484.00 Td (5,417) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 451.50 484.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 476.10 484.00 Td (\(20,138) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 500.80 484.00 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 510.50 484.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 535.10 484.00 Td (\(22,047) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 559.80 484.00 Td (\)) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 456.25 Td (Increases \(decreases\) in net income as a result of amortization of the Company’) Tj ET Q q 0 0 0 rg BT 391.16 456.25 Td (s tenant origination and absorption costs, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 444.25 Td (above-market lease assets and below-market lease liabilities for the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 321.34 444.25 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 341.32 444.25 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 402.15 444.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 465.75 444.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 485.18 444.25 Td (2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 505.18 444.25 Td ( were as ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 432.25 Td (follows \(in thousands\):) Tj ET Q 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 361.75 163.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 213.00 361.75 55.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 268.00 361.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 272.00 361.75 55.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 327.00 361.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 331.00 361.75 55.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 386.00 361.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 390.00 361.75 55.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 445.00 361.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 449.00 361.75 55.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 504.00 361.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 508.00 361.75 55.00 -14.00 re f /GS0 gs 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 213 395.75 m 268 395.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 268 395.75 m 272 395.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 272 395.75 m 327 395.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 331 395.75 m 386 395.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 386 395.75 m 390 395.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 390 395.75 m 445 395.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 449 395.75 m 504 395.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 504 395.75 m 508 395.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 508 395.75 m 563 395.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 213 395.75 m 268 395.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 213 375.75 m 268 375.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 268 395.75 m 272 395.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 268 375.75 m 272 375.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 272 395.75 m 327 395.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 272 375.75 m 327 375.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 331 395.75 m 386 395.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 331 375.75 m 386 375.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 386 395.75 m 390 395.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 386 375.75 m 390 375.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 390 395.75 m 445 395.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 390 375.75 m 445 375.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 449 395.75 m 504 395.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 449 375.75 m 504 375.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 504 395.75 m 508 395.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 504 375.75 m 508 375.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 508 395.75 m 563 395.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 508 375.75 m 563 375.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 213 375.75 m 268 375.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 213 361.75 m 268 361.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 272 375.75 m 327 375.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 272 361.75 m 327 361.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 331 375.75 m 386 375.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 331 361.75 m 386 361.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 390 375.75 m 445 375.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 390 361.75 m 445 361.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 449 375.75 m 504 375.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 449 361.75 m 504 361.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 508 375.75 m 563 375.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 508 361.75 m 563 361.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 213 348.75 m 268 348.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 213 346.75 m 268 346.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 272 348.75 m 327 348.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 272 346.75 m 327 346.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 331 348.75 m 386 348.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 331 346.75 m 386 346.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 390 348.75 m 445 348.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 390 346.75 m 445 346.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 449 348.75 m 504 348.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 449 346.75 m 504 346.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 508 361.75 m 563 361.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 508 348.75 m 563 348.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 508 346.75 m 563 346.75 l s BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 400.00 Td ( ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 228.15 407.83 Td (T) Tj ET Q q 0 0 0 rg BT 232.75 407.83 Td (enant Origination and) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 239.80 399.83 Td (Absorption Costs) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 362.35 407.83 Td (Above-Market) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 366.25 399.83 Td (Lease ) Tj ET Q q 0 0 0 rg BT 387.36 399.83 Td (Assets) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 480.80 407.83 Td (Below-Market) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 477.60 399.83 Td (Lease Liabilities) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 380.00 Td ( ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 219.70 387.83 Td (For the Three Months Ended) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 252.00 379.83 Td (March 31,) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 337.70 387.83 Td (For the Three Months Ended) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 370.00 379.83 Td (March 31,) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 455.70 387.83 Td (For the Three Months Ended) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 488.00 379.83 Td (March 31,) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 366.00 Td ( ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 232.00 365.98 Td (2016) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 291.00 365.98 Td (2015) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 350.00 365.98 Td (2016) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 409.00 365.98 Td (2015) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 468.00 365.98 Td (2016) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 527.00 365.98 Td (2015) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 352.00 Td (Amortization) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 215.50 352.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 244.10 352.00 Td (\(1,542) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 264.80 352.00 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 274.50 352.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 303.10 352.00 Td (\(2,824) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 323.80 352.00 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 333.50 352.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 368.10 352.00 Td (\(828) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 382.80 352.00 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 392.50 352.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 427.10 352.00 Td (\(855) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 441.80 352.00 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 451.50 352.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 482.80 352.00 Td (2,140) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 510.50 352.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 541.80 352.00 Td (2,645) Tj ET Q BT /F1 10.00 Tf ET endstream endobj 31 0 obj <>] /Rotate 0 /Contents 32 0 R>> endobj 32 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 1. Financial Statements \(continued\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 195.70 712.60 Td (KBS REAL) Tj ET Q q 0 0 0 rg BT 245.44 712.60 Td ( EST) Tj ET Q q 0 0 0 rg BT 266.10 712.60 Td (A) Tj ET Q q 0 0 0 rg BT 272.58 712.60 Td (TE INVESTMENT) Tj ET Q q 0 0 0 rg BT 355.48 712.60 Td ( ) Tj ET Q q 0 0 0 rg BT 357.79 712.60 Td (TRUST) Tj ET Q q 0 0 0 rg BT 390.40 712.60 Td (, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 107.50 694.60 Td (CONDENSED NOTES ) Tj ET Q q 0 0 0 rg BT 209.01 694.60 Td (T) Tj ET Q q 0 0 0 rg BT 215.50 694.60 Td (O CONSOLIDA) Tj ET Q q 0 0 0 rg BT 285.60 694.60 Td (TED FINANCIAL) Tj ET Q q 0 0 0 rg BT 364.78 694.60 Td ( ST) Tj ET Q q 0 0 0 rg BT 378.77 694.60 Td (A) Tj ET Q q 0 0 0 rg BT 385.25 694.60 Td (TEMENTS \(CONTINUED\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 274.20 676.60 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 282.95 661.60 Td (\(unaudited\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.00 33.60 Td (14) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 632.25 Td (5. ) Tj ET Q q 0 0 0 rg BT 72.00 632.25 Td (REAL) Tj ET Q q 0 0 0 rg BT 99.23 632.25 Td ( EST) Tj ET Q q 0 0 0 rg BT 119.89 632.25 Td (A) Tj ET Q q 0 0 0 rg BT 126.37 632.25 Td (TE LOANS RECEIV) Tj ET Q q 0 0 0 rg BT 216.77 632.25 Td (ABLE) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 614.25 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 97.94 614.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 161.54 614.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 180.98 614.25 Td (December 31, 2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 259.56 614.25 Td (, the Company) Tj ET Q q 0 0 0 rg BT 317.52 614.25 Td (, through indirect wholly owned subsidiaries, had invested in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 602.25 Td (or originated real estate loans receivable as follows \(dollars in thousands\):) Tj ET Q 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 548.75 127.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 177.00 548.75 4.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 181.00 548.75 34.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 215.00 548.75 4.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 219.00 548.75 29.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 248.00 548.75 4.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 252.00 548.75 35.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 287.00 548.75 4.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 291.00 548.75 48.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 339.00 548.75 4.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 343.00 548.75 46.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 389.00 548.75 4.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 393.00 548.75 46.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 439.00 548.75 4.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 443.00 548.75 38.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 481.00 548.75 4.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 485.00 548.75 36.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 521.00 548.75 4.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 525.00 548.75 34.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 512.75 127.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 177.00 512.75 4.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 181.00 512.75 34.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 215.00 512.75 4.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 219.00 512.75 29.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 248.00 512.75 4.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 252.00 512.75 35.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 287.00 512.75 4.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 291.00 512.75 48.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 339.00 512.75 4.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 343.00 512.75 46.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 389.00 512.75 4.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 393.00 512.75 46.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 439.00 512.75 4.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 443.00 512.75 38.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 481.00 512.75 4.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 485.00 512.75 36.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 521.00 512.75 4.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 525.00 512.75 34.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 476.75 127.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 177.00 476.75 4.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 181.00 476.75 34.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 215.00 476.75 4.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 219.00 476.75 29.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 248.00 476.75 4.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 252.00 476.75 35.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 287.00 476.75 4.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 291.00 476.75 48.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 339.00 476.75 4.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 343.00 476.75 46.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 389.00 476.75 4.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 393.00 476.75 46.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 439.00 476.75 4.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 443.00 476.75 38.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 481.00 476.75 4.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 485.00 476.75 36.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 521.00 476.75 4.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 525.00 476.75 34.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 440.75 127.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 177.00 440.75 4.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 181.00 440.75 34.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 215.00 440.75 4.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 219.00 440.75 29.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 248.00 440.75 4.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 252.00 440.75 35.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 287.00 440.75 4.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 291.00 440.75 48.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 339.00 440.75 4.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 343.00 440.75 46.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 389.00 440.75 4.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 393.00 440.75 46.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 439.00 440.75 4.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 443.00 440.75 38.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 481.00 440.75 4.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 485.00 440.75 36.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 521.00 440.75 4.00 -18.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 525.00 440.75 34.00 -18.00 re f /GS0 gs 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 50 548.75 m 177 548.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 181 548.75 m 215 548.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 219 548.75 m 248 548.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 252 548.75 m 287 548.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 291 548.75 m 339 548.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 343 548.75 m 389 548.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393 548.75 m 439 548.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 443 548.75 m 481 548.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 485 548.75 m 521 548.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 525 548.75 m 559 548.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 50 548.75 m 177 548.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 291 476.75 m 339 476.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 343 476.75 m 389 476.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393 476.75 m 439 476.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 291 440.75 m 339 440.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 343 440.75 m 389 440.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393 440.75 m 439 440.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 291 423.75 m 339 423.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 291 421.75 m 339 421.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 343 423.75 m 389 423.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 343 421.75 m 389 421.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393 423.75 m 439 423.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 393 421.75 m 439 421.75 l s BT /F2 6.00 Tf ET q 0 0 0 rg BT 52.50 558.59 Td (Loan Name) Tj ET Q BT /F2 6.00 Tf ET q 0 0 0 rg BT 61.50 552.59 Td (Location of Related Pr) Tj ET Q q 0 0 0 rg BT 119.55 552.59 Td (operty or) Tj ET Q q 0 0 0 rg BT 143.26 552.59 Td ( Collateral) Tj ET Q BT /F2 6.00 Tf ET q 0 0 0 rg BT 191.50 564.59 Td (Date) Tj ET Q BT /F2 6.00 Tf ET q 0 0 0 rg BT 184.70 558.59 Td (Acquir) Tj ET Q q 0 0 0 rg BT 202.59 558.59 Td (ed/) Tj ET Q BT /F2 6.00 Tf ET q 0 0 0 rg BT 183.50 552.59 Td (Originated) Tj ET Q BT /F2 6.00 Tf ET q 0 0 0 rg BT 221.55 558.59 Td (Pr) Tj ET Q q 0 0 0 rg BT 227.77 558.59 Td (operty) Tj ET Q BT /F2 6.00 Tf ET q 0 0 0 rg BT 226.70 552.59 Td (T) Tj ET Q q 0 0 0 rg BT 230.26 552.59 Td (ype) Tj ET Q BT /F2 6.00 Tf ET q 0 0 0 rg BT 262.30 558.59 Td (Loan) Tj ET Q BT /F2 6.00 Tf ET q 0 0 0 rg BT 262.70 552.59 Td (T) Tj ET Q q 0 0 0 rg BT 266.26 552.59 Td (ype) Tj ET Q BT /F2 6.00 Tf ET q 0 0 0 rg BT 298.45 576.59 Td (Outstanding) Tj ET Q BT /F2 6.00 Tf ET q 0 0 0 rg BT 302.65 570.59 Td (Principal) Tj ET Q BT /F2 6.00 Tf ET q 0 0 0 rg BT 297.65 564.59 Td (Balance as of ) Tj ET Q BT /F2 6.00 Tf ET q 0 0 0 rg BT 301.35 558.59 Td (Mar) Tj ET Q q 0 0 0 rg BT 312.57 558.59 Td (ch 31, ) Tj ET Q BT /F2 6.00 Tf ET q 0 0 0 rg BT 306.20 552.59 Td (2016) Tj ET Q BT /F2 6.00 Tf ET BT /F2 3.90 Tf ET q 0 0 0 rg BT 318.20 555.31 Td (\(1\)) Tj ET Q BT /F2 6.00 Tf ET q 0 0 0 rg BT 350.90 570.59 Td (Book ) Tj ET Q q 0 0 0 rg BT 365.63 570.59 Td (V) Tj ET Q q 0 0 0 rg BT 369.41 570.59 Td (alue) Tj ET Q BT /F2 6.00 Tf ET q 0 0 0 rg BT 359.55 564.59 Td (as of) Tj ET Q BT /F2 6.00 Tf ET q 0 0 0 rg BT 352.35 558.59 Td (Mar) Tj ET Q q 0 0 0 rg BT 363.57 558.59 Td (ch 31,) Tj ET Q BT /F2 6.00 Tf ET q 0 0 0 rg BT 355.70 552.59 Td ( 2016 ) Tj ET Q BT /F2 6.00 Tf ET BT /F2 3.90 Tf ET q 0 0 0 rg BT 370.70 555.31 Td (\(2\)) Tj ET Q BT /F2 6.00 Tf ET q 0 0 0 rg BT 400.90 570.59 Td (Book ) Tj ET Q q 0 0 0 rg BT 415.63 570.59 Td (V) Tj ET Q q 0 0 0 rg BT 419.41 570.59 Td (alue) Tj ET Q BT /F2 6.00 Tf ET q 0 0 0 rg BT 409.55 564.59 Td (as of) Tj ET Q BT /F2 6.00 Tf ET q 0 0 0 rg BT 398.05 558.59 Td (December) Tj ET Q q 0 0 0 rg BT 423.93 558.59 Td ( 31,) Tj ET Q BT /F2 6.00 Tf ET q 0 0 0 rg BT 406.45 552.59 Td (2015 ) Tj ET Q BT /F2 6.00 Tf ET BT /F2 3.90 Tf ET q 0 0 0 rg BT 419.95 555.31 Td (\(2\)) Tj ET Q BT /F2 6.00 Tf ET q 0 0 0 rg BT 446.00 564.59 Td (Contractual) Tj ET Q BT /F2 6.00 Tf ET q 0 0 0 rg BT 451.55 558.59 Td (Inter) Tj ET Q q 0 0 0 rg BT 464.44 558.59 Td (est) Tj ET Q BT /F2 6.00 Tf ET q 0 0 0 rg BT 452.45 552.59 Td (Rate ) Tj ET Q BT /F2 6.00 Tf ET BT /F2 3.90 Tf ET q 0 0 0 rg BT 465.94 555.31 Td (\(3\)) Tj ET Q BT /F2 6.00 Tf ET q 0 0 0 rg BT 487.80 570.59 Td (Annualized) Tj ET Q BT /F2 6.00 Tf ET q 0 0 0 rg BT 491.15 564.59 Td (Effective) Tj ET Q BT /F2 6.00 Tf ET q 0 0 0 rg BT 492.55 558.59 Td (Inter) Tj ET Q q 0 0 0 rg BT 505.44 558.59 Td (est) Tj ET Q BT /F2 6.00 Tf ET q 0 0 0 rg BT 493.45 552.59 Td (Rate ) Tj ET Q BT /F2 6.00 Tf ET BT /F2 3.90 Tf ET q 0 0 0 rg BT 506.94 555.31 Td (\(3\)) Tj ET Q BT /F2 6.00 Tf ET q 0 0 0 rg BT 529.80 558.59 Td (Maturity) Tj ET Q BT /F2 6.00 Tf ET q 0 0 0 rg BT 535.50 552.59 Td (Date) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 52.50 542.09 Td (Sandmar Mezzanine Loan) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 61.50 534.09 Td (Southeast U.S. ) Tj ET Q BT /F1 6.00 Tf ET BT /F1 3.90 Tf ET q 0 0 0 rg BT 98.50 536.81 Td (\(4\)) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 183.80 534.59 Td (01/09/2007) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 225.80 534.59 Td (Retail) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 255.80 534.59 Td (Mezzanine) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 293.50 534.59 Td ($) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 323.00 534.59 Td (5,074) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 345.50 534.59 Td ($) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 373.00 534.59 Td (5,096) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 395.50 534.59 Td ($) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 423.00 534.59 Td (5,096) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 455.25 534.59 Td (5.4%) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 509.50 534.59 Td (—) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 515.50 534.59 Td (%) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 528.15 534.59 Td (01/01/2017) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 52.50 524.09 Td (Lawrence ) Tj ET Q q 0 0 0 rg BT 77.54 524.09 Td (V) Tj ET Q q 0 0 0 rg BT 81.51 524.09 Td (illage Plaza Loan Origination) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 61.50 516.09 Td (New Castle, Pennsylvania ) Tj ET Q BT /F1 6.00 Tf ET BT /F1 3.90 Tf ET q 0 0 0 rg BT 125.82 518.81 Td (\(5\)) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 183.80 516.59 Td (08/06/2007) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 225.80 516.59 Td (Retail) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 257.30 516.59 Td (Mortgage) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 323.00 516.59 Td (6,882) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 373.00 516.59 Td (6,882) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 423.00 516.59 Td (6,903) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 455.25 516.59 Td (8.0%) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 508.00 516.59 Td (8.1) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 515.50 516.59 Td (%) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 528.15 516.59 Td (09/01/2015) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 52.50 506.09 Td (San Diego Of) Tj ET Q q 0 0 0 rg BT 85.39 506.09 Td (fice Portfolio B-Note) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 61.50 498.09 Td (San Diego, California ) Tj ET Q BT /F1 6.00 Tf ET BT /F1 3.90 Tf ET q 0 0 0 rg BT 115.49 500.81 Td (\(6\)) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 183.80 498.59 Td (10/26/2007) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 225.35 498.59 Td (Office) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 260.15 498.59 Td (B-Note) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 320.00 498.59 Td (20,000) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 370.00 498.59 Td (18,498) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 420.00 498.59 Td (18,277) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 455.25 498.59 Td (5.8%) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 505.00 498.59 Td (11.2) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 515.50 498.59 Td (%) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 528.35 498.59 Td (10/11/2017) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 52.50 488.09 Td (4929 ) Tj ET Q q 0 0 0 rg BT 65.89 488.09 Td (W) Tj ET Q q 0 0 0 rg BT 71.31 488.09 Td (ilshire B-Note) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 61.50 480.09 Td (Los ) Tj ET Q q 0 0 0 rg BT 71.67 480.09 Td (Angeles, California) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 183.90 480.59 Td (11/19/2007) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 225.35 480.59 Td (Office) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 260.15 480.59 Td (B-Note) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 323.00 480.59 Td (3,820) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 373.00 480.59 Td (3,539) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 423.00 480.59 Td (3,503) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 455.25 480.59 Td (6.1%) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 505.00 480.59 Td (12.4) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 515.50 480.59 Td (%) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 528.35 480.59 Td (07/11/2017) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 293.50 462.59 Td ($) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 320.00 462.59 Td (35,776) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 345.50 462.59 Td ($) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 370.00 462.59 Td (34,015) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 395.50 462.59 Td ($) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 420.00 462.59 Td (33,779) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 52.50 444.59 Td (Reserve for Loan Losses ) Tj ET Q BT /F1 6.00 Tf ET BT /F1 3.90 Tf ET q 0 0 0 rg BT 113.48 447.31 Td (\(7\)) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 330.50 444.59 Td (—) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 371.00 444.59 Td (\(6,498) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 386.50 444.59 Td (\)) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 421.00 444.59 Td (\(6,498) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 436.50 444.59 Td (\)) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 293.50 426.59 Td ($) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 320.00 426.59 Td (35,776) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 345.50 426.59 Td ($) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 370.00 426.59 Td (27,517) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 395.50 426.59 Td ($) Tj ET Q BT /F1 6.00 Tf ET q 0 0 0 rg BT 420.00 426.59 Td (27,281) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 411.25 Td (_____________________) Tj ET Q BT /F1 6.50 Tf ET BT /F1 4.22 Tf ET q 0 0 0 rg BT 49.50 403.40 Td (\(1\)) Tj ET Q BT /F1 6.50 Tf ET q 0 0 0 rg BT 54.43 400.45 Td ( Outstanding principal balance as of ) Tj ET Q BT /F1 6.50 Tf ET q 0 0 0 rg BT 149.73 400.45 Td (March 31, 2016) Tj ET Q BT /F1 6.50 Tf ET q 0 0 0 rg BT 191.07 400.45 Td ( represents original principal balance outstanding under the loan, increased for any subsequent fundings and reduced for any principal ) Tj ET Q BT /F1 6.50 Tf ET q 0 0 0 rg BT 49.50 392.65 Td (paydowns.) Tj ET Q BT /F1 6.50 Tf ET BT /F1 4.22 Tf ET q 0 0 0 rg BT 49.50 384.80 Td (\(2\)) Tj ET Q BT /F1 6.50 Tf ET q 0 0 0 rg BT 54.43 381.85 Td ( Book value represents outstanding principal balance, adjusted for unamortized acquisition discounts, origination fees and direct origination and acquisition costs. Loan balances are presented ) Tj ET Q BT /F1 6.50 Tf ET q 0 0 0 rg BT 49.50 374.05 Td (gross of any asset-specific reserves.) Tj ET Q BT /F1 6.50 Tf ET BT /F1 4.22 Tf ET q 0 0 0 rg BT 49.50 366.20 Td (\(3\)) Tj ET Q BT /F1 6.50 Tf ET q 0 0 0 rg BT 54.43 363.25 Td ( Contractual interest rate is the stated interest rate on the face of the loan. ) Tj ET Q q 0 0 0 rg BT 247.01 363.25 Td (Annualized ef) Tj ET Q q 0 0 0 rg BT 283.53 363.25 Td (fective interest rate is calculated as the actual interest income recognized in 2016, using the interest ) Tj ET Q BT /F1 6.50 Tf ET q 0 0 0 rg BT 49.50 355.45 Td (method, annualized and divided by the average amortized cost basis of the investment during 2016. ) Tj ET Q q 0 0 0 rg BT 311.13 355.45 Td (The contractual interest rates and annualized ef) Tj ET Q q 0 0 0 rg BT 433.73 355.45 Td (fective interest rates presented are as of ) Tj ET Q BT /F1 6.50 Tf ET q 0 0 0 rg BT 49.50 347.65 Td (March 31, 2016) Tj ET Q BT /F1 6.50 Tf ET q 0 0 0 rg BT 90.84 347.65 Td (. ) Tj ET Q BT /F1 6.50 Tf ET BT /F1 4.22 Tf ET q 0 0 0 rg BT 49.50 339.80 Td (\(4\)) Tj ET Q BT /F1 6.50 Tf ET q 0 0 0 rg BT 54.43 336.85 Td ( ) Tj ET Q q 0 0 0 rg BT 55.93 336.85 Td (The Company had recorded an asset-specific loan loss reserve against this investment as of ) Tj ET Q BT /F1 6.50 Tf ET q 0 0 0 rg BT 294.57 336.85 Td (March 31, 2016) Tj ET Q BT /F1 6.50 Tf ET q 0 0 0 rg BT 335.91 336.85 Td (. See “—Reserve for Loan Losses.”) Tj ET Q BT /F1 6.50 Tf ET BT /F1 4.22 Tf ET q 0 0 0 rg BT 49.50 329.00 Td (\(5\)) Tj ET Q BT /F1 6.50 Tf ET q 0 0 0 rg BT 54.43 326.05 Td ( On September 1, 2015, the Lawrence ) Tj ET Q q 0 0 0 rg BT 154.49 326.05 Td (V) Tj ET Q q 0 0 0 rg BT 158.79 326.05 Td (illage Plaza Loan Origination matured without repayment. ) Tj ET Q q 0 0 0 rg BT 313.73 326.05 Td (The Company had recorded an asset-specific loan loss reserve against this investment as of ) Tj ET Q BT /F1 6.50 Tf ET q 0 0 0 rg BT 49.50 318.25 Td (March 31, 2016) Tj ET Q BT /F1 6.50 Tf ET q 0 0 0 rg BT 90.84 318.25 Td (. See “—Reserve for Loan Losses.” On March 29, 2016, the Company entered into an agreement in lieu of foreclosure with the borrower under the Lawrence ) Tj ET Q q 0 0 0 rg BT 506.78 318.25 Td (V) Tj ET Q q 0 0 0 rg BT 511.08 318.25 Td (illage Plaza Loan ) Tj ET Q BT /F1 6.50 Tf ET q 0 0 0 rg BT 49.50 310.45 Td (Origination. On ) Tj ET Q q 0 0 0 rg BT 93.55 310.45 Td (April 25, 2016, the scheduled closing date of the agreement in lieu of foreclosure was extended to May 13, 2016.) Tj ET Q BT /F1 6.50 Tf ET BT /F1 4.22 Tf ET q 0 0 0 rg BT 49.50 302.60 Td (\(6\)) Tj ET Q BT /F1 6.50 Tf ET q 0 0 0 rg BT 54.43 299.65 Td ( ) Tj ET Q q 0 0 0 rg BT 55.93 299.65 Td (The borrower under this note is a wholly owned subsidiary of the Irvine Company) Tj ET Q q 0 0 0 rg BT 269.43 299.65 Td (. Donald Bren, who is the brother of Peter Bren \(one of the Company’) Tj ET Q q 0 0 0 rg BT 452.84 299.65 Td (s executive of) Tj ET Q q 0 0 0 rg BT 488.82 299.65 Td (ficers and sponsors\), is the ) Tj ET Q BT /F1 6.50 Tf ET q 0 0 0 rg BT 49.50 291.85 Td (chairman of the Irvine Company) Tj ET Q q 0 0 0 rg BT 133.91 291.85 Td (. During the ) Tj ET Q BT /F1 6.50 Tf ET q 0 0 0 rg BT 168.40 291.85 Td (three) Tj ET Q BT /F1 6.50 Tf ET q 0 0 0 rg BT 181.39 291.85 Td ( months ended ) Tj ET Q BT /F1 6.50 Tf ET q 0 0 0 rg BT 220.92 291.85 Td (March 31, 2016) Tj ET Q BT /F1 6.50 Tf ET q 0 0 0 rg BT 262.26 291.85 Td (, the Company recognized ) Tj ET Q BT /F1 6.50 Tf ET q 0 0 0 rg BT 332.12 291.85 Td ($0.5 million) Tj ET Q BT /F1 6.50 Tf ET q 0 0 0 rg BT 363.90 291.85 Td ( of interest income related to its investment in this loan.) Tj ET Q BT /F1 6.50 Tf ET BT /F1 4.22 Tf ET q 0 0 0 rg BT 49.50 284.00 Td (\(7\)) Tj ET Q BT /F1 6.50 Tf ET q 0 0 0 rg BT 54.43 281.05 Td ( See “—Reserve for Loan Losses.”) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 257.05 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 97.94 257.05 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 161.54 257.05 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 180.98 257.05 Td (December 31, 2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 259.56 257.05 Td (, interest receivable from real estate loans receivable was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.00 257.05 Td ($0.1 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 538.90 257.05 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 245.05 Td ($0.1 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 98.39 245.05 Td (, respectively) Tj ET Q q 0 0 0 rg BT 151.05 245.05 Td (, and is included in rents and other receivables.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 227.05 Td (The following summarizes the activity related to real estate loans receivable for the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 409.20 227.05 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 429.18 227.05 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.01 227.05 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.61 227.05 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 215.05 Td (\(in thousands\):) Tj ET Q 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 198.55 426.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 476.00 198.55 87.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 170.55 426.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 476.00 170.55 87.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 142.55 426.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 476.00 142.55 87.00 -14.00 re f /GS0 gs 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 476 142.54999999999995 m 563 142.54999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 476 129.54999999999995 m 563 129.54999999999995 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 476 127.54999999999995 m 563 127.54999999999995 l s BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 188.80 Td (Real estate loans receivable, net - December 31, 2015) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 478.50 188.80 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 537.80 188.80 Td (27,281) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 174.80 Td (Principal repayments received on real estate loans receivable) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 549.10 174.80 Td (\(35) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 559.80 174.80 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 160.80 Td (Accretion of discounts on purchased real estate loans receivable) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 547.80 160.80 Td (280) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 146.80 Td (Amortization of origination fees and costs on purchased and originated real estate loans receivable) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 553.10 146.80 Td (\(9) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 559.80 146.80 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 132.80 Td (Real estate loans receivable, net - March 31, 2016) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 478.50 132.80 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 537.80 132.80 Td (27,517) Tj ET Q BT /F1 10.00 Tf ET endstream endobj 33 0 obj <>] /Rotate 0 /Contents 34 0 R>> endobj 34 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 1. Financial Statements \(continued\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 195.70 712.60 Td (KBS REAL) Tj ET Q q 0 0 0 rg BT 245.44 712.60 Td ( EST) Tj ET Q q 0 0 0 rg BT 266.10 712.60 Td (A) Tj ET Q q 0 0 0 rg BT 272.58 712.60 Td (TE INVESTMENT) Tj ET Q q 0 0 0 rg BT 355.48 712.60 Td ( ) Tj ET Q q 0 0 0 rg BT 357.79 712.60 Td (TRUST) Tj ET Q q 0 0 0 rg BT 390.40 712.60 Td (, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 107.50 694.60 Td (CONDENSED NOTES ) Tj ET Q q 0 0 0 rg BT 209.01 694.60 Td (T) Tj ET Q q 0 0 0 rg BT 215.50 694.60 Td (O CONSOLIDA) Tj ET Q q 0 0 0 rg BT 285.60 694.60 Td (TED FINANCIAL) Tj ET Q q 0 0 0 rg BT 364.78 694.60 Td ( ST) Tj ET Q q 0 0 0 rg BT 378.77 694.60 Td (A) Tj ET Q q 0 0 0 rg BT 385.25 694.60 Td (TEMENTS \(CONTINUED\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 274.20 676.60 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 282.95 661.60 Td (\(unaudited\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.00 33.60 Td (15) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 632.10 Td (For the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 104.61 632.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 124.59 632.10 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 185.42 632.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 249.02 632.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 268.46 632.10 Td (2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 288.46 632.10 Td (, interest income from real estate loans receivable consisted of the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 620.10 Td (following \(in thousands\):) Tj ET Q 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 575.60 335.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 385.00 575.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 389.00 575.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 474.00 575.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 478.00 575.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 547.60 335.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 385.00 547.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 389.00 547.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 474.00 547.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 478.00 547.60 85.00 -14.00 re f /GS0 gs 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 589.6 m 474 589.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 474 589.6 m 478 589.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 589.6 m 563 589.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 589.6 m 474 589.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 575.6 m 474 575.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 474 589.6 m 478 589.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 589.6 m 563 589.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 575.6 m 563 575.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 575.6 m 474 575.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 575.6 m 563 575.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 533.6 m 474 533.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 533.6 m 563 533.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 520.6 m 474 520.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 518.6 m 474 518.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 520.6 m 563 520.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 518.6 m 563 518.6 l s BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 593.85 Td ( ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 420.60 593.83 Td (Three Months Ended March 31,) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 579.85 Td ( ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 423.00 579.83 Td (2016) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 512.00 579.83 Td (2015) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 565.85 Td (Contractual interest income) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 391.50 565.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 458.80 565.85 Td (539) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 480.50 565.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 547.80 565.85 Td (486) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 551.85 Td (Interest accretion) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 458.80 551.85 Td (280) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 547.80 551.85 Td (248) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 537.85 Td (Amortization of origination fees and costs) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 464.10 537.85 Td (\(9) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 470.80 537.85 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 553.10 537.85 Td (\(8) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 559.80 537.85 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 523.85 Td (Interest income from real estate loans receivable) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 391.50 523.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 458.80 523.85 Td (810) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 480.50 523.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 547.80 523.85 Td (726) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 496.10 Td (The Company generally recognizes income on impaired loans on either a cash basis, where interest income is only ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 484.10 Td (recorded when received in cash, or on a cost-recovery basis, where all cash receipts are applied against the carrying value of the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 472.10 Td (loan. ) Tj ET Q q 0 0 0 rg BT 74.04 472.10 Td (The Company will resume the accrual of interest if it determines the collection of interest according to the contractual ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 460.10 Td (terms of the loan is probable. ) Tj ET Q q 0 0 0 rg BT 170.96 460.10 Td (The Company considers the collectibility of the loan’) Tj ET Q q 0 0 0 rg BT 383.96 460.10 Td (s principal balance in determining whether ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 448.10 Td (to recognize income on impaired loans on a cash basis or a cost-recovery basis. ) Tj ET Q q 0 0 0 rg BT 371.06 448.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 395.51 448.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 459.10 448.10 Td (, the borrower under the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 436.10 Td (Sandmar Mezzanine Loan was delinquent. Beginning in July 2014, interest income received on the Sandmar Mezzanine Loan ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 424.10 Td (was recorded on a cost-recovery basis. ) Tj ET Q q 0 0 0 rg BT 208.33 424.10 Td (As of September 30, 2015, the book value, which is net of the loan loss reserve for the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 412.10 Td (Sandmar Mezzanine Loan was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 175.01 412.10 Td ($0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 185.01 412.10 Td (. Subsequent to September 30, 2015, the Company began recognizing cash receipts related to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 400.10 Td (the Sandmar Mezzanine Loan as interest income. During the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 296.92 400.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 316.90 400.10 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 377.73 400.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 441.33 400.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 460.76 400.10 Td (2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.76 400.10 Td (, the Company ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 388.10 Td (recognized interest income of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 170.56 388.10 Td ($49,000) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 203.06 388.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 222.50 388.10 Td ($0) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 232.50 388.10 Td ( related to the Sandmar Mezzanine Loan, respectively) Tj ET Q q 0 0 0 rg BT 447.31 388.10 Td (. On September 1, 2015, the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 376.10 Td (Lawrence ) Tj ET Q q 0 0 0 rg BT 91.23 376.10 Td (V) Tj ET Q q 0 0 0 rg BT 97.85 376.10 Td (illage Plaza Loan Origination matured without repayment and the Company began recognizing interest income on a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 364.10 Td (cash basis. During the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 142.82 364.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 162.80 364.10 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 223.63 364.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 287.22 364.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 306.66 364.10 Td (2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 326.66 364.10 Td (, the Company recognized interest income of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 508.83 364.10 Td ($0.1 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 557.72 364.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 352.10 Td (and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 66.44 352.10 Td ($0.1 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 115.33 352.10 Td ( on the Lawrence ) Tj ET Q q 0 0 0 rg BT 186.78 352.10 Td (V) Tj ET Q q 0 0 0 rg BT 193.40 352.10 Td (illage Plaza Loan Origination, respectively) Tj ET Q q 0 0 0 rg BT 364.08 352.10 Td (. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 334.10 Td (Reserve for) Tj ET Q q 0 0 0 rg BT 98.46 334.10 Td ( Loan Losses) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 316.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 97.94 316.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 161.54 316.10 Td (, the total reserve for loan losses consisted of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 343.71 316.10 Td ($5.1 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 392.61 316.10 Td ( of asset-specific reserves related to the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 304.10 Td (Sandmar Mezzanine Loan and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 173.89 304.10 Td ($1.4 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 222.79 304.10 Td ( of asset-specific reserves related to the Lawrence ) Tj ET Q q 0 0 0 rg BT 424.17 304.10 Td (V) Tj ET Q q 0 0 0 rg BT 430.79 304.10 Td (illage Plaza Loan Origination; ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 292.10 Td (these loans had amortized cost bases of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 209.17 292.10 Td ($5.1 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 258.06 292.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 277.50 292.10 Td ($6.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 326.39 292.10 Td (, respectively) Tj ET Q q 0 0 0 rg BT 379.06 292.10 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 274.10 Td (The Company did not record additional loan loss reserves during the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 350.38 274.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 370.37 274.10 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 431.19 274.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 494.79 274.10 Td (. ) Tj ET Q endstream endobj 35 0 obj <>] /Rotate 0 /Contents 36 0 R>> endobj 36 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 1. Financial Statements \(continued\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 195.70 712.60 Td (KBS REAL) Tj ET Q q 0 0 0 rg BT 245.44 712.60 Td ( EST) Tj ET Q q 0 0 0 rg BT 266.10 712.60 Td (A) Tj ET Q q 0 0 0 rg BT 272.58 712.60 Td (TE INVESTMENT) Tj ET Q q 0 0 0 rg BT 355.48 712.60 Td ( ) Tj ET Q q 0 0 0 rg BT 357.79 712.60 Td (TRUST) Tj ET Q q 0 0 0 rg BT 390.40 712.60 Td (, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 107.50 694.60 Td (CONDENSED NOTES ) Tj ET Q q 0 0 0 rg BT 209.01 694.60 Td (T) Tj ET Q q 0 0 0 rg BT 215.50 694.60 Td (O CONSOLIDA) Tj ET Q q 0 0 0 rg BT 285.60 694.60 Td (TED FINANCIAL) Tj ET Q q 0 0 0 rg BT 364.78 694.60 Td ( ST) Tj ET Q q 0 0 0 rg BT 378.77 694.60 Td (A) Tj ET Q q 0 0 0 rg BT 385.25 694.60 Td (TEMENTS \(CONTINUED\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 274.20 676.60 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 282.95 661.60 Td (\(unaudited\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.00 33.60 Td (16) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 632.25 Td (6. ) Tj ET Q q 0 0 0 rg BT 72.00 632.25 Td (REAL) Tj ET Q q 0 0 0 rg BT 99.23 632.25 Td ( EST) Tj ET Q q 0 0 0 rg BT 119.89 632.25 Td (A) Tj ET Q q 0 0 0 rg BT 126.37 632.25 Td (TE HELD FOR SALE ) Tj ET Q q 0 0 0 rg BT 224.73 632.25 Td (AND DISCONTINUED OPERA) Tj ET Q q 0 0 0 rg BT 363.45 632.25 Td (TIONS) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 614.25 Td (In accordance with ) Tj ET Q q 0 0 0 rg BT 151.52 614.25 Td (ASU No. 2014-08, ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 229.57 614.25 Td (Pr) Tj ET Q q 0 0 0 rg BT 239.20 614.25 Td (esentation of Financial Statements \(T) Tj ET Q q 0 0 0 rg BT 388.27 614.25 Td (opic 205\) and Pr) Tj ET Q q 0 0 0 rg BT 455.94 614.25 Td (operty) Tj ET Q q 0 0 0 rg BT 480.94 614.25 Td (, Plant, and ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 49.50 602.25 Td (Equipment \(T) Tj ET Q q 0 0 0 rg BT 103.30 602.25 Td (opic 360\): Reporting Discontinued Operations and Disclosur) Tj ET Q q 0 0 0 rg BT 349.02 602.25 Td (es of Disposals of Components of an Entity) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 521.52 602.25 Td ( \(“ASU ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 590.25 Td (No. 2014-08”\), operating results of properties that are classified as held for sale in the ordinary course of business on or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 578.25 Td (subsequent to January 1, 2014 would generally be included in continuing operations on the Company’) Tj ET Q q 0 0 0 rg BT 457.48 578.25 Td (s consolidated statements ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 566.25 Td (of operations. Operating results of properties that were classified as held for sale in financial statements issued for the reporting ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 554.25 Td (periods prior to January 1, 2014 will remain in discontinued operations on the Company’) Tj ET Q q 0 0 0 rg BT 404.99 554.25 Td (s consolidated statement of operations. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 542.25 Td (Prior to the adoption of ) Tj ET Q q 0 0 0 rg BT 144.77 542.25 Td (ASU No. 2014-08, the operating results of properties held for sale or to be disposed of and the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 530.25 Td (aggregate net gains recognized upon their disposition were presented as discontinued operations in the accompanying ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 518.25 Td (consolidated statements of operations for all periods presented. During the year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 398.28 518.25 Td (December 31, 2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 476.86 518.25 Td (, the Company ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 506.25 Td (disposed of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 97.83 506.25 Td (34) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 107.83 506.25 Td ( properties \(of which ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 193.91 506.25 Td (31) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 203.91 506.25 Td ( were GKK Properties\) and terminated its leasehold interest in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 455.51 506.25 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.49 506.25 Td ( GKK Properties. ) Tj ET Q q 0 0 0 rg BT 549.65 506.25 Td (As ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 494.25 Td (of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 60.33 494.25 Td (December 31, 2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 138.91 494.25 Td (, the Company had classified ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 257.22 494.25 Td (eight) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 277.21 494.25 Td ( properties as held for sale \(all of which were GKK Properties\). ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 482.25 Td (During the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 95.05 482.25 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 115.03 482.25 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 175.86 482.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 239.46 482.25 Td (, the Company disposed of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 348.89 482.25 Td (14) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 358.89 482.25 Td ( properties \(all of which were GKK Properties\). ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 470.25 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.94 470.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 137.54 470.25 Td (, the Company had classified ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 255.85 470.25 Td (77) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 265.85 470.25 Td ( properties as held for sale, all of which were GKK Properties.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 452.25 Td (The following summary presents the major components of assets and liabilities related to real estate held for sale as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 440.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 113.10 440.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 132.54 440.25 Td (December 31, 2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 211.12 440.25 Td ( \(in thousands\):) Tj ET Q 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 409.75 309.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 359.00 409.75 100.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 459.00 409.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 463.00 409.75 100.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 381.75 309.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 359.00 381.75 100.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 459.00 381.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 463.00 381.75 100.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 353.75 309.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 359.00 353.75 100.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 459.00 353.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 463.00 353.75 100.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 325.75 309.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 359.00 325.75 100.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 459.00 325.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 463.00 325.75 100.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 297.75 309.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 359.00 297.75 100.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 459.00 297.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 463.00 297.75 100.00 -14.00 re f /GS0 gs 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 359 409.75 m 459 409.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 463 409.75 m 563 409.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 359 367.75 m 459 367.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 463 367.75 m 563 367.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 359 339.75 m 459 339.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 463 339.75 m 563 339.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 359 326.75 m 459 326.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 359 324.75 m 459 324.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 463 326.75 m 563 326.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 463 324.75 m 563 324.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 359 283.75 m 459 283.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 463 283.75 m 563 283.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 359 270.75 m 459 270.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 359 268.75 m 459 268.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 463 270.75 m 563 270.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 463 268.75 m 563 268.75 l s BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 414.00 Td ( ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 382.00 413.98 Td (March 31, 2016) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 480.25 413.98 Td (December 31, 2015) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 400.00 Td (Assets related to real estate held for sale) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 58.50 386.00 Td (Total real estate, at cost and net of impairment charges) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 361.50 386.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 429.80 386.00 Td (157,889) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 465.50 386.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 533.80 386.00 Td (179,708) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 58.50 372.00 Td (Accumulated depreciation and amortization) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 431.10 372.00 Td (\(29,378) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 455.80 372.00 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 535.10 372.00 Td (\(32,948) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 559.80 372.00 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 58.50 358.00 Td (Real estate held for sale, net) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 429.80 358.00 Td (128,511) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 533.80 358.00 Td (146,760) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 58.50 344.00 Td (Other assets) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 433.80 344.00 Td (18,243) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 537.80 344.00 Td (18,855) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 330.00 Td (Total assets related to real estate held for sale) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 361.50 330.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 429.80 330.00 Td (146,754) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 465.50 330.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 533.80 330.00 Td (165,615) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 316.00 Td (Liabilities related to real estate held for sale) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 58.50 302.00 Td (Notes payable, net) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 429.80 302.00 Td (118,982) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 533.80 302.00 Td (119,592) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 58.50 288.00 Td (Other liabilities) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 437.80 288.00 Td (3,496) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 541.80 288.00 Td (5,164) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 274.00 Td (Total liabilities related to real estate held for sale) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 361.50 274.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 429.80 274.00 Td (122,478) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 465.50 274.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 533.80 274.00 Td (124,756) Tj ET Q BT /F1 10.00 Tf ET endstream endobj 37 0 obj <>] /Rotate 0 /Contents 38 0 R>> endobj 38 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 1. Financial Statements \(continued\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 195.70 712.60 Td (KBS REAL) Tj ET Q q 0 0 0 rg BT 245.44 712.60 Td ( EST) Tj ET Q q 0 0 0 rg BT 266.10 712.60 Td (A) Tj ET Q q 0 0 0 rg BT 272.58 712.60 Td (TE INVESTMENT) Tj ET Q q 0 0 0 rg BT 355.48 712.60 Td ( ) Tj ET Q q 0 0 0 rg BT 357.79 712.60 Td (TRUST) Tj ET Q q 0 0 0 rg BT 390.40 712.60 Td (, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 107.50 694.60 Td (CONDENSED NOTES ) Tj ET Q q 0 0 0 rg BT 209.01 694.60 Td (T) Tj ET Q q 0 0 0 rg BT 215.50 694.60 Td (O CONSOLIDA) Tj ET Q q 0 0 0 rg BT 285.60 694.60 Td (TED FINANCIAL) Tj ET Q q 0 0 0 rg BT 364.78 694.60 Td ( ST) Tj ET Q q 0 0 0 rg BT 378.77 694.60 Td (A) Tj ET Q q 0 0 0 rg BT 385.25 694.60 Td (TEMENTS \(CONTINUED\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 274.20 676.60 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 282.95 661.60 Td (\(unaudited\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.00 33.60 Td (17) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 632.10 Td (During the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 119.05 632.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 139.03 632.10 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 199.86 632.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 263.46 632.10 Td (, the Company sold ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 343.73 632.10 Td (14) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 353.73 632.10 Td ( GKK Properties, which properties were not ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 620.10 Td (classified as held for sale in financial statements issued for the reporting periods prior to January 1, 2014. During the year ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 608.10 Td (ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 75.88 608.10 Td (December 31, 2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 154.46 608.10 Td (, the Company sold ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 234.73 608.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 254.72 608.10 Td ( historical real estate properties and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 399.10 608.10 Td (30) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 409.10 608.10 Td ( GKK Properties, which properties ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 596.10 Td (were not classified as held for sale in financial statements issued for the reporting periods prior to January 1, 2014. ) Tj ET Q q 0 0 0 rg BT 512.43 596.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 584.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 113.10 584.10 Td (, the Company had classified ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 231.40 584.10 Td (77) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 241.40 584.10 Td ( properties as held for sale, all of which were GKK Properties. In accordance ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 572.10 Td (with ) Tj ET Q q 0 0 0 rg BT 69.23 572.10 Td (ASU No. 2014-08, the operations of these properties are included in continuing operations on the Company’) Tj ET Q q 0 0 0 rg BT 502.75 572.10 Td (s consolidated ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 560.10 Td (statements of operations. ) Tj ET Q q 0 0 0 rg BT 154.02 560.10 Td (The following table summarizes certain revenues and expenses related to all of these properties, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 548.10 Td (which were included in continuing operations \(in thousands\): ) Tj ET Q 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 503.60 335.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 385.00 503.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 389.00 503.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 474.00 503.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 478.00 503.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 475.60 335.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 385.00 475.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 389.00 475.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 474.00 475.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 478.00 475.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 447.60 335.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 385.00 447.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 389.00 447.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 474.00 447.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 478.00 447.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 419.60 335.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 385.00 419.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 389.00 419.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 474.00 419.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 478.00 419.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 391.60 335.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 385.00 391.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 389.00 391.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 474.00 391.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 478.00 391.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 363.60 335.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 385.00 363.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 389.00 363.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 474.00 363.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 478.00 363.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 335.60 335.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 385.00 335.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 389.00 335.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 474.00 335.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 478.00 335.60 85.00 -14.00 re f /GS0 gs 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 517.6 m 474 517.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 474 517.6 m 478 517.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 517.6 m 563 517.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 517.6 m 474 517.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 503.6 m 474 503.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 474 517.6 m 478 517.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 517.6 m 563 517.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 503.6 m 563 503.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 461.6 m 474 461.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 447.6 m 474 447.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 461.6 m 563 461.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 447.6 m 563 447.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 335.6 m 474 335.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 321.6 m 474 321.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 335.6 m 563 335.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 321.6 m 563 321.6 l s BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 521.85 Td ( ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 420.60 521.83 Td (Three Months Ended March 31,) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 507.85 Td ( ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 423.00 507.83 Td (2016) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 512.00 507.83 Td (2015) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 493.85 Td (Revenues) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 64.50 479.85 Td (Rental income) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 391.50 479.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 452.80 479.85 Td (4,338) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 480.50 479.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 537.80 479.85 Td (11,139) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 64.50 465.85 Td (Tenant reimbursements and other operating income) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 452.80 465.85 Td (1,710) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 541.80 465.85 Td (4,684) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 451.85 Td (Total revenues) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 452.80 451.85 Td (6,048) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 537.80 451.85 Td (15,823) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 437.85 Td (Expenses) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 64.50 423.85 Td (Operating, maintenance, and management) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 452.80 423.85 Td (1,593) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 541.80 423.85 Td (6,531) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 64.50 409.85 Td (Real estate taxes and insurance) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 458.80 409.85 Td (759) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 541.80 409.85 Td (1,991) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 64.50 395.85 Td (Asset management fees to affiliate) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 462.80 395.85 Td (—) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 547.80 395.85 Td (130) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 64.50 381.85 Td (General and administrative expenses) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 466.80 381.85 Td (1) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 551.80 381.85 Td (—) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 64.50 367.85 Td (Depreciation and amortization) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 458.80 367.85 Td (520) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 541.80 367.85 Td (4,763) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 64.50 353.85 Td (Interest expense) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 452.80 353.85 Td (1,949) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 541.80 353.85 Td (4,244) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 64.50 339.85 Td (Impairment of real estate) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 458.80 339.85 Td (271) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 551.80 339.85 Td (—) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 325.85 Td (Total expenses) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 452.80 325.85 Td (5,093) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 537.80 325.85 Td (17,659) Tj ET Q BT /F1 10.00 Tf ET BT /F4 10.00 Tf ET q 0 0 0 rg BT 49.50 298.10 Td (Discontinued Operations) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 283.10 Td (The following table summarizes operating income from discontinued operations for the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 425.90 283.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 445.89 283.10 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 506.71 283.10 Td (March 31, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 271.10 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.50 271.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 88.94 271.10 Td (2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 108.94 271.10 Td ( \(in thousands\):) Tj ET Q 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 226.60 335.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 385.00 226.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 389.00 226.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 474.00 226.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 478.00 226.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 198.60 335.00 -20.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 385.00 198.60 4.00 -20.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 389.00 198.60 85.00 -20.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 474.00 198.60 4.00 -20.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 478.00 198.60 85.00 -20.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 164.60 335.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 385.00 164.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 389.00 164.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 474.00 164.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 478.00 164.60 85.00 -14.00 re f /GS0 gs 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 240.60000000000002 m 474 240.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 474 240.60000000000002 m 478 240.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 240.60000000000002 m 563 240.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 240.60000000000002 m 474 240.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 226.60000000000002 m 474 226.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 474 240.60000000000002 m 478 240.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 240.60000000000002 m 563 240.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 226.60000000000002 m 563 226.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 226.60000000000002 m 474 226.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 474 226.60000000000002 m 478 226.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 226.60000000000002 m 563 226.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 198.60000000000002 m 474 198.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 198.60000000000002 m 563 198.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 164.60000000000002 m 474 164.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 151.60000000000002 m 474 151.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 149.60000000000002 m 474 149.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 164.60000000000002 m 563 164.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 151.60000000000002 m 563 151.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 149.60000000000002 m 563 149.60000000000002 l s BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 244.85 Td ( ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 420.60 244.83 Td (Three Months Ended March 31,) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 230.85 Td ( ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 423.00 230.83 Td (2016) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 512.00 230.83 Td (2015) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 216.85 Td (Total revenues and other income) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 391.50 216.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 462.80 216.85 Td (—) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 480.50 216.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 551.80 216.85 Td (33) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 202.85 Td (Total expenses) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 466.80 202.85 Td (5) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 549.10 202.85 Td (\(11) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 559.80 202.85 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 58.50 190.55 Td (\(Loss\) income from discontinued operations before gain on sales of real estate, net, and impairment) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 67.50 182.55 Td (charge) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 464.10 182.85 Td (\(5) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 470.80 182.85 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 551.80 182.85 Td (44) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 168.85 Td (Gain on sales of real estate, net) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 462.80 168.85 Td (—) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 547.80 168.85 Td (124) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 58.50 154.85 Td (\(Loss\) income from discontinued operations) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 391.50 154.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 464.10 154.85 Td (\(5) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 470.80 154.85 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 480.50 154.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 547.80 154.85 Td (168) Tj ET Q BT /F1 10.00 Tf ET BT /F4 10.00 Tf ET q 0 0 0 rg BT 49.50 127.10 Td (Foreclosed Real Estate Held for Sale) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 112.10 Td (During the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 119.05 112.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 139.03 112.10 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 199.86 112.10 Td (March 31, 2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 263.46 112.10 Td (, the Company sold the remaining ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 401.49 112.10 Td (two) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 416.49 112.10 Td ( condominium units of the ) Tj ET Q q 0 0 0 rg BT 524.35 112.10 Td (T) Tj ET Q q 0 0 0 rg BT 530.11 112.10 Td (ribeca ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 100.10 Td (Building and recognized a gain on sale of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 218.34 100.10 Td ($2.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 267.23 100.10 Td ( \(which gain on sale has been reduced by disposition fees to the ) Tj ET Q q 0 0 0 rg BT 523.55 100.10 Td (Advisor ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 88.10 Td (of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 60.33 88.10 Td ($0.2 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 109.22 88.10 Td ( related to these two Units\) and recorded expenses of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 323.59 88.10 Td ($0.2 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 372.48 88.10 Td ( related to foreclosed real estate held for sale. ) Tj ET Q endstream endobj 39 0 obj <>] /Rotate 0 /Contents 40 0 R>> endobj 40 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 1. Financial Statements \(continued\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 195.70 712.60 Td (KBS REAL) Tj ET Q q 0 0 0 rg BT 245.44 712.60 Td ( EST) Tj ET Q q 0 0 0 rg BT 266.10 712.60 Td (A) Tj ET Q q 0 0 0 rg BT 272.58 712.60 Td (TE INVESTMENT) Tj ET Q q 0 0 0 rg BT 355.48 712.60 Td ( ) Tj ET Q q 0 0 0 rg BT 357.79 712.60 Td (TRUST) Tj ET Q q 0 0 0 rg BT 390.40 712.60 Td (, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 107.50 694.60 Td (CONDENSED NOTES ) Tj ET Q q 0 0 0 rg BT 209.01 694.60 Td (T) Tj ET Q q 0 0 0 rg BT 215.50 694.60 Td (O CONSOLIDA) Tj ET Q q 0 0 0 rg BT 285.60 694.60 Td (TED FINANCIAL) Tj ET Q q 0 0 0 rg BT 364.78 694.60 Td ( ST) Tj ET Q q 0 0 0 rg BT 378.77 694.60 Td (A) Tj ET Q q 0 0 0 rg BT 385.25 694.60 Td (TEMENTS \(CONTINUED\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 274.20 676.60 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 282.95 661.60 Td (\(unaudited\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.00 33.60 Td (18) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 632.25 Td (7. ) Tj ET Q q 0 0 0 rg BT 72.00 632.25 Td (NOTES P) Tj ET Q q 0 0 0 rg BT 113.77 632.25 Td (A) Tj ET Q q 0 0 0 rg BT 120.07 632.25 Td (Y) Tj ET Q q 0 0 0 rg BT 126.38 632.25 Td (ABLE) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 614.25 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 97.94 614.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 161.54 614.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 180.98 614.25 Td (December 31, 2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 259.56 614.25 Td (, the Company’) Tj ET Q q 0 0 0 rg BT 320.95 614.25 Td (s notes payable, including notes payable related to real ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 602.25 Td (estate held for sale, consisted of the following \(dollars in thousands\):) Tj ET Q 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 548.75 213.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 263.00 548.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 267.00 548.75 47.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 314.00 548.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 318.00 548.75 47.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 365.00 548.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 369.00 548.75 49.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 418.00 548.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 422.00 548.75 47.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 469.00 548.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.00 548.75 47.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 520.00 548.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 524.00 548.75 39.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 514.75 213.00 -26.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 263.00 514.75 4.00 -26.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 267.00 514.75 47.00 -26.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 314.00 514.75 4.00 -26.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 318.00 514.75 47.00 -26.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 365.00 514.75 4.00 -26.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 369.00 514.75 49.00 -26.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 418.00 514.75 4.00 -26.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 422.00 514.75 47.00 -26.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 469.00 514.75 4.00 -26.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.00 514.75 47.00 -26.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 520.00 514.75 4.00 -26.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 524.00 514.75 39.00 -26.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 471.75 213.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 263.00 471.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 267.00 471.75 47.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 314.00 471.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 318.00 471.75 47.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 365.00 471.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 369.00 471.75 49.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 418.00 471.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 422.00 471.75 47.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 469.00 471.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.00 471.75 47.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 520.00 471.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 524.00 471.75 39.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 437.75 213.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 263.00 437.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 267.00 437.75 47.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 314.00 437.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 318.00 437.75 47.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 365.00 437.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 369.00 437.75 49.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 418.00 437.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 422.00 437.75 47.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 469.00 437.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.00 437.75 47.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 520.00 437.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 524.00 437.75 39.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 403.75 213.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 263.00 403.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 267.00 403.75 47.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 314.00 403.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 318.00 403.75 47.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 365.00 403.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 369.00 403.75 49.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 418.00 403.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 422.00 403.75 47.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 469.00 403.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.00 403.75 47.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 520.00 403.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 524.00 403.75 39.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 369.75 213.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 263.00 369.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 267.00 369.75 47.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 314.00 369.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 318.00 369.75 47.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 365.00 369.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 369.00 369.75 49.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 418.00 369.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 422.00 369.75 47.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 469.00 369.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.00 369.75 47.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 520.00 369.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 524.00 369.75 39.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 335.75 213.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 263.00 335.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 267.00 335.75 47.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 314.00 335.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 318.00 335.75 47.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 365.00 335.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 369.00 335.75 49.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 418.00 335.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 422.00 335.75 47.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 469.00 335.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.00 335.75 47.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 520.00 335.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 524.00 335.75 39.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 301.75 213.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 263.00 301.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 267.00 301.75 47.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 314.00 301.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 318.00 301.75 47.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 365.00 301.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 369.00 301.75 49.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 418.00 301.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 422.00 301.75 47.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 469.00 301.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.00 301.75 47.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 520.00 301.75 4.00 -17.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 524.00 301.75 39.00 -17.00 re f /GS0 gs 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 50 548.75 m 263 548.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 267 548.75 m 314 548.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 318 548.75 m 365 548.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 369 548.75 m 418 548.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 422 548.75 m 469 548.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 469 548.75 m 473 548.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473 548.75 m 520 548.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 524 548.75 m 563 548.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 50 548.75 m 263 548.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 524 548.75 m 563 548.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 267 488.75 m 314 488.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 318 488.75 m 365 488.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 267 471.75 m 314 471.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 318 471.75 m 365 471.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 267 352.75 m 314 352.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 267 335.75 m 314 335.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 318 352.75 m 365 352.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 318 335.75 m 365 335.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 267 335.75 m 314 335.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 318 335.75 m 365 335.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 267 284.75 m 314 284.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 318 284.75 m 365 284.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 267 268.75 m 314 268.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 267 266.75 m 314 266.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 318 268.75 m 365 268.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 318 266.75 m 365 266.75 l s BT /F2 7.00 Tf ET q 0 0 0 rg BT 52.50 552.81 Td (Loan Type) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 282.20 573.81 Td (Book ) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 273.75 566.81 Td (V) Tj ET Q q 0 0 0 rg BT 278.16 566.81 Td (alue as of) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 274.70 559.81 Td (Mar) Tj ET Q q 0 0 0 rg BT 287.79 559.81 Td (ch 31, ) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 283.00 552.81 Td (2016) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 333.20 573.81 Td (Book ) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 324.75 566.81 Td (V) Tj ET Q q 0 0 0 rg BT 329.16 566.81 Td (alue as of) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 320.65 559.81 Td (December) Tj ET Q q 0 0 0 rg BT 350.84 559.81 Td ( 31, ) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 334.00 552.81 Td (2015) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 374.90 580.81 Td (Contractual) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 373.50 573.81 Td (Inter) Tj ET Q q 0 0 0 rg BT 388.54 573.81 Td (est Rate ) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 386.05 566.81 Td (as of) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 377.70 559.81 Td (Mar) Tj ET Q q 0 0 0 rg BT 390.79 559.81 Td (ch 31, ) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 382.45 552.81 Td (2016 ) Tj ET Q BT /F2 7.00 Tf ET BT /F2 4.55 Tf ET q 0 0 0 rg BT 398.20 555.98 Td (\(1\)) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 431.75 580.81 Td (Effective) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 425.50 573.81 Td (Inter) Tj ET Q q 0 0 0 rg BT 440.54 573.81 Td (est Rate ) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 438.05 566.81 Td (as of) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 429.70 559.81 Td (Mar) Tj ET Q q 0 0 0 rg BT 442.79 559.81 Td (ch 31, ) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 434.45 552.81 Td (2016 ) Tj ET Q BT /F2 7.00 Tf ET BT /F2 4.55 Tf ET q 0 0 0 rg BT 450.20 555.98 Td (\(1\)) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 482.75 559.81 Td (Payment) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 488.65 552.81 Td (Type) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 529.35 559.81 Td (Maturity ) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 532.45 552.81 Td (Date ) Tj ET Q BT /F2 7.00 Tf ET BT /F2 4.55 Tf ET q 0 0 0 rg BT 548.19 555.98 Td (\(2\)) Tj ET Q BT /F3 7.00 Tf ET q 0 0 0 rg BT 52.50 535.79 Td (Notes Payable) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 52.50 518.80 Td (Plaza in Clayton Mortgage Loan) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 269.50 518.80 Td ($) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 291.90 518.80 Td (62,200) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 320.50 518.80 Td ($) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 342.90 518.80 Td (62,200) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 385.70 518.80 Td (5.9%) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 437.70 518.80 Td (5.9%) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 477.60 518.80 Td (Interest Only) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 527.05 518.80 Td (10/06/2016) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 52.50 492.80 Td (Portfolio Loan) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 288.40 492.80 Td (164,131) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 339.40 492.80 Td (164,131) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 377.05 506.80 Td (One-month ) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 379.65 499.80 Td (LIBOR + ) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 383.95 492.80 Td (1.80%) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 437.70 492.80 Td (2.2%) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 477.60 492.80 Td (Interest Only) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 527.05 492.80 Td (01/01/2017) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 288.40 475.80 Td (226,331) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 339.40 475.80 Td (226,331) Tj ET Q BT /F3 7.00 Tf ET q 0 0 0 rg BT 52.50 458.79 Td (GKK Properties Notes Payable) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 52.50 441.80 Td (Bank of ) Tj ET Q q 0 0 0 rg BT 76.22 441.80 Td (America - BBD2 Mortgage Loan ) Tj ET Q BT /F1 7.00 Tf ET BT /F1 4.55 Tf ET q 0 0 0 rg BT 170.89 444.97 Td (\(3\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 291.90 441.80 Td (65,223) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 342.90 441.80 Td (65,712) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 385.70 441.80 Td (6.0%) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 437.70 441.80 Td (6.0%) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 479.75 447.40 Td (Principal &) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 485.50 440.40 Td (Interest) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 527.05 441.80 Td (09/08/2019) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 52.50 424.80 Td (Pitney Bowes - Bank of America Mortgage Loan) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 291.90 424.80 Td (36,160) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 342.90 424.80 Td (36,160) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 385.70 424.80 Td (5.3%) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 437.70 424.80 Td (5.3%) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 479.75 430.40 Td (Principal &) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 485.50 423.40 Td (Interest) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 527.05 424.80 Td (10/10/2022) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 52.50 407.80 Td (FSI 6000D Mortgage Loan ) Tj ET Q BT /F1 7.00 Tf ET BT /F1 4.55 Tf ET q 0 0 0 rg BT 130.27 410.97 Td (\(4\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 291.90 407.80 Td (28,646) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 342.90 407.80 Td (28,934) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 385.70 407.80 Td (5.8%) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 437.70 407.80 Td (5.8%) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 479.75 413.40 Td (Principal &) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 485.50 406.40 Td (Interest) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 527.05 407.80 Td (06/05/2017) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 52.50 390.80 Td (FSI 6000B Mortgage Loan ) Tj ET Q BT /F1 7.00 Tf ET BT /F1 4.55 Tf ET q 0 0 0 rg BT 129.88 393.97 Td (\(4\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 291.90 390.80 Td (27,641) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 342.90 390.80 Td (27,763) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 385.70 390.80 Td (5.8%) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 437.70 390.80 Td (5.8%) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 479.75 396.40 Td (Principal &) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 485.50 389.40 Td (Interest) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 527.05 390.80 Td (06/05/2017) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 52.50 373.80 Td (FSI 6000A) Tj ET Q q 0 0 0 rg BT 83.04 373.80 Td ( Mortgage Loan ) Tj ET Q BT /F1 7.00 Tf ET BT /F1 4.55 Tf ET q 0 0 0 rg BT 129.88 376.97 Td (\(4\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 291.90 373.80 Td (24,197) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 342.90 373.80 Td (24,271) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 385.70 373.80 Td (6.8%) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 437.70 373.80 Td (6.8%) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 479.75 379.40 Td (Principal &) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 485.50 372.40 Td (Interest) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 527.05 373.80 Td (10/05/2017) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 52.50 356.80 Td (FSI 6000C Mortgage Loan ) Tj ET Q BT /F1 7.00 Tf ET BT /F1 4.55 Tf ET q 0 0 0 rg BT 129.88 359.97 Td (\(4\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 291.90 356.80 Td (21,900) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 342.90 356.80 Td (21,967) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 385.70 356.80 Td (6.8%) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 437.70 356.80 Td (6.8%) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 479.75 362.40 Td (Principal &) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 485.50 355.40 Td (Interest) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 527.05 356.80 Td (10/05/2017) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 288.40 339.80 Td (203,767) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 339.40 339.80 Td (204,807) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 58.50 322.80 Td (Total notes payable principal outstanding) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 288.40 322.80 Td (430,098) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 339.40 322.80 Td (431,138) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 70.50 305.80 Td (Discount on notes payable, net) Tj ET Q BT /F1 7.00 Tf ET BT /F1 4.55 Tf ET q 0 0 0 rg BT 156.62 308.97 Td ( \(5\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 293.05 305.85 Td (\(2,299) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 311.15 305.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 344.05 305.85 Td (\(2,487) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 362.15 305.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 70.50 288.80 Td (Deferred financing costs, net) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 298.30 288.85 Td (\(341) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 311.15 288.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 349.30 288.85 Td (\(429) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 362.15 288.80 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 58.50 271.80 Td (Total notes payable, net ) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 269.50 271.80 Td ($) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 288.40 271.80 Td (427,458) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 320.50 271.80 Td ($) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 339.40 271.80 Td (428,222) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 256.25 Td (_____________________) Tj ET Q BT /F1 7.00 Tf ET BT /F1 4.55 Tf ET q 0 0 0 rg BT 49.50 248.02 Td (\(1\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 54.81 244.85 Td ( Contractual interest rate represents the interest rate in ef) Tj ET Q q 0 0 0 rg BT 213.08 244.85 Td (fect under the loan as of ) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 282.27 244.85 Td (March 31, 2016) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 326.79 244.85 Td (. Ef) Tj ET Q q 0 0 0 rg BT 338.52 244.85 Td (fective interest rate is calculated as the actual interest rate in ef) Tj ET Q q 0 0 0 rg BT 513.89 244.85 Td (fect as of ) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 49.50 236.45 Td (March 31, 2016) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 94.02 236.45 Td ( \(consisting of the contractual interest rate\), using interest rate indices as of ) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 305.89 236.45 Td (March 31, 2016) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 350.41 236.45 Td (, where applicable.) Tj ET Q BT /F1 7.00 Tf ET BT /F1 4.55 Tf ET q 0 0 0 rg BT 49.50 228.22 Td (\(2\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 54.81 225.05 Td ( Represents the initial maturity date or the maturity date as extended as of ) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 262.80 225.05 Td (March 31, 2016) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 307.31 225.05 Td (; subject to certain conditions, the maturity dates of certain loans may be extended beyond ) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 49.50 216.65 Td (the maturity date shown.) Tj ET Q BT /F1 7.00 Tf ET BT /F1 4.55 Tf ET q 0 0 0 rg BT 49.50 208.42 Td (\(3\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 54.81 205.25 Td ( On ) Tj ET Q q 0 0 0 rg BT 66.47 205.25 Td (April 15, 2016, the Company) Tj ET Q q 0 0 0 rg BT 148.07 205.25 Td (, through an indirect wholly owned subsidiary) Tj ET Q q 0 0 0 rg BT 276.51 205.25 Td (, entered into a defeasance agreement with the lenders under the Bank of ) Tj ET Q q 0 0 0 rg BT 481.37 205.25 Td (America - BBD2 Mortgage ) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 49.50 196.85 Td (Loan. See Note 12, “Subsequent Events - Defeasance of the Bank of ) Tj ET Q q 0 0 0 rg BT 244.47 196.85 Td (America - BBD2 Mortgage Loan.”) Tj ET Q BT /F1 7.00 Tf ET BT /F1 4.55 Tf ET q 0 0 0 rg BT 49.50 188.62 Td (\(4\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 54.81 185.45 Td ( On ) Tj ET Q q 0 0 0 rg BT 66.47 185.45 Td (April 1) Tj ET Q q 0 0 0 rg BT 86.24 185.45 Td (1, 2016, the Company) Tj ET Q q 0 0 0 rg BT 147.81 185.45 Td (, through indirect wholly owned subsidiaries, entered into a defeasance agreement with each of the lenders under these loans. See Note 12, ) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 49.50 177.05 Td (“Subsequent Events - Disposition of the FSI 6000 Properties and Defeasance of the FSI 6000 Mortgage Loans.”) Tj ET Q BT /F1 7.00 Tf ET BT /F1 4.55 Tf ET q 0 0 0 rg BT 49.50 168.82 Td (\(5\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 54.81 165.65 Td ( Represents the unamortized discounts and premiums on notes payable due to the above- and below-market interest rates when the loans were assumed. ) Tj ET Q q 0 0 0 rg BT 482.91 165.65 Td (The discounts and ) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 49.50 157.25 Td (premiums are amortized over the remaining life of the respective loan.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 133.25 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 96.44 133.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 160.04 133.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 179.48 133.25 Td (December 31, 2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 258.06 133.25 Td (, the Company’) Tj ET Q q 0 0 0 rg BT 319.45 133.25 Td (s deferred financing costs were ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 446.34 133.25 Td ($0.3 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 495.23 133.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 121.25 Td ($0.4 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 98.39 121.25 Td (, respectively) Tj ET Q q 0 0 0 rg BT 151.05 121.25 Td (, net of amortization. During the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 285.18 121.25 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 305.17 121.25 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 365.99 121.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 429.59 121.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 449.03 121.25 Td (2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 469.03 121.25 Td (, the Company ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 109.25 Td (incurred interest expense of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 162.79 109.25 Td ($5.2 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 211.68 109.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 231.12 109.25 Td ($8.7 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 280.01 109.25 Td (, respectively) Tj ET Q q 0 0 0 rg BT 332.67 109.25 Td (. Included in interest expense was: \(i\) the amortization ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 97.25 Td (of deferred financing costs of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 169.73 97.25 Td ($0.1 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 218.62 97.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 238.06 97.25 Td ($0.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 286.95 97.25 Td ( for the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 318.33 97.25 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 338.31 97.25 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 399.14 97.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 462.74 97.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 482.18 97.25 Td (2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 502.18 97.25 Td (, respectively) Tj ET Q q 0 0 0 rg BT 554.84 97.25 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 85.25 Td (and \(ii\) the amortization of discounts and premiums on notes payable, which increased interest expense by ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 477.99 85.25 Td ($0.2 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 526.88 85.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 73.25 Td ($0.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 98.39 73.25 Td ( for the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 129.77 73.25 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 149.75 73.25 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 210.58 73.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 274.18 73.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 293.62 73.25 Td (2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 313.62 73.25 Td (, respectively) Tj ET Q q 0 0 0 rg BT 366.28 73.25 Td (. ) Tj ET Q q 0 0 0 rg BT 373.23 73.25 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 397.67 73.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 461.27 73.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.71 73.25 Td (December 31, 2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 559.29 73.25 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 61.25 Td ($2.2 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 98.39 61.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 117.83 61.25 Td ($1.7 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 166.72 61.25 Td ( of interest was payable, respectively) Tj ET Q q 0 0 0 rg BT 313.79 61.25 Td (.) Tj ET Q endstream endobj 41 0 obj <>] /Rotate 0 /Contents 42 0 R>> endobj 42 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 1. Financial Statements \(continued\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 195.70 712.60 Td (KBS REAL) Tj ET Q q 0 0 0 rg BT 245.44 712.60 Td ( EST) Tj ET Q q 0 0 0 rg BT 266.10 712.60 Td (A) Tj ET Q q 0 0 0 rg BT 272.58 712.60 Td (TE INVESTMENT) Tj ET Q q 0 0 0 rg BT 355.48 712.60 Td ( ) Tj ET Q q 0 0 0 rg BT 357.79 712.60 Td (TRUST) Tj ET Q q 0 0 0 rg BT 390.40 712.60 Td (, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 107.50 694.60 Td (CONDENSED NOTES ) Tj ET Q q 0 0 0 rg BT 209.01 694.60 Td (T) Tj ET Q q 0 0 0 rg BT 215.50 694.60 Td (O CONSOLIDA) Tj ET Q q 0 0 0 rg BT 285.60 694.60 Td (TED FINANCIAL) Tj ET Q q 0 0 0 rg BT 364.78 694.60 Td ( ST) Tj ET Q q 0 0 0 rg BT 378.77 694.60 Td (A) Tj ET Q q 0 0 0 rg BT 385.25 694.60 Td (TEMENTS \(CONTINUED\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 274.20 676.60 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 282.95 661.60 Td (\(unaudited\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.00 33.60 Td (19) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 632.10 Td (The following is a schedule of maturities, including principal amortization payments, for all notes payable outstanding as ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 620.10 Td (of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 60.33 620.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 123.93 620.10 Td ( \(in thousands\):) Tj ET Q 0.8 0.9333333333333333 1 rg /GS0 gs 49.00 603.60 447.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 496.00 603.60 66.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 49.00 575.60 447.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 496.00 575.60 66.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 49.00 547.60 447.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 496.00 547.60 66.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 49.00 519.60 447.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 496.00 519.60 66.00 -14.00 re f /GS0 gs 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 496 519.6 m 562 519.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 496 506.6 m 562 506.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 496 504.6 m 562 504.6 l s BT /F1 8.00 Tf ET q 0 0 0 rg BT 51.50 593.85 Td (April 1, 2016 through December 31, 2016) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 498.50 593.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 536.80 593.85 Td (67,078) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 51.50 579.85 Td (2017) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 532.80 579.85 Td (269,788) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 51.50 565.85 Td (2018) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 540.80 565.85 Td (4,707) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 51.50 551.85 Td (2019) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 536.80 551.85 Td (61,957) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 51.50 537.85 Td (2020) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 540.80 537.85 Td (2,728) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 51.50 523.85 Td (Thereafter) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 536.80 523.85 Td (23,840) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 498.50 509.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 532.80 509.85 Td (430,098) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 482.10 Td (The following summarizes the activity related to notes payable for the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 356.46 482.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 376.45 482.10 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 437.27 482.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 500.87 482.10 Td ( \(in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 470.10 Td (thousands\):) Tj ET Q 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 453.60 447.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 497.00 453.60 66.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 425.60 447.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 497.00 425.60 66.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 397.60 447.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 497.00 397.60 66.00 -14.00 re f /GS0 gs 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 497 397.6 m 563 397.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 497 384.6 m 563 384.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 497 382.6 m 563 382.6 l s BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 443.85 Td (Total notes payable, net - December 31, 2015) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 499.50 443.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 533.80 443.85 Td (428,222) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 429.85 Td (Principal repayments) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 539.10 429.85 Td (\(1,040) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 559.80 429.85 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 415.85 Td (Amortization of discounts and premiums on notes payable, net) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 547.80 415.85 Td (188) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 401.85 Td (Amortization of deferred financing costs) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 551.80 401.85 Td (88) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 387.85 Td (Total notes payable, net - March 31, 2016) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 499.50 387.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 533.80 387.85 Td (427,458) Tj ET Q BT /F1 10.00 Tf ET BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 360.10 Td (Debt Covenants ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 342.10 Td (The documents evidencing the Company’) Tj ET Q q 0 0 0 rg BT 240.13 342.10 Td (s outstanding debt obligations typically require that specified loan-to-value and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 330.10 Td (debt service coverage ratios be maintained with respect to the financed properties. ) Tj ET Q q 0 0 0 rg BT 382.15 330.10 Td (A) Tj ET Q q 0 0 0 rg BT 388.82 330.10 Td ( breach of the financial covenants in these ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 318.10 Td (documents may result in the lender imposing additional restrictions on the Company’) Tj ET Q q 0 0 0 rg BT 390.27 318.10 Td (s operations, such as restrictions on the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 306.10 Td (Company’) Tj ET Q q 0 0 0 rg BT 91.17 306.10 Td (s ability to incur additional debt, or may allow the lender to impose “cash traps” with respect to cash flow from the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 294.10 Td (property securing the loan. In addition, such a breach may constitute an event of default and the lender could require the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 282.10 Td (Company to repay the debt immediately) Tj ET Q q 0 0 0 rg BT 209.64 282.10 Td (. If the Company fails to make such repayment in a timely manner) Tj ET Q q 0 0 0 rg BT 476.94 282.10 Td (, the lender may be ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 270.10 Td (entitled to take possession of any property securing the loan. ) Tj ET Q q 0 0 0 rg BT 296.11 270.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 320.55 270.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 384.15 270.10 Td (, the Company was in compliance with ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 258.10 Td (these debt covenants.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 234.10 Td (8. ) Tj ET Q q 0 0 0 rg BT 72.00 234.10 Td (F) Tj ET Q q 0 0 0 rg BT 77.37 234.10 Td (AIR ) Tj ET Q q 0 0 0 rg BT 98.02 234.10 Td (V) Tj ET Q q 0 0 0 rg BT 103.95 234.10 Td (ALUE DISCLOSURES) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 216.10 Td (Under GAAP) Tj ET Q q 0 0 0 rg BT 127.11 216.10 Td (, the Company is required to measure certain financial instruments at fair value on a recurring basis. In ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 204.10 Td (addition, the Company is required to measure other non-financial and financial assets at fair value on a non-recurring basis ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 192.10 Td (\(e.g., carrying value of impaired real estate loans receivable and long-lived assets\). Fair value is defined as the price that would ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 180.10 Td (be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 168.10 Td (measurement date. ) Tj ET Q q 0 0 0 rg BT 129.29 168.10 Td (The GAAP) Tj ET Q q 0 0 0 rg BT 174.19 168.10 Td ( fair value framework uses a three-tiered approach. Fair value measurements are classified and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 156.10 Td (disclosed in one of the following three categories:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 138.10 Td (• ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 138.10 Td (Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 126.10 Td (liabilities;) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 111.10 Td (• ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 111.10 Td (Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 99.10 Td (markets that are not active, and model-derived valuations in which significant inputs and significant value drivers are ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 87.10 Td (observable in active markets; and) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 72.10 Td (• ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 72.10 Td (Level 3: prices or valuation techniques where little or no market data is available that requires inputs that are both ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 60.10 Td (significant to the fair value measurement and unobservable.) Tj ET Q endstream endobj 43 0 obj <>] /Rotate 0 /Contents 44 0 R>> endobj 44 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 1. Financial Statements \(continued\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 195.70 712.60 Td (KBS REAL) Tj ET Q q 0 0 0 rg BT 245.44 712.60 Td ( EST) Tj ET Q q 0 0 0 rg BT 266.10 712.60 Td (A) Tj ET Q q 0 0 0 rg BT 272.58 712.60 Td (TE INVESTMENT) Tj ET Q q 0 0 0 rg BT 355.48 712.60 Td ( ) Tj ET Q q 0 0 0 rg BT 357.79 712.60 Td (TRUST) Tj ET Q q 0 0 0 rg BT 390.40 712.60 Td (, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 107.50 694.60 Td (CONDENSED NOTES ) Tj ET Q q 0 0 0 rg BT 209.01 694.60 Td (T) Tj ET Q q 0 0 0 rg BT 215.50 694.60 Td (O CONSOLIDA) Tj ET Q q 0 0 0 rg BT 285.60 694.60 Td (TED FINANCIAL) Tj ET Q q 0 0 0 rg BT 364.78 694.60 Td ( ST) Tj ET Q q 0 0 0 rg BT 378.77 694.60 Td (A) Tj ET Q q 0 0 0 rg BT 385.25 694.60 Td (TEMENTS \(CONTINUED\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 274.20 676.60 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 282.95 661.60 Td (\(unaudited\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.00 33.60 Td (20) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 632.10 Td (The fair value for certain financial instruments is derived using a combination of market quotes, pricing models and other ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 620.10 Td (valuation techniques that involve significant management judgment. ) Tj ET Q q 0 0 0 rg BT 327.86 620.10 Td (The price transparency of financial instruments is a key ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 608.10 Td (determinant of the degree of judgment involved in determining the fair value of the Company’) Tj ET Q q 0 0 0 rg BT 426.61 608.10 Td (s financial instruments. Financial ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 596.10 Td (instruments for which actively quoted prices or pricing parameters are available and for which markets contain orderly ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 584.10 Td (transactions will generally have a higher degree of price transparency than financial instruments for which markets are inactive ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 572.10 Td (or consist of non-orderly trades. ) Tj ET Q q 0 0 0 rg BT 182.34 572.10 Td (The Company evaluates several factors when determining if a market is inactive or when ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 560.10 Td (market transactions are not orderly) Tj ET Q q 0 0 0 rg BT 188.24 560.10 Td (. ) Tj ET Q q 0 0 0 rg BT 195.56 560.10 Td (The following is a summary of the methods and assumptions used by management in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 548.10 Td (estimating the fair value of each class of assets and liabilities for which it is practicable to estimate the fair value:) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 73.50 530.10 Td (Cash and cash equivalents, r) Tj ET Q q 0 0 0 rg BT 188.95 530.10 Td (estricted cash, r) Tj ET Q q 0 0 0 rg BT 252.74 530.10 Td (ent and other r) Tj ET Q q 0 0 0 rg BT 312.08 530.10 Td (eceivables, and accounts payable and accrued liabilities:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.74 530.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 518.10 Td (These balances approximate their fair values due to the short maturities of these items.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 73.50 500.10 Td (Real estate loans r) Tj ET Q q 0 0 0 rg BT 147.84 500.10 Td (eceivable:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 188.92 500.10 Td ( ) Tj ET Q q 0 0 0 rg BT 191.24 500.10 Td (These instruments are presented in the accompanying consolidated balance sheets at their ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 488.10 Td (amortized cost net of recorded loan loss reserves and not at fair value. ) Tj ET Q q 0 0 0 rg BT 333.93 488.10 Td (The fair values of real estate loans receivable were ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 476.10 Td (estimated using an internal valuation model that considered the expected cash flows for the loans, underlying collateral values ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 464.10 Td (\(for collateral-dependent loans\) and estimated yield requirements of institutional investors for loans with similar characteristics, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 452.10 Td (including remaining loan term, loan-to-value, type of collateral and other credit enhancements. ) Tj ET Q q 0 0 0 rg BT 433.62 452.10 Td (The Company classifies these ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 440.10 Td (inputs as Level 3 inputs.) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 73.50 422.10 Td (Notes payable:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 133.76 422.10 Td ( ) Tj ET Q q 0 0 0 rg BT 136.08 422.10 Td (The fair values of the Company’) Tj ET Q q 0 0 0 rg BT 265.77 422.10 Td (s notes payable are estimated using a discounted cash flow analysis based ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 410.10 Td (on management’) Tj ET Q q 0 0 0 rg BT 115.87 410.10 Td (s estimates of current market interest rates for instruments with similar characteristics, including remaining ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 398.10 Td (loan term, loan-to-value ratio, type of collateral and other credit enhancements. ) Tj ET Q q 0 0 0 rg BT 370.76 398.10 Td (Additionally) Tj ET Q q 0 0 0 rg BT 420.66 398.10 Td (, when determining the fair value ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 386.10 Td (of a liability in circumstances in which a quoted price in an active market for an identical liability is not available, the Company ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 374.10 Td (measures fair value using \(i\) a valuation technique that uses the quoted price of the identical liability when traded as an asset or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 362.10 Td (quoted prices for similar liabilities when traded as assets or \(ii\) another valuation technique that is consistent with the principles ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 350.10 Td (of fair value measurement, such as the income approach or the market approach. ) Tj ET Q q 0 0 0 rg BT 376.40 350.10 Td (The Company classifies these inputs as Level ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 338.10 Td (3 inputs.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 320.10 Td (The following were the face values, carrying amounts and fair values of the Company’) Tj ET Q q 0 0 0 rg BT 420.05 320.10 Td (s real estate loans receivable and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 308.10 Td (notes payable as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 128.36 308.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 191.96 308.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 211.40 308.10 Td (December 31, 2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 289.98 308.10 Td (, which carrying amounts generally do not approximate the fair ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 296.10 Td (values \(in thousands\):) Tj ET Q 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 245.60 162.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 212.00 245.60 55.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 267.00 245.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 271.00 245.60 55.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 326.00 245.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 330.00 245.60 55.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 385.00 245.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 389.00 245.60 55.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 444.00 245.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 448.00 245.60 55.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 503.00 245.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 507.00 245.60 55.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 217.60 162.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 212.00 217.60 55.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 267.00 217.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 271.00 217.60 55.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 326.00 217.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 330.00 217.60 55.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 385.00 217.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 389.00 217.60 55.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 444.00 217.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 448.00 217.60 55.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 503.00 217.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 507.00 217.60 55.00 -14.00 re f /GS0 gs 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 212 265.6 m 267 265.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 267 265.6 m 271 265.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 271 265.6 m 326 265.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 326 265.6 m 330 265.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 330 265.6 m 385 265.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 265.6 m 444 265.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 444 265.6 m 448 265.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 448 265.6 m 503 265.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 503 265.6 m 507 265.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 507 265.6 m 562 265.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 212 245.60000000000002 m 267 245.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 271 245.60000000000002 m 326 245.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 330 245.60000000000002 m 385 245.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 245.60000000000002 m 444 245.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 448 245.60000000000002 m 503 245.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 507 245.60000000000002 m 562 245.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 330 245.60000000000002 m 385 245.60000000000002 l s BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 269.85 Td ( ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 271.50 269.83 Td (March 31, 2016) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 442.75 269.83 Td (December 31, 2015) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 249.85 Td ( ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 220.40 249.83 Td (Face Value ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 282.20 257.68 Td (Carrying) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 283.95 249.68 Td (Amount ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 339.15 249.83 Td (Fair Value ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 397.40 249.83 Td (Face Value ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 459.20 257.68 Td (Carrying) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 460.95 249.68 Td (Amount ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 516.15 249.83 Td (Fair Value ) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 235.85 Td (Financial assets:) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 64.50 221.85 Td (Real estate loans receivable ) Tj ET Q BT /F1 8.00 Tf ET BT /F1 5.20 Tf ET q 0 0 0 rg BT 155.12 225.48 Td (\(1\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 214.50 221.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 241.80 221.85 Td (35,776) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 273.50 221.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 300.80 221.85 Td (27,517) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 332.50 221.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 359.80 221.85 Td (25,747) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 391.50 221.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 418.80 221.85 Td (35,811) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 450.50 221.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 477.80 221.85 Td (27,281) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 509.50 221.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 536.80 221.85 Td (25,218) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 207.85 Td (Financial liabilities:) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 64.50 193.85 Td (Notes payable) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 214.50 193.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 237.75 193.85 Td (430,098) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 273.50 193.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 296.75 193.85 Td (427,458) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 332.50 193.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 355.75 193.85 Td (450,544) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 391.50 193.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 414.75 193.85 Td (431,138) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 450.50 193.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 473.75 193.85 Td (428,222) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 509.50 193.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 532.75 193.85 Td (448,351) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 178.10 Td (_____________________) Tj ET Q BT /F1 7.50 Tf ET BT /F1 4.87 Tf ET q 0 0 0 rg BT 49.50 169.50 Td (\(1\)) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 55.18 166.10 Td ( Carrying amount of real estate loans receivable includes loan loss reserves.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 142.10 Td (Disclosure of the fair values of financial instruments is based on pertinent information available to the Company as of the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 130.10 Td (period end and requires a significant amount of judgment. ) Tj ET Q q 0 0 0 rg BT 286.20 130.10 Td (The actual value of these investments could be materially dif) Tj ET Q q 0 0 0 rg BT 529.54 130.10 Td (ferent ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 118.10 Td (from the Company’) Tj ET Q q 0 0 0 rg BT 127.82 118.10 Td (s estimate of value.) Tj ET Q endstream endobj 45 0 obj <>] /Rotate 0 /Contents 46 0 R>> endobj 46 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 1. Financial Statements \(continued\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 195.70 712.60 Td (KBS REAL) Tj ET Q q 0 0 0 rg BT 245.44 712.60 Td ( EST) Tj ET Q q 0 0 0 rg BT 266.10 712.60 Td (A) Tj ET Q q 0 0 0 rg BT 272.58 712.60 Td (TE INVESTMENT) Tj ET Q q 0 0 0 rg BT 355.48 712.60 Td ( ) Tj ET Q q 0 0 0 rg BT 357.79 712.60 Td (TRUST) Tj ET Q q 0 0 0 rg BT 390.40 712.60 Td (, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 107.50 694.60 Td (CONDENSED NOTES ) Tj ET Q q 0 0 0 rg BT 209.01 694.60 Td (T) Tj ET Q q 0 0 0 rg BT 215.50 694.60 Td (O CONSOLIDA) Tj ET Q q 0 0 0 rg BT 285.60 694.60 Td (TED FINANCIAL) Tj ET Q q 0 0 0 rg BT 364.78 694.60 Td ( ST) Tj ET Q q 0 0 0 rg BT 378.77 694.60 Td (A) Tj ET Q q 0 0 0 rg BT 385.25 694.60 Td (TEMENTS \(CONTINUED\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 274.20 676.60 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 282.95 661.60 Td (\(unaudited\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.00 33.60 Td (21) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 632.25 Td (Assets Recorded at Fair) Tj ET Q q 0 0 0 rg BT 151.24 632.25 Td ( ) Tj ET Q q 0 0 0 rg BT 153.56 632.25 Td (V) Tj ET Q q 0 0 0 rg BT 159.86 632.25 Td (alue) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 614.25 Td (During the three months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 199.86 614.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 263.46 614.25 Td (, the Company measured the following assets at fair value on a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 602.25 Td (nonrecurring basis \(in thousands\):) Tj ET Q 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 533.75 184.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 234.00 533.75 45.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 279.00 533.75 4.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 283.00 533.75 100.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 383.00 533.75 4.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 387.00 533.75 91.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 478.00 533.75 4.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 482.00 533.75 81.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 507.75 184.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 234.00 507.75 45.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 279.00 507.75 4.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 283.00 507.75 100.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 383.00 507.75 4.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 387.00 507.75 91.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 478.00 507.75 4.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 482.00 507.75 81.00 -13.00 re f /GS0 gs 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 283 570.75 m 383 570.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 383 570.75 m 387 570.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 387 570.75 m 478 570.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 570.75 m 482 570.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 482 570.75 m 563 570.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 234 533.75 m 279 533.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 283 533.75 m 383 533.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 387 533.75 m 478 533.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 482 533.75 m 563 533.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 234 533.75 m 279 533.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 283 533.75 m 383 533.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 387 533.75 m 478 533.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 482 533.75 m 563 533.75 l s BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 575.00 Td ( ) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 236.50 575.00 Td ( ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 367.85 574.98 Td (Fair Value Measurements Using) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 538.00 Td ( ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 247.25 537.98 Td (Total) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 304.05 561.98 Td (Quoted Prices in) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 300.10 553.98 Td (Active Markets for) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 305.90 545.98 Td (Identical ) Tj ET Q q 0 0 0 rg BT 337.68 545.98 Td (Assets) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 317.50 537.98 Td (\(Level 1\)) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 402.40 553.98 Td (Significant Other) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 400.30 545.98 Td (Observable Inputs) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 417.00 537.98 Td (\(Level 2\)) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 503.55 561.98 Td (Significant) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 498.40 553.98 Td (Unobservable) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 510.85 545.98 Td (Inputs) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 507.00 537.98 Td (\(Level 3\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 525.00 Td (Nonrecurring Basis ) Tj ET Q BT /F1 8.00 Tf ET BT /F1 5.20 Tf ET q 0 0 0 rg BT 116.93 528.63 Td (\(1\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 122.99 525.00 Td (:) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 70.50 512.00 Td (Impaired real estate held for investment) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 236.50 512.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 253.75 512.00 Td (37,070) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 285.50 512.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 371.80 512.00 Td (—) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 389.50 512.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 466.80 512.00 Td (—) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 484.50 512.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 537.80 512.00 Td (37,070) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 70.50 499.00 Td (Impaired real estate held for sale) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 257.75 499.00 Td (8,771) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 371.80 499.00 Td (—) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 466.80 499.00 Td (—) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 541.80 499.00 Td (8,771) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 483.25 Td (_____________________) Tj ET Q BT /F1 7.50 Tf ET BT /F1 4.87 Tf ET q 0 0 0 rg BT 49.50 474.65 Td (\(1\)) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 55.18 471.25 Td ( ) Tj ET Q q 0 0 0 rg BT 56.65 471.25 Td (Amounts represent the aggregate fair value for real estate assets impacted by impairment char) Tj ET Q q 0 0 0 rg BT 337.86 471.25 Td (ges during the three months ended ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 442.84 471.25 Td (March 31, 2016) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 490.54 471.25 Td (, as of the date that the ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 49.50 462.25 Td (fair value measurements were made. ) Tj ET Q q 0 0 0 rg BT 162.86 462.25 Td (The carrying value for these real estate assets may have subsequently increased or decreased from the fair value reflected due to ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 49.50 453.25 Td (activity that has occurred since the measurement date.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 429.25 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 97.94 429.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 161.54 429.25 Td (, certain of the Company’) Tj ET Q q 0 0 0 rg BT 263.46 429.25 Td (s real estate properties held for investment were measured at estimated fair ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 417.25 Td (value as these properties were impaired and the carrying values of these properties were adjusted as a result of changes in cash ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 405.25 Td (flow projections. See Note 3, “Real Estate Held for Investment — Impairment of Real Estate,” for information regarding ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 393.25 Td (impairments related to real estate held for investment. ) Tj ET Q q 0 0 0 rg BT 269.43 393.25 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 293.87 393.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 357.47 393.25 Td (, certain of the Company’) Tj ET Q q 0 0 0 rg BT 459.38 393.25 Td (s real estate properties ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 381.25 Td (held for sale and sold were measured at estimated fair value as these properties were impaired and the carrying values of these ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 369.25 Td (properties were adjusted to estimated fair value. ) Tj ET Q q 0 0 0 rg BT 246.19 369.25 Td (The Company estimated the fair value for these impaired real estate properties ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 357.25 Td (held for sale and sold based on an estimated sales price, less estimated costs to sell. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 333.25 Td (9. ) Tj ET Q q 0 0 0 rg BT 72.00 333.25 Td (RELA) Tj ET Q q 0 0 0 rg BT 99.04 333.25 Td (TED P) Tj ET Q q 0 0 0 rg BT 127.47 333.25 Td (AR) Tj ET Q q 0 0 0 rg BT 141.56 333.25 Td (TY) Tj ET Q q 0 0 0 rg BT 155.08 333.25 Td ( ) Tj ET Q q 0 0 0 rg BT 157.40 333.25 Td (TRANSACTIONS) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 315.25 Td (The Company has entered into an ) Tj ET Q q 0 0 0 rg BT 210.13 315.25 Td (Advisory ) Tj ET Q q 0 0 0 rg BT 249.30 315.25 Td (Agreement with the ) Tj ET Q q 0 0 0 rg BT 330.67 315.25 Td (Advisor) Tj ET Q q 0 0 0 rg BT 362.49 315.25 Td (, which entitles the ) Tj ET Q q 0 0 0 rg BT 439.97 315.25 Td (Advisor to specified fees for ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 303.25 Td (the management and disposition of investments, among other services, as well as to reimbursement for certain costs incurred by ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 291.25 Td (the ) Tj ET Q q 0 0 0 rg BT 63.67 291.25 Td (Advisor in providing services to the Company) Tj ET Q q 0 0 0 rg BT 247.99 291.25 Td (. In addition, the ) Tj ET Q q 0 0 0 rg BT 318.26 291.25 Td (Advisor is entitled to certain other fees, including an ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 279.25 Td (incentive fee upon achieving certain performance goals, as detailed in the ) Tj ET Q q 0 0 0 rg BT 345.49 279.25 Td (Advisory ) Tj ET Q q 0 0 0 rg BT 384.66 279.25 Td (Agreement. ) Tj ET Q q 0 0 0 rg BT 436.40 279.25 Td (The Company has also entered ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 267.25 Td (into a fee reimbursement agreement \(the “AIP) Tj ET Q q 0 0 0 rg BT 234.05 267.25 Td ( Reimbursement ) Tj ET Q q 0 0 0 rg BT 301.82 267.25 Td (Agreement”\) with the Dealer Manager pursuant to which the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 255.25 Td (Company agreed to reimburse the Dealer Manager for certain fees and expenses it incurs for administering the Company’) Tj ET Q q 0 0 0 rg BT 535.72 255.25 Td (s ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 243.25 Td (participation in the DTCC ) Tj ET Q q 0 0 0 rg BT 156.15 243.25 Td (Alternative Investment Product Platform with respect to certain accounts of the Company’) Tj ET Q q 0 0 0 rg BT 517.44 243.25 Td (s investors ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 231.25 Td (serviced through the platform. ) Tj ET Q q 0 0 0 rg BT 175.39 231.25 Td (The ) Tj ET Q q 0 0 0 rg BT 192.89 231.25 Td (Advisor also serves, and the Dealer Manager also serves or served, as the advisor and dealer ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 219.25 Td (manager) Tj ET Q q 0 0 0 rg BT 83.52 219.25 Td (, respectively) Tj ET Q q 0 0 0 rg BT 136.18 219.25 Td (, for KBS Real Estate Investment ) Tj ET Q q 0 0 0 rg BT 271.81 219.25 Td (T) Tj ET Q q 0 0 0 rg BT 277.57 219.25 Td (rust II, Inc., KBS Real Estate Investment ) Tj ET Q q 0 0 0 rg BT 443.46 219.25 Td (T) Tj ET Q q 0 0 0 rg BT 449.22 219.25 Td (rust III, Inc., KBS Strategic ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 207.25 Td (Opportunity REIT) Tj ET Q q 0 0 0 rg BT 122.36 207.25 Td (, Inc., KBS Legacy Partners ) Tj ET Q q 0 0 0 rg BT 236.22 207.25 Td (Apartment REIT) Tj ET Q q 0 0 0 rg BT 302.96 207.25 Td (, Inc., KBS Strategic Opportunity REIT) Tj ET Q q 0 0 0 rg BT 461.65 207.25 Td ( II, Inc. and KBS ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 195.25 Td (Growth & Income REIT) Tj ET Q q 0 0 0 rg BT 146.79 195.25 Td (, Inc.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 177.25 Td (On January 6, 2014, the Company) Tj ET Q q 0 0 0 rg BT 209.77 177.25 Td (, together with KBS Real Estate Investment ) Tj ET Q q 0 0 0 rg BT 386.78 177.25 Td (T) Tj ET Q q 0 0 0 rg BT 392.54 177.25 Td (rust II, Inc., KBS Real Estate Investment ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 165.25 Td (T) Tj ET Q q 0 0 0 rg BT 55.26 165.25 Td (rust III, Inc., KBS Strategic Opportunity REIT) Tj ET Q q 0 0 0 rg BT 240.87 165.25 Td (, Inc., KBS Legacy Partners ) Tj ET Q q 0 0 0 rg BT 354.73 165.25 Td (Apartment REIT) Tj ET Q q 0 0 0 rg BT 421.47 165.25 Td (, Inc., KBS Strategic Opportunity ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 153.25 Td (REIT) Tj ET Q q 0 0 0 rg BT 71.54 153.25 Td ( II, Inc., the Dealer Manager) Tj ET Q q 0 0 0 rg BT 184.96 153.25 Td (, the ) Tj ET Q q 0 0 0 rg BT 204.13 153.25 Td (Advisor and other KBS-af) Tj ET Q q 0 0 0 rg BT 309.21 153.25 Td (filiated entities, entered into an errors and omissions and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 141.25 Td (directors and of) Tj ET Q q 0 0 0 rg BT 112.07 141.25 Td (ficers liability insurance program where the lower tiers of such insurance coverage are shared. ) Tj ET Q q 0 0 0 rg BT 493.40 141.25 Td (The cost of these ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 129.25 Td (lower tiers is allocated by the ) Tj ET Q q 0 0 0 rg BT 168.91 129.25 Td (Advisor and its insurance broker among each of the various entities covered by the program, and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 117.25 Td (is billed directly to each entity) Tj ET Q q 0 0 0 rg BT 170.20 117.25 Td (. ) Tj ET Q q 0 0 0 rg BT 177.52 117.25 Td (The allocation of these shared coverage costs is proportionate to the pricing by the insurance ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 105.25 Td (marketplace for the first tiers of directors and of) Tj ET Q q 0 0 0 rg BT 241.46 105.25 Td (ficers liability coverage purchased individually by each REIT) Tj ET Q q 0 0 0 rg BT 487.02 105.25 Td (. ) Tj ET Q q 0 0 0 rg BT 494.34 105.25 Td (The ) Tj ET Q q 0 0 0 rg BT 511.83 105.25 Td (Advisor) Tj ET Q q 0 0 0 rg BT 544.43 105.25 Td (’) Tj ET Q q 0 0 0 rg BT 547.21 105.25 Td (s ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 93.25 Td (and the Dealer Manager) Tj ET Q q 0 0 0 rg BT 146.21 93.25 Td (’) Tj ET Q q 0 0 0 rg BT 148.99 93.25 Td (s portion of the shared lower tiers’) Tj ET Q q 0 0 0 rg BT 285.98 93.25 Td ( cost is proportionate to the respective entities’) Tj ET Q q 0 0 0 rg BT 472.13 93.25 Td ( prior cost for the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 81.25 Td (errors and omissions insurance. In June 2015, KBS Growth & Income REIT) Tj ET Q q 0 0 0 rg BT 356.49 81.25 Td (, Inc. was added to the insurance program at terms ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 69.25 Td (similar to those described above.) Tj ET Q endstream endobj 47 0 obj <>] /Rotate 0 /Contents 48 0 R>> endobj 48 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 1. Financial Statements \(continued\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 195.70 712.60 Td (KBS REAL) Tj ET Q q 0 0 0 rg BT 245.44 712.60 Td ( EST) Tj ET Q q 0 0 0 rg BT 266.10 712.60 Td (A) Tj ET Q q 0 0 0 rg BT 272.58 712.60 Td (TE INVESTMENT) Tj ET Q q 0 0 0 rg BT 355.48 712.60 Td ( ) Tj ET Q q 0 0 0 rg BT 357.79 712.60 Td (TRUST) Tj ET Q q 0 0 0 rg BT 390.40 712.60 Td (, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 107.50 694.60 Td (CONDENSED NOTES ) Tj ET Q q 0 0 0 rg BT 209.01 694.60 Td (T) Tj ET Q q 0 0 0 rg BT 215.50 694.60 Td (O CONSOLIDA) Tj ET Q q 0 0 0 rg BT 285.60 694.60 Td (TED FINANCIAL) Tj ET Q q 0 0 0 rg BT 364.78 694.60 Td ( ST) Tj ET Q q 0 0 0 rg BT 378.77 694.60 Td (A) Tj ET Q q 0 0 0 rg BT 385.25 694.60 Td (TEMENTS \(CONTINUED\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 274.20 676.60 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 282.95 661.60 Td (\(unaudited\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.00 33.60 Td (22) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 632.10 Td (During the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 119.05 632.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 139.03 632.10 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 199.86 632.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 263.46 632.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 282.89 632.10 Td (2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 302.89 632.10 Td (, no other business transactions occurred between the Company ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 620.10 Td (and the other KBS-sponsored programs. On May 18, 2012, KBS Strategic Opportunity REIT) Tj ET Q q 0 0 0 rg BT 423.71 620.10 Td (, Inc. made an ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 482.58 620.10 Td ($8.0 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 531.47 620.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 608.10 Td (investment in a joint venture in which the Company indirectly owns a participation interest through another joint venture ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 596.10 Td (investment. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 578.10 Td (Pursuant to the terms of the ) Tj ET Q q 0 0 0 rg BT 185.71 578.10 Td (Advisory ) Tj ET Q q 0 0 0 rg BT 224.88 578.10 Td (Agreement and the ) Tj ET Q q 0 0 0 rg BT 302.90 578.10 Td (AIP) Tj ET Q q 0 0 0 rg BT 318.65 578.10 Td ( Reimbursement ) Tj ET Q q 0 0 0 rg BT 386.42 578.10 Td (Agreement, summarized below are the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 566.10 Td (related-party costs incurred by the Company for the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 258.88 566.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 278.86 566.10 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 339.69 566.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 403.28 566.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 422.72 566.10 Td (2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 442.72 566.10 Td (, respectively) Tj ET Q q 0 0 0 rg BT 495.38 566.10 Td (, and any related ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 554.10 Td (amounts payable as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 141.14 554.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 204.74 554.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 224.18 554.10 Td (December 31, 2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 302.76 554.10 Td ( \(in thousands\):) Tj ET Q 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 495.60 201.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 251.00 495.60 75.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 326.00 495.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 330.00 495.60 75.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 405.00 495.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 409.00 495.60 75.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 484.00 495.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 488.00 495.60 75.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 467.60 201.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 251.00 467.60 75.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 326.00 467.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 330.00 467.60 75.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 405.00 467.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 409.00 467.60 75.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 484.00 467.60 4.00 -14.00 re f /GS0 gs 0.8 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Tf ET q 0 0 0 rg BT 504.65 513.66 Td (December 31,) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 499.85 Td ( ) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 281.00 499.66 Td (2016) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 360.00 499.66 Td (2015) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 439.00 499.66 Td (2016) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 518.00 499.66 Td (2015) Tj ET Q BT /F4 8.00 Tf ET q 0 0 0 rg BT 52.50 485.83 Td (Expensed) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 471.85 Td (Asset management fees) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 253.50 471.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 304.80 471.85 Td (2,348) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 332.50 471.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 383.80 471.85 Td (2,420) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 411.50 471.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 472.80 471.85 Td (—) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 490.50 471.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 551.80 471.85 Td (—) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 457.85 Td (Reimbursement of operating expenses) Tj ET Q BT /F1 8.00 Tf ET BT /F1 5.20 Tf ET q 0 0 0 rg BT 174.91 461.48 Td (\(1\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 314.80 457.85 Td (64) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 393.80 457.85 Td (49) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 472.80 457.85 Td (46) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 551.80 457.85 Td (68) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 443.85 Td (Disposition fees) Tj ET Q BT /F1 8.00 Tf ET BT /F1 5.20 Tf ET q 0 0 0 rg BT 104.27 447.48 Td (\(2\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 310.80 443.85 Td (418) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 383.80 443.85 Td (1,185) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 472.80 443.85 Td (—) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 551.80 443.85 Td (—) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 253.50 429.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 304.80 429.85 Td (2,830) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 332.50 429.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 383.80 429.85 Td (3,654) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 411.50 429.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 472.80 429.85 Td (46) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 490.50 429.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 551.80 429.85 Td (68) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 414.10 Td (_____________________) Tj ET Q BT /F1 7.50 Tf ET BT /F1 4.87 Tf ET q 0 0 0 rg BT 49.50 405.50 Td (\(1\)) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 55.18 402.10 Td ( Reimbursable operating expenses primarily consists of internal audit personnel costs, accounting software and cybersecurity related expenses incurred by the ) Tj ET Q q 0 0 0 rg BT 530.26 402.10 Td (Advisor ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 49.50 393.10 Td (under the ) Tj ET Q q 0 0 0 rg BT 79.08 393.10 Td (Advisory ) Tj ET Q q 0 0 0 rg BT 108.45 393.10 Td (Agreement. ) Tj ET Q q 0 0 0 rg BT 147.26 393.10 Td (The Company reimburses the ) Tj ET Q q 0 0 0 rg BT 237.25 393.10 Td (Advisor for the Company’) Tj ET Q q 0 0 0 rg BT 316.20 393.10 Td (s allocable portion of the salaries, benefits and overhead of internal audit ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 49.50 384.10 Td (department personnel providing services to the Company) Tj ET Q q 0 0 0 rg BT 220.64 384.10 Td (. ) Tj ET Q q 0 0 0 rg BT 226.13 384.10 Td (These amounts totaled ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 295.49 384.10 Td ($64,000) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 319.87 384.10 Td ( and ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 334.45 384.10 Td ($45,000) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 358.82 384.10 Td ( for the ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 382.36 384.10 Td (three) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 397.35 384.10 Td ( months ended ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 442.97 384.10 Td (March 31, 2016) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 490.67 384.10 Td ( and ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 505.24 384.10 Td (2015) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 520.24 384.10 Td (, respectively) Tj ET Q q 0 0 0 rg BT 559.74 384.10 Td (. ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 49.50 375.10 Td (These were the only type of employee costs reimbursed under the ) Tj ET Q q 0 0 0 rg BT 247.99 375.10 Td (Advisory ) Tj ET Q q 0 0 0 rg BT 277.36 375.10 Td (Agreement for the ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 334.22 375.10 Td (three) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 349.21 375.10 Td ( months ended ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 394.83 375.10 Td (March 31, 2016) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 442.53 375.10 Td ( and ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 457.11 375.10 Td (2015) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 472.11 375.10 Td (. ) Tj ET Q q 0 0 0 rg BT 477.60 375.10 Td (The Company will not ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 49.50 366.10 Td (reimburse for employee costs in connection with services for which the ) Tj ET Q q 0 0 0 rg BT 265.07 366.10 Td (Advisor earns disposition fees \(other than reimbursement of travel and communication expenses\) ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 49.50 357.10 Td (or for the salaries or benefits the ) Tj ET Q q 0 0 0 rg BT 148.01 357.10 Td (Advisor or its af) Tj ET Q q 0 0 0 rg BT 196.83 357.10 Td (filiates may pay to the Company’) Tj ET Q q 0 0 0 rg BT 296.60 357.10 Td (s executive of) Tj ET Q q 0 0 0 rg BT 338.12 357.10 Td (ficers. In addition to the amounts above, the Company reimburses the ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 49.50 348.10 Td (Advisor for certain of the Company’) Tj ET Q q 0 0 0 rg BT 158.85 348.10 Td (s direct costs incurred from third parties that were initially paid by the ) Tj ET Q q 0 0 0 rg BT 370.26 348.10 Td (Advisor on behalf of the Company) Tj ET Q q 0 0 0 rg BT 474.13 348.10 Td (.) Tj ET Q BT /F1 7.50 Tf ET BT /F1 4.87 Tf ET q 0 0 0 rg BT 49.50 339.50 Td (\(2\)) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 55.18 336.10 Td ( 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. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 312.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 97.94 312.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 161.54 312.10 Td (, the Company had ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 239.58 312.10 Td ($1) Tj ET Q q 0 0 0 rg BT 249.21 312.10 Td (12,000) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 276.71 312.10 Td ( due from the ) Tj ET Q q 0 0 0 rg BT 332.25 312.10 Td (Advisor) Tj ET Q q 0 0 0 rg BT 364.08 312.10 Td (, which consisted of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 446.56 312.10 Td ($36,000) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.06 312.10 Td ( in property ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 300.10 Td (insurance rebate and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 134.18 300.10 Td ($76,000) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 166.68 300.10 Td ( in legal and professional fees reimbursable to the Company) Tj ET Q q 0 0 0 rg BT 406.24 300.10 Td (.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 282.10 Td (Modification of Disposition Fee Related to GKK Pr) Tj ET Q q 0 0 0 rg BT 267.90 282.10 Td (operties) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 264.10 Td (In accordance with the ) Tj ET Q q 0 0 0 rg BT 166.23 264.10 Td (Advisory ) Tj ET Q q 0 0 0 rg BT 205.40 264.10 Td (Agreement, for substantial assistance in connection with the sale of properties, loans or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 252.10 Td (other investments as determined by the conflicts committee of the Company’) Tj ET Q q 0 0 0 rg BT 357.20 252.10 Td (s board of directors, the Company pays the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 240.10 Td (Advisor or its af) Tj ET Q q 0 0 0 rg BT 114.59 240.10 Td (filiates a disposition fee of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 223.17 240.10 Td (1%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 236.50 240.10 Td ( of the contract sales price of the properties, loans or other investments sold. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 228.10 Td (However) Tj ET Q q 0 0 0 rg BT 85.75 228.10 Td (, in no event may the total commissions \(including such disposition fees\) paid to the ) Tj ET Q q 0 0 0 rg BT 424.04 228.10 Td (Advisor) Tj ET Q q 0 0 0 rg BT 455.86 228.10 Td (, its af) Tj ET Q q 0 0 0 rg BT 480.39 228.10 Td (filiates and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 216.10 Td (unaf) Tj ET Q q 0 0 0 rg BT 67.09 216.10 Td (filiated third parties exceed ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 178.70 216.10 Td (6%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 192.03 216.10 Td ( of the contract sales price of the property) Tj ET Q q 0 0 0 rg BT 357.98 216.10 Td (, loan or other investment sold or exceed a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 204.10 Td (competitive real estate commission. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 186.10 Td ( Notwithstanding the foregoing, in January 2015, the disposition fee related to the sales of GKK Properties was modified ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 174.10 Td (to provide that the conflicts committee will determine in its sole discretion the amount of the disposition fee related to the sale ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 162.10 Td (of GKK Properties upon the terms set forth below) Tj ET Q q 0 0 0 rg BT 248.81 162.10 Td (, which disposition fee may be an amount not to exceed ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 473.75 162.10 Td (1%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 487.08 162.10 Td ( of the contract ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 150.10 Td (sales price, which maximum amount is consistent with the fixed percentage applicable to the sales of other properties, loans and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 138.10 Td (other investments.) Tj ET Q endstream endobj 49 0 obj <>] /Rotate 0 /Contents 50 0 R>> endobj 50 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 1. Financial Statements \(continued\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 195.70 712.60 Td (KBS REAL) Tj ET Q q 0 0 0 rg BT 245.44 712.60 Td ( EST) Tj ET Q q 0 0 0 rg BT 266.10 712.60 Td (A) Tj ET Q q 0 0 0 rg BT 272.58 712.60 Td (TE INVESTMENT) Tj ET Q q 0 0 0 rg BT 355.48 712.60 Td ( ) Tj ET Q q 0 0 0 rg BT 357.79 712.60 Td (TRUST) Tj ET Q q 0 0 0 rg BT 390.40 712.60 Td (, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 107.50 694.60 Td (CONDENSED NOTES ) Tj ET Q q 0 0 0 rg BT 209.01 694.60 Td (T) Tj ET Q q 0 0 0 rg BT 215.50 694.60 Td (O CONSOLIDA) Tj ET Q q 0 0 0 rg BT 285.60 694.60 Td (TED FINANCIAL) Tj ET Q q 0 0 0 rg BT 364.78 694.60 Td ( ST) Tj ET Q q 0 0 0 rg BT 378.77 694.60 Td (A) Tj ET Q q 0 0 0 rg BT 385.25 694.60 Td (TEMENTS \(CONTINUED\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 274.20 676.60 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 282.95 661.60 Td (\(unaudited\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.00 33.60 Td (23) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 632.10 Td (W) Tj ET Q q 0 0 0 rg BT 82.54 632.10 Td (ith respect to sales of the GKK Properties, and provided that the conflicts committee determines that the ) Tj ET Q q 0 0 0 rg BT 500.76 632.10 Td (Advisor has ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 620.10 Td (provided a substantial amount of services in connection with the sale of each GKK Property for which the payment of a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 608.10 Td (disposition fee is requested by the ) Tj ET Q q 0 0 0 rg BT 187.25 608.10 Td (Advisor) Tj ET Q q 0 0 0 rg BT 219.08 608.10 Td (, then:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 67.50 590.10 Td (\(a\) ) Tj ET Q q 0 0 0 rg BT 85.50 590.10 Td (W) Tj ET Q q 0 0 0 rg BT 94.54 590.10 Td (ith respect to portfolio or single asset sales of GKK Properties designated by the conflicts committee in its sole ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 85.50 578.10 Td (discretion at or about the time of the sale, the Company will pay the ) Tj ET Q q 0 0 0 rg BT 359.04 578.10 Td (Advisor a fee in an amount not to exceed ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 525.93 578.10 Td (1%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 539.26 578.10 Td ( of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 85.50 566.10 Td (the contract sales price and subject to other limitations and conditions set forth in the ) Tj ET Q q 0 0 0 rg BT 426.80 566.10 Td (Advisory ) Tj ET Q q 0 0 0 rg BT 465.97 566.10 Td (Agreement, as ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 85.50 554.10 Td (determined by the conflicts committee in its sole discretion, which fee will be payable upon the respective closing; and) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 67.50 539.10 Td (\(b\) ) Tj ET Q q 0 0 0 rg BT 85.50 539.10 Td (W) Tj ET Q q 0 0 0 rg BT 94.54 539.10 Td (ith respect to sales of all other GKK Properties for which a disposition fee has not yet been paid, if, upon the sale of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 85.50 527.10 Td (the final GKK Property) Tj ET Q q 0 0 0 rg BT 179.00 527.10 Td (, the conflicts committee determines in its sole discretion that the Company has recovered its ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 85.50 515.10 Td (entire investment related to the GKK Mezzanine Loan and the GKK Properties subsequent to the Settlement ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 85.50 503.10 Td (Agreement, after taking into consideration the net cash flow received by the Company from the investment, whether in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 85.50 491.10 Td (the form of \(i\) net proceeds from the sales or other dispositions or transfers of the GKK Properties, \(ii\) the net cash ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 85.50 479.10 Td (flow related to the GKK Mezzanine Loan, \(iii\) the net cash flow related to the GKK Properties subsequent to the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 85.50 467.10 Td (Settlement ) Tj ET Q q 0 0 0 rg BT 130.22 467.10 Td (Agreement and/or \(iv\) other proceeds related to the assets and liabilities received under the Settlement ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 85.50 455.10 Td (Agreement, then the Company will pay the ) Tj ET Q q 0 0 0 rg BT 259.90 455.10 Td (Advisor a fee in an amount not to exceed ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 426.79 455.10 Td (1%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 440.12 455.10 Td ( of the contract sales price and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 85.50 443.10 Td (subject to other conditions set forth in the ) Tj ET Q q 0 0 0 rg BT 253.81 443.10 Td (Advisory ) Tj ET Q q 0 0 0 rg BT 292.98 443.10 Td (Agreement, as determined by the conflicts committee in its sole ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 85.50 431.10 Td (discretion, which fee will be payable promptly upon such determination by the conflicts committee.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 410.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 97.94 410.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 161.54 410.10 Td (, the Company had sold ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 258.75 410.10 Td (161) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 273.75 410.10 Td ( GKK Properties for an aggregate contract sales price of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 500.88 410.10 Td ($214.1 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 398.10 Td (million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 78.39 398.10 Td ( for which the Company had not paid or accrued a disposition fee. If the conflicts committee determines the Company ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 386.10 Td (has recovered its entire investment related to the GKK Mezzanine Loan and the GKK Properties upon the sale of the final GKK ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 374.10 Td (Property) Tj ET Q q 0 0 0 rg BT 83.29 374.10 Td (, the conflicts committee may authorize the Company to pay the ) Tj ET Q q 0 0 0 rg BT 341.55 374.10 Td (Advisor a disposition fee of up to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 477.92 374.10 Td (1%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 491.25 374.10 Td ( of the aggregate ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 362.10 Td (contract sales price of these GKK Properties sold as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 270.54 362.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 334.14 362.10 Td (, which amount would be determined by the conflicts ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 350.10 Td (committee in its sole discretion.) Tj ET Q endstream endobj 51 0 obj <>] /Rotate 0 /Contents 52 0 R>> endobj 52 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 1. Financial Statements \(continued\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 195.70 712.60 Td (KBS REAL) Tj ET Q q 0 0 0 rg BT 245.44 712.60 Td ( EST) Tj ET Q q 0 0 0 rg BT 266.10 712.60 Td (A) Tj ET Q q 0 0 0 rg BT 272.58 712.60 Td (TE INVESTMENT) Tj ET Q q 0 0 0 rg BT 355.48 712.60 Td ( ) Tj ET Q q 0 0 0 rg BT 357.79 712.60 Td (TRUST) Tj ET Q q 0 0 0 rg BT 390.40 712.60 Td (, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 107.50 694.60 Td (CONDENSED NOTES ) Tj ET Q q 0 0 0 rg BT 209.01 694.60 Td (T) Tj ET Q q 0 0 0 rg BT 215.50 694.60 Td (O CONSOLIDA) Tj ET Q q 0 0 0 rg BT 285.60 694.60 Td (TED FINANCIAL) Tj ET Q q 0 0 0 rg BT 364.78 694.60 Td ( ST) Tj ET Q q 0 0 0 rg BT 378.77 694.60 Td (A) Tj ET Q q 0 0 0 rg BT 385.25 694.60 Td (TEMENTS \(CONTINUED\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 274.20 676.60 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 282.95 661.60 Td (\(unaudited\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.00 33.60 Td (24) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 632.25 Td (10. ) Tj ET Q q 0 0 0 rg BT 72.00 632.25 Td (SEGMENT) Tj ET Q q 0 0 0 rg BT 121.83 632.25 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 172.47 632.25 Td (TION) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 614.25 Td (The Company presently operates in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 218.18 614.25 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 238.17 614.25 Td ( business segments based on its investment types: real estate, real estate-related ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 602.25 Td (and commercial properties primarily leased to financial institutions received under the Settlement ) Tj ET Q q 0 0 0 rg BT 441.59 602.25 Td (Agreement, or the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 590.25 Td (GKK Properties. Under the real estate segment, the Company has invested primarily in of) Tj ET Q q 0 0 0 rg BT 410.89 590.25 Td (fice and industrial properties located ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 578.25 Td (throughout the United States. ) Tj ET Q q 0 0 0 rg BT 171.53 578.25 Td (The real estate segment excludes all real estate properties that were classified as discontinued ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 566.25 Td (operations. Under the real estate-related segment, the Company has invested in or originated mortgage loans, mezzanine loans ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 554.25 Td (and other real estate-related assets, including real estate securities. ) Tj ET Q q 0 0 0 rg BT 319.20 554.25 Td (The GKK Properties segment consists of primarily of) Tj ET Q q 0 0 0 rg BT 533.15 554.25 Td (fice ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 542.25 Td (properties, bank branch properties, operations centers and other properties located in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 390.21 542.25 Td (29) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 400.21 542.25 Td ( states but excludes GKK Properties that ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 530.25 Td (were classified as discontinued operations. ) Tj ET Q q 0 0 0 rg BT 224.73 530.25 Td (All revenues earned from the Company’) Tj ET Q q 0 0 0 rg BT 385.51 530.25 Td (s three reporting segments were from ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 518.25 Td (external customers and there were no intersegment sales or transfers. ) Tj ET Q q 0 0 0 rg BT 329.77 518.25 Td (The Company does not allocate corporate-level accounts ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 506.25 Td (to its reporting segments. Corporate-level accounts include corporate general and administrative expenses, asset management ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 494.25 Td (fees, non-operating interest income and other corporate-level expenses. ) Tj ET Q q 0 0 0 rg BT 339.48 494.25 Td (The accounting policies of the reporting segments are ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 482.25 Td (consistent with those described in Note 2, “Summary of Significant ) Tj ET Q q 0 0 0 rg BT 321.40 482.25 Td (Accounting Policies.”) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 464.25 Td (The Company evaluates the performance of its segments based upon net operating income from continuing operations ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 452.25 Td (\(“NOI”\), which is a non-GAAP) Tj ET Q q 0 0 0 rg BT 176.04 452.25 Td ( supplemental financial measure. ) Tj ET Q q 0 0 0 rg BT 312.48 452.25 Td (The Company defines NOI for its real estate segment and the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 440.25 Td (GKK Properties segment as operating revenues \(rental income, tenant reimbursements and other operating income\) less ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 428.25 Td (property and related expenses \(property operating expenses, real estate taxes, insurance and provision for bad debt\) less interest ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 416.25 Td (expense. ) Tj ET Q q 0 0 0 rg BT 89.03 416.25 Td (The Company defines NOI for its real estate-related segment as interest income and income from its unconsolidated ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 404.25 Td (joint venture investment less loan servicing costs \(if applicable\) and interest expense \(if applicable\). NOI excludes certain ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 392.25 Td (items that are not considered to be controllable in connection with the management of an asset such as non-property income and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 380.25 Td (expenses, depreciation and amortization, asset management fees and corporate general and administrative expenses. ) Tj ET Q q 0 0 0 rg BT 518.30 380.25 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 368.25 Td (Company uses NOI to evaluate the operating performance of the Company’) Tj ET Q q 0 0 0 rg BT 352.19 368.25 Td (s real estate investments, real estate-related ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 356.25 Td (investments and the GKK Properties and to make decisions about resource allocations. ) Tj ET Q q 0 0 0 rg BT 401.45 356.25 Td (The Company believes that net income ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 344.25 Td (is the GAAP) Tj ET Q q 0 0 0 rg BT 100.24 344.25 Td ( measure that is most directly comparable to NOI; however) Tj ET Q q 0 0 0 rg BT 336.71 344.25 Td (, NOI should not be considered as an alternative to net ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 332.25 Td (income as the primary indicator of operating performance as it excludes the items described above. ) Tj ET Q q 0 0 0 rg BT 450.19 332.25 Td (Additionally) Tj ET Q q 0 0 0 rg BT 500.09 332.25 Td (, NOI as ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 320.25 Td (defined above may not be comparable to other REIT) Tj ET Q q 0 0 0 rg BT 259.28 320.25 Td (s or companies as their definitions of NOI may dif) Tj ET Q q 0 0 0 rg BT 460.44 320.25 Td (fer from the Company’) Tj ET Q q 0 0 0 rg BT 552.36 320.25 Td (s ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 308.25 Td (definition. During the year ended December 31, 2014, the Company revised its definition of NOI to exclude asset management ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 296.25 Td (fees, which the Company does not consider to be controllable in connection with the management of each property or real ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 284.25 Td (estate-related asset and is viewed by the chief operating decision makers as a corporate-level administrative expense. NOI for ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 272.25 Td (all prior periods presented has been adjusted to conform to the current period definition.) Tj ET Q endstream endobj 53 0 obj <>] /Rotate 0 /Contents 54 0 R>> endobj 54 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 1. Financial Statements \(continued\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 195.70 712.60 Td (KBS REAL) Tj ET Q q 0 0 0 rg BT 245.44 712.60 Td ( EST) Tj ET Q q 0 0 0 rg BT 266.10 712.60 Td (A) Tj ET Q q 0 0 0 rg BT 272.58 712.60 Td (TE INVESTMENT) Tj ET Q q 0 0 0 rg BT 355.48 712.60 Td ( ) Tj ET Q q 0 0 0 rg BT 357.79 712.60 Td (TRUST) Tj ET Q q 0 0 0 rg BT 390.40 712.60 Td (, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 107.50 694.60 Td (CONDENSED NOTES ) Tj ET Q q 0 0 0 rg BT 209.01 694.60 Td (T) Tj ET Q q 0 0 0 rg BT 215.50 694.60 Td (O CONSOLIDA) Tj ET Q q 0 0 0 rg BT 285.60 694.60 Td (TED FINANCIAL) Tj ET Q q 0 0 0 rg BT 364.78 694.60 Td ( ST) Tj ET Q q 0 0 0 rg BT 378.77 694.60 Td (A) Tj ET Q q 0 0 0 rg BT 385.25 694.60 Td (TEMENTS \(CONTINUED\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 274.20 676.60 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 282.95 661.60 Td (\(unaudited\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.00 33.60 Td (25) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 632.10 Td (The following tables summarize total revenues, interest expense and NOI for each reportable segment for the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 512.50 632.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.49 632.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 620.10 Td (months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 107.83 620.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 171.42 620.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 190.86 620.10 Td (2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 210.86 620.10 Td (, and total assets and total liabilities for each reportable segment as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 491.33 620.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 554.92 620.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 608.10 Td (and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 66.44 608.10 Td (December 31, 2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 145.02 608.10 Td ( \(in thousands\):) Tj ET Q 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 565.60 329.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 379.00 565.60 90.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 469.00 565.60 4.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.00 565.60 90.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 539.60 329.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 379.00 539.60 90.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 469.00 539.60 4.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.00 539.60 90.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 513.60 329.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 379.00 513.60 90.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 469.00 513.60 4.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.00 513.60 90.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 487.60 329.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 379.00 487.60 90.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 469.00 487.60 4.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.00 487.60 90.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 461.60 329.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 379.00 461.60 90.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 469.00 461.60 4.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.00 461.60 90.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 435.60 329.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 379.00 435.60 90.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 469.00 435.60 4.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.00 435.60 90.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 409.60 329.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 379.00 409.60 90.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 469.00 409.60 4.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.00 409.60 90.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 336.60 329.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 379.00 336.60 90.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 469.00 336.60 4.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.00 336.60 90.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 310.60 329.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 379.00 310.60 90.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 469.00 310.60 4.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.00 310.60 90.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 284.60 329.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 379.00 284.60 90.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 469.00 284.60 4.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.00 284.60 90.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 258.60 329.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 379.00 258.60 90.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 469.00 258.60 4.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.00 258.60 90.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 232.60 329.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 379.00 232.60 90.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 469.00 232.60 4.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.00 232.60 90.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 206.60 329.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 379.00 206.60 90.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 469.00 206.60 4.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.00 206.60 90.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 180.60 329.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 379.00 180.60 90.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 469.00 180.60 4.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.00 180.60 90.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 154.60 329.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 379.00 154.60 90.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 469.00 154.60 4.00 -13.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 473.00 154.60 90.00 -13.00 re f /GS0 gs 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 379 578.6 m 469 578.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 469 578.6 m 473 578.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473 578.6 m 563 578.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 379 578.6 m 469 578.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 379 565.6 m 469 565.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 469 578.6 m 473 578.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473 578.6 m 563 578.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473 565.6 m 563 565.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 379 513.6 m 469 513.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473 513.6 m 563 513.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 379 513.6 m 469 513.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 379 501.6 m 469 501.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 379 499.6 m 469 499.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473 513.6 m 563 513.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473 501.6 m 563 501.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473 499.6 m 563 499.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 379 461.6 m 469 461.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473 461.6 m 563 461.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 379 461.6 m 469 461.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 379 449.6 m 469 449.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 379 447.6 m 469 447.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473 461.6 m 563 461.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473 449.6 m 563 449.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473 447.6 m 563 447.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 379 396.6 m 469 396.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473 396.6 m 563 396.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 379 396.6 m 469 396.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 379 384.6 m 469 384.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 379 382.6 m 469 382.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473 396.6 m 563 396.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473 384.6 m 563 384.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473 382.6 m 563 382.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 379 349.6 m 469 349.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473 349.6 m 563 349.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 379 297.6 m 469 297.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473 297.6 m 563 297.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 379 258.6 m 469 258.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473 258.6 m 563 258.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 379 246.60000000000002 m 469 246.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 379 244.60000000000002 m 469 244.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473 246.60000000000002 m 563 246.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473 244.60000000000002 m 563 244.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 379 193.60000000000002 m 469 193.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473 193.60000000000002 m 563 193.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 379 154.60000000000002 m 469 154.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473 154.60000000000002 m 563 154.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 379 142.60000000000002 m 469 142.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 379 140.60000000000002 m 469 140.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473 142.60000000000002 m 563 142.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 473 140.60000000000002 m 563 140.60000000000002 l s BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 582.85 Td ( ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 402.20 582.83 Td (For the Three Months Ended March 31,) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 569.85 Td ( ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 415.50 569.83 Td (2016) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 509.50 569.83 Td (2015) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 556.85 Td (Revenues:) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 70.50 543.85 Td (Real estate segment ) Tj ET Q BT /F1 8.00 Tf ET BT /F1 5.20 Tf ET q 0 0 0 rg BT 136.03 547.48 Td (\(1\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 381.50 543.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 443.80 543.85 Td (17,189) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 475.50 543.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 537.80 543.85 Td (17,841) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 70.50 530.85 Td (Real estate-related segment) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 453.80 530.85 Td (810) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 547.80 530.85 Td (726) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 70.50 517.85 Td (GKK Properties segment ) Tj ET Q BT /F1 8.00 Tf ET BT /F1 5.20 Tf ET q 0 0 0 rg BT 152.93 521.48 Td (\(1\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 443.80 517.85 Td (23,126) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 537.80 517.85 Td (31,010) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 504.85 Td (Total revenues) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 381.50 504.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 443.80 504.85 Td (41,125) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 475.50 504.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 537.80 504.85 Td (49,577) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 491.85 Td (Interest expense:) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 70.50 478.85 Td (Real estate segment ) Tj ET Q BT /F1 8.00 Tf ET BT /F1 5.20 Tf ET q 0 0 0 rg BT 136.03 482.48 Td (\(1\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 381.50 478.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 447.80 478.85 Td (1,938) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 475.50 478.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 541.80 478.85 Td (2,209) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 70.50 465.85 Td (GKK Properties segment ) Tj ET Q BT /F1 8.00 Tf ET BT /F1 5.20 Tf ET q 0 0 0 rg BT 152.93 469.48 Td (\(1\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 447.80 465.85 Td (3,291) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 541.80 465.85 Td (6,524) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 452.85 Td (Total interest expense) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 381.50 452.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 447.80 452.85 Td (5,229) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 475.50 452.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 541.80 452.85 Td (8,733) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 439.85 Td (NOI:) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 70.50 426.85 Td (Real estate segment ) Tj ET Q BT /F1 8.00 Tf ET BT /F1 5.20 Tf ET q 0 0 0 rg BT 136.03 430.48 Td (\(1\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 381.50 426.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 447.80 426.85 Td (7,735) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 475.50 426.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 541.80 426.85 Td (6,394) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 70.50 413.85 Td (Real estate-related segment) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 453.80 413.85 Td (809) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 547.80 413.85 Td (725) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 70.50 400.85 Td (GKK Properties segment ) Tj ET Q BT /F1 8.00 Tf ET BT /F1 5.20 Tf ET q 0 0 0 rg BT 152.93 404.48 Td (\(1\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 447.80 400.85 Td (6,036) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 541.80 400.85 Td (4,955) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 387.85 Td (Total NOI) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 381.50 387.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 443.80 387.85 Td (14,580) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 475.50 387.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 537.80 387.85 Td (12,074) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 366.85 Td ( ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 396.20 366.83 Td (As of March 31,) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 484.45 366.83 Td (As of December 31,) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 353.85 Td ( ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 415.50 353.83 Td (2016) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 509.50 353.83 Td (2015) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 340.85 Td (Assets:) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 70.50 327.85 Td (Real estate segment) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 381.50 327.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 439.80 327.85 Td (493,978) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 475.50 327.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 533.80 327.85 Td (499,789) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 70.50 314.85 Td (Real estate-related segment) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 443.80 314.85 Td (28,705) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 537.80 314.85 Td (27,899) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 70.50 301.85 Td (GKK Properties segment) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 439.80 301.85 Td (324,063) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 533.80 301.85 Td (350,392) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 88.50 288.85 Td (Total segment assets) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 439.80 288.85 Td (846,746) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 533.80 288.85 Td (878,080) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 70.50 275.85 Td (Real estate held for sale) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 439.80 275.85 Td (146,754) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 533.80 275.85 Td (165,615) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 70.50 262.85 Td (Corporate-level ) Tj ET Q BT /F1 8.00 Tf ET BT /F1 5.20 Tf ET q 0 0 0 rg BT 122.70 266.48 Td (\(2\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 443.80 262.85 Td (59,974) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 537.80 262.85 Td (11,170) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 249.85 Td (Total assets) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 381.50 249.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 433.80 249.85 Td (1,053,474) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 475.50 249.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 527.80 249.85 Td (1,054,865) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 236.85 Td (Liabilities:) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 70.50 223.85 Td (Real estate segment) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 381.50 223.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 439.80 223.85 Td (242,832) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 475.50 223.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 533.80 223.85 Td (243,387) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 70.50 210.85 Td (Real estate-related segment) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 457.80 210.85 Td (14) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 555.80 210.85 Td (3) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 70.50 197.85 Td (GKK Properties segment) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 439.80 197.85 Td (152,124) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 533.80 197.85 Td (155,752) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 88.50 184.85 Td (Total segment liabilities) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 439.80 184.85 Td (394,970) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 533.80 184.85 Td (399,142) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 70.50 171.85 Td (Real estate held for sale) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 439.80 171.85 Td (122,478) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 533.80 171.85 Td (124,756) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 70.50 158.85 Td (Corporate-level ) Tj ET Q BT /F1 8.00 Tf ET BT /F1 5.20 Tf ET q 0 0 0 rg BT 122.70 162.48 Td (\(3\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 447.80 158.85 Td (1,446) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 541.80 158.85 Td (1,304) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 145.85 Td (Total liabilities) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 381.50 145.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 439.80 145.85 Td (518,894) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 475.50 145.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 533.80 145.85 Td (525,202) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 130.10 Td (_____________________) Tj ET Q BT /F1 7.50 Tf ET BT /F1 4.87 Tf ET q 0 0 0 rg BT 49.50 121.50 Td (\(1\) ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 56.40 118.10 Td (Amounts include certain properties in continuing operations that were sold or held for sale as of ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 345.92 118.10 Td (March 31, 2016) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 393.62 118.10 Td (. See Note 6, “Real Estate Held for Sale and ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 49.50 109.10 Td (Discontinued Operations” for more information.) Tj ET Q BT /F1 7.50 Tf ET BT /F1 4.87 Tf ET q 0 0 0 rg BT 49.50 100.50 Td (\(2\)) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 55.18 97.10 Td ( ) Tj ET Q q 0 0 0 rg BT 56.92 97.10 Td (T) Tj ET Q q 0 0 0 rg BT 60.98 97.10 Td (otal corporate-level assets consisted primarily of cash and cash equivalents of approximately ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 340.90 97.10 Td ($59.5 million) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 381.32 97.10 Td ( and ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 395.90 97.10 Td ($10.6 million) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 436.32 97.10 Td ( as of ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 454.44 97.10 Td (March 31, 2016) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 502.14 97.10 Td ( and ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 516.72 97.10 Td (December 31, ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 49.50 88.10 Td (2015) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 64.50 88.10 Td (, respectively) Tj ET Q q 0 0 0 rg BT 104.00 88.10 Td (.) Tj ET Q BT /F1 7.50 Tf ET BT /F1 4.87 Tf ET q 0 0 0 rg BT 49.50 79.50 Td (\(3\)) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 55.18 76.10 Td ( ) Tj ET Q q 0 0 0 rg BT 56.65 76.10 Td (As of ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 74.98 76.10 Td (March 31, 2016) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 122.68 76.10 Td ( and ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 137.26 76.10 Td (December 31, 2015) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 196.20 76.10 Td (, corporate-level liabilities consisted primarily of accounts payable and accrued liabilities for general and administrative ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 49.50 67.10 Td (expenses. ) Tj ET Q endstream endobj 55 0 obj <>] /Rotate 0 /Contents 56 0 R>> endobj 56 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 1. Financial Statements \(continued\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 195.70 712.60 Td (KBS REAL) Tj ET Q q 0 0 0 rg BT 245.44 712.60 Td ( EST) Tj ET Q q 0 0 0 rg BT 266.10 712.60 Td (A) Tj ET Q q 0 0 0 rg BT 272.58 712.60 Td (TE INVESTMENT) Tj ET Q q 0 0 0 rg BT 355.48 712.60 Td ( ) Tj ET Q q 0 0 0 rg BT 357.79 712.60 Td (TRUST) Tj ET Q q 0 0 0 rg BT 390.40 712.60 Td (, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 107.50 694.60 Td (CONDENSED NOTES ) Tj ET Q q 0 0 0 rg BT 209.01 694.60 Td (T) Tj ET Q q 0 0 0 rg BT 215.50 694.60 Td (O CONSOLIDA) Tj ET Q q 0 0 0 rg BT 285.60 694.60 Td (TED FINANCIAL) Tj ET Q q 0 0 0 rg BT 364.78 694.60 Td ( ST) Tj ET Q q 0 0 0 rg BT 378.77 694.60 Td (A) Tj ET Q q 0 0 0 rg BT 385.25 694.60 Td (TEMENTS \(CONTINUED\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 274.20 676.60 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 282.95 661.60 Td (\(unaudited\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.00 33.60 Td (26) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 632.10 Td (The following table reconciles the Company’) Tj ET Q q 0 0 0 rg BT 254.28 632.10 Td (s net income to its NOI for the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 378.70 632.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 398.69 632.10 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 459.51 632.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 523.11 632.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 620.10 Td (2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.50 620.10 Td ( \(amounts in thousands\):) Tj ET Q 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 567.60 339.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 389.00 567.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 474.00 567.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 478.00 567.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 539.60 339.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 389.00 539.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 474.00 539.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 478.00 539.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 511.60 339.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 389.00 511.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 474.00 511.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 478.00 511.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 483.60 339.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 389.00 483.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 474.00 483.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 478.00 483.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 455.60 339.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 389.00 455.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 474.00 455.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 478.00 455.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 427.60 339.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 389.00 427.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 474.00 427.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 478.00 427.60 85.00 -14.00 re f /GS0 gs 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 581.6 m 474 581.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 474 581.6 m 478 581.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 581.6 m 563 581.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 581.6 m 474 581.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 567.6 m 474 567.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 581.6 m 563 581.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 567.6 m 563 567.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 567.6 m 474 567.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 567.6 m 563 567.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 427.6 m 474 427.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 427.6 m 563 427.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 427.6 m 474 427.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 414.6 m 474 414.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 412.6 m 474 412.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 427.6 m 563 427.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 414.6 m 563 414.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 412.6 m 563 412.6 l s BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 585.85 Td ( ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 407.20 585.83 Td (For the Three Months Ended March 31,) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 571.85 Td ( ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 423.00 571.83 Td (2016) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 512.00 571.83 Td (2015) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 557.85 Td (Net income) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 391.50 557.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 448.80 557.85 Td (10,819) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 480.50 557.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 541.80 557.85 Td (8,589) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 543.85 Td (Gain on sales of real estate) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 446.10 543.85 Td (\(23,586) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 470.80 543.85 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 535.10 543.85 Td (\(13,967) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 559.80 543.85 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 529.85 Td (Loss \(gain\) from extinguishment of debt) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 466.80 529.85 Td (3) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 551.80 529.85 Td (—) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 515.85 Td (Gain on sale of foreclosed real estate held for sale) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 462.80 515.85 Td (—) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 539.10 515.85 Td (\(2,509) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 559.80 515.85 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 501.85 Td (Other income and interest income) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 456.10 501.85 Td (\(243) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 470.80 501.85 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 545.10 501.85 Td (\(116) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 559.80 501.85 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 487.85 Td (Asset management fees to affiliate) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 452.80 487.85 Td (2,348) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 541.80 487.85 Td (2,420) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 473.85 Td (General and administrative expenses) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 452.80 473.85 Td (3,372) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 541.80 473.85 Td (2,220) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 459.85 Td (Depreciation and amortization) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 448.80 459.85 Td (10,998) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 537.80 459.85 Td (15,605) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 445.85 Td (Impairment charges on real estate) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 448.80 445.85 Td (10,864) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 551.80 445.85 Td (—) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 431.85 Td (Total income from discontinued operations) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 466.80 431.85 Td (5) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 545.10 431.85 Td (\(168) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 559.80 431.85 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 417.85 Td (NOI ) Tj ET Q BT /F1 8.00 Tf ET BT /F1 5.20 Tf ET q 0 0 0 rg BT 68.72 421.48 Td (\(1\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 391.50 417.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 448.80 417.85 Td (14,580) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 480.50 417.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 537.80 417.85 Td (12,074) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 402.10 Td (_____________________) Tj ET Q BT /F1 7.50 Tf ET BT /F1 4.87 Tf ET q 0 0 0 rg BT 49.50 393.50 Td (\(1\) ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 56.40 390.10 Td (Amounts include certain properties in continuing operations that were sold or held for sale as of ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 345.92 390.10 Td (March 31, 2016) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 393.62 390.10 Td (. See Note 6, “Real Estate Held for Sale and ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 49.50 381.10 Td (Discontinued Operations” for more information.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 357.10 Td (1) Tj ET Q q 0 0 0 rg BT 53.95 357.10 Td (1. ) Tj ET Q q 0 0 0 rg BT 72.00 357.10 Td (COMMITMENTS ) Tj ET Q q 0 0 0 rg BT 153.95 357.10 Td (AND CONTINGENCIES) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 339.10 Td (Lease Obligations) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 321.10 Td (Pursuant to the Settlement ) Tj ET Q q 0 0 0 rg BT 180.71 321.10 Td (Agreement, the Company indirectly received leasehold interests in certain commercial ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 309.10 Td (properties, pursuant to leases between the owner of the property) Tj ET Q q 0 0 0 rg BT 304.88 309.10 Td (, as landlord, and the Company) Tj ET Q q 0 0 0 rg BT 428.92 309.10 Td (, as tenant. ) Tj ET Q q 0 0 0 rg BT 476.51 309.10 Td (The ground leases ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 297.10 Td (have expiration dates from 2017 through 2042 and the building leases have expiration dates from 2016 through 2085. ) Tj ET Q q 0 0 0 rg BT 524.21 297.10 Td (These ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 285.10 Td (lease obligations generally contain rent increases and renewal options. In certain instances, the rent owed by the Company to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 273.10 Td (the owner of the property under the lease is greater than the revenue received by the Company from the tenants occupying the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 261.10 Td (property) Tj ET Q q 0 0 0 rg BT 82.73 261.10 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 243.10 Td (Future minimum lease payments owed by the Company under non-cancelable operating building and ground leases as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 231.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 113.10 231.10 Td ( were as follows \(in thousands\):) Tj ET Q 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 214.60 412.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 462.00 214.60 100.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 186.60 412.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 462.00 186.60 100.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 158.60 412.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 462.00 158.60 100.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 130.60 412.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 462.00 130.60 100.00 -14.00 re f /GS0 gs 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 462 130.60000000000002 m 562 130.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 462 130.60000000000002 m 562 130.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 462 117.60000000000002 m 562 117.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 462 115.60000000000002 m 562 115.60000000000002 l s BT /F1 9.00 Tf ET q 0 0 0 rg BT 52.50 205.06 Td (April 1, 2016 through December 31, 2016) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 464.50 205.06 Td ($) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 533.75 205.06 Td (12,477) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 52.50 191.06 Td (2017) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 533.75 191.06 Td (12,644) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 52.50 177.06 Td (2018) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 538.25 177.06 Td (2,440) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 52.50 163.06 Td (2019) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 538.25 163.06 Td (1,774) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 52.50 149.06 Td (2020) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 538.25 149.06 Td (1,289) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 52.50 135.06 Td (Thereafter) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 533.75 135.06 Td (30,182) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 464.50 121.06 Td ($) Tj ET Q BT /F1 9.00 Tf ET q 0 0 0 rg BT 533.75 121.06 Td (60,806) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 93.10 Td (If the Company was to dispose of an asset that is subject to a ground lease, the Company may incur additional losses to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 81.10 Td (settle obligations related to the ground lease. ) Tj ET Q endstream endobj 57 0 obj <>] /Rotate 0 /Contents 58 0 R>> endobj 58 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 1. Financial Statements \(continued\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 195.70 712.60 Td (KBS REAL) Tj ET Q q 0 0 0 rg BT 245.44 712.60 Td ( EST) Tj ET Q q 0 0 0 rg BT 266.10 712.60 Td (A) Tj ET Q q 0 0 0 rg BT 272.58 712.60 Td (TE INVESTMENT) Tj ET Q q 0 0 0 rg BT 355.48 712.60 Td ( ) Tj ET Q q 0 0 0 rg BT 357.79 712.60 Td (TRUST) Tj ET Q q 0 0 0 rg BT 390.40 712.60 Td (, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 107.50 694.60 Td (CONDENSED NOTES ) Tj ET Q q 0 0 0 rg BT 209.01 694.60 Td (T) Tj ET Q q 0 0 0 rg BT 215.50 694.60 Td (O CONSOLIDA) Tj ET Q q 0 0 0 rg BT 285.60 694.60 Td (TED FINANCIAL) Tj ET Q q 0 0 0 rg BT 364.78 694.60 Td ( ST) Tj ET Q q 0 0 0 rg BT 378.77 694.60 Td (A) Tj ET Q q 0 0 0 rg BT 385.25 694.60 Td (TEMENTS \(CONTINUED\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 274.20 676.60 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 282.95 661.60 Td (\(unaudited\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.00 33.60 Td (27) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 632.25 Td (Economic Dependency) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 614.25 Td (The Company is dependent on the ) Tj ET Q q 0 0 0 rg BT 212.36 614.25 Td (Advisor for certain services that are essential to the Company) Tj ET Q q 0 0 0 rg BT 458.02 614.25 Td (, including the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 602.25 Td (management of the Company’) Tj ET Q q 0 0 0 rg BT 170.30 602.25 Td (s real estate and real estate-related investment portfolio; the disposition of real estate and real ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 590.25 Td (estate-related investments; and other general and administrative responsibilities. In the event that the ) Tj ET Q q 0 0 0 rg BT 456.32 590.25 Td (Advisor is unable to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 578.25 Td (provide any of these services, the Company will be required to obtain such services from other sources. ) Tj ET Q q 0 0 0 rg BT 468.09 578.25 Td (The Company is also ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 566.25 Td (dependent on the Property Manager for the Services under the ) Tj ET Q q 0 0 0 rg BT 299.97 566.25 Td (Amended Services ) Tj ET Q q 0 0 0 rg BT 377.18 566.25 Td (Agreement, including the operations, leasing ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 554.25 Td (and eventual dispositions of the GKK Properties.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 536.25 Td (Envir) Tj ET Q q 0 0 0 rg BT 73.77 536.25 Td (onmental) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 518.25 Td (As an owner of real estate, the Company is subject to various environmental laws of federal, state and local governments. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 506.25 Td (Although there can be no assurance, the Company is not aware of any environmental liability that could have a material adverse ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 494.25 Td (ef) Tj ET Q q 0 0 0 rg BT 57.09 494.25 Td (fect on its financial condition or results of operations. However) Tj ET Q q 0 0 0 rg BT 312.45 494.25 Td (, changes in applicable environmental laws and regulations, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 482.25 Td (the uses and conditions of properties in the vicinity of the Company’) Tj ET Q q 0 0 0 rg BT 323.62 482.25 Td (s properties, the activities of its tenants and other ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 470.25 Td (environmental conditions of which the Company is unaware with respect to the properties could result in future environmental ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 458.25 Td (liabilities.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 440.25 Td (Under the Settlement ) Tj ET Q q 0 0 0 rg BT 160.42 440.25 Td (Agreement, the Company indirectly took title to or) Tj ET Q q 0 0 0 rg BT 363.31 440.25 Td (, with respect to a limited number of the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 428.25 Td (GKK Properties, indirectly took a leasehold interest in, the GKK Properties on an “as is” basis. ) Tj ET Q q 0 0 0 rg BT 434.42 428.25 Td (As such, the Company was not ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 416.25 Td (able to inspect the GKK Properties or conduct standard due diligence on certain of the GKK Properties before the transfers of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 404.25 Td (the properties. ) Tj ET Q q 0 0 0 rg BT 111.15 404.25 Td (Additionally) Tj ET Q q 0 0 0 rg BT 161.05 404.25 Td (, the Company did not receive representations, warranties and indemnities relating to the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 392.25 Td (GKK Properties from Gramercy and/or its af) Tj ET Q q 0 0 0 rg BT 228.71 392.25 Td (filiates. ) Tj ET Q q 0 0 0 rg BT 263.24 392.25 Td (Thus, the value of the GKK Properties may decline if the Company ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 380.25 Td (subsequently discovers environmental problems with the GKK Properties.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 362.25 Td (Legal Matters) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 344.25 Td (From time to time, the Company is party to legal proceedings that arise in the ordinary course of its business. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 332.25 Td (Management is not aware of any legal proceedings the outcome of which is probable or reasonably possible to have a material ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 320.25 Td (adverse ef) Tj ET Q q 0 0 0 rg BT 90.13 320.25 Td (fect on the Company’) Tj ET Q q 0 0 0 rg BT 176.49 320.25 Td (s results of operations or financial condition, which would require accrual or disclosure of the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 308.25 Td (contingency and possible range of loss. ) Tj ET Q q 0 0 0 rg BT 211.14 308.25 Td (Additionally) Tj ET Q q 0 0 0 rg BT 261.04 308.25 Td (, the Company has not recorded any loss contingencies related to legal ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 296.25 Td (proceedings in which the potential loss is deemed to be remote.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 272.25 Td (12. ) Tj ET Q q 0 0 0 rg BT 72.00 272.25 Td (SUBSEQUENT) Tj ET Q q 0 0 0 rg BT 139.07 272.25 Td ( EVENTS) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 254.25 Td (The Company evaluates subsequent events up until the date the consolidated financial statements are issued.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 236.25 Td (Distribution Declar) Tj ET Q q 0 0 0 rg BT 132.37 236.25 Td (ed) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 218.25 Td (On May 6, 2016, the Company’) Tj ET Q q 0 0 0 rg BT 198.93 218.25 Td (s board of directors declared a distribution in the amount of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 439.14 218.25 Td ($0.025) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 466.64 218.25 Td ( per share of common ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 206.25 Td (stock to stockholders of record as of the close of business on June 22, 2016. ) Tj ET Q q 0 0 0 rg BT 357.60 206.25 Td (The Company expects to pay this distribution on ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 194.25 Td (or about June 29, 2016.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 176.25 Td (Disposition of the FSI 6000 Pr) Tj ET Q q 0 0 0 rg BT 177.38 176.25 Td (operties and Defeasance of the FSI 6000 Mortgage Loans) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 158.25 Td (On ) Tj ET Q q 0 0 0 rg BT 86.17 158.25 Td (April 1) Tj ET Q q 0 0 0 rg BT 114.41 158.25 Td (1, 2016, the Company sold ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 224.68 158.25 Td (61) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 234.68 158.25 Td ( bank branch properties, containing ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 378.52 158.25 Td (245,843) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 411.02 158.25 Td ( rentable square feet \(the “FSI 6000 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 146.25 Td (Properties”\), to a buyer unaf) Tj ET Q q 0 0 0 rg BT 162.89 146.25 Td (filiated with the Company or the ) Tj ET Q q 0 0 0 rg BT 295.09 146.25 Td (Advisor \(the “FSI 6000 Buyer”\), for an aggregate sales price, net ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 134.25 Td (of closing credits, of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 134.20 134.25 Td ($139.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 193.09 134.25 Td ( \(which includes a payment of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 316.39 134.25 Td ($6.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 365.28 134.25 Td ( by the FSI 6000 Buyer to the Company to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 122.25 Td (compensate the Company for costs and expenses the Company incurred in connection with the defeasance of the FSI 6000 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 110.25 Td (Mortgage Loans, as defined below\), excluding closing costs. ) Tj ET Q endstream endobj 59 0 obj <>] /Rotate 0 /Contents 60 0 R>> endobj 60 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 1. Financial Statements \(continued\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 195.70 712.60 Td (KBS REAL) Tj ET Q q 0 0 0 rg BT 245.44 712.60 Td ( EST) Tj ET Q q 0 0 0 rg BT 266.10 712.60 Td (A) Tj ET Q q 0 0 0 rg BT 272.58 712.60 Td (TE INVESTMENT) Tj ET Q q 0 0 0 rg BT 355.48 712.60 Td ( ) Tj ET Q q 0 0 0 rg BT 357.79 712.60 Td (TRUST) Tj ET Q q 0 0 0 rg BT 390.40 712.60 Td (, INC.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 107.50 694.60 Td (CONDENSED NOTES ) Tj ET Q q 0 0 0 rg BT 209.01 694.60 Td (T) Tj ET Q q 0 0 0 rg BT 215.50 694.60 Td (O CONSOLIDA) Tj ET Q q 0 0 0 rg BT 285.60 694.60 Td (TED FINANCIAL) Tj ET Q q 0 0 0 rg BT 364.78 694.60 Td ( ST) Tj ET Q q 0 0 0 rg BT 378.77 694.60 Td (A) Tj ET Q q 0 0 0 rg BT 385.25 694.60 Td (TEMENTS \(CONTINUED\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 274.20 676.60 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 282.95 661.60 Td (\(unaudited\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.00 33.60 Td (28) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 632.10 Td (In connection with the disposition of the FSI 6000 Properties, the Company entered into a defeasance agreement with ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 620.10 Td (each of the lenders under the FSI 6000A) Tj ET Q q 0 0 0 rg BT 210.85 620.10 Td ( Mortgage Loan, FSI 6000B Mortgage Loan, FSI 6000C Mortgage Loan and FSI ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 608.10 Td (6000D Mortgage Loan \(collectively) Tj ET Q q 0 0 0 rg BT 192.97 608.10 Td (, the “FSI 6000 Mortgage Loans”\) to defease the entire aggregate outstanding principal ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 596.10 Td (balance of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 93.36 596.10 Td ($102.3 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 152.25 596.10 Td ( under the FSI 6000 Mortgage Loans, releasing the FSI 6000 Properties, which had secured the FSI ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 584.10 Td (6000 Mortgage Loans. ) Tj ET Q q 0 0 0 rg BT 145.13 584.10 Td (The defeasance costs and write-of) Tj ET Q q 0 0 0 rg BT 281.00 584.10 Td (f of an unamortized discount resulted in an aggregate loss on ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 572.10 Td (extinguishment of debt of approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 215.30 572.10 Td ($6.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 264.19 572.10 Td (.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 554.10 Td (Defeasance of the Bank of ) Tj ET Q q 0 0 0 rg BT 161.99 554.10 Td (America - BBD2 Mortgage Loan) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 536.10 Td (On ) Tj ET Q q 0 0 0 rg BT 86.17 536.10 Td (April 15, 2016, the Company) Tj ET Q q 0 0 0 rg BT 202.73 536.10 Td (, through an indirect wholly owned subsidiary) Tj ET Q q 0 0 0 rg BT 386.22 536.10 Td (, entered into a defeasance with the lender ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 524.10 Td (under the Bank of ) Tj ET Q q 0 0 0 rg BT 123.37 524.10 Td (America - BBD2 Mortgage Loan to defease the remaining outstanding principal balance of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.19 524.10 Td ($65.1 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 544.08 524.10 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 512.10 Td (releasing all the properties that secured the Bank of ) Tj ET Q q 0 0 0 rg BT 256.93 512.10 Td (America - BBD2 Mortgage Loan. ) Tj ET Q q 0 0 0 rg BT 396.99 512.10 Td (The Bank of ) Tj ET Q q 0 0 0 rg BT 448.92 512.10 Td (America - BBD2 Mortgage ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 500.10 Td (Loan bore interest at a rate of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 169.72 500.10 Td (5.96%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 195.55 500.10 Td ( and was due to mature on September 8, 2019. ) Tj ET Q q 0 0 0 rg BT 385.60 500.10 Td (The defeasance costs and write-of) Tj ET Q q 0 0 0 rg BT 521.47 500.10 Td (f of an ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 488.10 Td (unamortized discount and unamortized deferred financing costs resulted in a loss on extinguishment of debt of approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 476.10 Td ($12.7 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.39 476.10 Td (. ) Tj ET Q endstream endobj 61 0 obj <>] /Rotate 0 /Contents 62 0 R>> endobj 62 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 2. Management’) Tj ET Q q 0 0 0 rg BT 144.05 730.60 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 216.03 730.60 Td (Analysis of Financial Condition and Results of Operations) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.00 33.60 Td (29) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 704.10 Td (The following discussion and analysis should be read in conjunction with the accompanying financial statements of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 692.10 Td (KBS Real Estate Investment ) Tj ET Q q 0 0 0 rg BT 165.96 692.10 Td (T) Tj ET Q q 0 0 0 rg BT 171.72 692.10 Td (rust, Inc. and the notes thereto. ) Tj ET Q q 0 0 0 rg BT 299.47 692.10 Td (As used herein, the terms “we,” “our” and “us” refer to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 680.10 Td (KBS Real Estate Investment ) Tj ET Q q 0 0 0 rg BT 165.96 680.10 Td (T) Tj ET Q q 0 0 0 rg BT 171.72 680.10 Td (rust, Inc., a Maryland corporation, and, as required by context, KBS Limited Partnership, a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 668.10 Td (Delaware limited partnership, which we refer to as the “Operating Partnership,” and to their subsidiaries.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 650.10 Td (Forward-Looking Statements) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 632.10 Td (Certain statements included in this Quarterly Report on Form 10-Q are forward-looking statements. ) Tj ET Q q 0 0 0 rg BT 476.83 632.10 Td (Those statements ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 620.10 Td (include statements regarding the intent, belief or current expectations of KBS Real Estate Investment ) Tj ET Q q 0 0 0 rg BT 456.14 620.10 Td (T) Tj ET Q q 0 0 0 rg BT 461.89 620.10 Td (rust, Inc. and members ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 608.10 Td (of our management team, as well as the assumptions on which such statements are based, and generally are identified by the use ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 596.10 Td (of words such as “may) Tj ET Q q 0 0 0 rg BT 139.94 596.10 Td (,” “will,” “seeks,” “anticipates,” “believes,” “estimates,” “expects,” “plans,” “intends,” “should” or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 584.10 Td (similar expressions. ) Tj ET Q q 0 0 0 rg BT 133.38 584.10 Td (Actual results may dif) Tj ET Q q 0 0 0 rg BT 221.79 584.10 Td (fer materially from those contemplated by such forward-looking statements. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 572.10 Td (Further) Tj ET Q q 0 0 0 rg BT 78.54 572.10 Td (, forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or revise ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 560.10 Td (forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 548.10 Td (operating results over time, unless required by law) Tj ET Q q 0 0 0 rg BT 251.02 548.10 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 530.10 Td (The following are some of the risks and uncertainties, although not all of the risks and uncertainties, that could cause our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 518.10 Td (actual results to dif) Tj ET Q q 0 0 0 rg BT 125.69 518.10 Td (fer materially from those presented in our forward-looking statements:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 500.10 Td (• ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 500.10 Td (W) Tj ET Q q 0 0 0 rg BT 98.64 500.10 Td (e are the first publicly of) Tj ET Q q 0 0 0 rg BT 197.03 500.10 Td (fered investment program sponsored by the af) Tj ET Q q 0 0 0 rg BT 380.68 500.10 Td (filiates of our external advisor) Tj ET Q q 0 0 0 rg BT 500.80 500.10 Td (, KBS Capital ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 488.10 Td (Advisors LLC \( “KBS Capital ) Tj ET Q q 0 0 0 rg BT 213.05 488.10 Td (Advisors”\), which makes our future performance dif) Tj ET Q q 0 0 0 rg BT 423.08 488.10 Td (ficult to predict. Our stockholders ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 476.10 Td (should not assume that our performance will be similar to the past performance of other real estate investment ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 464.10 Td (programs sponsored by af) Tj ET Q q 0 0 0 rg BT 193.41 464.10 Td (filiates of our advisor) Tj ET Q q 0 0 0 rg BT 278.67 464.10 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 449.10 Td (• ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 449.10 Td (All of our executive of) Tj ET Q q 0 0 0 rg BT 180.90 449.10 Td (ficers and some of our directors and other key real estate and debt finance professionals are ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 437.10 Td (also of) Tj ET Q q 0 0 0 rg BT 116.76 437.10 Td (ficers, directors, managers, key professionals and/or holders of a direct or indirect controlling interest in our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 425.10 Td (advisor) Tj ET Q q 0 0 0 rg BT 119.04 425.10 Td (, the entity that acted as our dealer manager and/or other KBS-af) Tj ET Q q 0 0 0 rg BT 377.09 425.10 Td (filiated entities. ) Tj ET Q q 0 0 0 rg BT 443.74 425.10 Td (As a result, they face ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 413.10 Td (conflicts of interest, including significant conflicts created by our advisor) Tj ET Q q 0 0 0 rg BT 383.62 413.10 Td (’) Tj ET Q q 0 0 0 rg BT 386.40 413.10 Td (s compensation arrangements with us and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 401.10 Td (other KBS-sponsored programs and KBS-advised investors and conflicts in allocating time among us and these other ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 389.10 Td (programs and investors. ) Tj ET Q q 0 0 0 rg BT 190.63 389.10 Td (These conflicts could result in unanticipated actions.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 374.10 Td (• ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 374.10 Td (W) Tj ET Q q 0 0 0 rg BT 98.64 374.10 Td (e pay substantial fees to and expenses of our advisor and its af) Tj ET Q q 0 0 0 rg BT 347.28 374.10 Td (filiates. ) Tj ET Q q 0 0 0 rg BT 381.81 374.10 Td (These payments increase the risk that our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 362.10 Td (stockholders will not earn a profit on their investment in us and increase the risk of loss to our stockholders.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 347.10 Td (• ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 347.10 Td (W) Tj ET Q q 0 0 0 rg BT 98.64 347.10 Td (e depend on tenants for the revenue generated by our real estate investments and, accordingly) Tj ET Q q 0 0 0 rg BT 472.01 347.10 Td (, the revenue ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 335.10 Td (generated by our real estate investments is dependent upon the success and economic viability of our tenants. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 323.10 Td (Revenues from our properties could decrease due to a reduction in occupancy \(caused by factors including, but not ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 311.10 Td (limited to, tenant defaults, tenant insolvency) Tj ET Q q 0 0 0 rg BT 266.81 311.10 Td (, early termination of tenant leases and non-renewal of existing tenant ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 299.10 Td (leases\) and/or lower rental rates, making it more dif) Tj ET Q q 0 0 0 rg BT 296.69 299.10 Td (ficult for us to meet our debt service obligations and reducing our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 287.10 Td (stockholders’) Tj ET Q q 0 0 0 rg BT 143.13 287.10 Td ( returns.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 272.10 Td (• ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 272.10 Td (W) Tj ET Q q 0 0 0 rg BT 98.64 272.10 Td (e may not be able to refinance some or all of our existing indebtedness or to obtain additional debt financing on ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 260.10 Td (attractive terms. If we are not able to refinance existing indebtedness on attractive terms at or prior to its maturity) Tj ET Q q 0 0 0 rg BT 545.02 260.10 Td (, we ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 248.10 Td (may be forced to dispose of our assets sooner than we otherwise would and/or our lenders may take action against us. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 233.10 Td (• ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 233.10 Td (Our investments in real estate and real estate loans may be af) Tj ET Q q 0 0 0 rg BT 333.89 233.10 Td (fected by unfavorable real estate market and general ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 221.10 Td (economic conditions, which could decrease the value of those assets and reduce the investment return to our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 209.10 Td (stockholders. Revenues from our real property investments could decrease, making it more dif) Tj ET Q q 0 0 0 rg BT 469.99 209.10 Td (ficult for us to meet ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 197.10 Td (our debt service obligations. Revenues from the properties and other assets directly or indirectly securing our loan ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 185.10 Td (investments could decrease, making it more dif) Tj ET Q q 0 0 0 rg BT 278.93 185.10 Td (ficult for the borrowers under those loans to meet their payment ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 173.10 Td (obligations to us. In addition, decreases in revenues from the properties directly or indirectly securing our loan ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 161.10 Td (investments could result in decreased valuations for those properties, which could make it dif) Tj ET Q q 0 0 0 rg BT 463.05 161.10 Td (ficult for our borrowers ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 149.10 Td (to repay or refinance their obligations to us. ) Tj ET Q q 0 0 0 rg BT 269.77 149.10 Td (These factors could make it more dif) Tj ET Q q 0 0 0 rg BT 416.75 149.10 Td (ficult for us to meet our debt service ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 137.10 Td (obligations and could reduce our stockholders’) Tj ET Q q 0 0 0 rg BT 276.71 137.10 Td ( return.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 122.10 Td (• ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 122.10 Td (Disruptions in the financial markets and uncertain economic conditions could adversely af) Tj ET Q q 0 0 0 rg BT 451.10 122.10 Td (fect our ability to meet our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 110.10 Td (debt service obligations and cash needs, reducing the value of our stockholders’) Tj ET Q q 0 0 0 rg BT 408.60 110.10 Td ( investment in us.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 95.10 Td (• ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 95.10 Td (Certain of our debt obligations have variable interest rates and related payments that vary with the movement of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 83.10 Td (LIBOR or other indexes. Increases in these indexes could increase the amount of our debt payments and reduce our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 71.10 Td (stockholders’) Tj ET Q q 0 0 0 rg BT 143.13 71.10 Td ( return.) Tj ET Q endstream endobj 63 0 obj <>] /Rotate 0 /Contents 64 0 R>> endobj 64 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 2. Management’) Tj ET Q q 0 0 0 rg BT 144.05 730.60 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 216.03 730.60 Td (Analysis of Financial Condition and Results of Operations \(continued\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.00 33.60 Td (30) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 704.10 Td (• ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 704.10 Td (Our share redemption program provides only for redemptions sought upon a stockholder) Tj ET Q q 0 0 0 rg BT 445.01 704.10 Td (’) Tj ET Q q 0 0 0 rg BT 447.79 704.10 Td (s death, “qualifying ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 692.10 Td (disability” or “determination of incompetence” \(each as defined in the share redemption program and, together with ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 680.10 Td (redemptions in connection with a stockholder) Tj ET Q q 0 0 0 rg BT 272.83 680.10 Td (’) Tj ET Q q 0 0 0 rg BT 275.61 680.10 Td (s death, “special redemptions”\). ) Tj ET Q q 0 0 0 rg BT 407.88 680.10 Td (The dollar amounts available for such ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 668.10 Td (redemptions are determined by our board of directors and may be reviewed and adjusted from time to time. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 656.10 Td (Additionally) Tj ET Q q 0 0 0 rg BT 139.90 656.10 Td (, redemptions are further subject to limitations described in our share redemption program. ) Tj ET Q q 0 0 0 rg BT 507.39 656.10 Td (W) Tj ET Q q 0 0 0 rg BT 516.03 656.10 Td (e currently ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 644.10 Td (do not expect to have funds available for ordinary redemptions in the future. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 629.10 Td (• ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 629.10 Td (W) Tj ET Q q 0 0 0 rg BT 98.64 629.10 Td (e may not be able to successfully operate and/or sell the GKK Properties \(defined below\) given the concentration of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 617.10 Td (the GKK Properties in the financial services sector) Tj ET Q q 0 0 0 rg BT 292.59 617.10 Td (, the significant debt obligations we have assumed with respect to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 605.10 Td (such GKK Properties, and our advisor) Tj ET Q q 0 0 0 rg BT 243.12 605.10 Td (’) Tj ET Q q 0 0 0 rg BT 245.90 605.10 Td (s limited experience operating, managing and selling bank branch properties. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 593.10 Td (Moreover) Tj ET Q q 0 0 0 rg BT 129.03 593.10 Td (, we depend upon GKK Realty ) Tj ET Q q 0 0 0 rg BT 254.28 593.10 Td (Advisors LLC \(the “Property Manager”\), an af) Tj ET Q q 0 0 0 rg BT 441.54 593.10 Td (filiate of Gramercy \(defined ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 581.10 Td (below\), to manage and conduct the operations of the GKK Properties and any adverse changes in or the termination ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 569.10 Td (of our relationship with the Property Manager could hinder the performance of the GKK Properties and the return on ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 557.10 Td (our stockholders’) Tj ET Q q 0 0 0 rg BT 158.96 557.10 Td ( investment in us.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 542.10 Td (• ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 542.10 Td (As a result of the transfer of the GKK Properties to us, a significant portion of our properties are leased to financial ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 530.10 Td (institutions, making us more economically vulnerable in the event of a downturn in the banking industry) Tj ET Q q 0 0 0 rg BT 507.05 530.10 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 515.10 Td (• ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 515.10 Td (During the year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 181.63 515.10 Td (December 31, 2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 260.21 515.10 Td (, the Company disposed of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 369.65 515.10 Td (34) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 379.65 515.10 Td ( properties \(of which ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 465.73 515.10 Td (31) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.73 515.10 Td ( were GKK ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 503.10 Td (Properties\) and terminated its leasehold interest in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 293.00 503.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.98 503.10 Td ( GKK Properties. During the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 430.74 503.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 450.73 503.10 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 511.55 503.10 Td (March 31, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 491.10 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 110.00 491.10 Td (, the Company disposed of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 219.43 491.10 Td (14) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 229.43 491.10 Td ( properties \(all of which were GKK Properties\). ) Tj ET Q q 0 0 0 rg BT 424.93 491.10 Td (As a result of our disposition ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 479.10 Td (activity) Tj ET Q q 0 0 0 rg BT 119.34 479.10 Td (, our general and administrative expenses, which are not directly related to the size of our portfolio, have ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 467.10 Td (increased significantly as a percentage of our cash flow from operations and will continue to increase to the extent we ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 455.10 Td (sell additional assets.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 440.10 Td (• ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 440.10 Td (Although the special committee of our board of directors has engaged a financial advisor to assist with the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 428.10 Td (exploration of strategic alternatives for us, we are not obligated to enter into any particular transaction or any ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 416.10 Td (transaction at all. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 395.10 Td (All forward-looking statements should be read in light of the risks identified in Part I, Item 1A) Tj ET Q q 0 0 0 rg BT 450.93 395.10 Td ( of our ) Tj ET Q q 0 0 0 rg BT 479.54 395.10 Td (Annual Report on ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 383.10 Td (Form 10-K for the year ended December 31, 2015 filed with the Securities and Exchange Commission \(the “SEC”\).) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 365.10 Td (Overview) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 347.10 Td (W) Tj ET Q q 0 0 0 rg BT 82.14 347.10 Td (e are a Maryland corporation that was formed on June 13, 2005 to invest in a diverse portfolio of real estate properties ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 335.10 Td (and real estate-related investments. ) Tj ET Q q 0 0 0 rg BT 194.81 335.10 Td (W) Tj ET Q q 0 0 0 rg BT 203.45 335.10 Td (e elected to be taxed as a real estate investment trust \(“REIT”\) beginning with the taxable ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 323.10 Td (year ended December 31, 2006 and we intend to continue to operate in such a manner) Tj ET Q q 0 0 0 rg BT 392.16 323.10 Td (. ) Tj ET Q q 0 0 0 rg BT 399.48 323.10 Td (W) Tj ET Q q 0 0 0 rg BT 408.11 323.10 Td (e own substantially all of our assets ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 311.10 Td (and conduct our operations through our Operating Partnership, of which we are the sole general partner) Tj ET Q q 0 0 0 rg BT 462.70 311.10 Td (. Subject to certain ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 299.10 Td (restrictions and limitations, our business is managed by KBS Capital ) Tj ET Q q 0 0 0 rg BT 326.42 299.10 Td (Advisors pursuant to an advisory agreement. Our advisor ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 287.10 Td (owns 20,000 shares of our common stock. ) Tj ET Q q 0 0 0 rg BT 223.19 287.10 Td (W) Tj ET Q q 0 0 0 rg BT 231.82 287.10 Td (e have no paid employees.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 269.10 Td (On January 27, 2006, we launched our initial public of) Tj ET Q q 0 0 0 rg BT 291.88 269.10 Td (fering of up to 200,000,000 shares of common stock in our primary ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 257.10 Td (of) Tj ET Q q 0 0 0 rg BT 57.65 257.10 Td (fering and 80,000,000 shares of common stock under our dividend reinvestment plan. ) Tj ET Q q 0 0 0 rg BT 405.17 257.10 Td (W) Tj ET Q q 0 0 0 rg BT 413.81 257.10 Td (e ceased of) Tj ET Q q 0 0 0 rg BT 458.04 257.10 Td (fering shares of common ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 245.10 Td (stock in our primary of) Tj ET Q q 0 0 0 rg BT 141.52 245.10 Td (fering on May 30, 2008. ) Tj ET Q q 0 0 0 rg BT 243.55 245.10 Td (W) Tj ET Q q 0 0 0 rg BT 252.19 245.10 Td (e terminated our dividend reinvestment plan ef) Tj ET Q q 0 0 0 rg BT 439.16 245.10 Td (fective ) Tj ET Q q 0 0 0 rg BT 468.31 245.10 Td (April 10, 2012. ) Tj ET Q q 0 0 0 rg BT 534.24 245.10 Td (W) Tj ET Q q 0 0 0 rg BT 542.88 245.10 Td (e ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 233.10 Td (sold ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 68.67 233.10 Td (171,109,494) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 118.67 233.10 Td ( shares in our primary of) Tj ET Q q 0 0 0 rg BT 217.07 233.10 Td (fering for gross of) Tj ET Q q 0 0 0 rg BT 289.37 233.10 Td (fering proceeds of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 364.62 233.10 Td ($1.7 billion) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 410.73 233.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 430.17 233.10 Td (28,306,086) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 475.17 233.10 Td ( shares under our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 221.10 Td (dividend reinvestment plan for gross of) Tj ET Q q 0 0 0 rg BT 206.79 221.10 Td (fering proceeds of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 282.03 221.10 Td ($233.7 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 340.92 221.10 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 203.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 97.94 203.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 161.54 203.10 Td (, we owned or) Tj ET Q q 0 0 0 rg BT 217.79 203.10 Td (, with respect to a limited number of properties, held a leasehold interest in, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 522.43 203.10 Td (350) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 537.43 203.10 Td ( real ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 191.10 Td (estate properties \(of which ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 158.35 191.10 Td (77) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 168.35 191.10 Td ( properties were held for sale, all of which were GKK Properties\), including the GKK Properties. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 179.10 Td (In addition, as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 119.76 179.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 183.36 179.10 Td (, we owned ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 231.68 179.10 Td (four) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 248.34 179.10 Td ( real estate loans receivable and a participation interest with respect to a real ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 167.10 Td (estate joint venture.) Tj ET Q endstream endobj 65 0 obj <>] /Rotate 0 /Contents 66 0 R>> endobj 66 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 2. Management’) Tj ET Q q 0 0 0 rg BT 144.05 730.60 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 216.03 730.60 Td (Analysis of Financial Condition and Results of Operations \(continued\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.00 33.60 Td (31) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 704.10 Td (On September 1, 201) Tj ET Q q 0 0 0 rg BT 158.11 704.10 Td (1, we, through indirect wholly owned subsidiaries \(collectively) Tj ET Q q 0 0 0 rg BT 409.91 704.10 Td (, “KBS”\), entered into a Collateral ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 692.10 Td (T) Tj ET Q q 0 0 0 rg BT 55.26 692.10 Td (ransfer and Settlement ) Tj ET Q q 0 0 0 rg BT 147.17 692.10 Td (Agreement \(the “Settlement ) Tj ET Q q 0 0 0 rg BT 261.30 692.10 Td (Agreement”\) with, among other parties, GKK Stars ) Tj ET Q q 0 0 0 rg BT 469.30 692.10 Td (Acquisition LLC ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 680.10 Td (\(“GKK Stars”\), the wholly owned subsidiary of Gramercy Property ) Tj ET Q q 0 0 0 rg BT 322.03 680.10 Td (T) Tj ET Q q 0 0 0 rg BT 327.79 680.10 Td (rust, Inc. \(“Gramercy”\) that indirectly owned the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 668.10 Td (Gramercy real estate portfolio, to ef) Tj ET Q q 0 0 0 rg BT 192.59 668.10 Td (fect the orderly transfer of certain assets and liabilities of the Gramercy real estate portfolio ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 656.10 Td (to KBS in satisfaction of certain debt obligations under a mezzanine loan owed by wholly owned subsidiaries of Gramercy to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 644.10 Td (KBS \(the “GKK Mezzanine Loan”\). ) Tj ET Q q 0 0 0 rg BT 200.10 644.10 Td (The Settlement ) Tj ET Q q 0 0 0 rg BT 262.86 644.10 Td (Agreement resulted in the transfer of the equity interests in certain ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 632.10 Td (subsidiaries of Gramercy \(the “Equity Interests”\) that indirectly owned or) Tj ET Q q 0 0 0 rg BT 343.72 632.10 Td (, with respect to a limited number of properties, held a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 620.10 Td (leasehold interest in, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 134.48 620.10 Td (867) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 149.48 620.10 Td ( properties \(the “GKK Properties”\), consisting of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 348.31 620.10 Td (576) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 363.31 620.10 Td ( bank branch properties and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 476.88 620.10 Td (291) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 491.88 620.10 Td ( of) Tj ET Q q 0 0 0 rg BT 502.53 620.10 Td (fice buildings, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 608.10 Td (operations centers and other properties. For a further discussion of the Settlement ) Tj ET Q q 0 0 0 rg BT 379.41 608.10 Td (Agreement, the transfers of the GKK ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 596.10 Td (Properties and the debt related to these properties, see our ) Tj ET Q q 0 0 0 rg BT 282.48 596.10 Td (Annual Report on Form 10-K for the year ended December 31, 201) Tj ET Q q 0 0 0 rg BT 552.03 596.10 Td (1 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 584.10 Td (filed with the SEC.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 566.10 Td (Our focus in 2016 is to manage our existing investment portfolio, which includes strategically selling assets; exploring ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 554.10 Td (short-term value-add opportunities for a small number of GKK Properties; and distributing operating cash flow and net sales ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 542.10 Td (proceeds to stockholders.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 524.10 Td (Market Outlook – Real Estate and Real Estate Finance Markets) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 49.50 506.10 Td (The following discussion is based on management’) Tj ET Q q 0 0 0 rg BT 252.09 506.10 Td (s beliefs, observations and expectations with r) Tj ET Q q 0 0 0 rg BT 436.42 506.10 Td (espect to the r) Tj ET Q q 0 0 0 rg BT 492.42 506.10 Td (eal estate and ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 49.50 494.10 Td (r) Tj ET Q q 0 0 0 rg BT 53.02 494.10 Td (eal estate finance markets.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 479.10 Td (Current conditions in the global capital markets remain volatile. ) Tj ET Q q 0 0 0 rg BT 331.58 479.10 Td (The International Monetary Fund, in its Global Financial ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 467.10 Td (Stability Report, states that the economic outlook has deteriorated in advanced economies because of heightened uncertainty ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 455.10 Td (and setbacks to growth and confidence. ) Tj ET Q q 0 0 0 rg BT 212.04 455.10 Td (This situation is amplified in emer) Tj ET Q q 0 0 0 rg BT 349.34 455.10 Td (ging economies, where oil and commodity prices, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 443.10 Td (coupled with slower economic growth, have kept risk levels elevated. Dismal financial conditions in Europe and Japan, and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 431.10 Td (continued outflows from emer) Tj ET Q q 0 0 0 rg BT 170.68 431.10 Td (ging markets are some of the crucial risks leading to financial uncertainty and poor investor ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 419.10 Td (confidence. China, in particular) Tj ET Q q 0 0 0 rg BT 177.94 419.10 Td (, has been a source of uncertainty) Tj ET Q q 0 0 0 rg BT 310.84 419.10 Td (, as the economy is under) Tj ET Q q 0 0 0 rg BT 412.30 419.10 Td (going a complex transition towards a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 407.10 Td (more sustainable growth model; one that is based on consumption and services.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 389.10 Td (In the United States, economic growth has been relatively steady and low) Tj ET Q q 0 0 0 rg BT 366.65 389.10 Td (. ) Tj ET Q q 0 0 0 rg BT 373.97 389.10 Td (The U.S. labor markets have been improving ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 377.10 Td (and are adding approximately 200,000 jobs each month. ) Tj ET Q q 0 0 0 rg BT 278.98 377.10 Td (The unemployment rate is hovering around 5%. ) Tj ET Q q 0 0 0 rg BT 475.14 377.10 Td (These positive signs ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 365.10 Td (are, however) Tj ET Q q 0 0 0 rg BT 100.74 365.10 Td (, of) Tj ET Q q 0 0 0 rg BT 113.88 365.10 Td (fset somewhat by a lack of real income growth and a persistently low labor participation rate. ) Tj ET Q q 0 0 0 rg BT 491.91 365.10 Td (The U.S. ener) Tj ET Q q 0 0 0 rg BT 547.27 365.10 Td (gy ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 353.10 Td (market has been struggling with the oversupply of oil and natural gas, which is a reversal of the trend that played an important ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 341.10 Td (role in the U.S. economic recovery following the 2008-2009 recession. Forward-looking economic indicators provided by the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 329.10 Td (Federal Reserve are pointing to a continued slowing in gross domestic product in Q1 2016.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 311.10 Td (Central bank interventions and the use of monetary policy to combat the lingering ef) Tj ET Q q 0 0 0 rg BT 411.28 311.10 Td (fects of the 2008-2009 recession ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 299.10 Td (continue to af) Tj ET Q q 0 0 0 rg BT 104.30 299.10 Td (fect the global economy) Tj ET Q q 0 0 0 rg BT 200.00 299.10 Td (. ) Tj ET Q q 0 0 0 rg BT 207.32 299.10 Td (The Federal Reserve pursued an accommodative monetary policy that included cutting ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 287.10 Td (interest rates and implementing a quantitative easing \(“QE”\) program. In 2015, the U.S. economy continued strengthening, and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 275.10 Td (the Federal Reserve ceased the QE program and raised the ) Tj ET Q q 0 0 0 rg BT 285.33 275.10 Td (T) Tj ET Q q 0 0 0 rg BT 290.74 275.10 Td (ar) Tj ET Q q 0 0 0 rg BT 298.33 275.10 Td (get Funds rate by 25 basis points. Following this move, the U.S. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 263.10 Td (economic indicators started to weaken, and the dollar traded of) Tj ET Q q 0 0 0 rg BT 300.89 263.10 Td (f against most major world currencies.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 245.10 Td (In Europe and Japan, the central bank interventions into the local economies have continued. ) Tj ET Q q 0 0 0 rg BT 449.21 245.10 Td (Asset purchases and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 233.10 Td (stimulus programs in both regions have driven down interest rates and investment yields. Both regions now have unnaturally ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 221.10 Td (low interest rates, with some government and corporate bonds trading with negative yields. ) Tj ET Q q 0 0 0 rg BT 416.73 221.10 Td (While the intent of these policies is ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 209.10 Td (to spur economic growth, the size of these programs is unprecedented, and the ultimate impact on the global financial system ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 197.10 Td (remains unknown. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 179.10 Td (W) Tj ET Q q 0 0 0 rg BT 82.54 179.10 Td (ith the backdrop of increasing levels of global political conflict, and weaker international economic conditions, the U.S. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 167.10 Td (dollar has remained a safe haven currency) Tj ET Q q 0 0 0 rg BT 217.10 167.10 Td (. Slowing economic growth and poor corporate earnings have caused the markets to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 155.10 Td (discount talk of further interest rate increases. ) Tj ET Q q 0 0 0 rg BT 234.80 155.10 Td (This, in turn, has kept the U.S. yield curve near all-time lows, and has kept the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 143.10 Td (dollar weak. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 125.10 Td (The U.S. commercial real estate market continues to benefit from strong inflows of foreign capital. In 2015, commercial ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 113.10 Td (real estate transaction volumes increased 23%, making 2015 the second highest level of investment volume, behind only 2007. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 101.10 Td (Low interest rates and aggressive loan underwriting standards have helped drive property values higher) Tj ET Q q 0 0 0 rg BT 462.42 101.10 Td (. In the first quarter of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 89.10 Td (2016, lending standards were tightened and transaction volumes have slowed. ) Tj ET Q q 0 0 0 rg BT 363.13 89.10 Td (This phenomenon is best captured in the decline ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 77.10 Td (of the commercial mortgage backed securities market, which saw issuance forecasts slashed as of 2016. Highly leveraged ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 65.10 Td (investors are temporarily being forced out of the market. Secondary markets and riskier asset classes experienced a drop in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 53.10 Td (prices.) Tj ET Q endstream endobj 67 0 obj <>] /Rotate 0 /Contents 68 0 R>> endobj 68 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 2. Management’) Tj ET Q q 0 0 0 rg BT 144.05 730.60 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 216.03 730.60 Td (Analysis of Financial Condition and Results of Operations \(continued\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.00 33.60 Td (32) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 49.50 704.25 Td (Impact on Our Real Estate Investments) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 689.25 Td (The volatility in the global financial markets continues to cause a level of uncertainty in our outlook for the performance ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 677.25 Td (of the U.S. commercial real estate markets. Both the investing and leasing environments are highly competitive. ) Tj ET Q q 0 0 0 rg BT 502.25 677.25 Td (While there ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 665.25 Td (has been an increase in the amount of capital flowing into U.S. real estate markets, the uncertainty regarding the economic ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 653.25 Td (environment has made businesses reluctant to make long-term commitments, as is evidenced by the lower level of business ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 641.25 Td (investment and capital expenditures. Possible future declines in rental rates, slower or potentially negative net absorption of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 629.25 Td (leased space and expectations of future rental concessions, including free rent to renew tenants early) Tj ET Q q 0 0 0 rg BT 450.08 629.25 Td (, to retain tenants who are ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 617.25 Td (up for renewal or to attract new tenants, may result in decreases in cash flows. Historically low interest rates could help of) Tj ET Q q 0 0 0 rg BT 537.77 617.25 Td (fset ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 605.25 Td (some of the impact of these potential decreases in operating cash flow for properties financed with variable rate mortgages; ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 593.25 Td (however) Tj ET Q q 0 0 0 rg BT 83.53 593.25 Td (, interest rates likely will not remain at these historically low levels for the remaining life of many of our investments. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 581.25 Td (In fact, the Federal Reserve increased interest rates in Q4 2015, and has left the door open for another increase in at the end of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 569.25 Td (Q2 2016. Currently we expect further increases in interest rates, but are uncertain as to the timing and levels. Interest rates ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 557.25 Td (have become more volatile as the global capital markets react to increasing economic and geopolitical risks.) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 49.50 539.25 Td (Impact on Our Real Estate-Related Investments) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 524.25 Td (All of our real estate-related investments are directly or indirectly secured by commercial real estate. ) Tj ET Q q 0 0 0 rg BT 478.32 524.25 Td (As a result, our real ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 512.25 Td (estate-related investments, in general, have been and likely will continue to be impacted by the same factors impacting our real ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 500.25 Td (estate properties. ) Tj ET Q q 0 0 0 rg BT 119.57 500.25 Td (The higher yields and the improving credit position of many U.S. tenants and borrowers have attracted global ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 488.25 Td (capital. However) Tj ET Q q 0 0 0 rg BT 117.40 488.25 Td (, the real estate and capital markets are fluid, and the positive trends can reverse quickly) Tj ET Q q 0 0 0 rg BT 468.55 488.25 Td (. Economic conditions ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 476.25 Td (remain relatively volatile and can have a negative impact on the performance of collateral securing our loan investments, and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 464.25 Td (therefore may impact the ability of some of the borrowers under our loans to make contractual interest payments to us.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 446.25 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 97.94 446.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 161.54 446.25 Td (, we had fixed rate real estate-related loan investments with a total book value \(excluding asset-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 434.25 Td (specific loan loss reserves\) of $34.0 million. On September 1, 2015, the Lawrence ) Tj ET Q q 0 0 0 rg BT 383.12 434.25 Td (V) Tj ET Q q 0 0 0 rg BT 389.74 434.25 Td (illage Plaza Loan Origination matured ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 422.25 Td (without repayment. On March 29, 2016, we entered into an agreement in lieu of foreclosure with the borrower under the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 410.25 Td (Lawrence ) Tj ET Q q 0 0 0 rg BT 91.23 410.25 Td (V) Tj ET Q q 0 0 0 rg BT 97.85 410.25 Td (illage Plaza Loan Origination. On ) Tj ET Q q 0 0 0 rg BT 237.54 410.25 Td (April 25, 2016, the scheduled closing date of the agreement in lieu of foreclosure ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 398.25 Td (was extended to May 13, 2016. Other than the Sandmar Mezzanine Loan, which has a book value of zero after asset specific ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 386.25 Td (loan loss reserves, no other real estate-related loan investments are scheduled to mature within one year from ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 488.23 386.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 551.83 386.25 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 374.25 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.94 374.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 137.54 374.25 Td (, we had recorded ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 211.12 374.25 Td ($6.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 260.01 374.25 Td ( of reserves for loan losses related to two of our real estate-related ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 362.25 Td (investments, the Lawrence ) Tj ET Q q 0 0 0 rg BT 158.72 362.25 Td (V) Tj ET Q q 0 0 0 rg BT 165.34 362.25 Td (illage Plaza Loan Origination and the Sandmar Mezzanine Loan. ) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 49.50 344.25 Td (Impact on Our Financing ) Tj ET Q q 0 0 0 rg BT 158.60 344.25 Td (Activities) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 329.25 Td (In light of the risks associated with potentially volatile operating cash flows from some of our real estate properties, and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 317.25 Td (the possible increase in the cost of financing due to higher interest rates, we may have dif) Tj ET Q q 0 0 0 rg BT 406.70 317.25 Td (ficulty refinancing some of our debt ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 305.25 Td (obligations prior to or at maturity or we may not be able to refinance these obligations at terms as favorable as the terms of our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 293.25 Td (existing indebtedness. Financial market conditions have improved from the bottom of the economic cycle, and short-term ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 281.25 Td (interest rates in the U.S. have increased. Market conditions can change quickly) Tj ET Q q 0 0 0 rg BT 366.80 281.25 Td (, potentially negatively impacting the value of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 269.25 Td (our investments.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 251.25 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 97.94 251.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 161.54 251.25 Td (, we had a total of $266.0 million of fixed rate notes payable and $164.1 million of variable rate ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 239.25 Td (notes payable. ) Tj ET Q q 0 0 0 rg BT 111.52 239.25 Td (W) Tj ET Q q 0 0 0 rg BT 120.16 239.25 Td (e have $226.3 million of debt maturing \(including principal amortization payments\) during the 12 months ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 227.25 Td (ending March 31, 2017. ) Tj ET Q q 0 0 0 rg BT 150.13 227.25 Td (W) Tj ET Q q 0 0 0 rg BT 158.77 227.25 Td (e plan to exercise our extension options available under our loan agreements or pay down or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 215.25 Td (refinance the related notes payable prior to their maturity dates. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 197.25 Td (Liquidity and Capital Resour) Tj ET Q q 0 0 0 rg BT 175.18 197.25 Td (ces) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 179.25 Td (Our principal demands for funds during the short- and long-term are and will be for: the payment of operating expenses, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 167.25 Td (capital expenditures and general and administrative expenses; refinancing upcoming maturities and paying down debt ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 155.25 Td (obligations; special redemptions of common stock pursuant to our share redemption program; and the payment of distributions ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 143.25 Td (to stockholders.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 125.25 Td (W) Tj ET Q q 0 0 0 rg BT 82.14 125.25 Td (e intend to use our cash on hand, proceeds from asset sales and principal repayments on our real estate loans receivable ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 113.25 Td (as our primary sources of immediate and long-term liquidity) Tj ET Q q 0 0 0 rg BT 290.46 113.25 Td (. ) Tj ET Q q 0 0 0 rg BT 297.78 113.25 Td (T) Tj ET Q q 0 0 0 rg BT 303.19 113.25 Td (o the extent available, we also intend to use cash flow generated ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 101.25 Td (by our real estate and real estate-related investments and funds available under our credit facilities. However) Tj ET Q q 0 0 0 rg BT 485.86 101.25 Td (, we have suf) Tj ET Q q 0 0 0 rg BT 538.44 101.25 Td (fered ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 89.25 Td (declines in cash flows from these sources. ) Tj ET Q endstream endobj 69 0 obj <>] /Rotate 0 /Contents 70 0 R>> endobj 70 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 2. Management’) Tj ET Q q 0 0 0 rg BT 144.05 730.60 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 216.03 730.60 Td (Analysis of Financial Condition and Results of Operations \(continued\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.00 33.60 Td (33) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 704.10 Td (Our share redemption program provides only for special redemptions. Such redemptions are subject to an annual dollar ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 692.10 Td (limitation. On December 8, 2015, our board of directors approved an annual dollar limitation for redemptions of $10.0 million ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 680.10 Td (in the aggregate for the calendar year 2016 \(subject to review and adjustment during the year by our board of directors\), and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 668.10 Td (further subject to the limitations described in the share redemption program document. Based on historical redemption activity) Tj ET Q q 0 0 0 rg BT 557.60 668.10 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 656.10 Td (we believe the $10.0 million redemption limitation for the calendar year 2016 will be suf) Tj ET Q q 0 0 0 rg BT 405.05 656.10 Td (ficient for these special redemptions. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 644.10 Td (During each calendar year) Tj ET Q q 0 0 0 rg BT 154.31 644.10 Td (, the annual dollar limitation for our share redemption program will be reviewed and adjusted from ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 632.10 Td (time to time, if necessary) Tj ET Q q 0 0 0 rg BT 149.65 632.10 Td (. ) Tj ET Q q 0 0 0 rg BT 156.97 632.10 Td (W) Tj ET Q q 0 0 0 rg BT 165.61 632.10 Td (e currently do not expect to have funds available for ordinary redemptions in the future.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 614.10 Td (Our focus in 2016 is: to manage our existing investment portfolio, which includes strategically selling assets; exploring ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 602.10 Td (short-term value-add opportunities for a small number of GKK Properties; and distributing operating cash flow and net sales ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 590.10 Td (proceeds to stockholders. ) Tj ET Q q 0 0 0 rg BT 155.68 590.10 Td (W) Tj ET Q q 0 0 0 rg BT 164.32 590.10 Td (e plan to make certain strategic asset sales and, from time to time, may declare special distributions ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 578.10 Td (to our stockholders that would be funded with the net proceeds from those asset sales or from cash flow from other sources. ) Tj ET Q q 0 0 0 rg BT 549.19 578.10 Td (W) Tj ET Q q 0 0 0 rg BT 557.83 578.10 Td (e ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 566.10 Td (will continue our existing strategy of selling assets when we believe the assets have reached the stage that disposition will assist ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 554.10 Td (in improving returns to our stockholders. Our board of directors currently expects to authorize and declare distributions on a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 542.10 Td (quarterly basis based on cash flow generated by our real estate and real estate-related investments. ) Tj ET Q q 0 0 0 rg BT 447.21 542.10 Td (W) Tj ET Q q 0 0 0 rg BT 455.85 542.10 Td (e can give no assurance ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 530.10 Td (regarding the timing or source of future distributions. On March 1) Tj ET Q q 0 0 0 rg BT 315.74 530.10 Td (1, 2016, our board of directors declared a distribution in the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 518.10 Td (amount of $0.025 per share of common stock to stockholders of record as of the close of business on March 21, 2016. ) Tj ET Q q 0 0 0 rg BT 525.88 518.10 Td (W) Tj ET Q q 0 0 0 rg BT 534.52 518.10 Td (e paid ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 506.10 Td (this distribution on March 28, 2016. ) Tj ET Q q 0 0 0 rg BT 198.48 506.10 Td (W) Tj ET Q q 0 0 0 rg BT 207.12 506.10 Td (e funded this distribution with cash flow from operations from the current period. ) Tj ET Q q 0 0 0 rg BT 537.69 506.10 Td (W) Tj ET Q q 0 0 0 rg BT 546.33 506.10 Td (e ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 494.10 Td (also continue to focus on the repayment of certain debt obligations. Reducing our debt will allow us to hold certain assets in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 482.10 Td (our portfolio with a goal of improving their value and the returns to our stockholders. ) Tj ET Q q 0 0 0 rg BT 395.63 482.10 Td (W) Tj ET Q q 0 0 0 rg BT 404.27 482.10 Td (e intend to maintain adequate cash ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 470.10 Td (reserves for liquidity) Tj ET Q q 0 0 0 rg BT 132.16 470.10 Td (, capital expenditures, debt repayments, future share redemptions and other future capital needs.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 452.10 Td (On January 27, 2016, our board of directors formed a special committee \(the “Special Committee”\) composed of all of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 440.10 Td (our independent directors to explore the availability of strategic alternatives involving us. ) Tj ET Q q 0 0 0 rg BT 409.49 440.10 Td (While we conduct this process, we ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 428.10 Td (remain 100% focused on managing our properties.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 410.10 Td (As part of the process of exploring strategic alternatives, on February 23, 2016, the Special Committee engaged Evercore ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 398.10 Td (Group L.L.C. \(“Evercore”\) to act as our financial advisor and to assist the Special Committee with this process. Under the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 386.10 Td (terms of the engagement, Evercore will provide various financial advisory services, as requested by the Special Committee as ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 374.10 Td (customary for an engagement in connection with exploring strategic alternatives. ) Tj ET Q q 0 0 0 rg BT 375.23 374.10 Td (Although the Special Committee has engaged ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 362.10 Td (Evercore to assist us and the Special Committee with the exploration of strategic alternatives for us, we are not obligated to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 350.10 Td (enter into any particular transaction or any transaction at all. Further) Tj ET Q q 0 0 0 rg BT 322.05 350.10 Td (, although we have begun the process of exploring strategic ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 338.10 Td (alternatives, there is no assurance that the process will result in stockholder liquidity) Tj ET Q q 0 0 0 rg BT 386.26 338.10 Td (, or provide a return to stockholders that ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 326.10 Td (equals or exceeds our estimated value per share.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 308.10 Td (Our investments in real estate generate cash flow in the form of rental revenues and tenant reimbursements, which are ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 296.10 Td (reduced by operating expenditures, debt service payments, the payment of asset management fees and corporate general and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 284.10 Td (administrative expenses. Cash flow from operations from our real estate investments is primarily dependent upon the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 272.10 Td (occupancy level of our portfolio, the net ef) Tj ET Q q 0 0 0 rg BT 220.36 272.10 Td (fective rental rates on our leases, the collectibility of rent and operating recoveries ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 260.10 Td (from our tenants and how well we manage our expenditures. ) Tj ET Q q 0 0 0 rg BT 296.10 260.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 320.54 260.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 384.14 260.10 Td (, our real estate held for investment was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 248.10 Td (86%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 67.83 248.10 Td ( occupied.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 230.10 Td (Our real estate-related investments generate cash flow in the form of interest income, which is reduced by the payment of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 218.10 Td (asset management fees and corporate general and administrative expenses. Cash flow from operations from our real estate-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 206.10 Td (related investments is primarily dependent on the operating performance of the underlying collateral and the borrowers’) Tj ET Q q 0 0 0 rg BT 528.31 206.10 Td ( ability ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 194.10 Td (to make debt service payments. ) Tj ET Q q 0 0 0 rg BT 179.74 194.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 204.18 194.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 267.78 194.10 Td (, the borrower under the Sandmar Mezzanine Loan was delinquent. On ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 182.10 Td (September 1, 2015, the Lawrence ) Tj ET Q q 0 0 0 rg BT 186.21 182.10 Td (V) Tj ET Q q 0 0 0 rg BT 192.83 182.10 Td (illage Plaza Loan Origination matured without repayment. On March 29, 2016, we entered ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 170.10 Td (into an agreement in lieu of foreclosure with the borrower under the Lawrence ) Tj ET Q q 0 0 0 rg BT 365.58 170.10 Td (V) Tj ET Q q 0 0 0 rg BT 372.20 170.10 Td (illage Plaza Loan Origination. On ) Tj ET Q q 0 0 0 rg BT 511.89 170.10 Td (April 25, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 158.10 Td (2016, the scheduled closing date of the agreement in lieu of foreclosure was extended to May 13, 2016.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 140.10 Td (Other than the Sandmar Mezzanine Loan, which has a book value of zero after asset specific loan loss reserves, no other ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 128.10 Td (real estate-related loan investments are scheduled to mature within one year from ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 377.15 128.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 440.75 128.10 Td (. ) Tj ET Q q 0 0 0 rg BT 447.69 128.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.14 128.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 535.74 128.10 Td (, we ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 116.10 Td (had recorded ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.91 116.10 Td ($6.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 152.81 116.10 Td ( of reserves for loan losses related to two of our real estate-related investments, the Lawrence ) Tj ET Q q 0 0 0 rg BT 528.31 116.10 Td (V) Tj ET Q q 0 0 0 rg BT 534.93 116.10 Td (illage ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 104.10 Td (Plaza Loan Origination and the Sandmar Mezzanine Loan.) Tj ET Q endstream endobj 71 0 obj <>] /Rotate 0 /Contents 72 0 R>> endobj 72 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 2. Management’) Tj ET Q q 0 0 0 rg BT 144.05 730.60 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 216.03 730.60 Td (Analysis of Financial Condition and Results of Operations \(continued\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.00 33.60 Td (34) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 704.10 Td (As a result of the factors described above, we may experience declines in future cash flow from our real estate and real ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 692.10 Td (estate-related investments and we expect an increased need for capital to cover leasing costs and capital improvements needed ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 680.10 Td (to improve the performance of our real estate assets. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 662.10 Td (For the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 104.61 662.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 124.59 662.10 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 185.42 662.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 249.02 662.10 Td (, we met our cash needs for leasing costs, capital expenditures and the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 650.10 Td (payment of debt obligations with cash on hand and proceeds from asset sales. ) Tj ET Q q 0 0 0 rg BT 364.52 650.10 Td (W) Tj ET Q q 0 0 0 rg BT 373.16 650.10 Td (e met our operating cash needs during the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 638.10 Td (same period through cash flow generated by our real estate and real estate-related investments. ) Tj ET Q q 0 0 0 rg BT 433.05 638.10 Td (W) Tj ET Q q 0 0 0 rg BT 441.69 638.10 Td (e believe that potential ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 626.10 Td (proceeds from the sale of real estate, cash flow from operations, potential proceeds from the sale or payof) Tj ET Q q 0 0 0 rg BT 471.66 626.10 Td (f of real estate loans ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 614.10 Td (receivable and cash on hand will be suf) Tj ET Q q 0 0 0 rg BT 206.76 614.10 Td (ficient to meet our liquidity needs for the remainder of 2016. ) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 49.50 596.10 Td (Cash Flows from Operating ) Tj ET Q q 0 0 0 rg BT 166.93 596.10 Td (Activities) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 581.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 97.94 581.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 161.54 581.10 Td (, we owned or) Tj ET Q q 0 0 0 rg BT 217.79 581.10 Td (, with respect to a limited number of properties, held a leasehold interest in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 519.93 581.10 Td (350) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 534.93 581.10 Td ( real ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 569.10 Td (estate properties \(of which ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 158.35 569.10 Td (77) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 168.35 569.10 Td ( properties were held for sale, all of which were GKK Properties\). In addition, as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 507.68 569.10 Td (March 31, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 557.10 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.50 557.10 Td (, we owned ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 117.82 557.10 Td (four) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 134.48 557.10 Td ( real estate loans receivable and a participation interest with respect to a real estate joint venture.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 539.10 Td (During the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 119.05 539.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 139.03 539.10 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 199.86 539.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 263.46 539.10 Td (, net cash provided by operating activities was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 450.90 539.10 Td ($4.7 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 499.79 539.10 Td (, compared to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 527.10 Td ($6.8 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 98.39 527.10 Td ( of net cash provided by operating activities during the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.44 527.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 339.43 527.10 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 400.25 527.10 Td (March 31, 2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.85 527.10 Td (. Net cash from ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 515.10 Td (operations decreased in 2016 primarily due to asset sales and the timing of payments for operating expenses, of) Tj ET Q q 0 0 0 rg BT 494.75 515.10 Td (fset by a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 503.10 Td (decrease in interest paid as a result of debt refinancing and restructuring and debt payof) Tj ET Q q 0 0 0 rg BT 399.18 503.10 Td (fs, which resulted in an overall decrease ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 491.10 Td (in ef) Tj ET Q q 0 0 0 rg BT 67.37 491.10 Td (fective interest rates and a decrease in principal outstanding. ) Tj ET Q q 0 0 0 rg BT 310.97 491.10 Td (W) Tj ET Q q 0 0 0 rg BT 319.61 491.10 Td (e anticipate cash flows from operating activities will ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 479.10 Td (decrease due to anticipated asset sales. ) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 49.50 461.10 Td (Cash Flows from Investing ) Tj ET Q q 0 0 0 rg BT 163.60 461.10 Td (Activities) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 446.10 Td (Net cash provided by investing activities was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 257.07 446.10 Td ($31.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 310.96 446.10 Td ( for the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 342.34 446.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 362.32 446.10 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 423.15 446.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 486.75 446.10 Td (. ) Tj ET Q q 0 0 0 rg BT 494.07 446.10 Td (The significant ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 434.10 Td (sources and uses of net cash provided by investing activities were as follows:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 416.10 Td (• ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 416.10 Td ($39.9 million of cash provided from the sale of real estate; and) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 401.10 Td (• ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 401.10 Td ($8.3 million of cash used for improvements to real estate.) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 49.50 386.10 Td (Cash Flows from Financing ) Tj ET Q q 0 0 0 rg BT 168.61 386.10 Td (Activities) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 371.10 Td (Net cash used in financing activities was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 238.73 371.10 Td ($7.3 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 287.62 371.10 Td ( for the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 319.00 371.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 338.98 371.10 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 399.81 371.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 463.41 371.10 Td (. ) Tj ET Q q 0 0 0 rg BT 470.73 371.10 Td (The significant ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 359.10 Td (sources and uses of cash for financing activities were as follows:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 341.10 Td (• ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 341.10 Td ($4.7 million of cash used for distributions;) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 326.10 Td (• ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 326.10 Td ($1.2 million of cash used for redemptions of common stock; ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 311.10 Td (• ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 311.10 Td ($1.0 million of principal payments on notes payable; and) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 296.10 Td (• ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 296.10 Td (a $0.4 million increase in restricted cash for debt service obligations.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 275.10 Td (In addition to using our capital resources to meet our debt service obligations, for leasing costs, for capital expenditures, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 263.10 Td (for operating costs, to fund special redemptions pursuant to our share redemption program and to pay distributions to our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 251.10 Td (stockholders, we use our capital resources to make certain payments to our advisor) Tj ET Q q 0 0 0 rg BT 380.23 251.10 Td (. ) Tj ET Q q 0 0 0 rg BT 387.55 251.10 Td (W) Tj ET Q q 0 0 0 rg BT 396.19 251.10 Td (e also reimburse our advisor and dealer ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 239.10 Td (manager for certain costs they incur on our behalf. ) Tj ET Q q 0 0 0 rg BT 256.18 239.10 Td (W) Tj ET Q q 0 0 0 rg BT 264.82 239.10 Td (e pay our advisor fees in connection with the management and disposition ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 227.10 Td (of our assets.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 209.10 Td (Among the fees payable to our advisor is an asset management fee. ) Tj ET Q q 0 0 0 rg BT 347.12 209.10 Td (W) Tj ET Q q 0 0 0 rg BT 356.16 209.10 Td (ith respect to investments in real estate, we pay our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 197.10 Td (advisor a monthly asset management fee equal to one-twelfth of 0.75% of the amount actually paid or allocated to acquire the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 185.10 Td (investment, plus the cost of any subsequent development, construction or improvements to the property) Tj ET Q q 0 0 0 rg BT 462.93 185.10 Td (. ) Tj ET Q q 0 0 0 rg BT 470.25 185.10 Td (This amount includes ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 173.10 Td (any portion of the investment that was debt financed and is inclusive of acquisition fees and expenses related thereto. In the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 161.10 Td (case of investments made through joint ventures, the asset management fee is determined based on our proportionate share of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 149.10 Td (the underlying investment. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 131.10 Td (W) Tj ET Q q 0 0 0 rg BT 82.54 131.10 Td (ith respect to investments in loans and any investments other than real estate, we pay our advisor a monthly asset ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 119.10 Td (management fee calculated, each month, as one-twelfth of 0.75% of the lesser of \(i\) the amount actually paid or allocated to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 107.10 Td (acquire or fund the loan or other investment \(which amount includes any portion of the investment that was debt financed and is ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 95.10 Td (inclusive of acquisition or origination fees and expenses related thereto\) and \(ii\) the outstanding principal amount of such loan ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 83.10 Td (or other investment, plus the acquisition or origination fees and expenses related to the acquisition or funding of such ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 71.10 Td (investment, as of the time of calculation. ) Tj ET Q endstream endobj 73 0 obj <>] /Rotate 0 /Contents 74 0 R>> endobj 74 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 2. Management’) Tj ET Q q 0 0 0 rg BT 144.05 730.60 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 216.03 730.60 Td (Analysis of Financial Condition and Results of Operations \(continued\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.00 33.60 Td (35) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 704.10 Td (W) Tj ET Q q 0 0 0 rg BT 82.54 704.10 Td (ith respect to an investment that has suf) Tj ET Q q 0 0 0 rg BT 240.38 704.10 Td (fered an impairment in value, reduction in cash flow or other negative ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 692.10 Td (circumstances, such investment may either be excluded from the calculation of the asset management fee described above or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 680.10 Td (included in such calculation at a reduced value that is recommended by our advisor and our management and then approved by ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 668.10 Td (a majority of our independent directors, and this change in the fee shall be applicable to an investment upon the earlier to occur ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 656.10 Td (of the date on which \(i\) such investment is sold, \(ii\) such investment is surrendered to a person other than the company) Tj ET Q q 0 0 0 rg BT 524.29 656.10 Td (, our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 644.10 Td (direct or indirect wholly owned subsidiary or a joint venture or partnership in which we have an interest, \(iii\) our advisor ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 632.10 Td (determines that it will no longer pursue collection or other remedies related to such investment, or \(iv\) our advisor recommends ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 620.10 Td (a revised fee arrangement with respect to such investment. ) Tj ET Q q 0 0 0 rg BT 288.03 620.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 312.47 620.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 376.07 620.10 Td (, we excluded our interest in an ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 608.10 Td (unconsolidated joint venture from the calculation of asset management fees. ) Tj ET Q q 0 0 0 rg BT 358.66 608.10 Td (W) Tj ET Q q 0 0 0 rg BT 367.30 608.10 Td (e also calculate the asset management fee for the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 596.10 Td (GKK Properties based on the original cost of our investment in the GKK Mezzanine Loan, rather than on the gross value of the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 584.10 Td (GKK Properties we own or in which we hold a leasehold interest. However) Tj ET Q q 0 0 0 rg BT 353.46 584.10 Td (, once the gross value of the GKK Properties falls ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 572.10 Td (below the original cost of our investment in the GKK Mezzanine Loan, we will calculate the asset management fee based on ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 560.10 Td (the gross value of the GKK Properties. ) Tj ET Q q 0 0 0 rg BT 209.19 560.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 233.64 560.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 297.23 560.10 Td (, we had not determined to calculate the asset management fee at ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 548.10 Td (an adjusted value for any other investments or to exclude any other investments from the calculation of the asset management ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 536.10 Td (fee.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 518.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 97.94 518.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 161.54 518.10 Td (, we had ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 197.64 518.10 Td ($75.4 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 251.53 518.10 Td ( of cash and cash equivalents. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 500.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 97.94 500.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 161.54 500.10 Td (, our borrowings and other liabilities were approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 392.31 500.10 Td (35%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 410.64 500.10 Td ( of the cost \(before deducting ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 488.10 Td (depreciation or other noncash reserves\) and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 226.09 488.10 Td (38%) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 244.42 488.10 Td ( of the book value \(before deducting depreciation\) of our tangible assets. ) Tj ET Q q 0 0 0 rg BT 539.70 488.10 Td (W) Tj ET Q q 0 0 0 rg BT 548.33 488.10 Td (e ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 476.10 Td (limit our total liabilities to 75% of the cost \(before deducting depreciation or other non-cash reserves\) of our tangible assets; ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 464.10 Td (however) Tj ET Q q 0 0 0 rg BT 83.53 464.10 Td (, we may exceed that limit if a majority of the conflicts committee approves each borrowing in excess of that limitation ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 452.10 Td (and we disclose such borrowing to our stockholders in our next quarterly report with an explanation from the conflicts ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 440.10 Td (committee of the justification for exceeding the total liabilities limitation. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 422.10 Td (Contractual Commitments and Contingencies) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 404.10 Td (The following is a summary of our contractual obligations as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 330.94 404.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 394.54 404.10 Td ( \(in thousands\):) Tj ET Q 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 359.60 186.00 -24.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 236.00 359.60 4.00 -24.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 240.00 359.60 62.00 -24.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 302.00 359.60 4.00 -24.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 306.00 359.60 71.00 -24.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 377.00 359.60 4.00 -24.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 381.00 359.60 58.00 -24.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 439.00 359.60 4.00 -24.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 443.00 359.60 58.00 -24.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 501.00 359.60 4.00 -24.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 505.00 359.60 58.00 -24.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 311.60 186.00 -24.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 236.00 311.60 4.00 -24.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 240.00 311.60 62.00 -24.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 302.00 311.60 4.00 -24.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 306.00 311.60 71.00 -24.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 377.00 311.60 4.00 -24.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 381.00 311.60 58.00 -24.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 439.00 311.60 4.00 -24.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 443.00 311.60 58.00 -24.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 501.00 311.60 4.00 -24.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 505.00 311.60 58.00 -24.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 263.60 186.00 -24.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 236.00 263.60 4.00 -24.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 240.00 263.60 62.00 -24.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 302.00 263.60 4.00 -24.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 306.00 263.60 71.00 -24.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 377.00 263.60 4.00 -24.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 381.00 263.60 58.00 -24.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 439.00 263.60 4.00 -24.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 443.00 263.60 58.00 -24.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 501.00 263.60 4.00 -24.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 505.00 263.60 58.00 -24.00 re f /GS0 gs 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 240 373.6 m 302 373.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 302 373.6 m 306 373.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 306 373.6 m 377 373.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 377 373.6 m 381 373.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 381 373.6 m 439 373.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 439 373.6 m 443 373.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 443 373.6 m 501 373.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 501 373.6 m 505 373.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 505 373.6 m 563 373.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 50 359.6 m 236 359.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 240 359.6 m 302 359.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 306 359.6 m 377 359.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 381 359.6 m 439 359.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 443 359.6 m 501 359.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 505 359.6 m 563 359.6 l s BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 377.85 Td ( ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 308.75 377.83 Td (Payments Due During the Years Ending December 31,) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 52.50 363.83 Td (Contractual Obligations) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 261.75 363.83 Td (Total ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 308.60 363.83 Td (Remainder of 2016) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 392.15 363.83 Td (2017-2018 ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 454.15 363.83 Td (2019-2020 ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 515.20 363.83 Td (Thereafter ) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 347.85 Td (Outstanding debt obligations related to historical ) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 61.50 339.85 Td (portfolio) Tj ET Q BT /F1 8.00 Tf ET BT /F1 5.20 Tf ET q 0 0 0 rg BT 89.50 343.48 Td (\(1\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 242.50 339.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 272.80 339.85 Td (226,331) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 308.50 339.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 351.80 339.85 Td (62,200) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 383.50 339.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 409.75 339.85 Td (164,131) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 445.50 339.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 489.80 339.85 Td (—) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 507.50 339.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 551.80 339.85 Td (—) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 323.85 Td (Outstanding debt obligations related to the GKK ) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 61.50 315.85 Td (Properties) Tj ET Q BT /F1 8.00 Tf ET BT /F1 5.20 Tf ET q 0 0 0 rg BT 93.94 319.48 Td (\(1\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 242.50 315.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 272.80 315.85 Td (203,767) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 308.50 315.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 355.80 315.85 Td (4,878) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 383.50 315.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 409.75 315.85 Td (110,364) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 445.50 315.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 475.80 315.85 Td (64,685) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 507.50 315.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 537.80 315.85 Td (23,840) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 299.85 Td (Interest payments on outstanding debt obligations ) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 61.50 291.85 Td (related to historical portfolio) Tj ET Q BT /F1 8.00 Tf ET BT /F1 5.20 Tf ET q 0 0 0 rg BT 153.25 295.48 Td (\(2\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 242.50 291.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 280.80 291.85 Td (6,474) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 308.50 291.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 355.80 291.85 Td (6,474) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 383.50 291.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 427.80 291.85 Td (—) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 445.50 291.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 489.80 291.85 Td (—) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 507.50 291.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 551.80 291.85 Td (—) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 275.85 Td (Interest payments on outstanding debt obligations ) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 61.50 267.85 Td (related to the GKK Properties) Tj ET Q BT /F1 8.00 Tf ET BT /F1 5.20 Tf ET q 0 0 0 rg BT 157.03 271.48 Td (\(2\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 242.50 267.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 276.80 267.85 Td (33,089) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 308.50 267.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 355.80 267.85 Td (9,764) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 383.50 267.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 413.80 267.85 Td (15,232) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 445.50 267.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 479.80 267.85 Td (5,673) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 507.50 267.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 541.80 267.85 Td (2,420) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 243.85 Td (Operating leases) Tj ET Q BT /F1 8.00 Tf ET BT /F1 5.20 Tf ET q 0 0 0 rg BT 105.59 247.48 Td (\(3\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 242.50 243.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 276.80 243.85 Td (60,806) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 308.50 243.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 351.80 243.85 Td (12,477) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 383.50 243.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 413.80 243.85 Td (15,084) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 445.50 243.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 479.80 243.85 Td (3,063) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 507.50 243.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 537.80 243.85 Td (30,182) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 228.10 Td (_____________________) Tj ET Q BT /F1 7.50 Tf ET BT /F1 4.87 Tf ET q 0 0 0 rg BT 49.50 219.50 Td (\(1\)) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 55.18 216.10 Td ( ) Tj ET Q q 0 0 0 rg BT 56.65 216.10 Td (Amounts include principal payments under notes payable based on maturity dates of debt obligations as of ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 378.25 216.10 Td (March 31, 2016) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 425.95 216.10 Td (. ) Tj ET Q BT /F1 7.50 Tf ET BT /F1 4.87 Tf ET q 0 0 0 rg BT 49.50 207.50 Td (\(2\)) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 55.18 204.10 Td ( Projected interest payments are based on the outstanding principal amounts, maturity dates and weighted-average interest rates as of ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 455.49 204.10 Td (March 31, 2016) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 503.19 204.10 Td (. ) Tj ET Q q 0 0 0 rg BT 508.68 204.10 Td (W) Tj ET Q q 0 0 0 rg BT 515.16 204.10 Td (e incurred ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 49.50 195.10 Td (interest expense of $4.9 million, excluding amortization of deferred financing costs and the amortization of debt discount and premium totaling $0.3 million, during the ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 49.50 186.10 Td (three) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 64.49 186.10 Td ( months ended ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 110.11 186.10 Td (March 31, 2016) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 157.81 186.10 Td (. ) Tj ET Q BT /F1 7.50 Tf ET BT /F1 4.87 Tf ET q 0 0 0 rg BT 49.50 177.50 Td (\(3\)) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 55.18 174.10 Td ( ) Tj ET Q q 0 0 0 rg BT 56.65 174.10 Td (Amounts relate to future minimum lease payments under non-cancelable building and ground leases.) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 49.50 150.10 Td (Debt Covenants ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 135.10 Td (The documents evidencing our outstanding debt obligations typically require that specified loan-to-value and debt service ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 123.10 Td (coverage ratios be maintained with respect to the financed properties. ) Tj ET Q q 0 0 0 rg BT 331.61 123.10 Td (A) Tj ET Q q 0 0 0 rg BT 338.28 123.10 Td ( breach of the financial covenants in these documents ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 111.10 Td (may result in the lender imposing additional restrictions on our operations, such as restrictions on our ability to incur additional ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 99.10 Td (debt, or may allow the lender to impose “cash traps” with respect to cash flow from the property securing the loan. In addition, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 87.10 Td (such a breach may constitute an event of default and the lender could require us to repay the debt immediately) Tj ET Q q 0 0 0 rg BT 489.52 87.10 Td (. If we fail to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 75.10 Td (make such repayment in a timely manner) Tj ET Q q 0 0 0 rg BT 214.04 75.10 Td (, the lender may be entitled to take possession of any property securing the loan. ) Tj ET Q q 0 0 0 rg BT 537.01 75.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 63.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 113.10 63.10 Td (, we were in compliance with these debt covenants.) Tj ET Q endstream endobj 75 0 obj <>] /Rotate 0 /Contents 76 0 R>> endobj 76 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 2. Management’) Tj ET Q q 0 0 0 rg BT 144.05 730.60 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 216.03 730.60 Td (Analysis of Financial Condition and Results of Operations \(continued\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.00 33.60 Td (36) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 49.50 704.25 Td (Asset Management Services ) Tj ET Q q 0 0 0 rg BT 166.62 704.25 Td (Agreement Related to the GKK Properties) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 689.25 Td (On December 19, 2013, we, through an indirect wholly owned subsidiary \(“KBS ) Tj ET Q q 0 0 0 rg BT 399.27 689.25 Td (Acquisition Sub”\), entered into an ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 677.25 Td (amended and restated asset management services agreement \(the “Amended Services ) Tj ET Q q 0 0 0 rg BT 392.69 677.25 Td (Agreement”\) with the Property Manager ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 665.25 Td (with respect to the GKK Properties. ) Tj ET Q q 0 0 0 rg BT 195.12 665.25 Td (The ef) Tj ET Q q 0 0 0 rg BT 220.75 665.25 Td (fective date of the ) Tj ET Q q 0 0 0 rg BT 294.61 665.25 Td (Amended Services ) Tj ET Q q 0 0 0 rg BT 371.81 665.25 Td (Agreement was December 1, 2013. Pursuant to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 653.25 Td (the ) Tj ET Q q 0 0 0 rg BT 63.67 653.25 Td (Amended Services ) Tj ET Q q 0 0 0 rg BT 140.87 653.25 Td (Agreement, the Property Manager agreed to provide, among other services: standard asset management ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 641.25 Td (services, assistance related to dispositions, accounting services and budgeting and business plans for the GKK Properties \(the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 629.25 Td (“Services”\). ) Tj ET Q q 0 0 0 rg BT 100.40 629.25 Td (The Property Manager is not af) Tj ET Q q 0 0 0 rg BT 225.46 629.25 Td (filiated with us or KBS ) Tj ET Q q 0 0 0 rg BT 320.18 629.25 Td (Acquisition Sub. ) Tj ET Q q 0 0 0 rg BT 389.36 629.25 Td (As compensation for the Services, we ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 617.25 Td (agreed to pay the Property Manager: \(i\) an annual fee of $7.5 million plus all GKK Property-related expenses incurred by the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 605.25 Td (Property Manager) Tj ET Q q 0 0 0 rg BT 121.58 605.25 Td (, \(ii\) subject to certain terms and conditions in the ) Tj ET Q q 0 0 0 rg BT 322.36 605.25 Td (Amended Services ) Tj ET Q q 0 0 0 rg BT 399.56 605.25 Td (Agreement, a profit participation ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 593.25 Td (interest based on a percentage \(ranging from 10% to 30%\) of the amount by which the gross fair market value or gross sales ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 581.25 Td (price of certain identified portfolios of GKK Properties exceeds the sum of \(a\) an agreed-upon baseline value for such GKK ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 569.25 Td (Property portfolios plus \(b\) new capital expended to increase the value of GKK Properties within the portfolios and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 557.25 Td (expenditures made to pay for tenant improvements and leasing commissions related to these GKK Properties as of the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 545.25 Td (measurement date, and \(iii\) a monthly construction oversight fee equal to a percentage of construction costs for certain ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 533.25 Td (construction projects at the GKK Properties overseen by the Property Manager) Tj ET Q q 0 0 0 rg BT 364.41 533.25 Td (. ) Tj ET Q q 0 0 0 rg BT 371.36 533.25 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 395.80 533.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 459.40 533.25 Td (, we accrued ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 512.15 533.25 Td ($21.4 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 521.25 Td (million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 78.39 521.25 Td ( of estimated profit participation interest related to the GKK Properties under the ) Tj ET Q q 0 0 0 rg BT 403.57 521.25 Td (Amended Services ) Tj ET Q q 0 0 0 rg BT 480.77 521.25 Td (Agreement.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 67.50 503.25 Td (The ) Tj ET Q q 0 0 0 rg BT 85.00 503.25 Td (Amended Services ) Tj ET Q q 0 0 0 rg BT 162.20 503.25 Td (Agreement will terminate on December 31, 2016, with a one-year extension option at our option, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 491.25 Td (subject to certain terms and conditions contained in the ) Tj ET Q q 0 0 0 rg BT 271.94 491.25 Td (Amended Services ) Tj ET Q q 0 0 0 rg BT 349.14 491.25 Td (Agreement. ) Tj ET Q q 0 0 0 rg BT 400.89 491.25 Td (The ) Tj ET Q q 0 0 0 rg BT 418.38 491.25 Td (Amended Services ) Tj ET Q q 0 0 0 rg BT 495.58 491.25 Td (Agreement ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 479.25 Td (supersedes and replaces all prior agreements related to the Services among us and our af) Tj ET Q q 0 0 0 rg BT 402.52 479.25 Td (filiates and the Property Manager and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 467.25 Td (its af) Tj ET Q q 0 0 0 rg BT 69.04 467.25 Td (filiates.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 449.25 Td (Results of Operations) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 49.50 431.25 Td (Overview) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 416.25 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 97.94 416.25 Td (March 31, 2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 161.54 416.25 Td (, we owned or) Tj ET Q q 0 0 0 rg BT 217.79 416.25 Td (, with respect to a limited number of properties, held a leasehold interest in, 397 real ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 404.25 Td (estate properties, four real estate loans receivable \(one of which was impaired\) and a participation interest with respect to a real ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 392.25 Td (estate joint venture. Subsequent to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 191.97 392.25 Td (March 31, 2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 255.57 392.25 Td (, we sold one historical real estate property and 43 GKK Properties and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 380.25 Td (terminated the lease of three GKK Properties in which we held a leasehold interest. ) Tj ET Q q 0 0 0 rg BT 387.17 380.25 Td (As a result, as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 456.59 380.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 520.19 380.25 Td (, we ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 368.25 Td (owned or) Tj ET Q q 0 0 0 rg BT 86.59 368.25 Td (, with respect to a limited number of properties, held a leasehold interest in, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 391.22 368.25 Td (350) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 406.22 368.25 Td ( real estate properties \(of which ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 535.06 368.25 Td (77) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 545.06 368.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 356.25 Td (properties were held for sale, all of which were GKK Properties\), four real estate loans receivable \(two of which were impaired\) ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 344.25 Td (and a participation interest with respect to a real estate joint venture.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 326.25 Td (In accordance with ) Tj ET Q q 0 0 0 rg BT 151.52 326.25 Td (ASU No. 2014-08, ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 229.57 326.25 Td (Pr) Tj ET Q q 0 0 0 rg BT 239.20 326.25 Td (esentation of Financial Statements \(T) Tj ET Q q 0 0 0 rg BT 388.27 326.25 Td (opic 205\) and Pr) Tj ET Q q 0 0 0 rg BT 455.94 326.25 Td (operty) Tj ET Q q 0 0 0 rg BT 480.94 326.25 Td (, Plant, and ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 49.50 314.25 Td (Equipment \(T) Tj ET Q q 0 0 0 rg BT 103.30 314.25 Td (opic 360\): Reporting Discontinued Operations and Disclosur) Tj ET Q q 0 0 0 rg BT 349.02 314.25 Td (es of Disposals of Components of an Entity) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 521.52 314.25 Td ( \(“ASU ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 302.25 Td (No. 2014-08”\), operating results of properties that are classified as held for sale in the ordinary course of business on or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 290.25 Td (subsequent to January 1, 2014 would generally be included in continuing operations on our consolidated statements of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 278.25 Td (operations. Operating results of properties that were classified as held for sale in financial statements issued for the reporting ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 266.25 Td (periods prior to reporting periods beginning January 1, 2014 will remain in discontinued operations on our consolidated ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 254.25 Td (statement of operations. During the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 195.85 254.25 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 215.84 254.25 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 276.66 254.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 340.26 254.25 Td (, we sold ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 378.59 254.25 Td (14) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.59 254.25 Td ( GKK Properties, which properties were ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 242.25 Td (not classified as held for sale in financial statements issued for the reporting periods prior to January 1, 2014. ) Tj ET Q q 0 0 0 rg BT 490.50 242.25 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 514.94 242.25 Td (March 31, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 230.25 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.50 230.25 Td (, we had classified ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 145.86 230.25 Td (77) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 155.86 230.25 Td ( properties as held for sale, all of which were GKK Properties. During the year ended December 31, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 218.25 Td (2015, we sold three historical real estate properties and 30 GKK Properties, which properties were not classified as held for sale ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 206.25 Td (in financial statements issued for the reporting periods prior to January 1, 2014. In accordance with ) Tj ET Q q 0 0 0 rg BT 450.77 206.25 Td (ASU No. 2014-08, the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 194.25 Td (operations of these properties are included in continuing operations on our consolidated statements of operations. Our results of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 182.25 Td (operations for the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 122.53 182.25 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 142.52 182.25 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 203.34 182.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 266.94 182.25 Td ( are not indicative of those expected in future periods due to anticipated ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 170.25 Td (asset sales. In general, we expect that our revenues and expenses related to our portfolio will decrease in future periods due to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 158.25 Td (anticipated disposition activity) Tj ET Q q 0 0 0 rg BT 171.60 158.25 Td (. ) Tj ET Q endstream endobj 77 0 obj <>] /Rotate 0 /Contents 78 0 R>> endobj 78 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 2. Management’) Tj ET Q q 0 0 0 rg BT 144.05 730.60 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 216.03 730.60 Td (Analysis of Financial Condition and Results of Operations \(continued\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.00 33.60 Td (37) Tj ET Q BT /F3 10.00 Tf ET 0 0 0 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 72 702.7669921875 m 148.9482421875 702.7669921875 l s q 0 0 0 rg BT 72.00 704.10 Td (Comparison of the ) Tj ET Q BT /F3 10.00 Tf ET 0 0 0 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 148.9482421875 702.7669921875 m 169.1240234375 702.7669921875 l s q 0 0 0 rg BT 148.95 704.10 Td (thr) Tj ET Q q 0 0 0 rg BT 160.25 704.10 Td (ee) Tj ET Q BT /F3 10.00 Tf ET 0 0 0 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 169.1240234375 702.7669921875 m 229.392578125 702.7669921875 l s q 0 0 0 rg BT 169.12 704.10 Td ( months ended ) Tj ET Q BT /F3 10.00 Tf ET 0 0 0 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 229.392578125 702.7669921875 m 293.181640625 702.7669921875 l s q 0 0 0 rg BT 229.39 704.10 Td (Mar) Tj ET Q q 0 0 0 rg BT 246.24 704.10 Td (ch 31, 2016) Tj ET Q BT /F3 10.00 Tf ET 0 0 0 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 293.181640625 702.7669921875 m 338.4501953125 702.7669921875 l s q 0 0 0 rg BT 293.18 704.10 Td ( versus the ) Tj ET Q BT /F3 10.00 Tf ET 0 0 0 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 338.4501953125 702.7669921875 m 358.6259765625 702.7669921875 l s q 0 0 0 rg BT 338.45 704.10 Td (thr) Tj ET Q q 0 0 0 rg BT 349.75 704.10 Td (ee) Tj ET Q BT /F3 10.00 Tf ET 0 0 0 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 358.6259765625 702.7669921875 m 418.89453125 702.7669921875 l s q 0 0 0 rg BT 358.63 704.10 Td ( months ended ) Tj ET Q BT /F3 10.00 Tf ET 0 0 0 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 418.89453125 702.7669921875 m 482.68359375 702.7669921875 l s q 0 0 0 rg BT 418.89 704.10 Td (Mar) Tj ET Q q 0 0 0 rg BT 435.75 704.10 Td (ch 31, 2015) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 482.68 704.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 689.10 Td (The following table provides summary information about our results of operations for the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 432.75 689.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 452.74 689.10 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 513.56 689.10 Td (March 31, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 677.10 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.50 677.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 88.94 677.10 Td (2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 108.94 677.10 Td ( \(dollar amounts in thousands\):) Tj ET Q 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 626.60 184.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 234.00 626.60 60.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 294.00 626.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 298.00 626.60 60.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 358.00 626.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 362.00 626.60 41.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 403.00 626.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 407.00 626.60 39.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 446.00 626.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 450.00 626.60 52.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 502.00 626.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 506.00 626.60 57.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 598.60 184.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 234.00 598.60 60.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 294.00 598.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 298.00 598.60 60.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 358.00 598.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 362.00 598.60 41.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 403.00 598.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 407.00 598.60 39.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 446.00 598.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 450.00 598.60 52.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 502.00 598.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 506.00 598.60 57.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 570.60 184.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 234.00 570.60 60.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 294.00 570.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 298.00 570.60 60.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 358.00 570.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 362.00 570.60 41.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 403.00 570.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 407.00 570.60 39.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 446.00 570.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 450.00 570.60 52.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 502.00 570.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 506.00 570.60 57.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 542.60 184.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 234.00 542.60 60.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 294.00 542.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 298.00 542.60 60.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 358.00 542.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 362.00 542.60 41.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 403.00 542.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 407.00 542.60 39.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 446.00 542.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 450.00 542.60 52.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 502.00 542.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 506.00 542.60 57.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 514.60 184.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 234.00 514.60 60.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 294.00 514.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 298.00 514.60 60.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 358.00 514.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 362.00 514.60 41.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 403.00 514.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 407.00 514.60 39.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 446.00 514.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 450.00 514.60 52.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 502.00 514.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 506.00 514.60 57.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 486.60 184.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 234.00 486.60 60.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 294.00 486.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 298.00 486.60 60.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 358.00 486.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 362.00 486.60 41.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 403.00 486.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 407.00 486.60 39.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 446.00 486.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 450.00 486.60 52.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 502.00 486.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 506.00 486.60 57.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 458.60 184.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 234.00 458.60 60.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 294.00 458.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 298.00 458.60 60.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 358.00 458.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 362.00 458.60 41.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 403.00 458.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 407.00 458.60 39.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 446.00 458.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 450.00 458.60 52.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 502.00 458.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 506.00 458.60 57.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 430.60 184.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 234.00 430.60 60.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 294.00 430.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 298.00 430.60 60.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 358.00 430.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 362.00 430.60 41.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 403.00 430.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 407.00 430.60 39.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 446.00 430.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 450.00 430.60 52.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 502.00 430.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 506.00 430.60 57.00 -14.00 re f /GS0 gs 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 234 654.6 m 294 654.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 294 654.6 m 298 654.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 298 654.6 m 358 654.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 234 654.6 m 294 654.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 234 626.6 m 294 626.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 298 654.6 m 358 654.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 298 626.6 m 358 626.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 362 626.6 m 403 626.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 407 626.6 m 446 626.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 450 626.6 m 502 626.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 506 626.6 m 563 626.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 234 626.6 m 294 626.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 298 626.6 m 358 626.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 362 626.6 m 403 626.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 450 626.6 m 502 626.6 l s BT /F1 7.00 Tf ET q 0 0 0 rg BT 52.50 658.65 Td ( ) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 247.50 658.66 Td (Three Months Ended March 31,) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 369.40 637.66 Td (Incr) Tj ET Q q 0 0 0 rg BT 382.10 637.66 Td (ease) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 366.30 630.66 Td (\(Decr) Tj ET Q q 0 0 0 rg BT 382.88 630.66 Td (ease\) ) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 409.50 637.66 Td (Per) Tj ET Q q 0 0 0 rg BT 419.86 637.66 Td (centage ) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 414.50 630.66 Td (Change) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 461.40 644.66 Td ($ Change ) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 465.65 637.66 Td (Due to ) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 453.85 630.66 Td (Dispositions ) Tj ET Q BT /F2 7.00 Tf ET BT /F2 4.55 Tf ET q 0 0 0 rg BT 491.78 633.83 Td (\(1\)) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 509.20 658.66 Td ($ Change Due to ) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 514.35 651.66 Td (Pr) Tj ET Q q 0 0 0 rg BT 521.61 651.66 Td (operties or) Tj ET Q q 0 0 0 rg BT 553.55 651.66 Td ( ) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 516.75 644.66 Td (Loans Held ) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 515.95 637.66 Td (Thr) Tj ET Q q 0 0 0 rg BT 527.49 637.66 Td (oughout ) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 511.10 630.66 Td (Both Periods ) Tj ET Q BT /F2 7.00 Tf ET BT /F2 4.55 Tf ET q 0 0 0 rg BT 551.54 633.83 Td (\(2\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 52.50 630.65 Td ( ) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 256.50 630.66 Td (2016) Tj ET Q BT /F2 7.00 Tf ET q 0 0 0 rg BT 320.50 630.66 Td (2015) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 52.50 616.65 Td (Rental income) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 236.50 616.65 Td ($) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 271.90 616.65 Td (29,396) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 300.50 616.65 Td ($) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 335.90 616.65 Td (35,365) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 364.50 616.65 Td ($) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 382.05 616.70 Td (\(5,969) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 400.15 616.65 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 427.95 616.65 Td (\(17) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 437.30 616.65 Td (\)%) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 452.50 616.65 Td ($) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 481.05 616.70 Td (\(6,673) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 499.15 616.65 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 508.50 616.65 Td ($) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 549.65 616.65 Td (704) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 52.50 602.65 Td (Tenant reimbursements) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 271.90 602.65 Td (10,247) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 335.90 602.65 Td (12,554) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 382.05 602.70 Td (\(2,307) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 400.15 602.65 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 427.95 602.65 Td (\(18) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 437.30 602.65 Td (\)%) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 481.05 602.70 Td (\(2,577) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 499.15 602.65 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 549.65 602.65 Td (270) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 52.50 588.65 Td (Interest income from real estate loans receivable) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 280.65 588.65 Td (810) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 344.65 588.65 Td (726) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 393.15 588.65 Td (84) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 430.30 588.65 Td (12) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 439.65 588.65 Td (%) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 492.15 588.65 Td (—) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 553.15 588.65 Td (84) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 52.50 574.65 Td (Parking revenues and other operating income) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 280.65 574.65 Td (672) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 344.65 574.65 Td (932) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 387.30 574.70 Td (\(260) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 400.15 574.65 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 427.95 574.65 Td (\(28) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 437.30 574.65 Td (\)%) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 486.30 574.70 Td (\(284) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 499.15 574.65 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 553.15 574.65 Td (24) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 52.50 560.65 Td (Operating, maintenance and management costs) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 271.90 560.65 Td (15,854) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 335.90 560.65 Td (21,989) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 382.05 560.70 Td (\(6,135) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 400.15 560.65 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 427.95 560.65 Td (\(28) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 437.30 560.65 Td (\)%) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 481.05 560.70 Td (\(4,662) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 499.15 560.65 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 542.05 560.70 Td (\(1,473) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 560.15 560.65 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 52.50 546.65 Td (Real estate taxes, property-related taxes and insurance) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 275.40 546.65 Td (5,462) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 339.40 546.65 Td (6,781) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 382.05 546.70 Td (\(1,319) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 400.15 546.65 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 427.95 546.65 Td (\(19) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 437.30 546.65 Td (\)%) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 481.05 546.70 Td (\(1,150) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 499.15 546.65 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 547.30 546.70 Td (\(169) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 560.15 546.65 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 52.50 532.65 Td (Asset management fees to affiliate) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 275.40 532.65 Td (2,348) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 339.40 532.65 Td (2,420) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 390.80 532.70 Td (\(72) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 400.15 532.65 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 431.45 532.65 Td (\(3) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 437.30 532.65 Td (\)%) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 486.30 532.70 Td (\(130) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 499.15 532.65 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 553.15 532.65 Td (58) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 52.50 518.65 Td (General and administrative expenses) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 275.40 518.65 Td (3,372) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 339.40 518.65 Td (2,220) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 384.40 518.65 Td (1,152) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 430.30 518.65 Td (52) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 439.65 518.65 Td (%) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 486.80 518.65 Td (N/A) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 547.80 518.65 Td (N/A) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 52.50 504.65 Td (Depreciation and amortization expense) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 271.90 504.65 Td (10,998) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 335.90 504.65 Td (15,605) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 382.05 504.70 Td (\(4,607) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 400.15 504.65 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 427.95 504.65 Td (\(30) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 437.30 504.65 Td (\)%) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 481.05 504.70 Td (\(2,639) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 499.15 504.65 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 542.05 504.70 Td (\(1,968) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 560.15 504.65 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 52.50 490.65 Td (Interest expense) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 275.40 490.65 Td (5,229) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 339.40 490.65 Td (8,733) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 382.05 490.70 Td (\(3,504) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 400.15 490.65 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 427.95 490.65 Td (\(40) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 437.30 490.65 Td (\)%) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 481.05 490.70 Td (\(2,040) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 499.15 490.65 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 542.05 490.70 Td (\(1,464) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 560.15 490.65 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 52.50 476.65 Td (Impairment charge on real estate) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 271.90 476.65 Td (10,864) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 348.15 476.65 Td (—) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 380.90 476.65 Td (10,864) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 426.80 476.65 Td (100) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 439.65 476.65 Td (%) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 492.15 476.65 Td (—) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 540.90 476.65 Td (10,864) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 52.50 462.65 Td (Gain on sales of real estate, net) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 271.90 462.65 Td (23,586) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 335.90 462.65 Td (13,967) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 384.40 462.65 Td (9,619) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 430.30 462.65 Td (69) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 439.65 462.65 Td (%) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 483.40 462.65 Td (9,619) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 553.15 462.65 Td (—) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 52.50 448.65 Td (Gain on sale of foreclosed real estate held for sale) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 284.15 448.65 Td (—) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 339.40 448.65 Td (2,509) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 382.05 448.70 Td (\(2,509) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 400.15 448.65 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 424.45 448.65 Td (\(100) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 437.30 448.65 Td (\)%) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 481.05 448.70 Td (\(2,509) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 499.15 448.65 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 553.15 448.65 Td (—) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 52.50 434.65 Td (Loss from extinguishment of debt) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 285.30 434.65 Td (\(3) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 291.15 434.65 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 348.15 434.65 Td (—) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 394.30 434.70 Td (\(3) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 400.15 434.65 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 424.45 434.65 Td (\(100) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 437.30 434.65 Td (\)%) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 493.30 434.70 Td (\(3) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 499.15 434.65 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 553.15 434.65 Td (—) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 52.50 420.65 Td (Gain on sales of real estate, net \(discontinued operations\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 284.15 420.65 Td (—) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 344.65 420.65 Td (124) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 387.30 420.70 Td (\(124) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 400.15 420.65 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 424.45 420.65 Td (\(100) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 437.30 420.65 Td (\)%) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 486.30 420.70 Td (\(124) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 499.15 420.65 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 553.15 420.65 Td (—) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 52.50 406.65 Td (\(Loss\) income from discontinued operations) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 285.30 406.65 Td (\(5) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 291.15 406.65 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 348.15 406.65 Td (44) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 390.80 406.70 Td (\(49) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 400.15 406.65 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 424.45 406.65 Td (\(111) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 437.30 406.65 Td (\)%) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 489.80 406.70 Td (\(49) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 499.15 406.65 Td (\)) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 553.15 406.65 Td (—) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 391.10 Td (_____________________) Tj ET Q BT /F1 7.50 Tf ET BT /F1 4.87 Tf ET q 0 0 0 rg BT 49.50 382.50 Td (\(1\)) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 55.18 379.10 Td ( Represents the dollar amount increase \(decrease\) for the ) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 227.40 379.10 Td (three) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 241.39 379.10 Td ( months ended ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 287.01 379.10 Td (March 31, 2016) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 334.71 379.10 Td ( compared to the ) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 386.78 379.10 Td (three) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 400.77 379.10 Td ( months ended ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 446.39 379.10 Td (March 31, 2015) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 494.09 379.10 Td ( related to real estate ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 49.50 370.10 Td (and real estate-related investments disposed of on or after January 1, 2015. ) Tj ET Q BT /F1 7.50 Tf ET BT /F1 4.87 Tf ET q 0 0 0 rg BT 49.50 361.50 Td (\(2\)) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 55.18 358.10 Td ( Represents the dollar amount increase \(decrease\) for the ) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 227.40 358.10 Td (three) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 241.39 358.10 Td ( months ended ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 287.01 358.10 Td (March 31, 2016) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 334.71 358.10 Td ( compared to the ) Tj ET Q BT /F1 7.00 Tf ET q 0 0 0 rg BT 386.78 358.10 Td (three) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 400.77 358.10 Td ( months ended ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 446.39 358.10 Td (March 31, 2015) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 494.09 358.10 Td ( related to real estate ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 49.50 349.10 Td (and real estate-related investments owned by us throughout both periods presented. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 325.10 Td (Rental income from our real estate properties decreased by ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 309.95 325.10 Td ($6.0 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 358.85 325.10 Td ( primarily due to properties sold, the results of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 313.10 Td (which are included in income from continuing operations, partially of) Tj ET Q q 0 0 0 rg BT 328.13 313.10 Td (fset by an increase in rental income due to termination ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 301.10 Td (fees and increase in occupancy at certain properties. Overall, we expect rental income to decrease in future periods due to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 289.10 Td (anticipated real estate property sales. Our rental income in future periods will also vary in lar) Tj ET Q q 0 0 0 rg BT 423.35 289.10 Td (ge part based on the occupancy ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 277.10 Td (rates and rental rates of the properties in our portfolio. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 259.10 Td (T) Tj ET Q q 0 0 0 rg BT 78.91 259.10 Td (enant reimbursements from our real estate properties decreased by ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 346.85 259.10 Td ($2.3 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 395.75 259.10 Td ( primarily due to properties sold, the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 247.10 Td (results of which are included in income from continuing operations, partially of) Tj ET Q q 0 0 0 rg BT 367.57 247.10 Td (fset by a net increase in operating expense ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 235.10 Td (recoveries related to the GKK Properties held throughout both periods. Our tenant reimbursements in future periods will vary ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 223.10 Td (based on several factors, including the occupancy rates of the properties in our portfolio, changes in base year terms, and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 211.10 Td (changes in reimbursable operating expenses. Generally) Tj ET Q q 0 0 0 rg BT 271.82 211.10 Td (, as new leases are negotiated, the base year resets to operating expenses ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 199.10 Td (incurred in the year the lease is signed and the tenant generally only reimburses operating expenses to the extent and by the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 187.10 Td (amount that its allocable share of the building’) Tj ET Q q 0 0 0 rg BT 235.29 187.10 Td (s operating expenses in future years increases from its base year) Tj ET Q q 0 0 0 rg BT 490.75 187.10 Td (. ) Tj ET Q q 0 0 0 rg BT 497.70 187.10 Td (As a result, as ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 175.10 Td (new leases are executed, tenant reimbursements would generally decrease. Rental income may or may not change by amounts ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 163.10 Td (corresponding to changes in tenant reimbursements due to new leases. Overall, we expect tenant reimbursements to decrease in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 151.10 Td (future periods due to anticipated real estate property sales.) Tj ET Q endstream endobj 79 0 obj <>] /Rotate 0 /Contents 80 0 R>> endobj 80 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 2. Management’) Tj ET Q q 0 0 0 rg BT 144.05 730.60 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 216.03 730.60 Td (Analysis of Financial Condition and Results of Operations \(continued\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.00 33.60 Td (38) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 704.10 Td (Interest income from real estate loans receivable increased slightly from ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 364.49 704.10 Td ($0.7 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 413.38 704.10 Td ( for the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 444.76 704.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 464.75 704.10 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 692.10 Td (March 31, 2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 113.10 692.10 Td ( to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 125.88 692.10 Td ($0.8 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 174.77 692.10 Td ( for the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 206.15 692.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 226.13 692.10 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 286.96 692.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 350.55 692.10 Td (. In general, we expect interest income in future ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 680.10 Td (periods to remain fairly constant, but to decrease to the extent that we receive principal repayments on or make dispositions of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 668.10 Td (real estate loans receivable. Interest income from real estate loans receivable in future periods may also be af) Tj ET Q q 0 0 0 rg BT 487.18 668.10 Td (fected by potential ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 656.10 Td (loan impairments as a result of current or future market conditions. ) Tj ET Q q 0 0 0 rg BT 321.92 656.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 346.37 656.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 409.96 656.10 Td (, the borrower under the Sandmar ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 644.10 Td (Mezzanine Loan was delinquent. On September 1, 2015, the Lawrence ) Tj ET Q q 0 0 0 rg BT 338.11 644.10 Td (V) Tj ET Q q 0 0 0 rg BT 344.73 644.10 Td (illage Plaza Loan Origination matured without ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 632.10 Td (repayment. Subsequently) Tj ET Q q 0 0 0 rg BT 152.44 632.10 Td (, we continued to receive interest payments from the borrower under the Lawrence ) Tj ET Q q 0 0 0 rg BT 485.46 632.10 Td (V) Tj ET Q q 0 0 0 rg BT 492.08 632.10 Td (illage Plaza Loan ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 620.10 Td (Origination and recognized the interest income on a cash basis. On March 29, 2016, we entered into an agreement in lieu of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 608.10 Td (foreclosure with the borrower under the Lawrence ) Tj ET Q q 0 0 0 rg BT 252.84 608.10 Td (V) Tj ET Q q 0 0 0 rg BT 259.46 608.10 Td (illage Plaza Loan Origination. On ) Tj ET Q q 0 0 0 rg BT 399.15 608.10 Td (April 25, 2016, the scheduled closing ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 596.10 Td (date of the agreement in lieu of foreclosure was extended to May 13, 2016.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 578.10 Td (If any of the borrowers under our real estate loans receivable are unable to repay their loans at maturity or default on their ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 566.10 Td (loan, the impact to future interest income and loan recoveries may be significant and will depend on several factors unique to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 554.10 Td (each individual loan. In general, if we have a first priority lien on the collateral securing a loan, we may agree to extend the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 542.10 Td (loan at similar terms, modify the terms of the loan, or foreclose on the collateral. If we foreclose on the collateral, we may ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 530.10 Td (either operate the property) Tj ET Q q 0 0 0 rg BT 154.63 530.10 Td (, resulting in our receipt of any cash flows generated by the property or our payment of any cash ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 518.10 Td (shortfalls related to the property) Tj ET Q q 0 0 0 rg BT 177.14 518.10 Td (, or sell the property for whatever amount we are able to obtain, which may or may not be equal ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 506.10 Td (to the loan balance prior to foreclosure. In general, if we own a mezzanine loan or a B-Note and the borrower is unable to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 494.10 Td (repay its loan at maturity) Tj ET Q q 0 0 0 rg BT 148.82 494.10 Td (, we may have more restrictions and fewer options regarding the resolution of our investment. In ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 482.10 Td (certain circumstances, the senior lenders, in conjunction with us, may be willing to grant the borrower extensions or may grant ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 470.10 Td (extensions in exchange for more favorable terms \(such as higher interest rates, a partial payof) Tj ET Q q 0 0 0 rg BT 423.34 470.10 Td (f, or the entitlement to a portion of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 458.10 Td (a junior lender) Tj ET Q q 0 0 0 rg BT 108.18 458.10 Td (’) Tj ET Q q 0 0 0 rg BT 110.96 458.10 Td (s interest income, etc.\). If the senior lenders will not grant the borrower an extension, we, as the mezzanine ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 446.10 Td (lender) Tj ET Q q 0 0 0 rg BT 74.08 446.10 Td (, may foreclose on the ownership interests of the borrower and indirectly take legal title to the property subject to the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 434.10 Td (existing senior loans or we may negotiate a discounted repayment. ) Tj ET Q q 0 0 0 rg BT 320.35 434.10 Td (W) Tj ET Q q 0 0 0 rg BT 328.99 434.10 Td (e could attempt to negotiate an extension or modification ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 422.10 Td (with the senior lenders as the new borrower; however) Tj ET Q q 0 0 0 rg BT 263.47 422.10 Td (, if the senior lenders were not willing to extend or modify the loans and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 410.10 Td (we were not able to repay the senior loans, we would most likely relinquish our interests or rights in the investment to the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 398.10 Td (holders of the senior loans. ) Tj ET Q q 0 0 0 rg BT 161.98 398.10 Td (Actual outcomes may dif) Tj ET Q q 0 0 0 rg BT 262.61 398.10 Td (fer significantly from the above based on factors specific to individual ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 386.10 Td (loans and situations.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 368.10 Td (Property operating, maintenance and management costs from our real estate properties decreased by ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 476.67 368.10 Td ($6.1 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 525.57 368.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 356.10 Td (primarily due to properties sold, the results of which are included in income from continuing operations, and a decrease in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 344.10 Td (utility expenses and snow removal expenses related to our real estate properties located in the midwestern and northeastern ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 332.10 Td (regions of the United States due to record snow fall during the first quarter 2015. Overall, we expect property operating, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 320.10 Td (maintenance and management costs to decrease in future periods due to anticipated real estate property sales.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 302.10 Td (Real estate taxes, property-related taxes and insurance from our real estate properties decreased from ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.70 302.10 Td ($6.8 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 528.59 302.10 Td ( for the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 290.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.49 290.10 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 130.31 290.10 Td (March 31, 2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 193.91 290.10 Td ( to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 206.69 290.10 Td ($5.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 255.58 290.10 Td ( for the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 286.96 290.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 306.94 290.10 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 367.77 290.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 431.37 290.10 Td ( primarily due to properties sold, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 278.10 Td (the results of which are included in income from continuing operations. Overall, we expect real estate taxes, property-related ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 266.10 Td (taxes and insurance to decrease in future periods due to anticipated real estate property sales. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 248.10 Td (Asset management fees decreased from ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 234.26 248.10 Td ($2.4 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 283.15 248.10 Td ( for the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 314.53 248.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 334.52 248.10 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 395.34 248.10 Td (March 31, 2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.94 248.10 Td ( to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 471.72 248.10 Td ($2.3 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 520.61 248.10 Td ( for the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 236.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.49 236.10 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 130.31 236.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 193.91 236.10 Td ( primarily due to properties sold, the results of which are included in income from ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 224.10 Td (continuing operations. Overall, we expect asset management fees to decrease in future periods due to anticipated asset sales or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 212.10 Td (payof) Tj ET Q q 0 0 0 rg BT 72.09 212.10 Td (fs. See “Liquidity and Capital Resources.”) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 194.10 Td (General and administrative expenses increased by ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 275.64 194.10 Td ($1.2 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 324.54 194.10 Td ( primarily due to an increase of $0.8 million in the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 182.10 Td (estimated profit participation interest related to the GKK Properties under the ) Tj ET Q q 0 0 0 rg BT 361.35 182.10 Td (Amended Services ) Tj ET Q q 0 0 0 rg BT 438.55 182.10 Td (Agreement, and an increase of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 170.10 Td ($0.4 million of other professional fees related to the Special Committee’) Tj ET Q q 0 0 0 rg BT 338.59 170.10 Td (s engagement of Evercore to act as our financial ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 158.10 Td (advisor) Tj ET Q q 0 0 0 rg BT 78.39 158.10 Td (. See “— Contractual Commitments and Contingencies — ) Tj ET Q q 0 0 0 rg BT 316.68 158.10 Td (Asset Management Services ) Tj ET Q q 0 0 0 rg BT 431.93 158.10 Td (Agreement Related to the GKK ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 146.10 Td (Properties” for more information and “— Liquidity and Capital Resources” for our discussion on the engagement of Evercore. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 134.10 Td (General and administrative expenses consist primarily of management fees related to the ) Tj ET Q q 0 0 0 rg BT 406.04 134.10 Td (Amended Services ) Tj ET Q q 0 0 0 rg BT 483.25 134.10 Td (Agreement, legal ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 122.10 Td (fees, audit fees, transfer agent fees, state and local income taxes and other professional fees.) Tj ET Q endstream endobj 81 0 obj <>] /Rotate 0 /Contents 82 0 R>> endobj 82 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 2. Management’) Tj ET Q q 0 0 0 rg BT 144.05 730.60 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 216.03 730.60 Td (Analysis of Financial Condition and Results of Operations \(continued\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.00 33.60 Td (39) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 704.10 Td (Depreciation and amortization expense from our real estate properties decreased by ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 409.74 704.10 Td ($4.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 458.63 704.10 Td ( primarily due to real ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 692.10 Td (estate property sales and decreased amortization of tenant origination and absorption costs resulting from lease expirations ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 680.10 Td (related to properties held throughout both periods. Upon classifying a property as held for sale, we cease depreciation and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 668.10 Td (amortization expense for that property) Tj ET Q q 0 0 0 rg BT 202.13 668.10 Td (. Overall, we expect depreciation and amortization expense to decrease in future periods ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 656.10 Td (due to anticipated real estate property sales.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 638.10 Td (Interest expense from the financing of our portfolio decreased by ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 336.18 638.10 Td ($3.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 385.07 638.10 Td (, primarily due to a decrease in the average ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 626.10 Td (loan balance as a result of principal repayments and debt extinguishments subsequent to March 31, 2015. Included in interest ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 614.10 Td (expense is the amortization of deferred financing costs of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 281.36 614.10 Td ($0.1 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 330.25 614.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 349.69 614.10 Td ($0.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 398.58 614.10 Td ( for the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 429.96 614.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 449.94 614.10 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 510.77 614.10 Td (March 31, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 602.10 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.50 602.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 88.94 602.10 Td (March 31, 2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 152.54 602.10 Td (, respectively) Tj ET Q q 0 0 0 rg BT 205.20 602.10 Td (. Interest expense in future periods will vary based on fluctuations in one-month ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 590.10 Td (LIBOR, our level of future borrowings and our ability to refinance existing indebtedness at similar rates. ) Tj ET Q q 0 0 0 rg BT 472.82 590.10 Td (W) Tj ET Q q 0 0 0 rg BT 481.46 590.10 Td (e do not currently ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 578.10 Td (plan to acquire or originate more real estate or real estate-related assets and, therefore, do not plan to enter into any purchase ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 566.10 Td (financing in the future. However) Tj ET Q q 0 0 0 rg BT 182.39 566.10 Td (, we may need to refinance our existing indebtedness in the future. Overall, we expect interest ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 554.10 Td (expense to decrease in future periods due to anticipated asset sales and principal paydowns.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 536.10 Td (During the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 119.05 536.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 139.03 536.10 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 199.86 536.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 263.46 536.10 Td (, we recorded a non-cash impairment char) Tj ET Q q 0 0 0 rg BT 431.25 536.10 Td (ge of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 454.02 536.10 Td ($10.9 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 507.91 536.10 Td (. ) Tj ET Q q 0 0 0 rg BT 515.23 536.10 Td (The ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 524.10 Td (impairment char) Tj ET Q q 0 0 0 rg BT 115.13 524.10 Td (ge for the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 155.94 524.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 175.93 524.10 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 236.75 524.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 300.35 524.10 Td ( included $10.6 million with respect to 20 properties classified as ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 512.10 Td (real estate held for investment \(including 18 GKK Properties\) to write-down the carrying values of these real estate investments ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 500.10 Td (to their estimated fair values and $0.3 million with respect to three GKK Properties that were held for sale to write-down the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 488.10 Td (carrying values of these real estate investments to their estimated sales price less estimated costs to sell. ) Tj ET Q q 0 0 0 rg BT 468.91 488.10 Td (W) Tj ET Q q 0 0 0 rg BT 477.55 488.10 Td (e did not record an ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 476.10 Td (impairment char) Tj ET Q q 0 0 0 rg BT 115.13 476.10 Td (ge on real estate during the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 225.64 476.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 245.62 476.10 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 306.45 476.10 Td (March 31, 2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 370.05 476.10 Td (. ) Tj ET Q q 0 0 0 rg BT 377.37 476.10 Td (The facts and circumstances leading to the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 464.10 Td (impairments on our real estate held for investment during the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 296.65 464.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 316.64 464.10 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 377.46 464.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 441.06 464.10 Td ( are as follows:) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 72.00 446.10 Td (• ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 90.00 446.10 Td (City Gate Plaza: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 162.21 446.10 Td (W) Tj ET Q q 0 0 0 rg BT 170.85 446.10 Td (e recognized an impairment char) Tj ET Q q 0 0 0 rg BT 301.71 446.10 Td (ge during the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 356.98 446.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 376.96 446.10 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 437.79 446.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 501.39 446.10 Td ( of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 514.72 446.10 Td ($2.7 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 434.10 Td (million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 118.89 434.10 Td ( to reduce the carrying value of our investment in City Gate Plaza, an of) Tj ET Q q 0 0 0 rg BT 406.67 434.10 Td (fice property located in Sacramento, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 422.10 Td (California, to its estimated fair value. During the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 289.67 422.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 309.65 422.10 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 370.48 422.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 434.08 422.10 Td (, we revised our cash flow ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 410.10 Td (projections to account for higher projected leasing costs to stabilize the property) Tj ET Q q 0 0 0 rg BT 410.08 410.10 Td (. ) Tj ET Q q 0 0 0 rg BT 417.40 410.10 Td (The continued lack of demand in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 398.10 Td (the Sacramento of) Tj ET Q q 0 0 0 rg BT 162.57 398.10 Td (fice rental market also resulted in higher capitalization rates. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 383.10 Td (• ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 90.00 383.10 Td (University Park Buildings: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 202.76 383.10 Td (W) Tj ET Q q 0 0 0 rg BT 211.40 383.10 Td (e recognized an impairment char) Tj ET Q q 0 0 0 rg BT 342.26 383.10 Td (ge during the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 397.52 383.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 417.51 383.10 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 478.33 383.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 541.93 383.10 Td ( of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 371.10 Td ($1.2 million to reduce the carrying value of our investment in the University Park Buildings, an of) Tj ET Q q 0 0 0 rg BT 483.07 371.10 Td (fice property ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 359.10 Td (located in Sacramento, California, to its estimated fair value. ) Tj ET Q q 0 0 0 rg BT 337.79 359.10 Td (W) Tj ET Q q 0 0 0 rg BT 346.43 359.10 Td (e revised our cash flow projections primarily to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 347.10 Td (account for higher projected capital costs for general building upgrades and to address certain maintenance issues. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 335.10 Td (The continued lack of demand in the Sacramento of) Tj ET Q q 0 0 0 rg BT 296.97 335.10 Td (fice rental market also resulted in higher capitalization rates. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 320.10 Td (• ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 90.00 320.10 Td (GKK Pr) Tj ET Q q 0 0 0 rg BT 122.69 320.10 Td (operties: ) Tj ET Q BT /F3 10.00 Tf ET /GS0 gs q 22.50 0 0 10.10 90.00 302.94 cm /I13 Do Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 112.50 305.10 Td (Citizens Bank Portfolio: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 214.72 305.10 Td (W) Tj ET Q q 0 0 0 rg BT 223.35 305.10 Td (e recognized an impairment char) Tj ET Q q 0 0 0 rg BT 354.22 305.10 Td (ge during the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 409.48 305.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 429.47 305.10 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 490.29 305.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 553.89 305.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 293.10 Td (of $5.3 million relating to 13 properties in the Citizens Bank Portfolio due to a decrease in cash flow projections ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 281.10 Td (primarily due to an increase in projected vacancy) Tj ET Q q 0 0 0 rg BT 308.71 281.10 Td (, thus decreasing the projected cash flows the properties would ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 269.10 Td (generate. ) Tj ET Q BT /F3 10.00 Tf ET /GS0 gs q 22.50 0 0 10.10 90.00 251.94 cm /I14 Do Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 112.50 254.10 Td (Other Pr) Tj ET Q q 0 0 0 rg BT 147.96 254.10 Td (operties: ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 188.51 254.10 Td (W) Tj ET Q q 0 0 0 rg BT 197.14 254.10 Td (e) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 201.58 254.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 204.08 254.10 Td (recognized an impairment char) Tj ET Q q 0 0 0 rg BT 328.01 254.10 Td (ge during the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 383.27 254.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 403.26 254.10 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 464.08 254.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 527.68 254.10 Td ( of $1.4 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 242.10 Td (million relating to five other GKK Properties classified as held for investment. No impairment char) Tj ET Q q 0 0 0 rg BT 512.22 242.10 Td (ge related to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 230.10 Td (any individual property was greater than $600,000. ) Tj ET Q q 0 0 0 rg BT 321.71 230.10 Td (These impairments generally resulted from changes in the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 218.10 Td (projected hold periods or changes in lease projections including longer estimated lease-up periods and lower ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 112.50 206.10 Td (projected rental rates, thus decreasing the projected cash flows the properties would generate. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 185.10 Td (W) Tj ET Q q 0 0 0 rg BT 82.14 185.10 Td (e recognized a gain on sales of real estate of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 260.94 185.10 Td ($23.6 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 314.83 185.10 Td ( related to the disposition of 14 GKK Properties during the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 173.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.49 173.10 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 130.31 173.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 193.91 173.10 Td ( that were included in income from continuing operations. ) Tj ET Q q 0 0 0 rg BT 431.17 173.10 Td (W) Tj ET Q q 0 0 0 rg BT 439.80 173.10 Td (e recognized a gain on sales ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 161.10 Td (of real estate of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 113.91 161.10 Td ($14.0 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 167.80 161.10 Td ( related to the disposition of two historical industrial properties and one GKK Property during the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 149.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.49 149.10 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 130.31 149.10 Td (March 31, 2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 193.91 149.10 Td ( that were included in income from continuing operations. ) Tj ET Q endstream endobj 83 0 obj <>] /Rotate 0 /Contents 84 0 R>> endobj 84 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 2. Management’) Tj ET Q q 0 0 0 rg BT 144.05 730.60 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 216.03 730.60 Td (Analysis of Financial Condition and Results of Operations \(continued\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.00 33.60 Td (40) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 704.25 Td (Funds fr) Tj ET Q q 0 0 0 rg BT 86.27 704.25 Td (om Operations and Modified Funds fr) Tj ET Q q 0 0 0 rg BT 249.16 704.25 Td (om Operations) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 686.25 Td (W) Tj ET Q q 0 0 0 rg BT 82.14 686.25 Td (e believe that funds from operations \(“FFO”\) is a beneficial indicator of the performance of an equity REIT) Tj ET Q q 0 0 0 rg BT 511.52 686.25 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 674.25 Td (W) Tj ET Q q 0 0 0 rg BT 58.14 674.25 Td (e compute FFO in accordance with the current National ) Tj ET Q q 0 0 0 rg BT 282.79 674.25 Td (Association of Real Estate Investment ) Tj ET Q q 0 0 0 rg BT 437.84 674.25 Td (T) Tj ET Q q 0 0 0 rg BT 443.60 674.25 Td (rusts \(“NAREIT”\) definition. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 662.25 Td (FFO represents net income, excluding gains and losses from sales of operating real estate assets \(which can vary among owners ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 650.25 Td (of identical assets in similar conditions based on historical cost accounting and useful-life estimates\), impairment losses on real ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 638.25 Td (estate assets, depreciation and amortization of real estate assets, and adjustments for unconsolidated partnerships and joint ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 626.25 Td (ventures. In connection with NAREIT’) Tj ET Q q 0 0 0 rg BT 207.80 626.25 Td (s ) Tj ET Q q 0 0 0 rg BT 213.64 626.25 Td (Accounting and Financial Standards Hot ) Tj ET Q q 0 0 0 rg BT 378.70 626.25 Td (T) Tj ET Q q 0 0 0 rg BT 384.11 626.25 Td (opics, we are excluding impairment char) Tj ET Q q 0 0 0 rg BT 546.64 626.25 Td (ges ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 614.25 Td (on real estate assets from our calculation of FFO. ) Tj ET Q q 0 0 0 rg BT 251.21 614.25 Td (W) Tj ET Q q 0 0 0 rg BT 259.85 614.25 Td (e have also restated FFO from prior periods to exclude these impairment ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 602.25 Td (char) Tj ET Q q 0 0 0 rg BT 66.53 602.25 Td (ges. NAREIT) Tj ET Q q 0 0 0 rg BT 123.84 602.25 Td ( believes that impairment char) Tj ET Q q 0 0 0 rg BT 244.72 602.25 Td (ges on real estate assets are often early recognition of losses on prospective ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 590.25 Td (sales of properties, and therefore, the exclusion of these impairments is consistent with the exclusion of gains and losses ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 578.25 Td (recognized from the sales of real estate. ) Tj ET Q q 0 0 0 rg BT 212.48 578.25 Td (Although these losses are included in the calculation of net income \(loss\), we have ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 566.25 Td (excluded these impairment char) Tj ET Q q 0 0 0 rg BT 176.77 566.25 Td (ges in our calculation of FFO because impairments do not impact the current operating ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 554.25 Td (performance of our investments, and may or may not provide an indication of future operating performance. ) Tj ET Q q 0 0 0 rg BT 487.22 554.25 Td (W) Tj ET Q q 0 0 0 rg BT 495.86 554.25 Td (e believe FFO ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 542.25 Td (facilitates comparisons of operating performance between periods and among other REIT) Tj ET Q q 0 0 0 rg BT 407.00 542.25 Td (s. However) Tj ET Q q 0 0 0 rg BT 454.65 542.25 Td (, our computation of FFO ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 530.25 Td (may not be comparable to other REIT) Tj ET Q q 0 0 0 rg BT 200.42 530.25 Td (s that do not define FFO in accordance with the current NAREIT) Tj ET Q q 0 0 0 rg BT 460.44 530.25 Td ( definition or that ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 518.25 Td (interpret the current NAREIT) Tj ET Q q 0 0 0 rg BT 167.88 518.25 Td ( definition dif) Tj ET Q q 0 0 0 rg BT 222.69 518.25 Td (ferently than we do. Our management believes that historical cost accounting for ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 506.25 Td (real estate assets in accordance with U.S. generally accepted accounting principles \(“GAAP”\) implicitly assumes that the value ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 494.25 Td (of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 482.25 Td (conditions, many industry investors and analysts have considered the presentation of operating results for real estate companies ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 470.25 Td (that use historical cost accounting to be insuf) Tj ET Q q 0 0 0 rg BT 229.55 470.25 Td (ficient by themselves. ) Tj ET Q q 0 0 0 rg BT 321.48 470.25 Td (As a result, we believe that the use of FFO, together with ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 458.25 Td (the required GAAP) Tj ET Q q 0 0 0 rg BT 126.89 458.25 Td ( presentations, provides a more complete understanding of our performance relative to our competitors and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 446.25 Td (provides a more informed and appropriate basis on which to make decisions involving operating, financing, and investing ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 434.25 Td (activities.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 416.25 Td (Changes in accounting rules have resulted in a substantial increase in the number of non-operating and non-cash items ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 404.25 Td (included in the calculation of FFO. ) Tj ET Q q 0 0 0 rg BT 193.92 404.25 Td (As a result, our management also uses modified funds from operations \(“MFFO”\) as an ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 392.25 Td (indicator of our ongoing performance. MFFO excludes from FFO: acquisition fees and expenses; adjustments related to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 380.25 Td (contingent purchase price obligations; amounts relating to straight-line rents and amortization of above and below market ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 368.25 Td (intangible lease assets and liabilities; accretion of discounts and amortization of premiums on debt investments; amortization of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 356.25 Td (closing costs relating to debt investments; impairments of real estate-related investments; mark-to-market adjustments included ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 344.25 Td (in net income; and gains or losses included in net income for the extinguishment or sale of debt or hedges. ) Tj ET Q q 0 0 0 rg BT 479.22 344.25 Td (W) Tj ET Q q 0 0 0 rg BT 487.85 344.25 Td (e compute MFFO ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 332.25 Td (in accordance with the definition of MFFO included in the practice guideline issued by the Investment Program ) Tj ET Q q 0 0 0 rg BT 498.00 332.25 Td (Association ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 320.25 Td (\(“IP) Tj ET Q q 0 0 0 rg BT 65.24 320.25 Td (A”\) in November 2010 as interpreted by management. Our computation of MFFO may not be comparable to other REIT) Tj ET Q q 0 0 0 rg BT 549.97 320.25 Td (s ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 308.25 Td (that do not compute MFFO in accordance with the current IP) Tj ET Q q 0 0 0 rg BT 292.97 308.25 Td (A) Tj ET Q q 0 0 0 rg BT 299.64 308.25 Td ( definition or that interpret the current IP) Tj ET Q q 0 0 0 rg BT 461.72 308.25 Td (A) Tj ET Q q 0 0 0 rg BT 468.39 308.25 Td ( definition dif) Tj ET Q q 0 0 0 rg BT 523.20 308.25 Td (ferently ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 296.25 Td (than we do. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 278.25 Td (W) Tj ET Q q 0 0 0 rg BT 82.14 278.25 Td (e believe that MFFO is helpful as a measure of ongoing operating performance because it excludes non-operating items ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 266.25 Td (included in FFO. MFFO also excludes non-cash items such as straight-line rental revenue. ) Tj ET Q q 0 0 0 rg BT 417.49 266.25 Td (Additionally) Tj ET Q q 0 0 0 rg BT 467.39 266.25 Td (, we believe that ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 254.25 Td (MFFO provides investors with supplemental performance information that is consistent with the performance indicators and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 242.25 Td (analysis used by management, in addition to net income and cash flows from operating activities as defined by GAAP) Tj ET Q q 0 0 0 rg BT 520.78 242.25 Td (, to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 230.25 Td (evaluate the sustainability of our operating performance. MFFO provides comparability in evaluating the operating ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 218.25 Td (performance of our portfolio with other non-traded REIT) Tj ET Q q 0 0 0 rg BT 277.34 218.25 Td (s, which typically have limited lives with short and defined acquisition ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 206.25 Td (periods and tar) Tj ET Q q 0 0 0 rg BT 108.74 206.25 Td (geted exit strategies. MFFO, or an equivalent measure, is routinely reported by non-traded REIT) Tj ET Q q 0 0 0 rg BT 496.55 206.25 Td (s, and we ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 194.25 Td (believe often used by analysts and investors for comparison purposes.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 176.25 Td (FFO and MFFO are non-GAAP) Tj ET Q q 0 0 0 rg BT 200.91 176.25 Td ( financial measures and do not represent net income as defined by GAAP) Tj ET Q q 0 0 0 rg BT 493.05 176.25 Td (. Net income as ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 164.25 Td (defined by GAAP) Tj ET Q q 0 0 0 rg BT 121.34 164.25 Td ( is the most relevant measure in determining our operating performance because FFO and MFFO include ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 152.25 Td (adjustments that investors may deem subjective, such as adding back expenses such as depreciation and amortization and the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 140.25 Td (other items described above. ) Tj ET Q q 0 0 0 rg BT 168.35 140.25 Td (Accordingly) Tj ET Q q 0 0 0 rg BT 217.69 140.25 Td (, FFO and MFFO should not be considered as alternatives to net income as an ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 128.25 Td (indicator of our current and historical operating performance. In addition, FFO and MFFO do not represent cash flows from ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 116.25 Td (operating activities determined in accordance with GAAP) Tj ET Q q 0 0 0 rg BT 280.72 116.25 Td ( and should not be considered an indication of our liquidity) Tj ET Q q 0 0 0 rg BT 516.69 116.25 Td (. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 104.25 Td (W) Tj ET Q q 0 0 0 rg BT 58.14 104.25 Td (e believe FFO and MFFO, in addition to net income and cash flows from operating activities as defined by GAAP) Tj ET Q q 0 0 0 rg BT 513.61 104.25 Td (, are ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 92.25 Td (meaningful supplemental performance measures. During periods of significant disposition activity) Tj ET Q q 0 0 0 rg BT 445.14 92.25 Td (, FFO and MFFO are much ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 80.25 Td (more limited as measures of future performance.) Tj ET Q endstream endobj 85 0 obj <>] /Rotate 0 /Contents 86 0 R>> endobj 86 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 2. Management’) Tj ET Q q 0 0 0 rg BT 144.05 730.60 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 216.03 730.60 Td (Analysis of Financial Condition and Results of Operations \(continued\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.00 33.60 Td (41) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 704.10 Td (Although MFFO includes other adjustments, the exclusion of straight-line rent, amortization of above- and below-market ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 692.10 Td (leases, gain \(loss\) from extinguishment of debt and the net amortization of discounts and premiums on mortgage loans related ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 680.10 Td (to the GKK Properties are the most significant adjustments to us at the present time. ) Tj ET Q q 0 0 0 rg BT 390.64 680.10 Td (W) Tj ET Q q 0 0 0 rg BT 399.28 680.10 Td (e have excluded these items based on ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 668.10 Td (the following economic considerations:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 650.10 Td (• ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 90.00 650.10 Td (Adjustments for straight-line r) Tj ET Q q 0 0 0 rg BT 211.02 650.10 Td (ent) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 223.24 650.10 Td (. ) Tj ET Q q 0 0 0 rg BT 230.56 650.10 Td (These are adjustments to rental revenue as required by GAAP) Tj ET Q q 0 0 0 rg BT 477.60 650.10 Td ( to recognize ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 638.10 Td (contractual lease payments on a straight-line basis over the life of the respective lease. ) Tj ET Q q 0 0 0 rg BT 439.68 638.10 Td (W) Tj ET Q q 0 0 0 rg BT 448.32 638.10 Td (e have excluded these ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 626.10 Td (adjustments in our calculation of MFFO to more appropriately reflect the current economic impact of our in-place ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 614.10 Td (leases, while also providing investors with a useful supplemental metric that addresses core operating performance by ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 602.10 Td (removing rent we expect to receive in a future period or rent that was received in a prior period;) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 587.10 Td (• ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 90.00 587.10 Td (Amortization of above- and below-market leases.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 286.64 587.10 Td ( Similar to depreciation and amortization of real estate assets and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 575.10 Td (lease related costs that are excluded from FFO, GAAP) Tj ET Q q 0 0 0 rg BT 307.62 575.10 Td ( implicitly assumes that the value of intangible lease assets and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 563.10 Td (liabilities diminishes predictably over time and requires that these char) Tj ET Q q 0 0 0 rg BT 372.79 563.10 Td (ges be recognized currently in revenue. Since ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 551.10 Td (market lease rates in the aggregate have historically risen or fallen with local market conditions, management ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 539.10 Td (believes that by excluding these char) Tj ET Q q 0 0 0 rg BT 237.27 539.10 Td (ges, MFFO provides useful supplemental information on the operating ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 527.10 Td (performance of the real estate;) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 512.10 Td (• ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 90.00 512.10 Td (Gain \(loss\) fr) Tj ET Q q 0 0 0 rg BT 143.52 512.10 Td (om extinguishment of debt) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 248.78 512.10 Td (. ) Tj ET Q q 0 0 0 rg BT 255.73 512.10 Td (A) Tj ET Q q 0 0 0 rg BT 262.40 512.10 Td ( gain \(loss\) from extinguishment of debt represents the dif) Tj ET Q q 0 0 0 rg BT 494.66 512.10 Td (ference between ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 500.10 Td (the carrying value of any consideration transferred to the lender in return for the extinguishment of a debt and the net ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 488.10 Td (carrying value of the debt at the time of settlement. ) Tj ET Q q 0 0 0 rg BT 299.19 488.10 Td (W) Tj ET Q q 0 0 0 rg BT 307.83 488.10 Td (e have excluded the gain \(loss\) from extinguishment of debt in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 476.10 Td (our calculation of MFFO because these gains \(losses\) do not impact the current operating performance of our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 464.10 Td (investments and do not provide an indication of future operating performance; and) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 449.10 Td (• ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 90.00 449.10 Td (Net amortization of discounts and pr) Tj ET Q q 0 0 0 rg BT 236.58 449.10 Td (emiums on mortgage loans r) Tj ET Q q 0 0 0 rg BT 350.65 449.10 Td (elated to the GKK Pr) Tj ET Q q 0 0 0 rg BT 435.27 449.10 Td (operties. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 472.49 449.10 Td ( Discounts and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 437.10 Td (premiums on debt are amortized over the term of the loan as an adjustment to interest expense. ) Tj ET Q q 0 0 0 rg BT 473.86 437.10 Td (This application ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 425.10 Td (results in interest expense recognition that is dif) Tj ET Q q 0 0 0 rg BT 281.16 425.10 Td (ferent than the underlying contractual terms of the debt. ) Tj ET Q q 0 0 0 rg BT 508.96 425.10 Td (W) Tj ET Q q 0 0 0 rg BT 517.59 425.10 Td (e have ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 413.10 Td (excluded the amortization of discounts and premiums related to the debt assumed in connection with the Settlement ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 401.10 Td (Agreement in our calculation of MFFO to more appropriately reflect the economic impact of our debt as the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 389.10 Td (amortization of discounts and premiums has no ongoing economic impact on our operations. ) Tj ET Q q 0 0 0 rg BT 465.58 389.10 Td (The debt assumed ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 377.10 Td (related to the GKK Properties was marked to market as of the date we entered into Settlement ) Tj ET Q q 0 0 0 rg BT 467.38 377.10 Td (Agreement, which ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 365.10 Td (resulted in discounts and premiums related to the debt assumed. ) Tj ET Q q 0 0 0 rg BT 350.32 365.10 Td (W) Tj ET Q q 0 0 0 rg BT 358.96 365.10 Td (e believe excluding these items provides investors ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 90.00 353.10 Td (with a useful supplemental metric that directly addresses core operating performance.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 332.10 Td (Our calculation of FFO and MFFO is presented in the table below for the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 369.00 332.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 388.98 332.10 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 449.81 332.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 513.41 332.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 532.85 332.10 Td (2015) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 552.85 332.10 Td (, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 320.10 Td (respectively \(in thousands\). No conclusions or comparisons should be made from the presentation of these periods. ) Tj ET Q 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 268.60 339.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 389.00 268.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 474.00 268.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 478.00 268.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 240.60 339.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 389.00 240.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 474.00 240.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 478.00 240.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 212.60 339.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 389.00 212.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 474.00 212.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 478.00 212.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 184.60 339.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 389.00 184.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 474.00 184.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 478.00 184.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 156.60 339.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 389.00 156.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 474.00 156.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 478.00 156.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 128.60 339.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 389.00 128.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 474.00 128.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 478.00 128.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 100.60 339.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 389.00 100.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 474.00 100.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 478.00 100.60 85.00 -14.00 re f /GS0 gs 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 282.6 m 474 282.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 474 282.6 m 478 282.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 282.6 m 563 282.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 282.6 m 474 282.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 268.6 m 474 268.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 282.6 m 563 282.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 268.6 m 563 268.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 268.6 m 474 268.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 268.6 m 563 268.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 170.60000000000002 m 474 170.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 170.60000000000002 m 563 170.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 100.60000000000002 m 474 100.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 100.60000000000002 m 563 100.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 87.60000000000002 m 474 87.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 389 85.60000000000002 m 474 85.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 87.60000000000002 m 563 87.60000000000002 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 478 85.60000000000002 m 563 85.60000000000002 l s BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 286.85 Td ( ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 407.20 286.83 Td (For the Three Months Ended March 31,) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 272.85 Td ( ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 423.00 272.83 Td (2016) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 512.00 272.83 Td (2015) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 258.85 Td (Net income) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 391.50 258.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 448.80 258.85 Td (10,819) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 480.50 258.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 541.80 258.85 Td (8,589) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 64.50 244.85 Td (Depreciation of real estate assets) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 452.80 244.85 Td (7,620) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 537.80 244.85 Td (10,015) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 64.50 230.85 Td (Amortization of lease-related costs) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 452.80 230.85 Td (3,378) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 541.80 230.85 Td (5,590) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 64.50 216.85 Td (Impairment charges on real estate) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 448.80 216.85 Td (10,864) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 551.80 216.85 Td (—) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 64.50 202.85 Td (Gain on foreclosed real estate held for sale) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 462.80 202.85 Td (—) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 539.10 202.85 Td (\(2,509) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 559.80 202.85 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 64.50 188.85 Td (Gain on sales of real estate, net) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 446.10 188.85 Td (\(23,586) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 470.80 188.85 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 535.10 188.85 Td (\(13,967) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 559.80 188.85 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 64.50 174.85 Td (Gain on sales of real estate, net - discontinued operations) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 462.80 174.85 Td (—) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 545.10 174.85 Td (\(124) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 559.80 174.85 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 160.85 Td (FFO) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 452.80 160.85 Td (9,095) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 541.80 160.85 Td (7,594) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 64.50 146.85 Td (Straight-line rent and amortization of above- and below-market leases) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 450.10 146.85 Td (\(1,244) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 470.80 146.85 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 539.10 146.85 Td (\(2,285) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 559.80 146.85 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 64.50 132.85 Td (Loss from extinguishment of debt) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 466.80 132.85 Td (3) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 551.80 132.85 Td (—) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 64.50 118.85 Td (Amortization of discounts and closing costs on real estate loans receivable) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 456.10 118.85 Td (\(271) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 470.80 118.85 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 545.10 118.85 Td (\(240) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 559.80 118.85 Td (\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 64.50 104.85 Td (Amortization of discounts and premiums on GKK notes payable, net) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 458.80 104.85 Td (188) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 547.80 104.85 Td (511) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 90.85 Td (MFFO) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 391.50 90.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 452.80 90.85 Td (7,771) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 480.50 90.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 541.80 90.85 Td (5,580) Tj ET Q BT /F1 10.00 Tf ET BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 63.10 Td (FFO and MFFO may be used to fund all or a portion of certain capitalizable items that are excluded from FFO and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 51.10 Td (MFFO, such as tenant improvements, building improvements and deferred leasing costs. ) Tj ET Q endstream endobj 87 0 obj <>] /Rotate 0 /Contents 88 0 R>> endobj 88 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 2. Management’) Tj ET Q q 0 0 0 rg BT 144.05 730.60 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 216.03 730.60 Td (Analysis of Financial Condition and Results of Operations \(continued\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.00 33.60 Td (42) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 704.25 Td (Distributions) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 686.25 Td (Distributions declared, distributions paid and cash flow from operations were as follows for the first quarter of 2016 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 674.25 Td (\(in thousands, except per share amounts\): ) Tj ET Q 0.8 0.9333333333333333 1 rg /GS0 gs 50.00 625.75 170.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 220.00 625.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 224.00 625.75 80.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 304.00 625.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 308.00 625.75 80.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 388.00 625.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 392.00 625.75 86.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 478.00 625.75 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 482.00 625.75 80.00 -14.00 re f /GS0 gs 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 50 625.75 m 220 625.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 224 625.75 m 304 625.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 308 625.75 m 388 625.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 392 625.75 m 478 625.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 482 625.75 m 562 625.75 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 482 625.75 m 562 625.75 l s BT /F2 8.00 Tf ET q 0 0 0 rg BT 123.15 629.98 Td (Period) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 241.05 637.98 Td (Distributions ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 244.20 629.98 Td (Declar) Tj ET Q q 0 0 0 rg BT 266.71 629.98 Td (ed ) Tj ET Q BT /F2 8.00 Tf ET BT /F2 5.20 Tf ET q 0 0 0 rg BT 276.71 633.61 Td (\(1\)) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 325.05 645.98 Td (Distributions ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 325.30 637.98 Td (Declar) Tj ET Q q 0 0 0 rg BT 347.81 637.98 Td (ed Per) Tj ET Q q 0 0 0 rg BT 369.65 637.98 Td ( ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 329.85 629.98 Td (Shar) Tj ET Q q 0 0 0 rg BT 346.15 629.98 Td (e ) Tj ET Q BT /F2 8.00 Tf ET BT /F2 5.20 Tf ET q 0 0 0 rg BT 351.71 633.61 Td (\(1\) \(2\)) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 503.35 637.98 Td (Cash Flow ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 491.90 629.98 Td (Fr) Tj ET Q q 0 0 0 rg BT 500.19 629.98 Td (om Operations) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 395.55 629.98 Td (Distributions Paid ) Tj ET Q BT /F2 8.00 Tf ET BT /F2 5.20 Tf ET q 0 0 0 rg BT 460.01 633.61 Td (\(1\) \(2\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 52.50 616.00 Td (First Quarter 2016) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 226.50 616.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 282.80 616.00 Td (4,655) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 310.50 616.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 366.80 616.00 Td (0.025) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 394.50 616.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 456.80 616.00 Td (4,655) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 484.50 616.00 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 540.80 616.00 Td (4,653) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 600.25 Td (_____________________) Tj ET Q BT /F1 7.50 Tf ET BT /F1 4.87 Tf ET q 0 0 0 rg BT 49.50 591.65 Td (\(1\)) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 55.18 588.25 Td ( Distributions consist of the following, as applicable: ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 67.50 576.25 Td (• ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 85.50 576.25 Td (On March 1) Tj ET Q q 0 0 0 rg BT 121.46 576.25 Td (1, 2016, our 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 ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 85.50 567.25 Td (of business on March 21, 2016. ) Tj ET Q q 0 0 0 rg BT 183.48 567.25 Td (This distribution totaled approximately $4.7 million and was paid on March 28, 2016.) Tj ET Q BT /F1 7.50 Tf ET BT /F1 4.87 Tf ET q 0 0 0 rg BT 49.50 558.65 Td (\(2\)) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 55.18 555.25 Td ( ) Tj ET Q q 0 0 0 rg BT 56.65 555.25 Td (Assumes share was issued and outstanding each day that was a record date for distributions during the period presented. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 531.25 Td ( For the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 108.11 531.25 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 128.09 531.25 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 188.92 531.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 252.52 531.25 Td (, we paid aggregate cash distributions of $4.7 million. FFO and cash flow ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 519.25 Td (from operations for the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 144.47 519.25 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 164.46 519.25 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 225.28 519.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 288.88 519.25 Td ( were ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 313.31 519.25 Td ($9.1 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 362.20 519.25 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 381.64 519.25 Td ($4.7 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 430.53 519.25 Td (, respectively) Tj ET Q q 0 0 0 rg BT 483.19 519.25 Td (. ) Tj ET Q q 0 0 0 rg BT 490.51 519.25 Td (W) Tj ET Q q 0 0 0 rg BT 499.15 519.25 Td (e funded our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 507.25 Td (total distributions paid with current period cash flow from operations. For purposes of determining the source of our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 495.25 Td (distributions paid, we assume first that we use cash flow from operations from the relevant periods to fund distribution ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 483.25 Td (payments. See the reconciliation of FFO to net income above. For information on our liquidity and distribution policies, see “– ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 471.25 Td (Liquidity and Capital Resources.”) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 453.25 Td (Our operating performance and ability to pay distributions cannot be accurately predicted and may deteriorate in the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 441.25 Td (future due to numerous factors, including those discussed under “Forward-Looking Statements,” “ - Market Outlook - Real ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 429.25 Td (Estate and Real Estate Finance Markets,” “Liquidity and Capital Resources”and “Results of Operations” herein and the risks ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 417.25 Td (discussed in Part I, Item 1A) Tj ET Q q 0 0 0 rg BT 160.04 417.25 Td ( of our ) Tj ET Q q 0 0 0 rg BT 188.65 417.25 Td (Annual Report on Form 10-K for the year ended December 31, 2015, as filed with the SEC. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 405.25 Td (Those factors include: the future operating performance of our investments; the success and economic viability of our tenants; ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 393.25 Td (the ability of our borrowers and their sponsors to continue to make their debt service payments and/or to repay their loans upon ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 381.25 Td (maturity; our ability to refinance existing indebtedness at comparable terms; changes in interest rates on our variable rate debt ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 369.25 Td (obligations; our ability to sell assets to cover our liquidity needs; our ability to successfully operate and sell the GKK Properties ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 357.25 Td (given the concentration of the GKK Properties in the financial services sector; the significant debt obligations we assumed with ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 345.25 Td (respect to the GKK Properties; and our advisor) Tj ET Q q 0 0 0 rg BT 237.88 345.25 Td (’) Tj ET Q q 0 0 0 rg BT 240.66 345.25 Td (s limited experience operating and selling bank branch properties.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 327.25 Td (Critical ) Tj ET Q q 0 0 0 rg BT 84.21 327.25 Td (Accounting Policies) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 309.25 Td (Our consolidated interim financial statements and condensed notes thereto have been prepared in accordance with GAAP) Tj ET Q q 0 0 0 rg BT 558.79 309.25 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 297.25 Td (and in conjunction with the rules and regulations of the SEC. ) Tj ET Q q 0 0 0 rg BT 298.44 297.25 Td (The preparation of our financial statements requires significant ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 285.25 Td (management judgments, assumptions and estimates about matters that are inherently uncertain. ) Tj ET Q q 0 0 0 rg BT 434.77 285.25 Td (These judgments af) Tj ET Q q 0 0 0 rg BT 512.90 285.25 Td (fect the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 273.25 Td (reported amounts of assets and liabilities and our disclosure of contingent assets and liabilities as of the dates of the financial ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 261.25 Td (statements and the reported amounts of revenue and expenses during the reporting periods. ) Tj ET Q q 0 0 0 rg BT 417.82 261.25 Td (W) Tj ET Q q 0 0 0 rg BT 426.86 261.25 Td (ith dif) Tj ET Q q 0 0 0 rg BT 450.84 261.25 Td (ferent estimates or ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 249.25 Td (assumptions, materially dif) Tj ET Q q 0 0 0 rg BT 157.91 249.25 Td (ferent amounts could be reported in our financial statements. ) Tj ET Q q 0 0 0 rg BT 405.33 249.25 Td (Additionally) Tj ET Q q 0 0 0 rg BT 455.24 249.25 Td (, other companies may ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 237.25 Td (utilize dif) Tj ET Q q 0 0 0 rg BT 87.92 237.25 Td (ferent estimates that may impact the comparability of our results of operations to those of companies in similar ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 225.25 Td (businesses. ) Tj ET Q q 0 0 0 rg BT 98.67 225.25 Td (A) Tj ET Q q 0 0 0 rg BT 105.34 225.25 Td ( discussion of the accounting policies that management considers critical in that they involve significant ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 213.25 Td (management judgments, assumptions and estimates is included in our ) Tj ET Q q 0 0 0 rg BT 330.01 213.25 Td (Annual Report on Form 10-K for the year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 201.25 Td (December 31, 2015 filed with the SEC. ) Tj ET Q q 0 0 0 rg BT 212.06 201.25 Td (There have been no significant changes to our policies during 2016. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 183.25 Td (Subsequent Events) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 165.25 Td (W) Tj ET Q q 0 0 0 rg BT 82.14 165.25 Td (e evaluate subsequent events up until the date the consolidated financial statements are issued.) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 49.50 147.25 Td (Distribution Declared) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 132.25 Td (On May 6, 2016, our board of directors declared a distribution in the amount of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 392.20 132.25 Td ($0.025) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 419.70 132.25 Td ( per share of common stock to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 120.25 Td (stockholders of record as of the close of business on June 22, 2016. ) Tj ET Q q 0 0 0 rg BT 323.71 120.25 Td (W) Tj ET Q q 0 0 0 rg BT 332.35 120.25 Td (e expect to pay this distribution on or about June 29, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 108.25 Td (2016.) Tj ET Q endstream endobj 89 0 obj <>] /Rotate 0 /Contents 90 0 R>> endobj 90 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 2. Management’) Tj ET Q q 0 0 0 rg BT 144.05 730.60 Td (s Discussion and ) Tj ET Q q 0 0 0 rg BT 216.03 730.60 Td (Analysis of Financial Condition and Results of Operations \(continued\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.00 33.60 Td (43) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 49.50 704.25 Td (Disposition of the FSI 6000 Properties and Defeasance of the FSI 6000 Mortgage Loans) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 686.25 Td (On ) Tj ET Q q 0 0 0 rg BT 86.17 686.25 Td (April 1) Tj ET Q q 0 0 0 rg BT 114.41 686.25 Td (1, 2016, we sold 61 bank branch properties, containing 245,843 rentable square feet \(the “FSI 6000 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 674.25 Td (Properties”\), to a buyer unaf) Tj ET Q q 0 0 0 rg BT 162.89 674.25 Td (filiated with us or our advisor \(the “FSI 6000 Buyer”\), for an aggregate sales price, net of closing ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 662.25 Td (credits, of $139.6 million \(which includes a payment of $6.6 million by the FSI 6000 Buyer to us to compensate us for costs ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 650.25 Td (and expenses we incurred in connection with the defeasance of the FSI 6000 Mortgage Loans, as defined below\), excluding ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 638.25 Td (closing costs. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 620.25 Td (In connection with the disposition of the FSI 6000 Properties, we entered into a defeasance agreement with each of the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 608.25 Td (lenders under the FSI 6000A) Tj ET Q q 0 0 0 rg BT 164.49 608.25 Td ( Mortgage Loan, FSI 6000B Mortgage Loan, FSI 6000C Mortgage Loan and FSI 6000D Mortgage ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 596.25 Td (Loan \(collectively) Tj ET Q q 0 0 0 rg BT 121.87 596.25 Td (, the “FSI 6000 Mortgage Loans”\) to defease the entire aggregate outstanding principal balance of $102.3 ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 584.25 Td (million under the FSI 6000 Mortgage Loans, releasing the FSI 6000 Properties, which had secured the FSI 6000 Mortgage ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 572.25 Td (Loans. ) Tj ET Q q 0 0 0 rg BT 81.26 572.25 Td (The defeasance costs and write-of) Tj ET Q q 0 0 0 rg BT 217.12 572.25 Td (f of an unamortized discount resulted in an aggregate loss on extinguishment of debt ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 560.25 Td (of approximately $6.6 million.) Tj ET Q BT /F4 10.00 Tf ET q 0 0 0 rg BT 49.50 542.25 Td (Defeasance of the Bank of ) Tj ET Q q 0 0 0 rg BT 161.06 542.25 Td (America - BBD2 Mortgage Loan) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 524.25 Td (On ) Tj ET Q q 0 0 0 rg BT 86.17 524.25 Td (April 15, 2016, we, through an indirect wholly owned subsidiary) Tj ET Q q 0 0 0 rg BT 344.92 524.25 Td (, entered into a defeasance with the lender under the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 512.25 Td (Bank of ) Tj ET Q q 0 0 0 rg BT 83.39 512.25 Td (America - BBD2 Mortgage Loan to defease the remaining outstanding principal balance of $65.1 million, releasing all ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 500.25 Td (the properties which had secured the Bank of ) Tj ET Q q 0 0 0 rg BT 232.22 500.25 Td (America - BBD2 Mortgage Loan. ) Tj ET Q q 0 0 0 rg BT 372.28 500.25 Td (The Bank of ) Tj ET Q q 0 0 0 rg BT 424.21 500.25 Td (America - BBD2 Mortgage Loan ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 488.25 Td (bore interest at a rate of 5.96% and was due to mature on September 8, 2019. ) Tj ET Q q 0 0 0 rg BT 362.56 488.25 Td (The defeasance costs and write-of) Tj ET Q q 0 0 0 rg BT 498.42 488.25 Td (f of an ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 476.25 Td (unamortized discount and unamortized deferred financing costs resulted in a loss on extinguishment of debt of approximately ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 464.25 Td ($12.7 million. ) Tj ET Q endstream endobj 91 0 obj <>] /Rotate 0 /Contents 92 0 R>> endobj 92 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 3. Quantitative and Qualitative Disclosur) Tj ET Q q 0 0 0 rg BT 250.09 730.60 Td (es about Market Risk) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.00 33.60 Td (44) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 72.00 704.10 Td (W) Tj ET Q q 0 0 0 rg BT 80.64 704.10 Td (e are exposed to the ef) Tj ET Q q 0 0 0 rg BT 170.13 704.10 Td (fects of interest rate changes as a result of borrowings used to \(i\) maintain liquidity) Tj ET Q q 0 0 0 rg BT 501.61 704.10 Td (, \(ii\) fund the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 692.10 Td (financing and refinancing of our real estate investment portfolio, and \(iii\) fund operations and payments on the debt assumed in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 680.10 Td (connection with the Settlement ) Tj ET Q q 0 0 0 rg BT 175.58 680.10 Td (Agreement. ) Tj ET Q q 0 0 0 rg BT 227.33 680.10 Td (W) Tj ET Q q 0 0 0 rg BT 235.96 680.10 Td (e are also exposed to the ef) Tj ET Q q 0 0 0 rg BT 344.07 680.10 Td (fects of changes in interest rates as a result of our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 668.10 Td (investments in mortgage, mezzanine and other real estate loans receivable. Our profitability and the value of our investment ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 656.10 Td (portfolio may be adversely af) Tj ET Q q 0 0 0 rg BT 167.05 656.10 Td (fected during any period as a result of interest rate changes. Our interest rate risk management ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 644.10 Td (objectives are to limit the impact of interest rate changes on earnings, prepayment penalties and cash flows and to lower overall ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 632.10 Td (borrowing costs. ) Tj ET Q q 0 0 0 rg BT 120.98 632.10 Td (W) Tj ET Q q 0 0 0 rg BT 129.62 632.10 Td (e have managed and will continue to manage interest rate risk by maintaining a ratio of fixed rate, long-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 620.10 Td (term debt such that variable rate exposure is kept at an acceptable level. In addition, we may utilize a variety of financial ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 608.10 Td (instruments, including interest rate caps, floors, and swap agreements, in order to limit the ef) Tj ET Q q 0 0 0 rg BT 420.33 608.10 Td (fects of changes in interest rates on ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 596.10 Td (our operations. ) Tj ET Q q 0 0 0 rg BT 114.30 596.10 Td (When we use these types of derivatives to hedge the risk of interest-earning assets or interest-bearing liabilities, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 584.10 Td (we may be subject to certain risks, including the risk that losses on a hedge position will reduce the overall returns to our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 572.10 Td (stockholders and that the losses may exceed the amount we invested in the instruments.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 554.10 Td (W) Tj ET Q q 0 0 0 rg BT 82.14 554.10 Td (e have borrowed funds and made investments at a combination of fixed and variable rates. Interest rate fluctuations ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 542.10 Td (will generally not af) Tj ET Q q 0 0 0 rg BT 130.13 542.10 Td (fect our future earnings or cash flows on our fixed rate debt or fixed rate real estate loans receivable unless ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 530.10 Td (such instruments mature or are otherwise terminated. However) Tj ET Q q 0 0 0 rg BT 303.18 530.10 Td (, interest rate changes will af) Tj ET Q q 0 0 0 rg BT 417.95 530.10 Td (fect the fair value of our fixed rate ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 518.10 Td (instruments. ) Tj ET Q q 0 0 0 rg BT 103.11 518.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 127.56 518.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 191.16 518.10 Td (, the fair value and book value of our fixed rate real estate loans receivable were ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 506.10 Td ($25.7 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.39 506.10 Td ( and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 122.83 506.10 Td ($27.5 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 176.72 506.10 Td (, respectively) Tj ET Q q 0 0 0 rg BT 229.38 506.10 Td (. ) Tj ET Q q 0 0 0 rg BT 236.70 506.10 Td (The fair value estimate of our real estate loans receivable is calculated using an ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 494.10 Td (internal valuation model that considers the expected cash flows for the loans, underlying collateral values \(for collateral-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 482.10 Td (dependent loans\) and the estimated yield requirements of institutional investors for loans with similar characteristics, including ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 470.10 Td (remaining loan term, loan-to-value, type of collateral and other credit enhancements. ) Tj ET Q q 0 0 0 rg BT 392.98 470.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 417.42 470.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 481.02 470.10 Td (, the fair value of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 458.10 Td (our fixed rate debt was $286.5 million and the outstanding principal balance of our fixed rate debt was $266.0 million. ) Tj ET Q q 0 0 0 rg BT 528.09 458.10 Td (The fair ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 446.10 Td (value estimate of our fixed rate debt was calculated using a discounted cash flow analysis utilizing rates we would expect to pay ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 434.10 Td (for debt of a similar type and remaining maturity if the loans were originated as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 381.06 434.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 444.66 434.10 Td (. ) Tj ET Q q 0 0 0 rg BT 451.98 434.10 Td (W) Tj ET Q q 0 0 0 rg BT 461.02 434.10 Td (ith respect to our fixed ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 422.10 Td (rate instruments, we do not expect that fluctuations in interest rates, and the resulting changes in fair value of our fixed rate ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 410.10 Td (instruments, would have a significant impact on our ongoing operations.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 392.10 Td (Conversely) Tj ET Q q 0 0 0 rg BT 118.40 392.10 Td (, movements in interest rates on variable rate debt would change our future earnings and cash flows, but would ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 380.10 Td (not significantly af) Tj ET Q q 0 0 0 rg BT 124.86 380.10 Td (fect the fair value of those instruments. However) Tj ET Q q 0 0 0 rg BT 322.44 380.10 Td (, changes in required risk premiums would result in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 368.10 Td (changes in the fair value of variable rate instruments. ) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL q 0 0 1 rg BT 264.42 368.10 Td ( ) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL q 0 0 0 rg BT 266.37 368.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 290.81 368.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 354.41 368.10 Td (, we were exposed to market risks related to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 356.10 Td (fluctuations in interest rates on our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 191.13 356.10 Td ($164.1 million) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 250.02 356.10 Td ( of variable rate debt outstanding. Based on interest rates as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 503.83 356.10 Td (March 31, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 344.10 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.50 344.10 Td (, if interest rates are 100 basis points higher during the 12 months ending March 31, 2017, interest expense on our variable ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 332.10 Td (rate debt outstanding would increase by approximately $1.6 million. ) Tj ET Q q 0 0 0 rg BT 327.22 332.10 Td (As of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 351.66 332.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 415.26 332.10 Td (, one-month LIBOR was 0.43725% ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 320.10 Td (and if this index was reduced to 0% during the 12 months ending March 31, 2017, interest expense on our variable rate debt ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 308.10 Td (would decrease by $0.7 million. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 290.10 Td (The weighted-average annual ef) Tj ET Q q 0 0 0 rg BT 201.86 290.10 Td (fective interest rate of our fixed rate real estate loans receivable as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 479.77 290.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 543.37 290.10 Td ( was ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 278.10 Td (1) Tj ET Q q 0 0 0 rg BT 54.13 278.10 Td (1.4%. ) Tj ET Q q 0 0 0 rg BT 82.28 278.10 Td (The weighted-average annual ef) Tj ET Q q 0 0 0 rg BT 210.64 278.10 Td (fective interest rate represents the ef) Tj ET Q q 0 0 0 rg BT 355.10 278.10 Td (fective interest rate as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 455.88 278.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 519.48 278.10 Td (, using the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 266.10 Td (interest method, which we use to recognize interest income on our real estate loans receivable without asset-specific loan loss ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 254.10 Td (reserves. ) Tj ET Q q 0 0 0 rg BT 89.58 254.10 Td (The weighted-average interest rates of our fixed rate debt and interest rate of our variable rate debt as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 508.00 254.10 Td (March 31, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 242.10 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 69.50 242.10 Td ( were 6.0% and 2.2%, respectively) Tj ET Q q 0 0 0 rg BT 207.69 242.10 Td (. ) Tj ET Q q 0 0 0 rg BT 215.01 242.10 Td (The weighted-average interest rate represents the actual interest rate in ef) Tj ET Q q 0 0 0 rg BT 507.45 242.10 Td (fect as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 230.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 113.10 230.10 Td (, using interest rate indices as of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 244.17 230.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 307.77 230.10 Td (, where applicable.) Tj ET Q endstream endobj 93 0 obj <>] /Rotate 0 /Contents 94 0 R>> endobj 94 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( I. FINANCIAL) Tj ET Q q 0 0 0 rg BT 143.46 748.60 Td ( INFORMA) Tj ET Q q 0 0 0 rg BT 194.10 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 4. Contr) Tj ET Q q 0 0 0 rg BT 110.36 730.60 Td (ols and Pr) Tj ET Q q 0 0 0 rg BT 153.52 730.60 Td (ocedur) Tj ET Q q 0 0 0 rg BT 182.78 730.60 Td (es) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.00 33.60 Td (45) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 704.25 Td (Disclosur) Tj ET Q q 0 0 0 rg BT 89.32 704.25 Td (e Contr) Tj ET Q q 0 0 0 rg BT 121.63 704.25 Td (ols and Pr) Tj ET Q q 0 0 0 rg BT 164.79 704.25 Td (ocedur) Tj ET Q q 0 0 0 rg BT 194.05 704.25 Td (es) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 686.25 Td (As of the end of the period covered by this report, management, including our principal executive of) Tj ET Q q 0 0 0 rg BT 474.86 686.25 Td (ficer and principal ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 674.25 Td (financial of) Tj ET Q q 0 0 0 rg BT 95.13 674.25 Td (ficer) Tj ET Q q 0 0 0 rg BT 113.04 674.25 Td (, evaluated the ef) Tj ET Q q 0 0 0 rg BT 181.16 674.25 Td (fectiveness of the design and operation of our disclosure controls and procedures. Based upon, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 662.25 Td (and as of the date of, the evaluation, our principal executive of) Tj ET Q q 0 0 0 rg BT 299.50 662.25 Td (ficer and principal financial of) Tj ET Q q 0 0 0 rg BT 420.93 662.25 Td (ficer concluded that the disclosure ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 650.25 Td (controls and procedures were ef) Tj ET Q q 0 0 0 rg BT 177.04 650.25 Td (fective as of the end of the period covered by this report to ensure that information required to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 638.25 Td (be disclosed in the reports we file and submit under the Exchange ) Tj ET Q q 0 0 0 rg BT 314.43 638.25 Td (Act is recorded, processed, summarized and reported as and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 626.25 Td (when required. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 614.25 Td (information required to be disclosed by us in the reports we file and submit under the Exchange ) Tj ET Q q 0 0 0 rg BT 434.12 614.25 Td (Act is accumulated and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 602.25 Td (communicated to our management, including our principal executive of) Tj ET Q q 0 0 0 rg BT 336.17 602.25 Td (ficer and our principal financial of) Tj ET Q q 0 0 0 rg BT 473.43 602.25 Td (ficer) Tj ET Q q 0 0 0 rg BT 491.34 602.25 Td (, as appropriate ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 590.25 Td (to allow timely decisions regarding required disclosure. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 572.25 Td (Internal Contr) Tj ET Q q 0 0 0 rg BT 112.37 572.25 Td (ol Over) Tj ET Q q 0 0 0 rg BT 144.12 572.25 Td ( Financial Reporting) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 554.25 Td (There have been no changes in our internal control over financial reporting that occurred during the quarter ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 542.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 113.10 542.25 Td ( that have materially af) Tj ET Q q 0 0 0 rg BT 205.10 542.25 Td (fected, or are reasonably likely to materially af) Tj ET Q q 0 0 0 rg BT 392.05 542.25 Td (fect, our internal control over financial ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 530.25 Td (reporting. ) Tj ET Q endstream endobj 95 0 obj <>] /Rotate 0 /Contents 96 0 R>> endobj 96 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( II. OTHER INFORMA) Tj ET Q q 0 0 0 rg BT 177.99 748.60 Td (TION) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.00 33.60 Td (46) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 719.25 Td (Item 1. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 85.50 719.25 Td (Legal Pr) Tj ET Q q 0 0 0 rg BT 122.25 719.25 Td (oceedings) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 701.25 Td (None.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 677.25 Td (Item 1A. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 94.50 677.25 Td (Risk Factors) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 659.25 Td (See the risks in Part I, Item 1A) Tj ET Q q 0 0 0 rg BT 196.26 659.25 Td ( of our ) Tj ET Q q 0 0 0 rg BT 224.87 659.25 Td (Annual Report on Form 10-K for the year ended December 31, 2015 filed with the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 49.50 647.25 Td (SEC on March 16, 2016.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 629.25 Td (Item 2. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 85.50 629.25 Td (Unr) Tj ET Q q 0 0 0 rg BT 102.54 629.25 Td (egister) Tj ET Q q 0 0 0 rg BT 130.68 629.25 Td (ed Sales of Equity Securities and Use of Pr) Tj ET Q q 0 0 0 rg BT 311.60 629.25 Td (oceeds) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 85.50 611.25 Td (a\) ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 611.25 Td (During the period covered by this Form 10-Q, we did not sell any equity securities that were not registered under ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 599.25 Td (the Securities ) Tj ET Q q 0 0 0 rg BT 159.60 599.25 Td (Act of 1933.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 85.50 581.25 Td (b\) ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 581.25 Td (Not applicable.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 85.50 563.25 Td (c\) ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 563.25 Td (W) Tj ET Q q 0 0 0 rg BT 112.14 563.25 Td (e have a share redemption program pursuant to which stockholders may only sell their shares to us in ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 551.25 Td (connection with a stockholder) Tj ET Q q 0 0 0 rg BT 224.12 551.25 Td (’) Tj ET Q q 0 0 0 rg BT 226.89 551.25 Td (s death, “qualifying disability” or “determination of incompetence” \(each as ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 539.25 Td (defined in the share redemption program and, together with redemptions sought in connection with a ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 527.25 Td (stockholder) Tj ET Q q 0 0 0 rg BT 150.53 527.25 Td (’) Tj ET Q q 0 0 0 rg BT 153.30 527.25 Td (s death, “special redemptions”\). Such redemptions are subject to an annual dollar limitation and are ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 515.25 Td (further subject to the other limitations described in our share redemption program, including:) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 497.25 Td (• ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 121.50 497.25 Td (During each calendar year) Tj ET Q q 0 0 0 rg BT 226.31 497.25 Td (, special redemptions are limited to an annual dollar amount determined by our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 121.50 485.25 Td (board of directors. ) Tj ET Q q 0 0 0 rg BT 199.90 485.25 Td (The annual dollar limitation for our share redemption program may be reviewed and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 121.50 473.25 Td (adjusted from time to time during the year) Tj ET Q q 0 0 0 rg BT 290.07 473.25 Td (. On December 8, 2015, our board of directors approved an annual ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 121.50 461.25 Td (dollar limitation of $10.0 million in the aggregate for the calendar year 2016 \(subject to review and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 121.50 449.25 Td (adjustment during the year by our board of directors\), and further subject to the limitations described in our ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 121.50 437.25 Td (share redemption program.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 422.25 Td (• ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 121.50 422.25 Td (During any calendar year) Tj ET Q q 0 0 0 rg BT 222.44 422.25 Td (, we may redeem no more than 5% of the weighted-average number of shares ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 121.50 410.25 Td (outstanding during the prior calendar year) Tj ET Q q 0 0 0 rg BT 288.95 410.25 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 395.25 Td (• ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 121.50 395.25 Td (W) Tj ET Q q 0 0 0 rg BT 130.14 395.25 Td (e have no obligation to redeem shares if the redemption would violate the restrictions on distributions under ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 121.50 383.25 Td (Maryland law) Tj ET Q q 0 0 0 rg BT 176.67 383.25 Td (, which prohibits distributions that would cause a corporation to fail to meet statutory tests of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 121.50 371.25 Td (solvency) Tj ET Q q 0 0 0 rg BT 156.40 371.25 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 350.25 Td (W) Tj ET Q q 0 0 0 rg BT 112.14 350.25 Td (e do not currently expect to have funds available for ordinary redemptions in the future.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 332.25 Td (If we cannot repurchase all shares presented for redemption in any month because of the limitations on ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 320.25 Td (redemptions set forth in our share redemption program, then we will honor redemption requests on a pro rata ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 308.25 Td (basis, except that if a pro rata redemption would result in a stockholder owning less than the minimum purchase ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 296.25 Td (requirement described in our most recently ef) Tj ET Q q 0 0 0 rg BT 285.47 296.25 Td (fective registration statement, as such registration statement has been ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 284.25 Td (amended or supplemented, then we would redeem all of such stockholder) Tj ET Q q 0 0 0 rg BT 397.95 284.25 Td (’) Tj ET Q q 0 0 0 rg BT 400.73 284.25 Td (s shares. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 266.25 Td (The complete share redemption program document is filed as an exhibit to our ) Tj ET Q q 0 0 0 rg BT 419.24 266.25 Td (Annual Report on Form 10-K for ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 254.25 Td (the year ended December 31, 2012 and is available at the SEC’) Tj ET Q q 0 0 0 rg BT 355.63 254.25 Td (s website at ) Tj ET Q BT /F3 10.00 Tf ET q 0 0 0 rg BT 404.79 254.25 Td (http:) Tj ET Q BT /F3 10.00 Tf ET 0 0 0 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 423.67578125 252.9169921875 m 480.70703125 252.9169921875 l s q 0 0 0 rg BT 423.68 254.25 Td (//www) Tj ET Q q 0 0 0 rg BT 448.50 254.25 Td (.sec.gov) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 480.71 254.25 Td (.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 236.25 Td (The only redemptions we made under our share redemption program during the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 424.52 236.25 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 444.50 236.25 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 505.33 236.25 Td (March 31, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 224.25 Td (2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 123.50 224.25 Td ( were those that qualified as, and met the requirements for) Tj ET Q q 0 0 0 rg BT 355.52 224.25 Td (, special redemptions under our share redemption ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 212.25 Td (program. For the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 175.99 212.25 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 195.97 212.25 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 256.80 212.25 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 320.39 212.25 Td (, we fulfilled all redemption requests that qualified as ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 200.25 Td (special redemptions under our share redemption program with a combination of cash flow from operations and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 188.25 Td (proceeds from the sale of properties.) Tj ET Q endstream endobj 97 0 obj <>] /Rotate 0 /Contents 98 0 R>> endobj 98 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( II. OTHER INFORMA) Tj ET Q q 0 0 0 rg BT 177.99 748.60 Td (TION \(CONTINUED\)) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 2. ) Tj ET Q q 0 0 0 rg BT 86.00 730.60 Td (Unr) Tj ET Q q 0 0 0 rg BT 103.04 730.60 Td (egister) Tj ET Q q 0 0 0 rg BT 131.18 730.60 Td (ed Sales of Equity Securities and Use of Pr) Tj ET Q q 0 0 0 rg BT 312.10 730.60 Td (oceeds \(continued\)) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.00 33.60 Td (47) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 704.10 Td (W) Tj ET Q q 0 0 0 rg BT 112.14 704.10 Td (e may amend, suspend or terminate the program upon 30 days’) Tj ET Q q 0 0 0 rg BT 363.27 704.10 Td ( notice to our stockholders. ) Tj ET Q q 0 0 0 rg BT 476.68 704.10 Td (W) Tj ET Q q 0 0 0 rg BT 485.32 704.10 Td (e may provide this ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 692.10 Td (notice by including such information in a Current Report on Form 8-K or in our annual or quarterly reports, all ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 680.10 Td (publicly filed with the SEC, or by a separate mailing to our stockholders.) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 662.10 Td (On December 8, 2015, our board of directors approved an estimated value per share of our common stock of ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 650.10 Td ($3.94 per share \(unaudited\), based on the estimated value of our assets less the estimated value of our liabilities, ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 638.10 Td (divided by the number of shares outstanding, all as of September 30, 2015, with the exception of an adjustment to ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 626.10 Td (our net asset value to give ef) Tj ET Q q 0 0 0 rg BT 217.72 626.10 Td (fect to the December 7, 2015 payment of a special distribution of $0.25 per share on ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 614.10 Td (the outstanding shares of our common stock to the stockholders of record as of the close of business on ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 602.10 Td (December 1, 2015. ) Tj ET Q q 0 0 0 rg BT 184.40 602.10 Td (The change in redemption price became ef) Tj ET Q q 0 0 0 rg BT 354.69 602.10 Td (fective for the December 2015 redemption date and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 590.10 Td (will be ef) Tj ET Q q 0 0 0 rg BT 141.08 590.10 Td (fective until the estimated value per share is updated. For a full description of the methodologies and ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 578.10 Td (assumptions used to value our assets and liabilities in connection with the calculation of the estimated value per ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 566.10 Td (share, see Part II, Item 5, “Market for Registrant’) Tj ET Q q 0 0 0 rg BT 299.82 566.10 Td (s Common Equity) Tj ET Q q 0 0 0 rg BT 371.95 566.10 Td (, Related Stockholder Matters and Issuer ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 554.10 Td (Purchases of Equity Securities - Market Information” of our ) Tj ET Q q 0 0 0 rg BT 345.94 554.10 Td (Annual Report on Form 10-K for the year ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 542.10 Td (December 31, 2015, filed with the SEC on March 16, 2016. ) Tj ET Q q 0 0 0 rg BT 347.16 542.10 Td (W) Tj ET Q q 0 0 0 rg BT 355.80 542.10 Td (e currently expect to utilize our advisor and/or an ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 530.10 Td (independent valuation firm to update the estimated value per share no later than December 2016. ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 512.10 Td (During the ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 149.05 512.10 Td (three) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 169.03 512.10 Td ( months ended ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 229.86 512.10 Td (March 31, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 293.46 512.10 Td (, we redeemed shares pursuant to our share redemption program as ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 500.10 Td (follows:) Tj ET Q 0.8 0.9333333333333333 1 rg /GS0 gs 104.00 454.60 104.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 208.00 454.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 212.00 454.60 90.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 302.00 454.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 306.00 454.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 391.00 454.60 15.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 406.00 454.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 410.00 454.60 153.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 104.00 426.60 104.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 208.00 426.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 212.00 426.60 90.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 302.00 426.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 306.00 426.60 85.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 391.00 426.60 15.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 406.00 426.60 4.00 -14.00 re f /GS0 gs 0.8 0.9333333333333333 1 rg /GS0 gs 410.00 426.60 153.00 -14.00 re f /GS0 gs 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 104 454.6 m 208 454.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 212 454.6 m 302 454.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 306 454.6 m 391 454.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 391 454.6 m 406 454.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 410 454.6 m 563 454.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 104 454.6 m 208 454.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 212 454.6 m 302 454.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 306 454.6 m 391 454.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 410 454.6 m 563 454.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 212 412.6 m 302 412.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 212 399.6 m 302 399.6 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 212 397.6 m 302 397.6 l s BT /F2 8.00 Tf ET q 0 0 0 rg BT 106.50 458.83 Td (Month) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 232.60 466.83 Td (T) Tj ET Q q 0 0 0 rg BT 237.20 466.83 Td (otal Number) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 217.85 458.83 Td (of Shar) Tj ET Q q 0 0 0 rg BT 242.82 458.83 Td (es Redeemed ) Tj ET Q BT /F2 8.00 Tf ET BT /F2 5.20 Tf ET q 0 0 0 rg BT 289.03 462.46 Td (\(1\)) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 331.70 466.83 Td (A) Tj ET Q q 0 0 0 rg BT 336.88 466.83 Td (verage Price ) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 329.85 458.83 Td (Paid Per) Tj ET Q q 0 0 0 rg BT 359.25 458.83 Td ( Shar) Tj ET Q q 0 0 0 rg BT 377.56 458.83 Td (e) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 424.20 474.83 Td (Appr) Tj ET Q q 0 0 0 rg BT 442.28 474.83 Td (oximate Dollar) Tj ET Q q 0 0 0 rg BT 493.01 474.83 Td ( ) Tj ET Q q 0 0 0 rg BT 494.87 474.83 Td (V) Tj ET Q q 0 0 0 rg BT 499.91 474.83 Td (alue of Shar) Tj ET Q q 0 0 0 rg BT 541.10 474.83 Td (es) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 440.25 466.83 Td (A) Tj ET Q q 0 0 0 rg BT 445.43 466.83 Td (vailable ) Tj ET Q q 0 0 0 rg BT 473.96 466.83 Td (That May ) Tj ET Q q 0 0 0 rg BT 509.66 466.83 Td (Y) Tj ET Q q 0 0 0 rg BT 514.55 466.83 Td (et Be) Tj ET Q BT /F2 8.00 Tf ET q 0 0 0 rg BT 433.80 458.83 Td (Redeemed Under) Tj ET Q q 0 0 0 rg BT 492.98 458.83 Td ( the Pr) Tj ET Q q 0 0 0 rg BT 515.93 458.83 Td (ogram) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 106.50 444.85 Td (January 2016) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 272.80 444.85 Td (110,866) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 308.50 444.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 373.80 444.85 Td (3.94) Tj ET Q BT /F1 5.20 Tf ET q 0 0 0 rg BT 393.50 448.96 Td (\(2\)) Tj ET Q BT /F1 5.20 Tf ET q 0 0 0 rg BT 482.95 448.96 Td (\(3\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 106.50 430.85 Td (February 2016) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 272.80 430.85 Td (111,902) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 308.50 430.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 373.80 430.85 Td (3.94) Tj ET Q BT /F1 5.20 Tf ET q 0 0 0 rg BT 393.50 434.96 Td (\(2\)) Tj ET Q BT /F1 5.20 Tf ET q 0 0 0 rg BT 482.95 434.96 Td (\(3\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 106.50 416.85 Td (March 2016) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 276.80 416.85 Td (93,851) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 308.50 416.85 Td ($) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 373.80 416.85 Td (3.94) Tj ET Q BT /F1 5.20 Tf ET q 0 0 0 rg BT 393.50 420.96 Td (\(2\)) Tj ET Q BT /F1 5.20 Tf ET q 0 0 0 rg BT 482.95 420.96 Td (\(3\)) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 124.50 402.85 Td (Total) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 272.80 402.85 Td (316,619) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 103.50 387.10 Td (_____________________) Tj ET Q BT /F1 7.50 Tf ET BT /F1 4.87 Tf ET q 0 0 0 rg BT 103.50 378.50 Td (\(1\)) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 109.18 375.10 Td ( ) Tj ET Q q 0 0 0 rg BT 110.92 375.10 Td (W) Tj ET Q q 0 0 0 rg BT 117.40 375.10 Td (e announced commencement of our share redemption program on ) Tj ET Q q 0 0 0 rg BT 316.30 375.10 Td (April 6, 2006 and amendments to the program on ) Tj ET Q q 0 0 0 rg BT 465.86 375.10 Td (August 16, 2006 \(which ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 103.50 366.10 Td (amendment became ef) Tj ET Q q 0 0 0 rg BT 170.83 366.10 Td (fective on December 14, 2006\), ) Tj ET Q q 0 0 0 rg BT 267.26 366.10 Td (August 1, 2007 \(which amendment became ef) Tj ET Q q 0 0 0 rg BT 405.21 366.10 Td (fective on September 13, 2007\), ) Tj ET Q q 0 0 0 rg BT 502.90 366.10 Td (August 14, 2008 ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 103.50 357.10 Td (\(which amendment became ef) Tj ET Q q 0 0 0 rg BT 193.53 357.10 Td (fective on September 13, 2008\), March 26, 2009 \(which amendment became ef) Tj ET Q q 0 0 0 rg BT 431.24 357.10 Td (fective on ) Tj ET Q q 0 0 0 rg BT 462.48 357.10 Td (April 26, 2009\), May 13, 2009 ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 103.50 348.10 Td (\(which amendment became ef) Tj ET Q q 0 0 0 rg BT 193.53 348.10 Td (fective on June 12, 2009\), March 26, 2012 \(which amendment became ef) Tj ET Q q 0 0 0 rg BT 412.91 348.10 Td (fective on ) Tj ET Q q 0 0 0 rg BT 444.15 348.10 Td (April 25, 2012\) and March 13, 2013 ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 103.50 339.10 Td (\(which amendment became ef) Tj ET Q q 0 0 0 rg BT 193.53 339.10 Td (fective on ) Tj ET Q q 0 0 0 rg BT 224.77 339.10 Td (April 12, 2013\).) Tj ET Q BT /F1 7.50 Tf ET BT /F1 4.87 Tf ET q 0 0 0 rg BT 103.50 330.50 Td (\(2\)) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 109.18 327.10 Td ( In accordance with our share redemption program, the redemption price for all stockholders is equal to the most recent estimated value per share of ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 103.50 318.10 Td (our common stock as of the redemption date \(described above\). ) Tj ET Q BT /F1 7.50 Tf ET BT /F1 4.87 Tf ET q 0 0 0 rg BT 103.50 309.50 Td (\(3\)) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 109.18 306.10 Td ( ) Tj ET Q q 0 0 0 rg BT 110.92 306.10 Td (W) Tj ET Q q 0 0 0 rg BT 117.40 306.10 Td (e limit the dollar value of shares that may be redeemed under our share redemption program as described above. During the ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 492.07 306.10 Td (three) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 507.06 306.10 Td ( months ended ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 103.50 297.10 Td (March 31, 2016) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 151.20 297.10 Td (, we redeemed ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 196.59 297.10 Td ($1.2 million) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 233.26 297.10 Td ( of shares of common stock. ) Tj ET Q q 0 0 0 rg BT 321.45 297.10 Td (The only redemptions we made under our share redemption program during the ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 103.50 288.10 Td (three) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 118.49 288.10 Td ( months ended ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 164.11 288.10 Td (March 31, 2016) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 211.81 288.10 Td ( were those that qualified as, and met the requirements for) Tj ET Q q 0 0 0 rg BT 385.83 288.10 Td (, special redemptions under our share redemption ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 103.50 279.10 Td (program. On December 8, 2015, our board of directors approved an annual dollar limitation for redemptions of $10.0 million in the aggregate for ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 103.50 270.10 Td (calendar year 2016. Based on this redemption limitation and those described above and redemptions through ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 433.21 270.10 Td (March 31, 2016) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 480.91 270.10 Td (, we may redeem up to ) Tj ET Q BT /F1 7.50 Tf ET q 0 0 0 rg BT 103.50 261.10 Td ($8.8 million of shares that meet the requirements for special redemptions for the remainder of 2016.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 237.10 Td (Item 3. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 85.50 237.10 Td (Defaults upon Senior) Tj ET Q q 0 0 0 rg BT 175.33 237.10 Td ( Securities) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 219.10 Td (None.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 195.10 Td (Item 4. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 85.50 195.10 Td (Mine Safety Disclosur) Tj ET Q q 0 0 0 rg BT 179.20 195.10 Td (es) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 177.10 Td (None.) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 49.50 153.10 Td (Item 5. ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 85.50 153.10 Td (Other) Tj ET Q q 0 0 0 rg BT 110.87 153.10 Td ( Information) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 73.50 135.10 Td (None.) Tj ET Q endstream endobj 99 0 obj <>] /Rotate 0 /Contents 100 0 R>> endobj 100 0 obj <> stream BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL 0 0 1 RG /GS0 gs 0.49 w 0 i [] 0 d 1 J 1 j 3 M 50 771.2669921875 m 120.9521484375 771.2669921875 l s q 0 0 1 rg BT 50.00 772.60 Td (T) Tj ET Q q 0 0 1 rg BT 55.41 772.60 Td (able of Contents) Tj ET Q BT /F1 10.00 Tf ET 0 Tr /GS0 gs 0 Tw 0 Tc 100 Tz 0 TL BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 748.60 Td (P) Tj ET Q q 0 0 0 rg BT 55.37 748.60 Td (AR) Tj ET Q q 0 0 0 rg BT 69.46 748.60 Td (T) Tj ET Q q 0 0 0 rg BT 75.95 748.60 Td ( II. OTHER INFORMA) Tj ET Q q 0 0 0 rg BT 177.99 748.60 Td (TION) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 50.00 730.60 Td (Item 6. Exhibits) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 301.00 33.60 Td (48) Tj ET Q 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 50 697.5 m 105 697.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 109 697.5 m 325 697.5 l s 0 0 0 RG /GS0 gs 1.00 w 0 i [] 0 d 0 J 0 j 3 M 325 697.5 m 561 697.5 l s BT /F2 10.00 Tf ET q 0 0 0 rg BT 52.50 701.23 Td (Ex.) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 107.50 701.75 Td ( ) Tj ET Q BT /F2 10.00 Tf ET q 0 0 0 rg BT 111.50 701.23 Td (Description) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 52.50 684.07 Td (3.1) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 107.50 685.45 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 111.50 684.07 Td (Articles of Amendment and Restatement of the Company, incorporated by reference to Exhibit 3.1 to the) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 111.50 674.07 Td (Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2006, filed May 4, 2006) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 52.50 655.07 Td (3.2) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 107.50 656.45 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 111.50 655.07 Td (Second Amended and Restated Bylaws of the Company, incorporated by reference to Exhibit 3.3 to the) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 111.50 645.07 Td (Company’s Annual Report on Form 10-K for the year ended December 31, 2015, filed March 16, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 52.50 626.07 Td (4.1) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 107.50 627.45 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 111.50 626.07 Td (Statement regarding restrictions on transferability of shares of common stock \(to appear on stock certificate or) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 111.50 616.07 Td (to be sent upon request and without charge to stockholders issued shares without certificates\), incorporated by) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 111.50 606.07 Td (reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-11, Commission File) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 111.50 596.07 Td (No. 333-126087, filed June 23, 2005) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 52.50 577.07 Td (10.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 111.50 577.07 Td (Advisory Agreement, by and between the Company and KBS Capital Advisors LLC, dated as of November 8,) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 111.50 567.07 Td (2015, incorporated by reference to Exhibit 10.2 to the Company’s Annual Report on Form 10-K for the year) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 111.50 557.07 Td (ended December 31, 2015, filed March 16, 2016) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 52.50 538.07 Td (31.1) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 107.50 539.45 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 111.50 538.07 Td (Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 52.50 519.07 Td (31.2) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 107.50 520.45 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 111.50 519.07 Td (Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 52.50 500.07 Td (32.1) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 107.50 501.45 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 111.50 500.07 Td (Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as created by Section 906 of the) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 111.50 490.07 Td (Sarbanes-Oxley Act of 2002) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 52.50 471.07 Td (32.2) Tj ET Q BT /F1 8.00 Tf ET q 0 0 0 rg BT 107.50 472.45 Td ( ) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 111.50 471.07 Td (Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as created by Section 906 of the Sarbanes-) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 111.50 461.07 Td (Oxley Act of 2002) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 52.50 442.07 Td (99.1) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 111.50 442.07 Td (Amended and Restated Share Redemption Program, dated March 6, 2013, incorporated by reference to Exhibit) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 111.50 432.07 Td (99.2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012) Tj ET Q BT /F1 10.00 Tf ET q 0 0 0 rg BT 52.50 413.07 Td (101.INS) Tj ET Q 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