ITEM 2.04 TRIGGERING EVENTS THAT ACCELERATE OR INCREASE A DIRECT FINANCIAL
OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT
On January 18, 2018, KBS Growth & Income REIT, Inc. (the "Company"), through an
indirect wholly owned subsidiary (the "Commonwealth Borrower") entered into a
loan agreement (the "Commonwealth Loan Agreement") secured by the Commonwealth
Building in Portland, Oregon with the Metropolitan Life Insurance Company (the
"Commonwealth Lender"), an unaffiliated lender, for borrowings of up to $51.4
million (the "Commonwealth Building Mortgage Loan").
On February 13, 2023, the Commonwealth Borrower defaulted on the Commonwealth
Building Mortgage Loan following its failure to pay the amount of the debt
outstanding and due to the lender on the February 1, 2023 maturity date. As
previously disclosed, given the reduced rent and occupancy by the building's
tenants, as well as the market conditions in Portland, Oregon, where the
property is located, the Commonwealth Building is currently valued at less than
the outstanding debt of $47.4 million. Given the depressed office rental rates
and the continued social unrest and increased crime in downtown Portland where
the property is located, the Company does not anticipate any near-term recovery
in value. The Company may relinquish ownership of the property to the lender in
a foreclosure transaction or other alternative to foreclosure in satisfaction of
the mortgage. The loan is non-recourse to the Company.
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