KBS Real Estate Investment Trust III (KBSR) DEFA14A Additional proxy soliciting materials

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

SCHEDULE 14A

(RULE14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Filed by the Registrant ☒

Filed by a Party other than the Registrant ☐

Check the appropriate box:

☐ Preliminary Proxy Statement

☐ Confidential, for Use of the Commission Only (as permitted by Rule14a-6(e)(2))

☐ Definitive Proxy Statement

☒ Definitive Additional Materials

☐ Soliciting Material Pursuant to§ 240.14a-12

KBS REAL ESTATE INVESTMENT TRUST III, INC.

(Name of Registrant as Specified in its charter)

Payment of Filing Fee (Check the appropriate box):

☒ No fee required.

☐ Fee computed on table below per Exchange Act Rules14a-6(i)(1) and0-11.

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☐          Check box if any part of the fee is offset as provided by Exchange ActRule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

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In connection with the mailing of the definitive proxy statement of KBS Real Estate Investment Trust III, Inc. (the “Company”) and the solicitation of proxies with respect to the proposals set forth in the definitive proxy statement, the Company distributed the following materials at the time of the mailing of the definitive proxy statement.

Please Vote!

YOUR VOTE IS CRITICAL. PLEASE SUBMIT YOUR PROXY VOTE PROMPTLY.

Reduce corporate expenses by submitting your vote online at www.proxyvote.com or by calling the toll free number on the voting form included in the enclosed materials.

Read Enclosed Materials for the Annual Stockholders Meeting

Enclosed for the Annual Meeting of Stockholders:

Annual Report

Proxy Statement describing proposals to be voted upon

Voting form for each account registration.*

* You may have more than one voting form included in your packet due to having multiple registrations. Please be sure to vote all proxies in your packet.

For information on key proposals outlined in the proxy statement, please go to proxy.kbs.com

Vote by Mail

Mark, sign and date your voting form and return it in the postage-paid return envelope.

or Vote by Telephone*

Please call the toll free number listed on your voting form. Have your control number listed on the voting form ready and follow the simple instructions.

or Vote by Internet*

Visit www.proxyvote.com and follow the online instructions to cast your vote. Your control number is located on the voting form.

* If you vote by telephone or online, you do not need to mail back the voting form.

For Assistance

If you have any questions or need assistance with completing your voting form, please call our proxy solicitor, Broadridge Financial Solutions, Inc., at (855)643-7458. Representatives are available Monday through Friday 9:00 a.m. to 9:00 p.m. (Eastern).

Thank you!

We appreciate your participation and support. Again, please be sure to vote!

www.kbs.com

EXPLANATION OF KEY PROXY PROPOSALS

At the annual meeting, we will seek your approval of, among other proposals, two proposals related to our pursuit of conversion to anon-listed perpetual-life “NAV REIT.”

We currently believe the best opportunity for us to achieve our objectives to provide attractive and stable cash distributions to our stockholders and provide additional liquidity for our stockholders is to pursue a strategy as anon-listed, perpetual-life “NAV REIT” that calculates the net asset value or “NAV” per share on a regular basis that is more frequent than annually (i.e. daily, monthly or quarterly), and seeks to provide increased liquidity to current and future stockholders through an expansion of our current share redemption program and/or periodic self-tender offers.

As more thoroughly described in the accompanying proxy statement, if we pursue conversion to an NAV REIT, we would implement a revised advisory fee structure, including a revised management fee and incentive fee structure that put a greater emphasis on our performance. We believe these changes would help further align the interests of our advisor (and its affiliates) and our stockholders in growing our company and performing well. In addition to the revised management fee and incentive fee structure, the new fee structure would eliminate the current transaction-based fees (i.e., the acquisition fee and disposition fee) payable to our advisor.

Proposal 3: Amending the Company’s Charter to remove Section 5.11

We believe we are more likely to succeed with a perpetual-life NAV REIT strategy if we revise our charter to remove Section 5.11, which requires that we seek stockholder approval of our liquidation if our shares of common stock are not listed on a national securities exchange by September 30, 2020, unless a majority of our independent directors determines that liquidation is not then in the best interest of our stockholders.

We believe that the continued inclusion of Section 5.11 in our charter may create confusion if we are pursuing a perpetual-life NAV REIT strategy and we are proposing that stockholders approve this amendment to our charter.

Proposal 4: Acceleration of Incentive Compensation

With respect to the incentive fee structure currently in effect with our advisor, the triggering events for payment of the incentive fee are generally expected to occur, if ever, upon a listing of our shares of stock on a national securities exchange or a significant distribution of cash in connection with a sale of all or a substantial amount of our assets.

These triggering events are inconsistent with a perpetual-life NAV REIT.

With respect to our historical performance period from inception through our conversion to a perpetual-life NAV REIT, we believe it is appropriate to accelerate the payment of the historical incentive fee in the form of restricted shares of our common stock so that it does not depend on the currently-existing triggering events.

The acceleration of the payment of the historical incentive compensation to our advisor will not affect the net asset value of our shares of common stock because our net asset value calculation has always included the potential liability related to the incentive fee.

Because the acceleration of this fee is not something we intended to do when we launched our initial public offering, we believe it is appropriate to ask the stockholders for their approval of this acceleration.

The historical incentive fee would be paid in restricted shares of our common stock and would be subject to certain restrictions as described further in the proxy statement.

The board of directors recommends a vote FOR the proposals presented on your proxy card. For more detailed information on these and other proposals on your voting card, please refer to the enclosed proxy statement, or call our proxy help line at (855)643-7458.

FORWARD-LOOKING STATEMENTS

The information herein and in the proxy statement include forward-looking statements within the meaning of the Federal Private Securities Litigation Reform Act of 1995. KBS REIT III intends that such forward-looking statements be subject to the safe harbors created by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include statements regarding the intent, belief or current expectations of KBS REIT III and members of its management team, as well as the assumptions on which such statements are based, and generally are identified by the use of words such as “may,” “will,” “seeks,” “anticipates,” “believes,” “estimates,” “expects,” “plans,” “intends,” “should” or similar expressions. Such statements include, in particular, statements about our plans, strategies, and prospects. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. Such statements are subject to known and unknown risks and uncertainties. Therefore, such statements are not intended to be a guarantee of our performance in future periods. KBS REIT III makes no representation or warranty (express or implied) about the accuracy of any such forward-looking statements. These statements are based on a number of assumptions involving the judgment of management.

See Part I, Item 1A in KBS REIT III’s Annual Report on Form10-K filed with the SEC on March 14, 2019 and Part II, Item 1A in KBS REIT III’s Quarterly Reports on Form10-Q filed with the SEC on August 9, 2019 and November 13, 2019 for a discussion of some of the risks and uncertainties, although not all risks and uncertainties, that could cause actual results to differ materially from those presented in our forward-looking statements. See “Proposed NAV REIT Conversion” in the proxy statement for risks related to our Proposed NAV REIT Conversion. You should consider these important cautionary factors as you read the proxy statement.

Our actual results, performance or achievements may differ materially from the anticipated results, performance or achievements that are expressed or implied by our forward-looking statements. Among the factors that could cause such a difference are: our ability to accurately anticipate results expressed in such forward-looking statements, including our ability to generate positive cash flows from operations, make distributions to stockholders, maintain the value of our real estate properties and provide liquidity to stockholders. Further, KBS REIT III can make no assurances with respect to the future value appreciation of its properties and ultimate return to stockholders. Stockholders may have to hold their shares for an indefinite period of time. KBS REIT III can provide no assurance that it will be able to provide additional liquidity to stockholders. KBS REIT III’s conflicts committee, which is composed of all of its independent directors, has approved the pursuit of KBS REIT III’s conversion to a perpetual-life NAV REIT. However, even if Proposal 3 and Proposal 4 are approved by KBS REIT III’s stockholders, implementation of these proposals and KBS REIT III’s conversion to an NAV REIT remain subject to further approval of the conflicts committee and board of directors, and regulatory, market or business considerations may influence KBS REIT III to delay the implementation of the NAV REIT conversion or abandon KBS REIT III’s conversion to an NAV REIT. Even if KBS REIT III converts to an NAV REIT, there is no assurance that KBS REIT III will successfully implement its strategy.

The cautionary statements contained or referred to in the proxy statement should be considered in connection with any subsequent written or oral forward-looking statements that may be issued by us or persons acting on our behalf. KBS REIT III undertakes no obligation to update or revise forward-looking statements in the proxy statement to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, unless required by law.