8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________

FORM 8-K

__________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 8, 2015

KBS REAL ESTATE INVESTMENT TRUST, INC.

(Exact Name of Registrant as Specified in Its Charter)

______________________________________________________

Maryland	000-52606	20-2985918
(State or Other Jurisdiction of Incorporation or Organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

800 Newport Center Drive, Suite 700

Newport Beach, California 92660

(Address of principal executive offices)

Registrant’s telephone number, including area code: (949) 417-6500

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 7.01 REGULATION FD DISCLOSURE

Information for KBS Real Estate Investment Trust, Inc.’s (the “Company”) stockholders regarding its estimated value per share and other portfolio information is attached as Exhibit 99.1 to this Current Report on Form 8-K.

The information in this Item 7.01 of Form 8-K and the attached Exhibit 99.1 are furnished to the Securities and Exchange Commission (“SEC”), and shall not be deemed to be “filed” with the SEC for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing.

ITEM 8.01 OTHER EVENTS

Estimated Value Per Share

On December 8, 2015, the Company’s board of directors approved an estimated value per share of the Company’s common stock of $3.94, based on the estimated value of the Company’s assets less the estimated value of the Company’s liabilities, or net asset value, divided by the number of shares outstanding, all as of September 30, 2015, with the exception of an adjustment to the Company’s net asset value to give effect to the December 7, 2015 payment of a special distribution of $0.25 per share on the outstanding shares of common stock of the Company to the stockholders of record as of the close of business on December 1, 2015 (the “Special Distribution”). Other than the declaration and payment of the Special Distribution, there have been no material changes between September 30, 2015 and the date of this filing that would impact the overall estimated value per share. Excluding the impact of the Special Distribution, the Company’s estimated value per share of common stock would be $4.19. The Company is providing this estimated value per share to assist broker-dealers that participated in the Company’s initial public offering in meeting their customer account statement reporting obligations under National Association of Securities Dealers Conduct Rule 2340 as required by the Financial Industry Regulatory Authority (“FINRA”). This valuation was performed in accordance with the provisions of and also to comply with Practice Guideline 2013–01, Valuations of Publicly Registered, Non-Listed REITs, issued by the Investment Program Association (“IPA”) in April 2013 (the “IPA Valuation Guidelines”).

The Company’s conflicts committee, composed solely of all of the Company’s independent directors, is responsible for the oversight of the valuation process used to determine the estimated value per share of the Company’s common stock, including the review and approval of the valuation and appraisal processes and methodologies used to determine the Company’s estimated value per share, the consistency of the valuation and appraisal methodologies with real estate industry standards and practices and the reasonableness of the assumptions used in the valuations and appraisals. The estimated value per share was based upon the recommendation and valuation prepared by KBS Capital Advisors LLC (the “Advisor”), the Company’s external advisor. The Advisor’s valuation of the Company’s real estate properties was based on either (i) appraisals of certain of the Company’s real estate properties performed by Duff & Phelps, LLC (“Duff & Phelps”), an independent third-party real estate valuation firm, and based on the methodologies and assumptions described further below; or (ii) the contractual sales prices less actual or estimated disposition costs and fees in the case of properties that were under contract to sell as of the date of this filing or properties sold subsequent to September 30, 2015.

The Company engaged Duff & Phelps to provide appraisals for 12 of the Company’s 13 historical real estate properties. In addition, the Company engaged Duff & Phelps to perform appraisals for all but 28 of the 378 GKK properties⁽¹⁾. The Company’s 12 appraised historical real estate properties and the 350 GKK properties appraised by Duff & Phelps are referred to herein collectively as the “Appraised Properties.” Duff & Phelps prepared appraisal reports summarizing key inputs and assumptions of its appraisals. The one historical real estate property and 28 GKK properties not valued by Duff & Phelps either were under contract to sell as of the date of this filing or were sold subsequent to September 30, 2015. The Advisor performed valuations with respect to the Company’s real estate-related investments, cash, other assets, mortgage debt and other liabilities. The methodologies and assumptions used to determine the estimated value of the Company’s assets and liabilities are described further below.

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⁽¹⁾ During the year ended December 31, 2011, the Company entered into a collateral transfer and settlement agreement (the “Settlement Agreement”) to effect the orderly transfer of certain assets and liabilities to the Company in satisfaction of the debt owed to the Company by the borrower under the Company’s $500 million GKK mezzanine loan investment. The real estate properties indirectly transferred to the Company under the Settlement Agreement are referred to herein as the “GKK properties”. The estimated value of the GKK properties was $1,806.1 million at closing of the Settlement Agreement. In addition, the Company assumed $1,544.0 million of mortgage debt and approximately $203.0 million of other net assets at closing of the Settlement Agreement.

1

The Advisor used (i) the appraised values of the Appraised Properties and the contractual sales prices less actual or estimated disposition costs and fees in the case of properties that were under contract to sell as of the date of this filing or properties sold subsequent to September 30, 2015, (ii) the Advisor’s estimated value of each of the Company’s other assets and the Company’s liabilities and (iii) the amount of the Special Distribution, to calculate and recommend an estimated value per share of the Company’s common stock. Based on (i) the conflicts committee’s receipt and review of the Advisor’s valuation report, including the Advisor’s summary of the appraisal reports prepared by Duff & Phelps and the Advisor’s estimated value of each of the Company’s other assets and the Company’s liabilities, (ii) the conflicts committee’s review of the reasonableness of the Company’s estimated value per share resulting from the Advisor’s valuation process, (iii) consideration of the Special Distribution, and (iv) other factors considered by the conflicts committee and the conflicts committee’s own extensive knowledge of the Company’s assets and liabilities, the conflicts committee concluded that the estimated value per share proposed by the Advisor was reasonable and recommended to the board of directors that it adopt $3.94 as the estimated value per share of the Company’s common stock. The board of directors unanimously agreed to accept the recommendation of the conflicts committee and approved $3.94 as the estimated value per share of the Company’s common stock, which determination is ultimately and solely the responsibility of the board of directors.

The table below sets forth the calculation of the Company’s estimated value per share as of December 8, 2015 as well as the calculation of the Company’s prior estimated value per share as of December 9, 2014:

	December 8, 2015 Estimated Value per Share			December 9, 2014 Estimated Value per Share (1)			Change in Estimated Value per Share
Real estate properties - historical (2)	$	2.95		$	3.35		$	(0.40	)
Real estate - GKK properties (3)	3.42			3.88			(0.46		)
Foreclosed real estate held for sale	—			0.13			(0.13		)
Real estate loans receivable	0.13			0.13			—
Investments in joint ventures (4)	—			0.14			(0.14		)
Cash and restricted cash	0.83			0.88			(0.05		)
Other assets	0.08			0.11			(0.03		)
Mortgage and other debt obligations (5)	(2.93		)	(3.85		)	0.92
Other liabilities	(0.29		)	(0.25		)	(0.04		)
Estimated value per share prior to December 7, 2015 Special Distribution payment	$	4.19		$	4.52		$	(0.33	)
Estimated enterprise value premium	None assumed			None assumed			None assumed
Special Distribution paid on December 7, 2015 (6)	(0.25		)	—			(0.25		)
Total estimated value per share	$	3.94		$	4.52		$	(0.58	)

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⁽¹⁾ The December 9, 2014 estimated value per share was based upon the recommendation and valuation of the Advisor. The Advisor’s recommendation and valuation of the Company’s real estate properties was based on either (i) appraisals of certain of the Company’s real estate properties performed by Duff & Phelps or (ii) the contractual sales prices less actual or estimated closing costs in the case of properties that were under contract to sell as of December 11, 2014 or properties sold subsequent to September 30, 2014. The Advisor performed valuations of the Company’s real estate-related investments, cash, other assets, mortgage debt and other liabilities. For more information relating to the December 9, 2014 estimated value per share and the assumptions and methodologies applied by the Advisor and Duff & Phelps, see the Company’s Current Report on Form 8-K filed with the SEC on December 11, 2014.

⁽²⁾ The decrease in the estimated value of real estate properties per share was primarily due to a decrease in the appraised value of the real estate properties.

⁽³⁾ The decrease in the estimated value of GKK properties per share was primarily due to real estate property sales.

⁽⁴⁾ See discussion of “–Participation Interest in Unconsolidated Joint Venture” below.

⁽⁵⁾ The decrease in the estimated value of mortgage and other debt obligations per share was primarily due to the repayment of principal related to asset sales and ongoing principal amortization payments.

⁽⁶⁾ On November 30, 2015, the Company’s board of directors declared the Special Distribution, which the Company paid on December 7, 2015. The Special Distribution was paid in cash and funded from the Company’s proceeds from the sales of real estate properties.

2

The decrease in the Company’s estimated value per share from the previous estimate was primarily due to the items noted in the table below, which reflect the significant contributors to the decrease in the estimated value per share from $4.52 to $3.94. The changes are not equal to the change in values of each asset and liability group presented in the table above due to asset sales, debt repayments and extinguishment of debt and other factors, which caused the value of certain asset or liability groups to change with no impact to the Company’s fair value of equity or the overall estimated value per share.

	Change in Estimated Value per Share
December 9, 2014 estimated value per share	$	4.52
Changes to estimated value per share
Real Estate
Properties held as of September 30, 2015 - historical	(0.35		)
Properties held as of September 30, 2015 - GKK properties	0.33
Properties sold through September 30, 2015	0.07
Capital expenditures on real estate	(0.24		)
Total changes related to real estate	(0.19		)
Mortgage debt	(0.06		)	(1)
Undistributed operating cash flows	0.03			(2)
Contingent liability to Gramercy Property Trust, Inc.	(0.09		)	(3)
Other changes, net	(0.02		)
Total change in estimated value per share	$	(0.33	)	(4)
Estimated value per share prior to December 7, 2015 Special Distribution payment	$	4.19
Special Distribution (5)	(0.25		)
December 8, 2015 estimated value per share	$	3.94

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⁽¹⁾ The change in value of the notes payable is primarily due to defeasance costs paid in connection with the repayment of certain loans and a decrease in market interest rates assumed in valuing the notes payable as compared to the December 9, 2014 estimated value per share, resulting in the notes payable being valued at less of a discount or more of a premium than in the December 9, 2014 estimated value per share. 

⁽²⁾ Amount includes operating cash flows through September 30, 2015 from real estate properties that were under contract to sell as of the date of this filing or were sold subsequent to September 30, 2015, which will not provide future operating cash flows.

⁽³⁾ Pursuant to an asset management services agreement, Gramercy Property Trust, Inc. has a profit participation interest with respect to the GKK properties.  The increase in this contingent liability was due to the increase in fair market value or gross sales price of the GKK properties. 

⁽⁴⁾ The reconciliation of total change in estimated value per share does not reflect $7.4 million used to fulfill redemption requests in accordance with the Company’s share redemption program, as such redemptions resulted in no change to the estimated value per share because, while the Company’s net asset value was reduced by the $7.4 million of redemptions, it also resulted in a corresponding decrease in the number of shares outstanding.

⁽⁵⁾ See footnote (6) to the table above.

As with any valuation methodology, the methodologies used are based upon a number of estimates and assumptions that may not be accurate or complete. Different parties using different assumptions and estimates could derive a different estimated value per share of the Company’s common stock, and this difference could be significant. The estimated value per share is not audited and does not represent the fair value of the Company’s assets less the fair value of the Company’s liabilities according to U.S. generally accepted accounting principles (“GAAP”), nor does it represent a liquidation value of the Company’s assets and liabilities or the price at which the Company’s shares of common stock would trade on a national securities exchange. The estimated value per share does not reflect a discount for the fact that the Company is externally managed, nor does it reflect a real estate portfolio premium/discount versus the sum of the individual property values. The estimated value per share also does not take into account debt defeasance costs the Company may incur in connection with prepayments on its notes payable, debt prepayment penalties or swap breakage fees that could apply upon the prepayment of certain of the Company’s debt obligations or termination of related swap agreements prior to expiration, the impact of restrictions on the assumption of debt, or disposition costs and fees for real estate properties that are not under contract to sell. The Company has generally incurred disposition costs and fees related to the sale of the Company’s historical real estate properties since inception of 1.7% to 5.7% of the gross sales price less concessions and credits, with the weighted average being 2.7%. The Company has generally incurred disposition costs and fees related to the sale of the GKK properties since December 15, 2011 (the date of the completion of the transfer of the GKK properties to the Company pursuant to the Settlement Agreement) of 1.5% to 8.5% of the gross sales price less concessions and credits, with the weighted average being 2.3%. If both these ranges of disposition costs and fees were applied to the Company’s real estate properties, which do not include these costs and fees in the appraised values, the resulting impact on the estimated value per share would be a decrease of $0.09 to $0.41 per share. As of December 8, 2015, the Company had no potentially dilutive securities outstanding that would impact the estimated value per share of the Company’s common stock.

3

The Company’s estimated value per share takes into consideration any potential liability related to a participation fee the Advisor is entitled to upon meeting certain stockholder return thresholds in accordance with the advisory agreement. For purposes of determining the estimated value per share, the Advisor calculated the potential liability related to this incentive fee based on a hypothetical liquidation of the assets and liabilities at their estimated fair values, after considering the impact of any potential closing costs and fees related to the disposition of real estate properties, and determined that there would be no liability related to the participation fee.

Methodology

The Company’s goal for the valuation was to arrive at a reasonable and supportable estimated value per share, using a process that was designed to be in compliance with the IPA Valuation Guidelines and using what the Company and the Advisor deemed to be appropriate valuation methodologies and assumptions. The following is a summary of the valuation and appraisal methodologies, assumptions and estimates used to value the Company’s assets and liabilities:

Real Estate

Independent Valuation Firm

Duff & Phelps⁽¹⁾ was selected by the Advisor and approved by the Company’s conflicts committee and board of directors to appraise the Appraised Properties. Duff & Phelps is engaged in the business of appraising commercial real estate properties and is not affiliated with the Company or the Advisor. The compensation the Company will pay to Duff & Phelps is based on the scope of work and not on the appraised values of the Appraised Properties.  The appraisals were performed in accordance with the Code of Ethics and the Uniform Standards of Professional Appraisal Practice, or USPAP, the real estate appraisal industry standards created by The Appraisal Foundation, as well as the requirements of the state where each real property is located.  Each appraisal was reviewed, approved and signed by an individual with the professional designation of MAI (Member of the Appraisal Institute). The use of the reports is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives.

Duff & Phelps collected all reasonably available material information that it deemed relevant in appraising the Appraised Properties. Duff & Phelps obtained property-level information from the Advisor, including (i) property historical and projected operating revenues and expenses; (ii) property lease agreements; and (iii) information regarding recent or planned capital expenditures. Duff & Phelps reviewed and relied in part on the property-level information provided by the Advisor and considered this information in light of its knowledge of each property’s specific market conditions.

In conducting its investigation and analyses, Duff & Phelps took into account customary and accepted financial and commercial procedures and considerations as it deemed relevant. Although Duff & Phelps reviewed information supplied or otherwise made available by the Company or the Advisor for reasonableness, it assumed and relied upon the accuracy and completeness of all such information and of all information supplied or otherwise made available to it by any other party and did not independently verify any such information. With respect to operating or financial forecasts and other information and data provided to or otherwise reviewed by or discussed with Duff & Phelps, Duff & Phelps assumed that such forecasts and other information and data were reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments of the Company’s management and/or the Advisor. Duff & Phelps relied on the Company to advise it promptly if any information previously provided became inaccurate or was required to be updated during the period of its review.

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⁽¹⁾ Duff & Phelps is actively engaged in the business of appraising commercial real estate properties similar to those owned by the Company in connection with public securities offerings, private placements, business combinations and similar transactions. The Company engaged Duff & Phelps to deliver appraisal reports with respect to the Appraised Properties and Duff & Phelps will receive fees upon the delivery of such reports. In addition, the Company has agreed to indemnify Duff & Phelps against certain liabilities arising out of this engagement. In the two years prior to the date of this filing, Duff & Phelps and its affiliates have provided a number of commercial real estate, appraisal, valuation and financial advisory services for the Company and its affiliates and have received fees in connection with such services. In connection with prior valuations of the Company’s shares, the Company engaged Duff & Phelps to provide valuations of certain of the Company’s properties and to provide a review, based on a limited set of procedures, of the methodologies and assumptions used by the Advisor in valuing certain properties. Duff & Phelps and its affiliates may from time to time in the future perform other commercial real estate, appraisal, valuation and financial advisory services for the Company and its affiliates in transactions related to the properties that are the subjects of the appraisals, so long as such other services do not adversely affect the independence of the applicable Duff & Phelps appraiser as certified in the applicable appraisal reports.

4

In performing its analyses, Duff & Phelps made numerous other assumptions as of various points in time with respect to industry performance, general business, economic and regulatory conditions and other matters, many of which are beyond its and the Company’s control, as well as certain factual matters. For example, unless specifically informed to the contrary, Duff & Phelps assumed that the Company had clear and marketable title to each of the Appraised Properties, that no title defects existed, that any improvements were made in accordance with law, that no hazardous materials were present or had been present previously, that no deed restrictions existed, and that no changes to zoning ordinances or regulations governing use, density or shape were pending or being considered. Furthermore, Duff & Phelps’ analyses, opinions and conclusions were necessarily based upon market, economic, financial and other circumstances and conditions existing as of or prior to the date of the appraisal, and any material change in such circumstances and conditions may affect Duff & Phelps’ analyses and conclusions.  Duff & Phelps’ appraisal reports contain other assumptions, qualifications and limitations that qualify the analyses, opinions and conclusions set forth therein.  Furthermore, the prices at which the Appraised Properties may actually be sold could differ from Duff & Phelps’ analyses.

Although Duff & Phelps considered any comments received from the Company or the Advisor to its appraisal reports, the final appraised values of the Appraised Properties were determined by Duff & Phelps.  The appraisal reports for the Appraised Properties are addressed solely to the Company to assist the Advisor in calculating and recommending an updated estimated value per share of the Company’s common stock. The appraisal reports are not addressed to the public and may not be relied upon by any other person to establish an estimated value per share of the Company’s common stock and do not constitute a recommendation to any person to purchase or sell any shares of the Company’s common stock. In preparing its appraisal reports, Duff & Phelps did not solicit third-party indications of interest for the Appraised Properties. In preparing its appraisal reports, Duff & Phelps also did not, and was not requested to, solicit third party indications of interest for the Company’s common stock in connection with possible purchases thereof or the acquisition of all or any part of the Company. While Duff & Phelps is responsible for providing appraisals of the Appraised Properties, Duff & Phelps is not responsible for, did not calculate, and did not participate in, the determination of the estimated value per share of the Company’s common stock.

The foregoing is a summary of the standard assumptions, qualifications and limitations that generally apply to Duff & Phelps’ appraisal reports. All of the Duff & Phelps appraisal reports, including the analyses, opinions and conclusions set forth in such reports, are qualified by the assumptions, qualifications and limitations set forth in the respective appraisal reports.

Historical Real Estate Properties

As of September 30, 2015, the Company owned 13 historical real estate properties (excluding the GKK properties), consisting of office and industrial properties. The Company engaged Duff & Phelps to provide appraisals for 12 of the 13 historical real estate properties. Duff & Phelps appraised these historical real estate properties, using various methodologies including the direct capitalization approach, 10-year discounted cash flow analyses and sales comparison approach and relied primarily on 10-year discounted cash flow analyses for the final appraisals of 12 of the 13 historical real estate properties.  Duff & Phelps calculated the discounted cash flow value of these 12 historical real estate properties using property-level cash flow estimates, terminal capitalization rates and discount rates that fall within ranges it believes would be used by similar investors to value the properties the Company owns based on recent comparable market transactions, adjusted for unique property and market-specific factors.

The total appraised value of the Company’s 12 historical real estate properties using the appraisal methodologies described above was $537.6 million. With respect to the one historical real estate property that was under contract to sell as of the date of this filing, the estimated value of $13.8 million was based on the contractual sales price, net of expected selling costs. Based on the appraisal and valuation methodologies described above, the estimated value of the Company’s historical properties was $551.4 million as of September 30, 2015, compared to a total cost basis, including acquisition fees and expenses, capital expenditures and leasing commissions through September 30, 2015, of $822.7 million.

5

The following summarizes the key assumptions that Duff & Phelps used in the 10-year discounted cash flow models to appraise these 12 historical real estate properties:

	Range in Values	Weighted-Average Basis
Terminal capitalization rate	6.50% to 8.75%	7.38%
Discount rate	7.25% to 9.50%	8.16%
Net operating income compounded annual growth rate (1)	1.32% to 13.51%	5.63%

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⁽¹⁾ The net operating income compounded annual growth rates (the “CAGRs”) reflect both the contractual and market rents and reimbursements (in cases where the contractual lease period is less than the hold period) net of expenses over the holding period.  The range of CAGRs shown is the constant annual rate at which the net operating income is projected to grow to reach the net operating income in the final year of the hold period for each of the properties.

While the Company believes that Duff & Phelps’ assumptions and inputs are reasonable, a change in these assumptions and inputs would significantly impact the appraised value of these 12 historical real estate properties and thus, the Company’s estimated value per share. The table below illustrates the impact on the estimated value per share if the terminal capitalization rates or discount rates were adjusted by 25 basis points, assuming all other factors remain unchanged, with respect to the 12 historical real estate properties referenced above. Additionally, the table below illustrates the impact on the estimated value per share if the terminal capitalization rates or discount rates were adjusted by 5% in accordance with the IPA Valuation Guidelines, assuming all other factors remain unchanged.

	Increase (Decrease) on the Estimated Value per Share due to
	Decrease of 25 basis points		Increase of 25 basis points			Decrease of 5%		Increase of 5%
Terminal capitalization rates	$	0.07	$	(0.06	)	$	0.10	$	(0.09	)
Discount rates	0.06		(0.06		)	0.09		(0.09		)

GKK Properties

As of September 30, 2015, the GKK properties consisted of 378 bank branch properties, office buildings, operations centers and other properties. The Company engaged Duff & Phelps to provide appraisals for 350 of the GKK properties. The total appraised value for these 350 GKK properties totaled $549.5 million. With respect to 28 GKK properties that were under contract to sell as of the date of this filing or were sold subsequent to September 30, 2015, the estimated value was based on contractual sale prices, net of actual or expected selling costs. The estimated value for these 28 GKK properties was $88.1 million. Based on the appraisal and valuation methodologies described above, the estimated value of the GKK properties was $637.6 million as of September 30, 2015, compared to a total cost basis, including capital expenditures and leasing commissions through September 30, 2015, of $549.0 million.

Duff & Phelps appraised 296 of the GKK properties using the direct capitalization method, which applies a current market capitalization rate to the property’s net operating income. In cases where a property was not stabilized, the estimated value was based on a stabilized property reduced for capital costs that would be incurred to lease up the property. The following summarizes the key assumption that was used to appraise these 296 GKK properties:

Range in Direct Capitalization Rate	Weighted-Average Direct Capitalization Rate
4.00% to 10.50%	7.64%

While the Company believes that Duff & Phelps’ assumptions and inputs are reasonable, a change in these assumptions and inputs would significantly impact the appraised value of the 296 GKK properties that Duff & Phelps appraised using the direct capitalization method and thus, the Company’s estimated value per share. The table below illustrates the impact on the estimated value per share if the direct capitalization rates were adjusted by 25 basis points, assuming all other factors remain unchanged, with respect to the 296 GKK properties appraised by Duff & Phelps using the direct capitalization method. Additionally, the table below illustrates the impact on the estimated value per share if the capitalization rates were adjusted by 5% in accordance with the IPA Valuation Guidelines, assuming all other factors remain unchanged.

	Increase (Decrease) on the Estimated Value per Share due to
	Decrease of 25 basis points		Increase of 25 basis points			Decrease of 5%		Increase of 5%
Capitalization rates	$	0.03	$	(0.03	)	$	0.05	$	(0.05	)

6

Duff & Phelps appraised 33 of the GKK properties by performing 10-year discounted cash flow analyses. The following table summarizes the key assumptions that were used by Duff & Phelps in the discounted cash flow models to appraise these 33 GKK properties:

	Range in Values	Weighted-Average Basis
Terminal capitalization rate	4.00% to 9.25%	7.06%
Discount rate	4.25% to 11.75%	8.47%
Net operating income CAGR (1)	(6.94)% to 13.50%	3.68%

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⁽¹⁾ The net operating income CAGRs reflect both the contractual and market rents and reimbursements (in cases where the contractual lease period is less than the hold period) net of expenses over the holding period.  The range of CAGRs shown is the constant annual rate at which the net operating income is projected to grow to reach the net operating income in the final year of the hold period for each of the properties.

While the Company believes that Duff & Phelps’ assumptions and inputs are reasonable, a change in these assumptions and inputs would change the appraised value of these 33 GKK properties and thus, the Company’s estimated value per share. The table below illustrates the impact on the estimated value per share if the terminal capitalization rates or discount rates were adjusted by 25 basis points, assuming all other factors remain unchanged, with respect to the 33 GKK properties valued by Duff & Phelps using the discounted cash flow analysis. Additionally, the table below illustrates the impact on the estimated value per share if the terminal capitalization rates or discount rates were adjusted by 5% in accordance with the IPA Valuation Guidelines, assuming all other factors remain unchanged.

	Increase (Decrease) on the Estimated Value per Share due to
	Decrease of 25 basis points		Increase of 25 basis points			Decrease of 5%		Increase of 5%
Terminal capitalization rates	$	0.01	$	(0.01	)	$	0.01	$	(0.01	)
Discount rates	0.01		(0.01		)	0.01		(0.01		)

The remaining 21 GKK properties were appraised by Duff & Phelps using a present value cash flow analysis as the Company does not have a fee ownership interest in these GKK properties (with the exception of one vacant building with a long-term ground lease), but instead holds leasehold interests in the properties.

Finally, a 1% increase in the appraised or estimated value of the Company’s real estate properties, including both historical properties and GKK properties, would result in a $0.06 increase in the Company’s estimated value per share and a 1% decrease in the appraised or estimated value of the Company’s real estate properties, including both historical properties and GKK properties, would result in a $0.06 decrease in the Company’s estimated value per share, assuming all other factors remain unchanged.

Real Estate Loans Receivable

The estimated values for the Company’s real estate loans receivable are equal to the GAAP fair values disclosed in the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2015, but do not equal the book value of the loans in accordance with GAAP. The values of the real estate loans receivable were estimated by applying a discounted cash flow analysis over the remaining expected lives of the investments, excluding any potential transaction costs. The cash flow estimates used in the analysis during the term of the investments were based on the investments’ contractual cash flows, which the Company anticipates it will receive. The expected cash flows for the loans were discounted at rates that the Company expects a market participant would require for instruments with similar characteristics, including remaining loan term, loan-to-value ratios, type of collateral, current performance, credit enhancements and other factors.

As of September 30, 2015, the Company owned four real estate loans receivable, consisting of a mortgage loan, a mezzanine loan and two B-notes. The cost of the Company’s real estate loans receivable, including origination fees and costs and principal repayments, was $27.9 million. As of September 30, 2015, the fair value of the Company’s investments in real estate loans receivable was $24.5 million. The weighted-average discount rate applied to the cash flows from the real estate loans receivable, which have a weighted-average remaining term of 1.6 years, was approximately 16.2%. Similar to the valuation for real estate, a change in the assumptions and inputs would change the fair value of the Company’s real estate loans receivable and thus, the Company’s estimated value per share. Assuming all other factors remain unchanged, a decrease or increase in the discount rates of 25 basis points would have no impact on the estimated value per share and, additionally, a 5% decrease or increase in the discount rates would have no impact on the estimated value per share.

7

Participation Interest in Unconsolidated Joint Venture

As of September 30, 2015, the Company held an interest in an unconsolidated joint venture through which the Company has been granted a participation interest in certain future profits generated by the joint venture. The Advisor estimated the value of the Company’s participation interest in this unconsolidated joint venture using a discounted cash flow analysis of the expected distributions to the Company. The cash flow estimates used in the analysis were based on the Company’s participation interest in the estimated cash flows available after paying debt service and making distributions to the other joint venture members until such members have received distributions sufficient to recover the entire amount of their invested capital plus a stipulated return. The cash flow estimates of the joint venture were reviewed by the Advisor. Due to decreases in projected cash flow estimates, the Company does not expect to receive future income with respect to its participation interest in the joint venture. As of September 30, 2015, the carrying value and estimated fair value of the Company’s investment in this unconsolidated joint venture were $0.

Notes Payable

The estimated values of the Company’s notes payable are equal to the GAAP fair values as disclosed in the Company’s Quarterly Report on Form 10-Q for the nine months ended September 30, 2015. The estimated value of the Company’s notes payable does not equal the book value of the loans in accordance with GAAP. The GAAP fair values of the Company’s notes payable were determined using a discounted cash flow analysis. The discounted cash flow analysis was based on projected cash flow over the remaining loan terms, including extensions the Company expects to exercise, and on management’s estimates of current market interest rates for instruments with similar characteristics, including remaining loan term, loan-to-value ratio and type of collateral.

As of September 30, 2015, the GAAP fair value and carrying value of the Company’s notes payable were $547.1 million and $518.2 million, respectively. The weighted-average discount rate applied to the future estimated debt payments was approximately 3.06%. The Company’s notes payable have a weighted-average remaining term of 1.58 years. The table below illustrates the impact on the Company’s estimated value per share if the discount rates were adjusted by 25 basis points, assuming all other factors remain unchanged, with respect to the Company’s notes payable. Additionally, the table below illustrates the impact on the estimated value per share if the discount rates were adjusted by 5% in accordance with the IPA Valuation Guidelines, assuming all other factors remain unchanged.

	Increase (Decrease) on the Estimated Value per Share due to
	Decrease of 25 basis points			Increase of 25 basis points		Decrease of 5%			Increase of 5%
Discount rates	$	(0.01	)	$	0.01	$	(0.01	)	$	0.01

Other Assets and Liabilities

The carrying values of a majority of the Company’s other assets and liabilities are considered to equal their fair values due to their short maturities or liquid nature. The Advisor eliminated certain balances, such as straight-line rent receivables, lease intangible assets and liabilities, capital expenditures payable, deferred financing costs, unamortized lease commissions and unamortized lease incentives, for the purpose of the valuation due to the fact that the value of those balances was already considered in the valuation of the respective investments. The Advisor has also excluded redeemable common stock, as temporary equity does not represent a true liability to the Company and the shares that this amount represents are included in the Company’s total outstanding shares of common stock for purposes of calculating the estimated value per share of the Company’s common stock.

Limitations of Estimated Value Per Share

As mentioned above, the Company is providing this estimated value per share to assist broker dealers that participated in the Company’s initial public offering in meeting their customer account statement reporting obligations. This valuation was performed in accordance with the provisions of and also to comply with the IPA Valuation Guidelines. The estimated value per share set forth above will first appear on the December 31, 2015 customer account statements that will be mailed in January 2016. As with any valuation methodology, the methodologies used are based upon a number of estimates and assumptions that may not be accurate or complete. Different parties with different assumptions and estimates could derive a different estimated value per share, and this difference could be significant. The estimated value per share is not audited and does not represent the fair value of the Company’s assets or liabilities according to GAAP.

8

Accordingly, with respect to the estimated value per share, the Company can give no assurance that:

• a stockholder would be able to resell his or her shares at this estimated value per share;

• a stockholder would ultimately realize distributions per share equal to the Company’s estimated value per share upon liquidation of the Company’s assets and settlement of its liabilities or a sale of the Company;

• the Company’s shares of common stock would trade at the estimated value per share on a national securities exchange;

• another independent third-party appraiser or third-party valuation firm would agree with the Company’s estimated value per share; or

• the methodology used to calculate the Company’s estimated value per share would be acceptable to FINRA or for compliance with ERISA reporting requirements.

Further, the estimated value per share as of December 8, 2015 is based on the estimated value of the Company’s assets less the estimated value of the Company’s liabilities divided by the number of shares outstanding, all as of September 30, 2015, after giving effect to the Special Distribution. The value of the Company’s shares will fluctuate over time in response to developments related to individual assets in the Company’s portfolio and the management of those assets and in response to the real estate and finance markets. The estimated value per share does not reflect a discount for the fact that the Company is externally managed, nor does it reflect a real estate portfolio premium/discount versus the sum of the individual property values. The estimated value per share also does not take into account debt defeasance costs the Company may incur in connection with prepayments on its notes payable, debt prepayment penalties or swap breakage fees that could apply upon the prepayment of certain of the Company’s debt obligations or termination of related swap agreements prior to expiration, the impact of restrictions on the assumption of debt, or disposition costs and fees for real estate properties that are not under contract to sell. The Company has generally incurred disposition costs and fees related to the sale of the Company’s historical real estate properties since inception of 1.7% to 5.7% of the gross sales price less concessions and credits, with the weighted average being 2.7%. The Company has generally incurred disposition costs and fees related to the sale of the GKK properties since December 15, 2011 (the date of the completion of the transfer of the GKK properties to the Company pursuant to the Settlement Agreement) of 1.5% to 8.5% of the gross sales price less concessions and credits, with the weighted average being 2.3%. If this range of disposition costs and fees were applied to the Company’s real estate properties, which do not include these costs and fees in the appraised values, the resulting impact on the estimated value per share would be a decrease of $0.09 to $0.41 per share. The Company currently expects to utilize the Advisor and/or an independent valuation firm to update the estimated value per share no later than December 2016.

Share Redemption Program

In accordance with the Company’s share redemption program, once the Company establishes an estimated value per share, the redemption price for stockholders eligible to participate is equal to the estimated value per share. The Company redeems shares on the last business day of each month. Effective for the December 31, 2015 redemption date, the redemption price for all stockholders is $3.94 per share. For a stockholder’s shares to be eligible for redemption in a given month or to withdraw a redemption request, the Company must receive a written notice from the stockholder or from an authorized representative of the stockholder in good order and on a form approved by the Company at least five business days before the redemption date, or by December 23, 2015 in the case of the December 31, 2015 redemption date.

The Company’s share redemption program provides only for redemptions sought upon a stockholder’s death, “qualifying disability” or “determination of incompetence” (each as defined in the share redemption program). Such redemptions are subject to an annual dollar limitation, which is $10.0 million in the aggregate for the calendar year 2015 (subject to review and adjustment during the year by the board of directors), and further subject to the limitations described in the share redemption program. On December 8, 2015, the Company’s board of directors approved the same annual dollar limitation of $10.0 million in the aggregate for the calendar year 2016 (subject to review and adjustment during the year by the board of directors), and further subject to the limitations described in the share redemption program. See the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 for a description of the share redemption program. The complete share redemption program document is filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 and is available at the SEC’s website at http://www.sec.gov.

9

Historical Estimated Values per Share

The historical reported estimated values per share of the Company’s common stock approved by the board of directors are set forth below:

Estimated Value per Share	Effective Date of Valuation	Filing with the Securities and Exchange Commission
$4.52	December 9, 2014	Current Report on Form 8-K, filed December 11, 2014
$4.45	December 18, 2013	Current Report on Form 8-K, filed December 19, 2013
$5.18	December 18, 2012	Current Report on Form 8-K, filed December 19, 2012
$5.16	March 22, 2012	Current Report on Form 8-K, filed March 26, 2012
$7.32	December 2, 2010	Current Report on Form 8-K, filed December 10, 2010
$7.17	November 20, 2009	Current Report on Form 8-K, filed November 23, 2009

Forward-Looking Statements

The foregoing includes forward-looking statements within the meaning of the Federal Private Securities Litigation Reform Act of 1995. The Company 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 the Company 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. Further, forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, unless required by law. Actual results may differ materially from those contemplated by such forward-looking statements. The appraisal methodology for the Appraised Properties assumes the properties realize the projected net operating income and expected exit cap rates and that investors would be willing to invest in such properties at yields equal to the expected discount rates. Though the valuation estimates used in calculating the estimated value per share are Duff & Phelps’ or the Company’s and/or the Advisor’s best estimates, the Company can give no assurance in this regard. Forward-looking statements also depend on factors such as: future economic, competitive and market conditions; the Company’s ability to maintain occupancy levels and lease rates at its real estate properties; the borrowers under the Company’s loan investments continuing to make required payments under the loan documents; the Company’s ability to sell real estate properties at the times and at the prices it expects; the ability of certain borrowers to maintain occupancy levels and lease rates at the properties securing the Company’s real estate-related investments; the Company’s ability to successfully negotiate modifications, extensions or refinancings of its debt obligations; the ability of the Company to make strategic asset sales to make required amortization payments and principal payments on its debt obligations and to fund its short and long-term liquidity needs; the Company’s ability to successfully operate and sell the GKK properties given current economic conditions and the concentration of the GKK properties in the financial services sector; the significant debt obligations the Company has assumed with respect to the GKK properties; the Advisor’s limited experience operating and selling bank branch properties; and other risks identified in Part I, Item IA of the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 and in Part II, Item IA of the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2015, each as filed with the SEC. Actual events may cause the value and returns on the Company’s investments to be less than that used for purposes of the Company’s estimated value per share.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(d)	Exhibits
Ex.	Description
99.1	Presentation to Stockholders

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	KBS REAL ESTATE INVESTMENT TRUST, INC.
Dated: December 10, 2015	BY:	/s/ Jeffrey K. Waldvogel
		Jeffrey K. Waldvogel
		Chief Financial Officer

EX-99.1

KBS REIT I Valuation & Portfolio Update December 10, 2015 1 Exhibit 99.1

Forward-Looking Statements The information contained herein should be read in conjunction with, and is qualified by, the information in KBS Real Estate Investment Trust’s (“KBS REIT I”) Annual Report on Form 10-K for the year ended December 31, 2014, filed with the Securities and Commission Exchange (the “SEC”) on March 10, 2015, and in KBS REIT I’s Quarterly Report on Form 10-Q for the period ended September 30, 2015, filed with the SEC on November 12, 2015, including the “Risk Factors” contained in such filings. For a full description of the limitations, methodologies and assumptions used to value KBS REIT I’s assets and liabilities in connection with the calculation of KBS REIT I’s estimated value per share, see KBS REIT I’s Current Report on Form 8-K, filed with the SEC on December 10, 2015. Forward-Looking Statements Certain statements contained herein may be deemed to be forward-looking statements within the meaning of the Federal Private Securities Litigation Reform Act of 1995. KBS REIT I 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 I 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. Further, forward-looking statements speak only as of the date they are made, and KBS REIT I undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, unless required by law. Actual results may differ materially from those contemplated by such forward- looking statements. The appraisal methodology for KBS REIT I’s appraised real estate properties assumes the properties realize the projected net operating income and expected exit cap rates and that investors would be willing to invest in such properties at yields equal to the expected discount rates. Though the valuation estimates used in calculating the estimated value per share are Duff & Phelps’ and/or KBS REIT I’s and KBS Capital Advisors LLC’s (“the Advisor”) best estimates, KBS REIT I can give no assurance in this regard. Forward-looking statements also depend on factors such as: future economic, competitive and market conditions; KBS REIT I’s ability to maintain occupancy levels and lease rates at its real estate properties; the borrowers under KBS REIT I’s loan investments continuing to make required payments under the loan documents; KBS REIT I’s ability to sell real estate properties at the times and at the prices it expects; the ability of certain borrowers to maintain occupancy levels and lease rates at the properties securing KBS REIT I’s real estate-related investments; KBS REIT I’s ability to successfully negotiate modifications, extensions or refinancings of its debt obligations; the ability of KBS REIT I to make strategic asset sales to make required amortization payments and principal payments on its debt obligations and to fund its short and long-term liquidity needs; KBS REIT I’s ability to successfully operate and sell the GKK properties given current economic conditions and the concentration of the GKK properties in the financial services sector; the significant debt obligations KBS REIT I has assumed with respect to the GKK properties; the Advisor’s limited experience operating and selling bank branch properties; and other risks identified in Part I, Item IA of KBS REIT I’s Annual Report on Form 10-K for the year ended December 31, 2014 and in Part II, Item IA of KBS REIT I’s Quarterly Report on Form 10-Q for the period ended September 30, 2015, each as filed with the SEC. Actual events may cause the value and returns on KBS REIT I’s investments to be less than that used for purposes of KBS REIT I’s estimated value per share. 2

• KBS REIT I followed the IPA Valuation Guidelines, which included independent third-party appraisals of 12 of its historical real estate properties and 350 GKK properties. Property values for properties held, and not under contract to sell, as of December 8, 2015 are equal to their appraised values as of September 30, 2015, and property values for properties sold from October 1, 2015 to December 8, 2015, or under contract to sell as of December 8, 2015, are equal to the contractual sales prices less actual or estimated disposition costs and fees. • Real estate-related investments, cash, other assets, mortgage debt and other liabilities were valued by the Advisor, similar to prior valuations. The estimated values of the real estate-related investments and mortgage debt are equal to the GAAP fair values as disclosed in the footnotes to KBS REIT I’s 10-Q for the period ended September 30, 2015. • The estimated value per share as of December 8, 2015 is based on the estimated value of the REIT’s assets less the estimated value of the REIT’s liabilities divided by the number of shares outstanding, as of September 30, 2015, with the exception of an adjustment to KBS REIT I’s net asset value (“NAV”) to give effect to the special distribution of $0.25 per share to stockholders of record as of the close of business on December 1, 2015. • Duff & Phelps primarily used a 10-year discounted cash flow (“DCF”) valuation method for the appraised historical properties, and direct capitalization, DCF and present value of cash flow valuation methods for the appraised GKK properties. • KBS REIT I currently expects to update the estimated value per share no later than December 2016. It expects to utilize an independent valuation firm or the Advisor for such valuation. Valuation Information 3 Third Party Valuation

Valuation Summary Estimated Value of Portfolio 12/8/151 12/9/142 Assets: $1.383 Billion3 $1.625 Billion4 GKK Properties $637.6 Million (46%) $730.8 Million (45%) 378 Assets 394 Assets Historical Real Estate $551.4 Million (40%) $683.2 Million (42%)5 13 Assets 15 Assets5 Historical Real Estate-Related $24.5 Million (2%) $25.3 Million (2%) Investments 4 Assets 4 Assets Other Assets6 $169.7 Million (12%) $185.8 Million (11%) Liabilities: $600.2 Million $773.9 Million Mortgage and other debt: $547.1 Million $726.0 Million Other Liabilities7: $53.1 Million $47.9 Million Net Equity at Estimated Value: $783.0 Million $851.2 Million Distributions Paid December 7, 2015 ($46.7 Million) Net Equity at Estimated Value After Distribution $736.3 Million 4 1Based on data as of September 30, 2015. 2 Based on data as of September 30, 2014. 3Includes properties held as of September 30, 2015, some of which were sold or transferred prior to December 8, 2015. 4Includes properties held for sale and non-sale disposition as of September 30, 2014, some of which were sold or transferred prior to December 9, 2014. 5Includes unconsolidated joint venture participation and Tribeca. 6Includes cash and cash equivalents, restricted cash, rents and other receivables, deposits and prepaid expenses as applicable. 7Includes accounts payable, accrued liabilities, security deposits, contingent liabilities and prepaid rent.

On December 8, 2015, KBS REIT I’s Board of Directors approved an estimated value per share of $3.94 The change in the estimated value per share from the December 2014 valuation of $4.52 was due to the following:* Valuation Information 5 * The changes are not equal to the change in values of each asset and liability group due to asset sales, loan payments, and other factors, which caused the value of certain asset or liability groups to change with no impact to KBS REIT I’s fair value of equity or the overall estimated value per share. For more information, see the Current Report on Form 8-K filed with the SEC on December 10, 2015. December 9, 2014 estimated value per share $ 4.52 Real Estate Properties held as of 9/30/15 – historical (0.35) Properties held as of 9/30/15 – GKK properties 0.33 Properties sold through 9/30/15 0.07 Capital expenditures on real estate (0.24) Total changes related to real estate (0.19) Mortgage debt (0.06) Contingent liability to Gramercy Property Trust (0.09) Undistributed operating cash flows 0.03 Other changes, net (0.02) Total changes (0.33) 2015 est. value per share before December 7, 2015 special distribution payment 4.19 Distribution paid on December 7, 2015 (0.25) December 8, 2015 estimated value per share $ 3.94

Overview Offering Price: $10.00 Valuation History: – November 20091 $7.17 – December 20102 $7.32 – March 20123 $5.16 – December 20124 $5.18 – December 20135 $4.45 after $0.395/share cash distribution paid 12/5/13 – December 20146 $4.52 – December 20157 $3.94 after $0.25/share cash distribution paid 12/7/15 Distribution History (Record Dates) – 7/18/06 – 6/30/09 (36 Payments): $0.70/share on an annualized basis – 7/1/09 – 2/28/12 (32 Payments): $0.525/share on an annualized basis – 11/8/13 (1 Payment): $0.395/share as a one-time distribution paid 12/5/13, as a return of capital – 9/30/14 – 9/30/15 (5 Payments): $0.10/share on an annualized basis (quarterly distributions)8 – 12/1/15 (1 Payment): $0.25/share as a one-time distribution paid 12/7/15 6 1 Data as of 9/30/09. See KBS REIT I’s Current Report on Form 8-K filed with the SEC on November 23, 2009. 2 Data as of 9/30/10. See KBS REIT I’s Current Report on Form 8-K filed with the SEC on December 10, 2010. 3 Data as of 12/31/11. See KBS REIT I’s Current Report on Form 8-K filed with the SEC on March 26, 2012. 4 Data as of 9/30/12. See KBS REIT I’s Current Report on Form 8-K filed with the SEC on December 19, 2012. 5 Data as of 9/30/13, with the exception of real estate appraised as of November 30, 2013. See KBS REIT I’s Current Report on Form 8-K filed with the SEC on December 19, 2013. 6 Data as of 9/30/14. See KBS REIT I’s Current Report on Form 8-K filed with the SEC on December 11, 2014. 7 Data as of 9/30/15. See KBS REIT I’s Current Report on Form 8-K filed with the SEC on December 10, 2015. 8 Distributions paid from September 2014 through September 2015 have been funded with cash flow from operations.

Real Estate Impairments & Updates Woodfield Preserve • Value declined $30.8 million from prior year NAV due to the following: – Lower projections for operating cash flows driven by lower market rents and higher leasing costs – A current lack of investor interest in the Chicago suburbs and this submarket in particular, which led to an increase in the assumed exit capitalization rate and discount rate – Market rents were $14.75 PSF at acquisition and were projected to grow 4.3% per year to $19-$20 PSF in 2015. Rents declined rapidly to $11-$12 PSF during the recession and currently holding steady at $13.50 PSF. – Two significant blocks of space to become available include in two different buildings in the market in the next 12-18 months for a total of 1.2 million SF. Plaza in Clayton • Value declined $8.3 million from prior year NAV due to the following: – Increase in both exit capitalization rate and discount rate due to overall rent roll, which is largely driven by one tenant occupying 61% of the building and will be expiring on December 31, 2022. – Another 9% of the building expires in 2022 and 13% of the building expires in 2020, therefore 83% of the building will expire within a 20-month period. Tysons Dulles • Value declined $6.1 million from prior year NAV due to the following: – Revised projections for lower operating cash flows driven by longer lease-up periods and a continuation of the current elevated leasing costs and concessions. – While the market has seen slight rent growth, the leasing costs and concessions have not declined as quickly as previously expected. – Operating cash flows were also revised for higher capital improvement costs, as building upgrades and deferred maintenance items are needed to position the property competitively and to attract additional tenants. 7

Significant Real Estate Value Changes GKK Properties 8 Sterling Bank The total Sterling Bank portfolio value increased by $6.0 million, which was a 26% increase over the prior year appraised value. This increase included four properties sold since December 2014 with aggregate net sales proceeds of $8.8 million compared to the prior year aggregate appraised value of $7.0 million. BBD2 The total BBD2 portfolio value increased by $58.1 million, which was a 22% increase over the prior year appraised value due to the following: • Properties sold subsequent to September 30, 2015 ($20.7 million increase in value) – valuation based on net sales proceeds: – Waltham increased $19.8 million or 63% over the prior year appraised value (sold in October 2015). – South Orange increased $133,000 or 27% over the prior year appraised value (sold in October 2015). – Nine other properties sold increased $0.8 million or 23% over the prior year appraised value (sold in November 2015). • Properties under contract to sell with hard deposits ($4.4 million increase to NAV) – valuation based on estimated net sales proceeds: – 12 properties are currently under contract to sell with estimated net sales proceeds higher than the prior year appraised value by an aggregate of $4.4 million or approximately 28%. • Other properties ($33.0 million increase to NAV, as appraised by Duff & Phelps): – The remaining 113 properties in the portfolio increased by $33.0 million or approximately 15% over the prior year appraised value.

National Industrial Portfolio 9 In December 2011, KBS REIT I transferred its interest in the National Industrial Portfolio to the lender in a deed-in-lieu of foreclosure. KBS REIT I was able to negotiate, in exchange, a back-end promote interest in the new owner of the National Industrial Portfolio, which would be paid out once the equity interests achieved certain returns. Thus, the promote interest value would be based largely on the real estate value. In the December 2014 estimated value per share, the promote interest was valued at $27.3 million based on business plan cash flows, which were run through the joint venture waterfall calculation and KBS REIT I’s resulting promote payment was then present valued. The business plan cash flows assumed the National Industrial Portfolio would be stabilized and then sold. In the December 2015 estimated value per share, the promote interest was written down to $0. This was a result of two broker opinions of value (BOVs), which indicated the current unstabilized value of the National Industrial Portfolio when combined with the actual and projected operating cash flows, would not be sufficient for the KBS REIT I promote interest to be paid out. A similar conclusion was also reached using updated business plan cash flows in a scenario where the real estate properties were stabilized and then sold. The decrease in promote interest value from December 2014 to December 2015 was attributable to a decline in the estimated value of the National Industrial Portfolio, which was primarily a result of an increase in assumed capitalization rates to sell the portfolio and an increase in assumed capital expenditures and time to stabilize the portfolio.

Disposition History 10 Real Estate Properties Sold Since December 2014 Valuation Historical Properties Acq. Date Purchase Price Cost Basis 1 Sale Date Net Sale Price 2 Sabal VI 03/05/07 16,318,435$ 18,876,955$ 03/31/15 13,150,000$ Royal Ridge 06/21/07 33,382,665 37,185,666 03/31/15 27,794,309 Total Historical Properties 49,701,100$ 56,062,621$ 40,944,309$ GKK Properties (by Loan Pool) 3 Acq. Date 4 Purchase Price 5 Cost Basis 1 Sale Date Net Sale Price 2 101 Independence 09/01/11 71,343,812$ 92,920,020$ 05/01/15 106,761,824$ BBD2 (12 properties) 09/01/11 23,894,799 28,508,839 Various 58,826,653 Beaver Valley 09/01/11 49,198,873 58,097,741 03/31/15 61,597,995 FSI (4 properties) 09/01/11 4,077,559 5,542,786 Various 3,730,500 RBC Centura (3 properties) 09/01/11 5,724,072 5,923,562 Various 4,042,500 Citizen's JV (1 property) 09/01/11 864,988 864,988 04/20/15 642,500 Sterling Bank (4 properties) 09/01/11 6,291,836 6,763,204 Various 9,062,600 Total GKK Properties 161,395,939$ 198,621,140$ 244,664,572$ Grand Total 211,097,039$ 254,683,761$ 285,608,881$ 1 Includes acquisition price, acquisition costs, capital expenditures and leasing commissions. 5 The value shown represents the estimated fair value upon transfer to KBS REIT I based upon KBS REIT I's purchase price allocation in accordance with GAAP. 4 The date represents the date of the Collateral Transfer and Settlement Agreement related to the GKK properties which were collateral for a mezzanine loan previously provided by KBS REIT I. 3 Includes 15 properties sold subsequent to 09/30/15 with purchase price, cost basis and net sale price of $29.5 million, $34.6 million and $66.8 million, respectively. 2 Gross sale price less concessions and credits.

11 Loan Payable Maturities December 2014 $ 57,150,887 December 2015 $ 36,939,134 December 2016 $ 21,079,419 December 2017 $ 11,598,346 as of September 30, 20151 Loan Payable Maturities by Year (All $ in thousands) as of September 30, 2014 Estimated defeasance and prepayment costs for GKK mortgage debt held: December 2015 $ 31,241,974 December 2016 $ 19,360,062 December 2017 $ 10,273,644 1 Estimates exclude the $15.1 million of defeasance costs paid from September 30, 2014 to December 8, 2015, and $2.0 million of estimated future defeasance costs related to a property under sale contract as of December 8, 2015, which defeasance costs have already been reflected in the December 8, 2015 estimated value per share.

Stockholder Performance 12 KBS REIT I is providing this estimated value per share to assist broker-dealers that participated in its initial public offering in meeting their customer account statement reporting obligations. The valuation was performed in accordance with the provisions of and also to comply with the IPA Valuation Guidelines. As with any valuation methodology, the methodologies used are based upon a number of estimates and assumptions that may not be accurate or complete. Different parties with different assumptions and estimates could derive a different estimated value per share of KBS REIT I’s common stock, and this difference could be significant. The estimated value per share is not audited and does not represent the fair value of KBS REIT I’s assets or liabilities according to GAAP. KBS REIT I can give no assurance that: • a stockholder would be able to resell his or her shares at this estimated value per share; • a stockholder would ultimately realize distributions per share equal to the estimated value per share upon liquidation of KBS REIT I’s assets and settlement of its liabilities or a sale of KBS REIT I; • KBS REIT I’s shares of common stock would trade at the estimated value per share on a national securities exchange; • another independent third-party appraiser or third-party valuation firm would agree with KBS REIT I’s estimated value per share; or • the methodology used to calculate KBS REIT I’s estimated value per share would be acceptable to FINRA or for compliance with ERISA reporting requirements. Further, the estimated value per share as of December 8, 2015 is based on the estimated value of KBS REIT I’s assets less the estimated value of KBS REIT I’s liabilities divided by the number of shares outstanding, all as of September 30, 2015, with the exception of an adjustment to KBS REIT I’s net asset value to give effect to the December 7, 2015 payment of a special distribution of $0.25 per share to stockholders of record as of the close of business on December 1, 2015. The value of KBS REIT I’s shares will fluctuate over time in response to developments related to individual assets in KBS REIT I’s portfolio and the management of those assets and in response to the real estate and finance markets. The estimated value per share does not reflect a discount for the fact that KBS REIT I is externally managed, nor does it reflect a real estate portfolio premium/discount versus the sum of the individual property values. The estimated value per share also does not take into account debt defeasance costs KBS REIT I may incur in connection with prepayments on its notes payable, debt prepayment penalties or swap breakage fees that could apply upon the prepayment of certain of KBS REIT I’s debt obligations or termination of related swap agreements prior to expiration, the impact of restrictions on the assumption of debt, or disposition costs and fees for real estate properties that are not under contract to sell. KBS REIT I has generally incurred disposition costs and fees related to the sale of the Company’s historical real estate properties since inception of 1.7% to 5.7% of the gross sales price less concessions and credits, with the weighted average being 2.7%. KBS REIT I has generally incurred disposition costs and fees related to the sale of the GKK properties since inception of 1.5% to 8.5% of the gross sales price less concessions and credits, with the weighted average being 2.3%. If both these ranges of disposition costs and fees were applied to KBS REIT I’s real estate properties, which do not include these costs and fees in the appraised values, the resulting impact on the estimated value per share would be a decrease of $0.09 to $0.41 per share. KBS REIT I currently expects to utilize the Advisor and/or an independent valuation firm to update the estimated value per share no later than December 2016.

Stockholder Performance 13 $3.94 $4.27 $8.21 Hypothetical Performance of Early and Late Investors Assumes all distributions have been taken in cash, stockholder has held shares since the dates below and no share redemptions1 Estimated Value Per Share As of December 8, 2015 Cumulative Cash Distributions Paid through December 8, 2015 Sum of Estimated Value Per Share as of December 8, 2015 and Cumulative Cash Distributions Paid through December 8, 2015 Late Investor: Invested at Close of Public Offering (May 31, 2008) Early Investor: Invested at Escrow Break (July 5, 2006) $3.94 $2.93 $6.87 1Does not reflect the hypothetical performance of investments by stockholders that participated in the dividend reinvestment plan. The hypothetical performance of investments by stockholders that participated in the dividend reinvestment plan would be lower per share than that shown above.

2016 Focus & Objectives 1) Strategically selling assets 2) Distributing operating cash flow and net sales proceeds to stockholders 3) Exploring short-term value-add opportunities for a small number of existing assets in the GKK portfolio 14

Challenges & Risks • Successful execution of dispositions to return capital to investors • Lower net operating income and cash flow from operations due to asset sales • Appropriately deploying capital to maintain and/or increase the value of the assets in the portfolio • Attracting tenants to vacant space in suburban markets at acceptable capital costs • Ability of tenants and borrowers to make future payments to the REIT • Susceptibility to disruptions in the banking industry due to a significant portion of GKK properties being leased to financial institutions 15

Thank you! KBS Capital Markets Group Member FINRA & SIPC 800 Newport Center Dr., Suite 700 Newport Beach, CA 92660 (866) 527-4264 16