KBS Growth & Income REIT, Inc. (Form: 10-Q, Received: 08/15/2022 06:03:16)

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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________________________________

FORM 10-Q

______________________________________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 000-56050

______________________________________________________

KBS GROWTH & INCOME REIT, INC.

(Exact Name of Registrant as Specified in Its Charter)

______________________________________________________


Maryland		47-2778257
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)
800 Newport Center Drive, Suite 700
Newport Beach,	California	92660
(Address of Principal Executive Offices)		(Zip Code)

(949) 417-6500

(Registrant’s Telephone Number, Including Area Code)

______________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class						Name of Each Exchange on Which Registered
None						None

Trading Symbol(s)

______________________________________________________

None

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

☐

Accelerated Filer

☐

Non-Accelerated Filer

☒

Smaller reporting company

☒

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 10, 2022, there were 9,851,052 outstanding shares of Class A common stock and 307,606 outstanding shares of Class T common stock of KBS Growth & Income REIT, Inc.

Table of Contents

INDEX TO FINANCIAL STATEMENTS

KBS GROWTH & INCOME REIT, INC.

FORM 10-Q

June 30, 2022

INDEX


PART I.	FINANCIAL INFORMATION
	Item 1.	Financial Statements	2
		Consolidated Balance Sheets as of June 30, 2022 (unaudited) and December 31, 2021	2
		Consolidated Statements of Operations (unaudited) for the Three and Six Months Ended June 30, 2022 and 2021	3
		Consolidated Statements of Stockholders’ Equity (unaudited) for the Three and Six Months Ended June 30, 2022 and 2021	4
		Consolidated Statements of Cash Flows (unaudited) for the Six Months Ended June 30, 2022 and 2021	6
		Condensed Notes to Consolidated Financial Statements as of June 30, 2022 (unaudited)	7
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	38
	Item 4.	Controls and Procedures	38
PART II.	OTHER INFORMATION		39
	Item 1.	Legal Proceedings	39
	Item 1A.	Risk Factors	39
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39
	Item 3.	Defaults upon Senior Securities	40
	Item 4.	Mine Safety Disclosures	40
	Item 5.	Other Information	40
	Item 6.	Exhibits	41
SIGNATURES			42

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

KBS GROWTH & INCOME REIT, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)


	June 30, 2022		December 31, 2021
	(unaudited)
Assets
Real estate:
Land	$	18,242	$	19,822
Buildings and improvements	97,721		110,582
Tenant origination and absorption costs	6,838		7,873
Total real estate, cost	122,801		138,277
Less accumulated depreciation and amortization	(13,575)		(15,101)


Total real estate, net	109,226		123,176
Cash and cash equivalents	6,352		7,882
Restricted cash	247		247
Rents and other receivables	4,717		4,284
Above-market leases, net	61		72
Due from affiliates	15		276

Prepaid expenses and other assets	2,322		2,218
Total assets	$	122,940	$	138,155
Liabilities and stockholders’ equity
Notes payable, net	$	101,528	$	101,454


Accounts payable and accrued liabilities	2,316		3,825
Due to affiliates	9,866		9,006

Below-market leases, net	650		838

Other liabilities	1,398		1,982
Total liabilities	115,758		117,105
Commitments and contingencies (Note 10)
Redeemable common stock	236		250
Stockholders’ equity:
Preferred stock, $.01 par value; 10,000,000 shares authorized, no shares issued and outstanding	—		—
Class A common stock, $.01 par value per share; 500,000,000 shares authorized, 9,851,052 and 9,855,330 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively	99		99
Class T common stock, $.01 par value per share; 500,000,000 shares authorized, 310,974 shares and 310,974 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively	3		3
Additional paid-in capital	85,158		85,158
Cumulative distributions and net losses	(78,314)		(64,460)
Total stockholders’ equity	6,946		20,800
Total liabilities and stockholders’ equity	$	122,940	$	138,155

See accompanying condensed notes to consolidated financial statements.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS GROWTH & INCOME REIT, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(in thousands, except share and per share amounts)


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2022		2021		2022		2021
Revenues:
Rental income	$	3,631	$	4,081	$	7,317	$	8,375
Other operating income	35		48		76		69
Total revenues	3,666		4,129		7,393		8,444
Expenses:
Operating, maintenance, and management	942		935		1,825		1,765
Property management fees and expenses to affiliate	22		28		46		59
Real estate taxes and insurance	772		728		1,556		1,494
Asset management fees to affiliate	436		434		866		862
General and administrative expenses	412		445		1,033		922
Depreciation and amortization	1,504		1,896		3,052		3,878
Interest expense	689		608		1,141		1,181
Impairment charges on real estate	8,409		—		11,733		—
Total expenses	13,186		5,074		21,252		10,161
Other income:
Interest and other income	5		—		5		—



Total other income	5		—		5		—
Net loss	$	(9,515)	$	(945)	$	(13,854)	$	(1,717)
Net loss per common share, basic and diluted	$	(0.94)	$	(0.09)	$	(1.36)	$	(0.17)
Weighted-average number of common shares outstanding basic and diluted	10,162,026		10,173,832		10,163,371		10,179,185

See accompanying condensed notes to consolidated financial statements.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS GROWTH & INCOME REIT, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Three Months Ended June 30, 2022 and 2021 (unaudited)

(dollars in thousands)


	Common Stock						Additional Paid-in Capital		Cumulative Distributions and Net Losses		Total Stockholders’ Equity
	Class A			Class T
	Shares	Amounts		Shares	Amounts
Balance, March 31, 2022	9,851,052	$	99	310,974	$	3	$	85,158	$	(68,799)	$	16,461
Net loss	—	—		—	—		—		(9,515)		(9,515)




Balance, June 30, 2022	9,851,052	$	99	310,974	$	3	$	85,158	$	(78,314)	$	6,946


	Common Stock						Additional Paid-in Capital		Cumulative Distributions and Net Losses		Total Stockholders’ Equity
	Class A			Class T
	Shares	Amounts		Shares	Amounts
Balance, March 31, 2021	9,864,261	$	99	310,974	$	3	$	85,248	$	(46,969)	$	38,381
Net loss	—	—		—	—		—		(945)		(945)

Transfers from redeemable common stock	—	—		—	—		21		—		21
Redemptions of common stock	(4,120)	—		—	—		(21)		—		(21)
Distributions declared	—	—		—	—		—		(436)		(436)
Balance, June 30, 2021	9,860,141	$	99	310,974	$	3	$	85,248	$	(48,350)	$	37,000

See accompanying condensed notes to consolidated financial statements.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS GROWTH & INCOME REIT, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (CONTINUED)

For the Six Months Ended June 30, 2022 and 2021 (unaudited)

(dollars in thousands)


	Common Stock						Additional Paid-in Capital		Cumulative Distributions and Net Losses		Total Stockholders’ Equity
	Class A			Class T
	Shares	Amounts		Shares	Amounts
Balance, December 31, 2021	9,855,330	$	99	310,974	$	3	$	85,158	$	(64,460)	$	20,800
Net loss	—	—		—	—		—		(13,854)		(13,854)

Transfers from redeemable common stock	—	—		—	—		14		—		14
Redemptions of common stock	(4,278)	—		—	—		(14)		—		(14)

Balance, June 30, 2022	9,851,052	$	99	310,974	$	3	$	85,158	$	(78,314)	$	6,946


	Common Stock						Additional Paid-in Capital		Cumulative Distributions and Net Losses		Total Stockholders’ Equity
	Class A			Class T
	Shares	Amounts		Shares	Amounts
Balance, December 31, 2020	9,873,729	$	99	310,974	$	3	$	85,248	$	(45,760)	$	39,590
Net loss	—	—		—	—		—		(1,717)		(1,717)

Transfers from redeemable common stock	—	—		—	—		67		—		67
Redemptions of common stock	(13,588)	—		—	—		(67)		—		(67)
Distributions declared	—	—		—	—		—		(873)		(873)
Balance, June 30, 2021	9,860,141	$	99	310,974	$	3	$	85,248	$	(48,350)	$	37,000

See accompanying condensed notes to consolidated financial statements.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS GROWTH & INCOME REIT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)


	Six Months Ended June 30,
	2022		2021
Cash Flows from Operating Activities:
Net loss	$	(13,854)	$	(1,717)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization	3,052		3,878
Impairment charges on real estate	11,733		—

Deferred rents	(480)		176
Amortization of above and below-market leases, net	(177)		(392)
Amortization of deferred financing costs	111		120
Unrealized gain on derivative instruments	(564)		(850)


Changes in operating assets and liabilities:
Rents and other receivables	39		(648)
Prepaid expenses and other assets	(282)		(365)
Accounts payable and accrued liabilities	(1,594)		(42)
Due from affiliates	261		—
Due to affiliates	860		860
Other liabilities	(17)		(439)
Net cash (used in) provided by operating activities	(912)		581
Cash Flows from Investing Activities:

Improvements to real estate	(567)		(352)

Net cash used in investing activities	(567)		(352)
Cash Flows from Financing Activities:
Proceeds from notes payable	—		2,000
Principal payments on notes payable	(37)		—


Payments to redeem common stock	(14)		(67)
Distributions paid to common stockholders	—		(873)
Net cash (used in) provided by financing activities	(51)		1,060
Net (decrease) increase in cash and cash equivalents	(1,530)		1,289
Cash and cash equivalents and restricted cash, beginning of period	8,129		4,359
Cash and cash equivalents and restricted cash, end of period	$	6,599	$	5,648
Supplemental Disclosure of Cash Flow Information
Interest paid	$	1,551	$	1,917
Supplemental Disclosure of Noncash Investing and Financing Activities:


Accrued improvements to real estate	$	213	$	12

See accompanying condensed notes to consolidated financial statements.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS GROWTH & INCOME REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2022

(unaudited)

1. ORGANIZATION

KBS Growth & Income REIT, Inc. (the “Company”) was formed on January 12, 2015 as a Maryland corporation that elected to be taxed as a real estate investment trust (“REIT”) beginning with the taxable year ended December 31, 2015. Substantially all of the Company’s business is conducted through KBS Growth & Income Limited Partnership (the “Operating Partnership”), a Delaware limited partnership formed on January 14, 2015. The Company is the sole general partner of, and owns a 0.1% partnership interest in, the Operating Partnership. KBS Growth & Income REIT Holdings LLC (“REIT Holdings”), a Delaware limited liability company formed on January 14, 2015, owns the remaining 99.9% partnership interest in the Operating Partnership and is the sole limited partner. The Company is the sole member and manager of REIT Holdings.

Subject to certain restrictions and limitations, the business of the Company is externally managed by KBS Capital Advisors LLC (the “Advisor”), an affiliate of the Company, pursuant to an advisory agreement between the Company and the Advisor initially entered into on June 11, 2015, and amended at various times thereafter (the “Advisory Agreement”). The Advisor conducts the Company’s operations and manages its portfolio of core real estate properties. On January 27, 2015, the Company issued 20,000 shares of its common stock to the Advisor at a purchase price of $10.00 per share. On June 11, 2015, these outstanding shares of common stock were designated Class A shares of common stock.

As of June 30, 2022, the Company had invested in four office properties. The Company has invested in a portfolio of core real estate properties. The Company considers core properties to be existing properties with at least 80% occupancy.

The Company commenced capital raising activities in June 2015 through a private placement offering. The private offering was followed by a public offering and a second private offering. In August 2020, the Company’s board of directors approved the termination of capital raising activities with the termination of the Company’s distribution reinvestment plan offering and second private offering. As of June 30, 2022, the Company had 9,851,052 and 310,974 shares of Class A and Class T common stock outstanding, respectively.

COVID-19 Pandemic

One of the most significant risks and uncertainties facing the Company and the real estate industry generally, and in particular office REITs like the Company, continues to be the effect of the public health crisis of the novel coronavirus disease (“COVID-19”) pandemic. The Company recognized impairment charges related to a projected reduction in cash flows as a result of changes in leasing projections that were impacted in part by the COVID-19 pandemic at the Institute Property and 210 W. Chicago during the year ended December 31, 2020, the Commonwealth Building during the year ended December 31, 2021, and the Commonwealth Building and the Institute Property during the six months ended June 30, 2022.

The extent to which the COVID-19 pandemic impacts the Company’s operations and those of its tenants and the Company’s implementation of a Plan of Liquidation (defined below) depends on future developments, which remain uncertain and cannot be predicted with confidence, including, among other developments, potential changes in customer behavior, such as the continued social acceptance, desirability and perceived economic benefits of work-from-home arrangements, resulting from the COVID-19 pandemic, which could materially and negatively impact the future demand for office space, resulting in slower overall leasing and an adverse impact to our operations.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS GROWTH & INCOME REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2022

(unaudited)

1. ORGANIZATION (CONTINUED)

Plan of Liquidation

The Company’s board of directors and a special committee composed of all of the Company’s independent directors (the “Special Committee”) has undertaken a review of various strategic alternatives available to the Company and expects to approve the sale of all of the Company’s assets and the Company’s dissolution pursuant to the terms of a plan of complete liquidation and dissolution (a “Plan of Liquidation”). Once approved by the Company’s board of directors, a Plan of Liquidation will be submitted to the Company’s stockholders for approval. The Advisor has been working diligently to develop a Plan of Liquidation to present to the Company’s Special Committee and Board of Directors for approval; however, the impact of the COVID-19 pandemic on a Plan of Liquidation for the Company’s portfolio, as well as the decreased demand for office space as employees continue to work from home, the rising interest rate environment that is impacting the ability of buyers to obtain favorable financing and continued social unrest and increased crime in the Portland area where one of the Company’s properties is located, have created significant headwinds to finalizing a Plan of Liquidation. The principal purpose of a Plan of Liquidation will be to provide liquidity to the Company’s stockholders by selling the Company’s assets, paying its debts and distributing the net proceeds from liquidation to the Company’s stockholders. Although this is the current intention of the Company’s board of directors, the Company can provide no assurances as to the ultimate approval of a Plan of Liquidation or the timing of the liquidation of the Company.

If the Company’s board of directors and stockholders approve a Plan of Liquidation, the Company intends to pursue an orderly liquidation of its company by selling all of its remaining assets, paying its debts and its known liabilities, providing for the payment of unknown or contingent liabilities, distributing the net proceeds from liquidation to the Company’s stockholders and winding up its operations and dissolving its company. In the interim, the Company intends to continue to manage its portfolio of assets to maintain and, if possible, improve the quality and income-producing ability of its properties to enhance property stability and better position the Company’s assets for a potential sale. A Plan of Liquidation remains subject to approval by the Company’s board of directors and the Company’s stockholders and the Company can give no assurance regarding the timing of the liquidation of the Company. Additional information regarding a Plan of Liquidation will be provided to the Company’s stockholders in a proxy statement to be distributed to stockholders in connection with a liquidation vote.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS GROWTH & INCOME REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2022

(unaudited)

2. GOING CONCERN

The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) on the basis that the Company will continue as a going concern, which assumes that the Company will be able to meet its obligations and continue its operations one year from the date the consolidated financial statements are issued. The Company has experienced a decline in occupancy from 90.4% as of December 31, 2020 to 74.5% as of June 30, 2022 and such occupancy may continue to decrease in the future as tenant leases expire. The decrease in occupancy has resulted in a decrease in cash flow from operations and has negatively impacted the market values of the properties in the Company’s portfolio. Additionally, the Commonwealth Building Mortgage Loan with an outstanding principal balance of $45.7 million is maturing in February 2023. Due to the decrease in occupancy and a decrease in market value of the property securing the Commonwealth Building Mortgage Loan, the Company does not expect to be able to extend or refinance that loan at current terms and may be required to pay down a portion of the maturing debt in order to extend or refinance the loan. With the Company’s limited amount of cash on hand, the Company’s ability to make any loan paydowns, without the sale of real estate assets, is severely limited. Additionally, in order to attract or retain tenants needed to increase occupancy and sustain operations, the Company will need to spend a substantial amount on capital leasing costs, however, the Company has limited amounts of liquidity to make these capital commitments. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments to reflect the outcome of these uncertainties. The Company’s ability to continue as a going concern is dependent upon the Company’s ability to exercise its extension option or refinance the Company’s mortgage debt. No assurances can be given that the Company will be successful in achieving these objectives. In addition, as described in Note 1, “Organization – Plan of Liquidation”, if the Company’s board of directors and its stockholders approve a Plan of Liquidation, the Company intends to pursue an orderly liquidation of its company by selling all of its remaining assets, paying its debts and its known liabilities, providing for the payment of unknown or contingent liabilities, distributing the net proceeds from liquidation to the Company’s stockholders and winding up its operations and dissolving the company.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

There have been no significant changes to the Company’s accounting policies since it filed its audited financial statements in its Annual Report on Form 10-K for the year ended December 31, 2021. For further information about the Company’s accounting policies, refer to the Company’s consolidated financial statements and notes thereto for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”).

Principles of Consolidation and Basis of Presentation

The accompanying unaudited consolidated financial statements and condensed notes thereto have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and the rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for audited financial statements. In the opinion of management, the financial statements for the unaudited interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair and consistent presentation of the results for such periods. Operating results for the six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

The consolidated financial statements include the accounts of the Company, REIT Holdings, the Operating Partnership, and their direct and indirect wholly owned subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS GROWTH & INCOME REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2022

(unaudited)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Use of Estimates

The preparation of the consolidated financial statements and the accompanying notes thereto in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates.

Segments

The Company had invested in four office properties as of June 30, 2022. Substantially all of the Company’s revenue and net loss is from real estate, and therefore, the Company currently operates in one reportable segment.

Per Share Data

Basic net income (loss) per share of common stock is calculated by dividing net income (loss) by the weighted-average number of shares of common stock issued and outstanding during such period. Diluted net income (loss) per share of common stock equals basic net income (loss) per share of common stock as there were no potentially dilutive securities outstanding for the six months ended June 30, 2022 and 2021. Basic and diluted net income (loss) per share of Class A common stock and basic and diluted net income (loss) per share of Class T common stock were equal for the three and six months ended June 30, 2022 and 2021 as aggregate cash distributions for each share class were equal during those periods.

During the three and six months ended June 30, 2021, aggregate cash distributions declared per share of Class A and Class T common stock were $0.04287500 and $0.08575000, respectively, assuming the share was issued and outstanding each date that was a record date for distributions during the period. During the three and six months ended June 30, 2022, the Company did not declare any distributions.

Square Footage, Occupancy and Other Measures

Square footage, occupancy, number of tenants and other measures, including annualized base rent and annualized base rent per square foot, or amounts derived from such measures, used to describe real estate investments included in these condensed notes to consolidated financial statements are presented on an unaudited basis and outside the scope of the Company’s independent registered public accounting firm’s review of the Company’s financial statements in accordance with the standards of the United States Public Company Accounting Oversight Board.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS GROWTH & INCOME REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2022

(unaudited)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recently Issued Accounting Standards Update

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU No. 2020-04”) to provide temporary optional expedients and exceptions to the guidance in GAAP on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate (“SOFR”). Modified contracts that meet the following criteria are eligible for relief from the modification accounting requirements under GAAP: (1) The contract references LIBOR or another rate that is expected to be discontinued due to reference rate reform, (2) The modified terms directly replace or have the potential to replace the reference rate that is expected to be discontinued due to reference rate reform, and (3) Any contemporaneous changes to other terms (i.e., those that do not directly replace or have the potential to replace the reference rate) that change or have the potential to change the amount and timing of contractual cash flows must be related to the replacement of the reference rate. For a contract that meets the criteria, the guidance generally allows an entity to account for and present modifications as an event that does not require contract remeasurement at the modification date or reassessment of a previous accounting determination. That is, the modified contract is accounted for as a continuation of the existing contract. In addition, ASU No. 2020-04 provides various optional expedients for hedging relationships affected by reference rate reform, if certain criteria are met. The amendments in ASU No. 2020-04 are effective for all entities as of March 12, 2020 through December 31, 2022. An entity may elect to apply the amendments for contract modifications by Topic or Industry Subtopic as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. Once elected for a Topic or an Industry Subtopic, the amendments in this Update must be applied prospectively for all eligible contract modifications for that Topic or Industry Subtopic. An entity may elect to apply the amendments in ASU No. 2020-04 to eligible hedging relationships existing as of the beginning of the interim period that includes March 12, 2020 and to new eligible hedging relationships entered into after the beginning of the interim period that includes March 12, 2020.

For the period from January 1, 2020 (the earliest date the Company may elect to apply ASU No. 2020-04) through June 30, 2022, the Company did not have any contract modifications that met the criteria described above, specifically contract modifications that have been modified from LIBOR to an alternative reference rate. The Company’s loan agreements, derivative instruments, and certain lease agreements use LIBOR as the current reference rate. For eligible contract modifications, the Company expects to adopt the temporary optional expedients described in ASU No. 2020-04. The optional expedients for hedging relationships described in ASU No. 2020-04 are not expected to have an impact to the Company as the Company has elected to not designate its derivative instruments as a hedge.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS GROWTH & INCOME REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2022

(unaudited)

4. REAL ESTATE

As of June 30, 2022, the Company’s portfolio of real estate was composed of four office buildings containing 599,030 rentable square feet, which were collectively 74.5% occupied. The following table provides summary information regarding the properties owned by the Company as of June 30, 2022 (in thousands):


Property	Date Acquired	City	State	Property Type	Total Real Estate at Cost (1)		Accumulated Depreciation and Amortization (1)		Total Real Estate, Net (1)
Commonwealth Building	06/30/2016	Portland	OR	Office	$	38,449	$	—	$	38,449
The Offices at Greenhouse	11/14/2016	Houston	TX	Office	47,151		(13,006)		34,145
Institute Property	11/09/2017	Chicago	IL	Office	32,502		(347)		32,155
210 W. Chicago	10/05/2020	Chicago	IL	Office	4,699		(222)		4,477
					$	122,801	$	(13,575)	$	109,226

_____________________

(1) Amounts presented are net of impairment charges and write-offs of fully depreciated/amortized assets.

As of June 30, 2022, the following properties each represented more than 10% of the Company’s total assets:


Property	Location	Rentable Square Feet	Total Real Estate, Net (in thousands)		Percentage of Total Assets		Annualized Base Rent (in thousands) (1)		Average Annualized Base Rent per sq. ft.		Occupancy
Commonwealth Building	Portland, OR	224,122	$	38,449	31.3	%	$	3,477	$	29.96	51.8	%
The Offices at Greenhouse	Houston, TX	203,284	34,145		27.8	%	4,005		20.63		95.5	%
Institute Property	Chicago, IL	155,385	32,155		26.2	%	3,587		28.75		80.3	%

_____________________

(1) Annualized base rent represents annualized contractual base rental income as of June 30, 2022, adjusted to straight-line any contractual tenant concessions (including free rent), rent increases and rent decreases from the lease’s inception through the balance of the lease term.

Operating Leases

The Company’s real estate properties are leased to tenants under operating leases for which the terms and expirations vary. As of June 30, 2022, the leases had remaining terms, excluding options to extend, of up to 8.7 years with a weighted-average remaining term of 3.5 years. Some of the leases have provisions to extend the term of the leases, options for early termination for all or a part of the leased premises after paying a specified penalty, and other terms and conditions as negotiated. The Company retains substantially all of the risks and benefits of ownership of the real estate assets leased to tenants. Generally, upon the execution of a lease, the Company requires a security deposit from the tenant in the form of a cash deposit and/or a letter of credit. The amount required as a security deposit varies depending upon the terms of the respective lease and the creditworthiness of the tenant, but generally is not a significant amount. Therefore, exposure to credit risk exists to the extent that a receivable from a tenant exceeds the amount of its security deposit. Security deposits received in cash related to tenant leases are included in other liabilities in the accompanying consolidated balance sheets and totaled $0.9 million and $0.7 million as of June 30, 2022 and December 31, 2021, respectively.

During the six months ended June 30, 2022 and 2021, the Company recognized deferred rent from tenants, net of lease incentive amortization, of $0.5 million and $(0.2) million, respectively. As of June 30, 2022 and December 31, 2021, the cumulative deferred rent balance was $4.6 million and $4.1 million, respectively, and is included in rents and other receivables on the accompanying consolidated balance sheets. The cumulative deferred rent balance included $1.8 million and $1.9 million of unamortized lease incentives as of June 30, 2022 and December 31, 2021, respectively.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS GROWTH & INCOME REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2022

(unaudited)

4. REAL ESTATE (CONTINUED)

As of June 30, 2022, the future minimum rental income from the Company’s properties under its non-cancelable operating leases was as follows (in thousands):


July 1, 2022 through December 31, 2022	$	5,241
2023	10,447
2024	9,516
2025	6,523
2026	6,239
Thereafter	11,785
	$	49,751

As of June 30, 2022, the Company had a concentration of credit risk related to AECOM, one of the tenants in The Offices at Greenhouse in the engineering industry, which represented 25% of the Company’s annualized base rent. The tenant individually occupied 135,727 rentable square feet or approximately 23% of the total rentable square feet of the Company’s real estate portfolio, which expires on December 31, 2024, with two five-year extension options. As of June 30, 2022, the annualized base rent for this tenant was approximately $2.9 million or $21.37 per square foot. No other tenant represented more than 10% of the Company’s annualized base rent.

As of June 30, 2022, the Company’s real estate properties were leased to 52 tenants over a diverse range of industries. The Company’s highest tenant industry concentration (greater than 10% of annualized base rent) was as follows:


Industry	Number of Tenants	Annualized Base Rent (1) (in thousands)		Percentage of Annualized Base Rent
Professional, scientific and technical	8	$	4,481	38.9	%
Computer system design and related services	3	1,380		12.0	%
		$	5,861	50.9	%

_____________________

As of June 30, 2022, no other tenant industries accounted for more than 10% of annualized base rent.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS GROWTH & INCOME REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2022

(unaudited)

4. REAL ESTATE (CONTINUED)

Impairment of Real Estate

During the three and six months ended June 30, 2022, the Company recorded non-cash impairment charges of $8.4 million and $11.7 million, respectively, to write down the carrying values of the Commonwealth Building, an office property located in Portland, Oregon and the Institute Property, an office property located in Chicago, Illinois, to their estimated fair values as follows:

•Commonwealth Building - During the three and six months ended June 30, 2022, the Company recorded non-cash impairment charges of $8.4 million and $9.6 million, respectively, related to the Commonwealth Building as a result of a continued decrease in occupancy and changes in cash flow estimates including a change in leasing projections, which triggered the future estimated undiscounted cash flows to be lower than the net carrying value of the property. As of June 30, 2022, the Commonwealth Building was 51.8% occupied. The Company is projecting longer lease-up periods for the vacant space as demand for office space in Portland has significantly declined as a result of both the COVID-19 pandemic, with employees continuing to work from home, and the impact of the disruptions caused by protests and demonstrations and increased crime in the downtown area. Downtown Portland is experiencing record high office vacancies and it is uncertain when the market will fully recover.

•Institute Property - During the six months ended June 30, 2022, the Company recorded non-cash impairment charges of $2.1 million related to the Institute Property as a result of changes in cash flow estimates including a change in leasing projections, which triggered the future estimated undiscounted cash flows to be lower than the net carrying value of the property. The decrease in cash flow projections was primarily due to reduced demand for the office space at the property resulting in longer lease-up periods and a decrease in projected rental rates due to the COVID-19 pandemic which resulted in additional challenges to re-lease the vacant space. Further, tenants at the Institute Property have been adversely impacted by the measures put in place to control the spread of COVID-19 and certain tenants at the Institute Property were granted rent concessions as their businesses have been severely impacted.

The Company did not record any impairment charges on its real estate properties during the three and six months ended June 30, 2021.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS GROWTH & INCOME REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2022

(unaudited)

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

MARKET LEASE LIABILITIES

As of June 30, 2022 and December 31, 2021, the Company’s tenant origination and absorption costs, above-market lease assets and below-market lease liabilities (excluding fully amortized assets and liabilities and accumulated amortization) were as follows (in thousands):


	Tenant Origination and Absorption Costs				Above-Market Lease Assets				Below-Market Lease Liabilities
	June 30, 2022		December 31, 2021		June 30, 2022		December 31, 2021		June 30, 2022		December 31, 2021
Cost	$	6,838	$	7,873	$	178	$	178	$	(2,630)	$	(2,704)
Accumulated Amortization	(4,444)		(4,768)		(117)		(106)		1,980		1,866
Net Amount	$	2,394	$	3,105	$	61	$	72	$	(650)	$	(838)

Increases (decreases) in net income as a result of amortization of the Company’s tenant origination and absorption costs, above-market lease assets and below-market lease liabilities for the three and six months ended June 30, 2022 and 2021 were as follows (in thousands):


	Tenant Origination and Absorption Costs				Above-Market Lease Assets				Below-Market Lease Liabilities
	For the Three Months Ended June 30,				For the Three Months Ended June 30,				For the Three Months Ended June 30,
	2022		2021		2022		2021		2022		2021
Amortization	$	(308)	$	(420)	$	(6)	$	(5)	$	93	$	232


	Tenant Origination and Absorption Costs				Above-Market Lease Assets				Below-Market Lease Liabilities
	For the Six Months Ended June 30,				For the Six Months Ended June 30,				For the Six Months Ended June 30,
	2022		2021		2022		2021		2022		2021
Amortization	$	(638)	$	(857)	$	(11)	$	(10)	$	188	$	402

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS GROWTH & INCOME REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2022

(unaudited)

6. NOTES PAYABLE

As of June 30, 2022 and December 31, 2021, the Company’s notes payable consisted of the following (dollars in thousands):


	Book Value as of June 30, 2022		Book Value as of December 31, 2021		Contractual Interest Rate as of June 30, 2022 (1)	Effective Interest Rate at June 30, 2022 (1)	Payment Type	Maturity Date (2)
Commonwealth Building Mortgage Loan (3)	$	45,681	$	45,681	One-month LIBOR + 1.80% (3)	4.27%	Interest Only	02/01/2023
Term Loan (4)	52,260		52,260		One-month LIBOR + 2.00% (4)	3.79%	Interest Only	11/09/2022 (4)
210 W. Chicago Mortgage Loan (5)	3,688		3,725		One-month LIBOR + 2.20%	3.95%	Principal & Interest (5)	06/28/2024
Notes payable principal outstanding	$	101,629	$	101,666
Deferred financing costs, net	(101)		(212)
Notes payable, net	$	101,528	$	101,454

_____________________

(1) Contractual interest rate represents the interest rate in effect under the loan as of June 30, 2022. Effective interest rate is calculated as the actual interest rate in effect as of June 30, 2022 (consisting of the contractual interest rate and the effect of interest rate swaps, if applicable), using interest rate indices as of June 30, 2022, where applicable.

(2) Represents the maturity date as of June 30, 2022; subject to certain conditions, the maturity dates of the loans may be extended beyond the dates shown.

(3) The interest rate under this loan is calculated at a variable rate of 180 basis points over one-month LIBOR, but at no point shall the interest rate be less than 2.05%.

(4) As of June 30, 2022, the outstanding balance under the Term Loan consisted of $34.9 million of term commitment and $17.4 million of revolving commitment. The Term Loan is secured by The Offices at Greenhouse and the Institute Property. On August 1, 2022, the Company entered into a modification agreement with the lender of the Term Loan to (i) extend the maturity date to November 9, 2023, (ii) convert the revolving commitment to term commitment and (iii) reset the interest rate of the loan. See Note 11, “Subsequent Events – Modified Term Loan” for additional information regarding these changes.

(5) Monthly payments for the 210 W. Chicago Mortgage Loan include principal and interest with principal payments calculated using an amortization schedule of 25 years at an interest rate of 6.0%, with the remaining principal balance, all accrued and unpaid interest and any other amounts due at maturity.

During the three and six months ended June 30, 2022, the Company incurred $0.7 million and $1.1 million of interest expense, respectively. During the three and six months ended June 30, 2021, the Company incurred $0.6 million and $1.2 million of interest expense, respectively. As of June 30, 2022 and December 31, 2021, $0.3 million of interest expense were payable. Included in interest expense during the three and six months ended June 30, 2022 were $0.1 million of amortization of deferred financing costs. Included in interest expense during the three and six months ended June 30, 2021 were $0.1 million of amortization of deferred financing costs. Interest expense (including gains and losses) incurred as a result of the Company’s derivative instruments decreased interest expense by $0.1 million and $0.2 million for the three and six months ended June 30, 2022, respectively. Interest expense (including gains and losses) incurred as a result of the Company’s derivative instruments increased interest expense by $28,000 and $31,000 for the three and six months ended June 30, 2021, respectively.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS GROWTH & INCOME REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2022

(unaudited)

6. NOTES PAYABLE (CONTINUED)

The following is a schedule of maturities, including principal amortization payments, for all notes payable outstanding as of June 30, 2022 (in thousands):


July 1, 2022 through December 31, 2022	$	52,297
2023	45,755
2024	3,577
2025	—
2026	—
Thereafter	—
	$	101,629

7. DERIVATIVE INSTRUMENTS

The Company enters into derivative instruments for risk management purposes to hedge its exposure to cash flow variability caused by changing interest rates. The primary goal of the Company’s risk management practices related to interest rate risk is to prevent changes in interest rates from adversely impacting the Company’s ability to achieve its investment return objectives. The Company does not enter into derivatives for speculative purposes.

The Company enters into interest rate swaps as a fixed rate payer to mitigate its exposure to rising interest rates on its variable rate notes payable. The value of interest rate swaps is primarily impacted by interest rates, market expectations about interest rates, and the remaining life of the instrument. In general, increases in interest rates, or anticipated increases in interest rates, will increase the value of the fixed rate payer position and decrease the value of the variable rate payer position. As the remaining term of the interest rate swap decreases, the value of both positions will generally move towards zero.

The following table summarizes the notional amount and other information related to the Company’s interest rate swap as of June 30, 2022 and December 31, 2021. The notional amount is an indication of the extent of the Company’s involvement in each instrument at that time, but does not represent exposure to credit, interest rate or market risks (dollars in thousands):

June 30, 2022

December 31, 2021

Reference Rate

as of

June 30, 2022

Fix Pay Rate

as of

June 30, 2022

Remaining Term in Years as of June 30, 2022

Derivative Instruments

Number of Instruments

Notional Amount

Number of Instruments

Notional Amount

Derivative instruments not designated as hedging instruments

Interest Rate Swap

30,000

One-month LIBOR/

Fixed at 2.82%

2.82%

0.3

The following table sets forth the fair value of the Company’s derivative instruments as well as their classification on the consolidated balance sheets as of June 30, 2022 and December 31, 2021 (dollars in thousands):

June 30, 2022

December 31, 2021

Derivative Instruments

Balance Sheet Location

Number of Instruments

Fair Value

Number of Instruments

Fair Value

Derivative instruments not designated as hedging instruments

Interest Rate Swap

Other liabilities, at fair value

(46)

(610)

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS GROWTH & INCOME REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2022

(unaudited)

7. DERIVATIVE INSTRUMENTS (CONTINUED)

The change in fair value of a derivative instrument that is not designated as a cash flow hedge is included in interest expense in the accompanying consolidated statements of operations. The following table summarizes the effects of derivative instruments on the Company’s consolidated statements of operations (in thousands):


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2022		2021		2022		2021
Income statement related
Derivatives not designated as hedging instruments
Realized loss recognized on interest rate swaps	$	156	$	445	$	356	$	881
Unrealized gain on interest rate swaps	(223)		(417)		(564)		(850)
(Decrease) increase in interest expense as a result of derivatives	$	(67)	$	28	$	(208)	$	31

8. FAIR VALUE DISCLOSURES

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

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

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

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

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

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

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS GROWTH & INCOME REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2022

(unaudited)

8. FAIR VALUE DISCLOSURES (CONTINUED)

Derivative instruments: The Company’s derivative instruments are presented at fair value on the accompanying consolidated balance sheets. The valuation of these instruments is determined using a proprietary model that utilizes observable inputs. As such, the Company classifies these inputs as Level 2 inputs. The proprietary model uses the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including interest rate curves and volatility. The fair values of interest rate swaps are estimated using the market standard methodology of netting the discounted fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on an expectation of interest rates (forward curves) derived from observable market interest rate curves. In addition, credit valuation adjustments, which consider the impact of any credit risks to the contracts, are incorporated in the fair values to account for potential nonperformance risk.

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

The following were the face values, carrying amounts and fair values of the Company’s notes payable as of June 30, 2022 and December 31, 2021, which carrying amounts generally do not approximate the fair values (in thousands):


	June 30, 2022						December 31, 2021
	Face Value		Carrying Amount		Fair Value		Face Value		Carrying Amount		Fair Value
Financial liabilities:
Notes payable	$	101,629	$	101,528	$	95,220	$	101,666	$	101,454	$	100,367

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

As of June 30, 2022, the Company measured the following derivative instruments at fair value (in thousands):


			Fair Value Measurements Using
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Recurring Basis:
Liability derivative - interest rate swap	$	(46)	$	—	$	(46)	$	—

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS GROWTH & INCOME REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2022

(unaudited)

8. FAIR VALUE DISCLOSURES (CONTINUED)

During the six months ended June 30, 2022, the Company measured the following asset at fair value on a nonrecurring basis (in thousands):


			Fair Value Measurements Using
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Nonrecurring Basis:
Impaired real estate (1)	$	73,000	$	—	$	—	$	73,000

_____________________

(1) Amount represents the fair value for real estate assets impacted by an impairment charge during the six months ended June 30, 2022, as of the date that the fair value measurement was made, which was March 31, 2022 for the Institute Property and June 30, 2022 for the Commonwealth Building. The carrying value for the real estate asset measured at a reporting date other than June 30, 2022 may have subsequently increased or decreased from the fair value reflected due to activity that has occurred since the measurement date.

During the six months ended June 30, 2022, the Commonwealth Building and the Institute Property were measured at their estimated fair values based on a discounted cash flow approach. The significant unobservable inputs the Company used in measuring the estimated fair value of the Commonwealth Building include a discount rate of 10.00% and a terminal cap rate of 6.50% and the significant unobservable inputs the Company used in measuring the estimated fair value of the Institute Property include a discount rate of 7.50% and a terminal cap rate of 6.50%. See Note 4, “Real Estate - Impairment of Real Estate” for further discussion on the impaired real estate property.

9. RELATED PARTY TRANSACTIONS

Pursuant to the Advisory Agreement, the Company is obligated to pay the Advisor specified fees upon the provision of certain services related to the management of the Company’s investments and for other services (including, but not limited to, the disposition of investments). The Company is also obligated to reimburse the Advisor for certain operating expenses incurred on behalf of the Company or incurred in connection with providing services to the Company. The Advisor is entitled to certain other fees, including an incentive fee upon achieving certain performance goals, as detailed in the Advisory Agreement. In addition, the Advisor paid all offering expenses related to the second private offering conducted by the Company without reimbursement by the Company.

In addition, in connection with property acquisitions, the Company, through indirect wholly owned subsidiaries, has entered into separate Property Management Agreements (defined below) with KBS Management Group, LLC, an affiliate of the Advisor (the “Co-Manager”).

The Company has also entered into a fee reimbursement agreement with the Dealer Manager pursuant to which the Company agreed to reimburse the Dealer Manager for certain fees and expenses it incurs for administering the Company’s participation in the DTCC Alternative Investment Product Platform with respect to certain accounts of the Company’s investors serviced through the platform.

The Advisor also serves as the advisor for KBS Real Estate Investment Trust II, Inc. (“KBS REIT II”) and KBS Real Estate Investment Trust III, Inc. (“KBS REIT III”). The Dealer Manager also serves as the dealer manager for KBS REIT II and KBS REIT III.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS GROWTH & INCOME REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2022

(unaudited)

9. RELATED PARTY TRANSACTIONS (CONTINUED)

As of January 1, 2021, the Company, together with KBS REIT II, KBS REIT III, the Dealer Manager, the Advisor and other KBS affiliated entities, had entered into an errors and omissions and directors and officers liability insurance program where the lower tiers of such insurance coverage were shared. The cost of these lower tiers is allocated by the Advisor and its insurance broker among each of the various entities covered by the program and is billed directly to each entity. In June 2022, the Company renewed its participation in the program, and the program is effective through June 30, 2023. At renewal on June 30, 2022, KBS REIT II elected to cease participation in the program and obtained separate insurance coverage.

During the six months ended June 30, 2022 and 2021, no other business transactions occurred between the Company and KBS REIT II and KBS REIT III.

Pursuant to the terms of these agreements, summarized below are the related-party costs incurred by the Company for the three and six months ended June 30, 2022 and 2021, and any related amounts receivable and payable as of June 30, 2022 and December 31, 2021 (in thousands).


	Incurred								Receivable as of				Payable as of
	Three Months Ended June 30,				Six Months Ended June 30,				June 30,		December 31,		June 30,		December 31,
	2022		2021		2022		2021		2022		2021		2022		2021
Expensed
Asset management fees (1)	$	436	$	434	$	866	$	862	$	—	$	—	$	8,507	$	7,641
Reimbursement of operating expenses (2)	46		71		78		164		15		276		14		19
Property management fees (3)	22		28		46		59		—		—		7		8

Other Arrangement
Advisor advance for cash distributions (4)	—		—		—		—		—		—		1,338		1,338
	$	504	$	533	$	990	$	1,085	$	15	$	276	$	9,866	$	9,006

_____________________

(1) The asset management fee is a monthly fee payable to the Advisor in an amount equal to one-twelfth of 1.0% of the cost of the Company’s investments including the portion of the investment that is debt financed. As of June 30, 2022, the Company had accrued and deferred payment of $8.5 million of asset management fees related to the periods from October 2017 through June 2022.

(2) See “Reimbursable Operating Expenses” below.

(3) See “Real Estate Property Co-Management Agreements” below.

(4) See “Advance from the Advisor” below.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS GROWTH & INCOME REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2022

(unaudited)

9. RELATED PARTY TRANSACTIONS (CONTINUED)

Reimbursable Operating Expenses

Reimbursable operating expenses primarily related to directors and officers liability insurance, legal fees, state and local taxes, accounting software and cybersecurity related expenses incurred by the Advisor under the Advisory Agreement. The Company has reimbursed the Advisor for the Company’s allocable portion of the salaries, benefits and overhead of internal audit department personnel providing services to the Company. These amounts totaled $47,000 and $73,000 for the three and six months ended June 30, 2022, respectively, and $70,000 and $159,000 for the three and six months ended June 30, 2021, respectively, and were the only type of employee costs reimbursed under the Advisory Agreement for the periods. The Company does not reimburse for employee costs in connection with services for which the Advisor earned or earns acquisition, origination or disposition fees (other than reimbursement of travel and communication expenses) or for the salaries or benefits the Advisor or its affiliates may pay to the Company’s executive officers. In addition to the amounts above, the Company reimburses the Advisor for certain of the Company’s direct costs incurred from third parties that were initially paid by the Advisor on behalf of the Company.

The receivable as of December 31, 2021 includes $0.3 million of estimated amounts charged to the Company by certain vendors for services for which the Company believes it was either overcharged or which were never performed. During the six months ended June 30, 2022, the Company incurred $0.2 million of legal and accounting costs related to the investigation of this matter. As of June 30, 2022, the Advisor had reimbursed the Company $0.5 million for any amounts inappropriately charged to the Company and for legal and accounting costs incurred related to the investigation of this matter.

The Advisor must reimburse the Company the amount by which the Company’s aggregate total operating expenses for the four fiscal quarters then ended exceed the greater of 2% of the Company’s average invested assets or 25% of the Company’s net income, unless the conflicts committee has determined that such excess expenses were justified based on unusual and non-recurring factors. Operating expenses for the four fiscal quarters ended June 30, 2022 did not exceed the charter-imposed limitation.

Advance from the Advisor

The Advisor advanced funds to the Company, which are non-interest bearing, for distribution record dates through the period ended May 31, 2016. As of June 30, 2022, the total advanced funds due to the Advisor from the Company was approximately $1.3 million, which is included in due to affiliates in the Company’s consolidated balance sheet. The Company is only obligated to repay the Advisor for its advance if and to the extent that:

(i)the Company’s modified funds from operations (“MFFO”), as such term is defined by the Institute for Portfolio Alternatives and interpreted by the Company, for the immediately preceding quarter exceeds the amount of cash distributions declared for record dates of such prior quarter (an “MFFO Surplus”), and the Company will pay the Advisor the amount of the MFFO Surplus to reduce the principal amount outstanding under the advance, provided that such payments shall only be made if management in its sole discretion expects an MFFO Surplus to be recurring for at least the next two calendar quarters, determined on a quarterly basis;

(ii)Excess proceeds from third-party financings are available (“Excess Proceeds”), provided that the amount of any such Excess Proceeds that may be used to repay the principal amount outstanding under the advance shall be determined by the conflicts committee in its sole discretion; or

(iii)Net sales proceeds from the sale of the Company’s real estate portfolio, after the pay down of any related debt and selling costs and expenses, are available.

In determining whether Excess Proceeds are available to repay the advance, the Company’s conflicts committee will consider whether cash on hand could have been used to reduce the amount of third-party financing provided to the Company. If such cash could have been used instead of third-party financing, the third-party financing proceeds will be available to repay the advance.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS GROWTH & INCOME REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2022

(unaudited)

9. RELATED PARTY TRANSACTIONS (CONTINUED)

The Advisor may defer repayment of the advance notwithstanding that the Company would otherwise be obligated to repay the advance.

Real Estate Property Co-Management Agreements

In connection with its property acquisitions, the Company, through separate, indirect, wholly-owned subsidiaries, entered into separate property management agreements (each, a “Property Management Agreement”) with the Co-Manager for each of its properties. Under each Property Management Agreement, the Co-Manager will provide certain management services related to these properties in addition to those provided by the third-party property managers. In exchange for these services, the Company pays the Co-Manager a monthly fee equal to a percentage of the rent, payable and actually collected for the month from each of the properties. Each Property Management Agreement has an initial term of one year and will be deemed renewed for successive one-year periods provided it is not terminated. Each party may terminate the Property Management Agreement without cause on 30 days’ written notice to the other party and may terminate each Property Management Agreement for cause on 5 days’ written notice to the other party upon the occurrence of certain events as detailed in each Property Management Agreement.

Property Name

Effective Date

Annual Fee Percentage

Commonwealth Building

07/01/2016

1.25%

The Offices at Greenhouse

11/14/2016

0.25%

Institute Property

11/09/2017

1.00%

10. COMMITMENTS AND CONTINGENCIES

Economic Dependency

The Company depends on the Advisor for certain services that are essential to the Company, including the management of the daily operations of the Company’s investment portfolio, disposition of investments and other general and administrative responsibilities. In the event that the Advisor is unable to provide such services, the Company will be required to obtain such services from other sources.

Legal Matters

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

Environmental

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

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

KBS GROWTH & INCOME REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2022

(unaudited)

11. SUBSEQUENT EVENTS

The Company evaluates subsequent events up until the date the consolidated financial statements are issued.

Modified Term Loan

On August 1, 2022, the Company, through its wholly owned subsidiaries (collectively, the “Borrower”), entered into a modification agreement to the Term Loan (the “Modified Term Loan”) with JP Morgan Chase Bank, N.A. (the “Lender”) to (i) extend the maturity date from November 9, 2022 to November 9, 2023, (ii) convert the revolving commitment to term commitment and (iii) reset the interest rate of the Term Loan. The Modified Term Loan has an outstanding balance of $52.3 million, which is the maximum term commitment available under the Modified Term Loan. The Modified Term Loan continues to be secured by the Offices at Greenhouse and the Institute Property.

The Modified Term Loan bears interest at the forward-looking term rate based on SOFR (“Secured Overnight Financing Rate”) with a tenor comparable to one-month plus 10 basis points (“Adjusted Term SOFR”) plus 200 basis points per annum prior to May 9, 2023. After May 9, 2023, the Modified Term Loan will bear interest at Adjusted Term SOFR plus 250 basis points per annum. Monthly payments are interest-only with the remaining principal balance, all accrued and unpaid interest and all other sums due under the loan documents payable at maturity. The Company has the right to prepay all or a portion of the Modified Term Loan at any time, subject to certain fees and conditions contained in the loan documents.

Subject to certain terms and conditions contained in the loan documents, cash currently held by the Company may only be used for the Company’s operating costs including but not limited to the Company’s general and administrative costs, liquidation costs (which may include proxy solicitation costs, DST transfer agent costs, legal costs, tail insurance policy costs and other reasonable and customary costs to maintain the Company in good standing), capital costs (including building improvements, tenant improvements and leasing commissions at its owned properties) and any other reasonable costs and expenses required to maintain the Company as a going concern (collectively “REIT Operating Costs”), but for no other purpose. Further, the Company is required to deposit any cash amount exceeding $7.0 million into an account controlled by the Lender or apply it to pay down the Modified Term Loan. The Company is prohibited from making any cash distributions (other than REIT Operating Costs) except for amounts needed to maintain REIT status and redemptions sought upon a stockholder’s death, “qualifying disability” or “determination of incompetence” (each as defined in the share redemption program) not exceeding $250,000 annually, in the aggregate, for any calendar year. In addition, on a monthly basis, any excess cash flow (as defined in the modification agreement) from the Offices at Greenhouse and the Institute Property is required to be deposited into an account which will serve as additional security for the loan.

KBSGI REIT Properties, LLC (“KBS GI REIT Properties”), the Company’s wholly owned subsidiary, in connection with the Modified Term Loan, is providing a guaranty of the payment of (i) principal balance and any interest or other sums outstanding under the Modified Term Loan as of the date such amounts become due, and (ii) the principal balance and any interest or other sums outstanding under the Modified Term Loan in the event of: certain bankruptcy, insolvency or related proceedings involving the Borrower and KBS GI REIT Properties, as described in the loan documents. KBS GI REIT Properties is also providing a guaranty of the payment of certain liabilities, losses, damages, costs and expenses (including legal fees) incurred by the Lender as a result of certain intentional actions or omissions committed by the Borrower, KBS GI REIT Properties and/or any of their affiliates in violation of the loan documents, or certain other occurrences in relation to The Offices at Greenhouse, the Institute Property and/or the Borrower, as further described in the amended and restated guaranty.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the accompanying financial statements of KBS Growth & Income REIT, Inc. and the notes thereto. As used herein, the terms “we,” “our” and “us” refer to KBS Growth & Income REIT, Inc., a Maryland corporation, and, as required by context, KBS Growth & Income Limited Partnership, a Delaware limited partnership, which we refer to as the “Operating Partnership,” and to their subsidiaries.

Forward-Looking Statements

Certain statements included in this Quarterly Report on Form 10-Q are forward-looking statements. Those statements include statements regarding the intent, belief or current expectations of KBS Growth & Income REIT, Inc. and members of our 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. These include statements about our plans, strategies, prospects and a proposed Plan of Liquidation (defined herein) and these statements are subject to known and unknown risks and uncertainties. Readers are cautioned not to place undue reliance on these forward-looking statements. Actual results may differ materially from those contemplated by such forward-looking statements. Further, forward-looking statements speak only as of the date they are made, and we undertake 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. Moreover, you should interpret many of the risks identified in this report, as well as the risks set forth below, as being heightened as a result of the ongoing and numerous adverse impacts of the COVID-19 pandemic.

The following are some of the risks and uncertainties, although not all of the risks and uncertainties, that could cause our actual results to differ materially from those presented in our forward-looking statements:

•The COVID-19 pandemic continues to be one of the most significant risks and uncertainties facing us and the real estate industry generally, and in particular office REITs like our company. We cannot predict to what extent economic activity, including the use of and demand for office space, will return to pre-pandemic levels. Even after the pandemic has ceased to be active, potential changes in customer behavior, such as the continued social acceptance, desirability and perceived economic benefits of work-from-home arrangements, resulting from the COVID-19 pandemic, could materially and negatively impact the future demand for office space, resulting in slower overall leasing and an adverse impact to our operations.

•Although our board of directors expects to approve the sale of all of our assets and our dissolution pursuant to a Plan of Liquidation and submit such plan to our stockholders for approval, we can give no assurance that our board of directors and/or our stockholders will approve a Plan of Liquidation, or if approved, that we will be able to successfully implement a Plan of Liquidation and sell our assets, pay our debts and distribute the net proceeds from liquidation to our stockholders as we intend. Given the uncertainty and current business disruptions as a result of the outbreak of COVID-19, as well as the current economic slowdown, the rising interest rate environment and inflation (or the public perception that any of these events may continue), and continued social unrest and increased crime in the Portland area where one of our properties is located, our implementation of a Plan of Liquidation, if approved by our board of directors and/or stockholders, may be materially and adversely impacted.

•We pay substantial fees to and expenses of our advisor and its affiliates. These payments decrease the amount of cash available for distribution to our stockholders.

•All of our executive officers, one of our directors and other key real estate and debt finance professionals are also officers, directors, managers, key professionals and/or holders of a direct or indirect controlling interest in our advisor, and/or other KBS-affiliated entities. As a result, they face conflicts of interest, including significant conflicts created by our advisor’s and its affiliates’ compensation arrangements with us and other KBS-sponsored programs and KBS-advised investors and conflicts in allocating time among us and these other programs and investors. Although we have adopted corporate governance measures to ameliorate some of the risks posed by these conflicts, these conflicts could result in action or inaction that is not in the best interests of our stockholders.

•As of June 30, 2022, we had a limited portfolio of four real estate investments, which may cause the value of an investment in us to vary more widely with the performance of specific assets in our portfolio and cause our general and administrative expenses to constitute a greater percentage of our revenue.

•Our advisor waived its asset management fee for the second and third quarters of 2017 and deferred its asset management fee related to the periods from October 2017 through June 2022. If our advisor determines to no longer waive or defer certain fees owed to them, our ability to fund our operations may be adversely affected.

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PART I. FINANCIAL INFORMATION (CONTINUED)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

•Our policies do not limit us from incurring debt until our aggregate borrowings would exceed 75% of the cost (before deducting depreciation or other non-cash reserves) of our tangible assets, and we may exceed this limit with the approval of the conflicts committee of our board of directors. High debt levels could limit the amount of cash we have available to distribute and could result in a decline in the value of our stockholders’ investment.

•We have debt obligations with variable interest rates. The interest and related payments will vary with the movement of LIBOR or other indexes. Increases in the indexes could increase the amount of our debt payments and limit our ability to pay distributions to our stockholders.

•We depend on tenants for the revenue generated by our real estate investments and, accordingly, the revenue generated by our real estate investments is dependent upon the success and economic viability of our tenants. Revenues from our properties could decrease due to a reduction in occupancy (caused by factors including, but not limited to, tenant defaults, tenant insolvency, early termination of tenant leases and non-renewal of existing tenant leases), rent deferrals or abatements, tenants becoming unable to pay their rent and/or lower rental rates, making it more difficult for us to meet our debt service obligations and reducing our stockholders’ returns. Further, the resale value of a property depends principally upon the value of the cash flow generated by the leases associated with that property. Non-renewals, terminations or lease defaults could reduce any net sales proceeds received upon the sale of the property and would adversely affect the amount of liquidating distributions our stockholders would receive if a Plan of Liquidation is approved by our board of directors and/or our stockholders.

•Our investments in real estate may be affected by unfavorable real estate market, the rising interest rate environment, and general economic conditions, which could decrease the value of those assets. Revenues from our properties could decrease. Such events would make it more difficult for us to meet our debt service obligations and successfully implement a Plan of Liquidation, which could in turn reduce our stockholders’ returns and the amount of any liquidating distributions they receive.

•Continued disruptions in the financial markets, including the current economic slowdown, the rising interest rate environment and inflation (or the public perception that any of these events may continue) as well as changes in the demand for office properties and uncertain economic conditions could adversely affect our ability to successfully implement our business strategy and any Plan of Liquidation approved by our board of directors and/or our stockholders, which could reduce our stockholders’ returns and the amount of any liquidating distributions they receive.

•Our share redemption program only provides for redemptions sought upon a stockholder’s death, “qualifying disability” or “determination of incompetence” (each as defined in the share redemption program, and collectively “special redemptions”). The dollar amounts available for such redemptions are determined by the board of directors and may be adjusted from time to time. The dollar amount limitation for such redemptions for the calendar year 2022 was $250,000 in the aggregate, of which $26,000 was used for such special redemptions from January through July 2022. Our share redemption program does not provide for ordinary redemptions and we can provide no assurances, when, if ever, we will provide for redemptions other than special redemptions.

All forward-looking statements should be read in light of the risks identified herein and in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021, each as filed with the Securities and Exchange Commission (the “SEC”).

Overview

We were formed on January 12, 2015 as a Maryland corporation that elected to be taxed as a real estate investment trust (“REIT”) beginning with the taxable year ended December 31, 2015 and we intend to continue to operate in such a manner. Substantially all of our business is conducted through our Operating Partnership, of which we are the sole general partner. Subject to certain restrictions and limitations, our business is externally managed by our advisor pursuant to an advisory agreement. KBS Capital Advisors manages our operations and our portfolio of core real estate properties. KBS Capital Advisors also provides asset-management, marketing, investor-relations and other administrative services on our behalf. Our advisor acquired 20,000 shares of our Class A common stock for an initial investment of $200,000. We have no paid employees.

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PART I. FINANCIAL INFORMATION (CONTINUED)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

We commenced a private placement offering of our shares of common stock that was exempt from registration pursuant to Rule 506(b) of Regulation D of the Securities Act of 1933, as amended (the “Securities Act”), on June 11, 2015. We ceased offering shares in the primary portion of our private offering on April 27, 2016. KBS Capital Markets Group LLC, an affiliate of our advisor, served as the dealer manager of the offering pursuant to a dealer manager agreement.

On April 26, 2016, the SEC declared our registration statement on Form S-11, pursuant to which we registered shares of our common stock for sale to the public, effective, and we retained KBS Capital Markets Group LLC to serve as the dealer manager of the initial public offering. We terminated the primary initial public offering effective June 30, 2017. We terminated the distribution reinvestment plan offering effective August 20, 2020.

On October 3, 2017, we launched a second private placement offering of our shares of common stock that exempt from registration pursuant to Rule 506(c) of Regulation D of the Securities Act. In connection with the offering, we entered into a dealer manager agreement with KBS Capital Advisors and an unaffiliated third party. In December 2019, in connection with its consideration of strategic alternatives for us, our board of directors determined to suspend the second private offering and terminated the second private offering on August 5, 2020.

Through our capital raising activities, we raised $94.0 million from the sale of 10,403,922 shares of our common stock, including $8.5 million from the sale of 924,286 shares of common stock under our distribution reinvestment plan. As of June 30, 2022, we had 9,851,052 and 310,974 Class A and Class T shares outstanding, respectively.

We have used substantially all of the net proceeds from our offerings to invest in a portfolio of core real estate properties. We consider core properties to be existing properties with at least 80% occupancy. As of June 30, 2022, we owned four office buildings.

Going Concern Considerations

The accompanying consolidated financial statements and notes have been prepared assuming we will continue as a going concern. We have experienced a decline in occupancy from 90.4% as of December 31, 2020 to 74.5% as of June 30, 2022 and such occupancy may continue to decrease in the future as tenant leases expire. The decrease in occupancy has resulted in a decrease in cash flow from operations and has negatively impacted the market values of our properties in our portfolio. Additionally, the Commonwealth Building Mortgage Loan with an outstanding principal balance of $45.7 million is maturing in February 2023. Due to the decrease in occupancy and a decrease in market value of the property securing the Commonwealth Building Mortgage Loan, we do not expect to be able to extend or refinance that loan at current terms and may be required to pay down a portion of the maturing debt in order to extend or refinance the loan. With our limited amount of cash on hand, our ability to make any loan paydowns, without the sale of real estate assets, is severely limited. Additionally, in order to attract or retain tenants needed to increase occupancy and sustain operations, we will need to spend a substantial amount on capital leasing costs, however we have limited amounts of liquidity to make these capital commitments. These conditions raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to exercise our extension option or refinance our mortgage debt. No assurances can be given that we will be successful in achieving these objectives.

Plan of Liquidation

Our board of directors and a special committee composed of all of our independent directors (the “Special Committee”) has undertaken a review of various strategic alternatives available to us and expects to approve the sale of all of our assets and our dissolution pursuant to the terms of a plan of complete liquidation and dissolution (a “Plan of Liquidation”). Once approved by our board of directors, a Plan of Liquidation will be submitted to our stockholders for approval. Our advisor has been working diligently to develop a Plan of Liquidation to present to our board of directors for approval; however, the impact of the COVID-19 pandemic on a Plan of Liquidation for our portfolio, as well as the decreased demand for office space as employees continue to work from home, the rising interest rate environment that is impacting the ability of buyers to obtain favorable financing and continued social unrest and increased crime in the Portland area where one of our properties is located, have created significant headwinds to finalizing a Plan of Liquidation. The principal purpose of a Plan of Liquidation will be to provide liquidity to our stockholders by selling our assets, paying our debts and distributing the net proceeds from liquidation to our stockholders. Although this is the current intention of our board of directors, we can provide no assurances as to the ultimate approval of a Plan of Liquidation or the timing of the liquidation of the company.

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PART I. FINANCIAL INFORMATION (CONTINUED)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

If our board of directors and our stockholders approve a Plan of Liquidation, we intend to pursue an orderly liquidation of our company by selling all of our remaining assets, paying our debts and our known liabilities, providing for the payment of unknown or contingent liabilities, distributing the net proceeds from liquidation to our stockholders and winding up our operations and dissolving our company. In the interim, we intend to continue to manage our portfolio of assets to maintain and, if possible, improve the quality and income-producing ability of our properties to enhance property stability and better position our assets for a potential sale. A Plan of Liquidation remains subject to approval by our board of directors and our stockholders and we can give no assurance regarding the timing of our liquidation. Additional information regarding a Plan of Liquidation will be provided to our stockholders in a proxy statement to be distributed to stockholders in connection with a liquidation vote.

In connection with its consideration of a Plan of Liquidation, our board of directors determined to cease regular quarterly distributions. We expect any future distributions to our stockholders will be liquidating distributions.

We elected to be taxed as a REIT under the Internal Revenue Code, beginning with the taxable year ended December 31, 2015. If we meet the REIT qualification requirements, we generally will not be subject to federal income tax on the income that we distribute to our stockholders each year. If we fail to qualify for taxation as a REIT in any year after electing REIT status, our income will be taxed at regular corporate rates, and we may be precluded from qualifying for treatment as a REIT for the four-year period following our failure to qualify. Such an event could materially and adversely affect our net income and cash available for distribution to our stockholders. However, we are organized and will operate in a manner that will enable us to qualify for treatment as a REIT for federal income tax purposes beginning with our taxable year ended December 31, 2015, and we will continue to operate so as to remain qualified as a REIT for federal income tax purposes thereafter.

Market Outlook – Real Estate and Real Estate Finance Markets

Volatility in global financial markets, changing political environments and civil unrest can cause fluctuations in the performance of the U.S. commercial real estate markets. Possible future declines in rental rates, slower or potentially negative net absorption of leased space and expectations of future rental concessions, including free rent to renew tenants early, to retain tenants who are up for renewal or to attract new tenants, may result in decreases in cash flows from investment properties. Further, revenues from our properties could decrease due to a reduction in occupancy (caused by factors including, but not limited to, tenant defaults, tenant insolvency, early termination of tenant leases and non-renewal of existing tenant leases), rent deferrals or abatements, tenants being unable to pay their rent and/or lower rental rates. Reductions in revenues from our properties would adversely impact the timing of any asset sales and/or the sales price we will receive for our properties if a Plan of Liquidation is approved by our board of directors and/or our stockholders. To the extent there are increases in the cost of financing due to higher interest rates, this may cause difficulty in refinancing debt obligations at terms as favorable as the terms of existing indebtedness. Market conditions can change quickly, potentially negatively impacting the value of real estate investments. Management continuously reviews our investment and debt financing strategies to optimize our portfolio and the cost of our debt exposure. Most recently, the outbreak of COVID-19 as well as the current economic slowdown, the rising interest rate environment and inflation (or the public perception that any of these events may continue) have had a negative impact on the office real estate market as discussed below.

COVID-19 Pandemic and Portfolio Outlook

One of the most significant risks and uncertainties facing us and the real estate industry generally, and in particular office REITs like our company, continues to be the effect of the public health crisis of the novel coronavirus disease (“COVID-19”) pandemic. We recognized impairment charges related to a projected reduction in cash flows as a result of changes in leasing projections that were impacted in part by the COVID-19 pandemic at the Institute Property and 210 W. Chicago during the year ended December 31, 2020, the Commonwealth Building during the year ended December 31, 2021 and the Commonwealth Building and the Institute Property during the six months ended June 30, 2022.

We cannot predict to what extent economic activity, including the use of and demand for office space, will return to pre-pandemic levels. During 2021 and the first and second quarters of 2022, the usage of our assets remained lower than pre-pandemic levels. In addition, we experienced a significant reduction in leasing interest and activity when compared to pre-pandemic levels. Even after the pandemic has ceased to be active, potential changes in customer behavior, such as the continued social acceptance, desirability and perceived economic benefits of work-from-home arrangements, resulting from the COVID-19 pandemic, could materially and negatively impact the future demand for office space, resulting in slower overall leasing and an adverse impact to our operations.

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PART I. FINANCIAL INFORMATION (CONTINUED)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

The current challenging economic circumstances have created a difficult environment in which to continue to create value in our portfolio consistent with our core-plus investment strategy. The properties in our portfolio were acquired to provide an opportunity for us to achieve more significant capital appreciation by increasing occupancy, negotiating new leases with higher rental rates and/or executing enhancement projects, all of which have become more difficult as a result of the impacts of COVID-19 on the demand for office space, in particular in the Portland area where one of our properties is located due to the social unrest that continues in the area. In addition, due to the impact of COVID-19, the leasing environment in the short-term will be challenging and the time to lease up and stabilize a property will be extended. More specifically, our office properties in Portland and Chicago will likely take more time to stabilize than previously anticipated and our ability to create value for our stockholders through the stabilization and disposition of these assets will be adversely affected. In addition, the timing in which we may be able to implement a liquidation strategy will be affected.

Liquidity and Capital Resources

As described above under “—Overview – Going Concern Considerations,” in preparing our financial statements for this annual reporting period, our management determined that substantial doubt exists about our ability to continue as a going concern within one year after the date that the financial statements are issued. In addition, as described above under “—Overview – Plan of Liquidation,” our board of directors expects to approve the sale of all of our assets and our dissolution pursuant to the terms of a Plan of Liquidation and submit such plan to our stockholders for approval. The principal purpose of a Plan of Liquidation will be to provide liquidity to our stockholders by selling our assets, paying our debts and distributing the net proceeds from liquidation to our stockholders. Subject to the approval of our board of directors and our stockholders of a Plan of Liquidation we expect our principal demands for funds during the short and long-term are and will be for the payment of operating expenses, capital expenditures and general and administrative expenses, including expenses in connection with a Plan of Liquidation; payments under debt obligations; special redemptions of common stock; capital commitments; and payments of distributions to stockholders pursuant to a Plan of Liquidation. If a Plan of Liquidation is approved by our board of directors and our stockholders, we expect to use our cash on hand and proceeds from the sale of properties as our primary sources of liquidity. To the extent available, we also intend to use cash flow generated by our real estate investments and proceeds from debt financing; however, asset sales will further reduce cash flow from these sources during the implementation of a Plan of Liquidation, if it is approved by our board of directors and our stockholders. Although this is the current intention of our board of directors, we can provide no assurance as to the ultimate approval of a Plan of Liquidation or the timing of the liquidation of the company.

Our share redemption program only provides for special redemptions. The dollar amounts available for such redemptions are determined by the board of directors and may be adjusted from time to time. The dollar amount limitation for such redemptions for the calendar year 2022 is $250,000 in the aggregate, of which $26,000 was used for such special redemptions from January through July 2022. Our share redemption program does not provide for ordinary redemptions and we can provide no assurances, when, if ever, we will provide for redemptions other than special redemptions.

Our investments in real estate generate cash flow in the form of rental revenues and tenant reimbursements, which are reduced by operating expenditures, capital expenditures, debt service payments, the payment of asset management fees and corporate general and administrative expenses. Cash flow from operations from real estate investments is primarily dependent upon the occupancy level of our portfolio, the net effective rental rates on our leases, the collectibility of rent and operating recoveries from our tenants and how well we manage our expenditures, all of which may be adversely affected by the impact of the COVID-19 pandemic as discussed above and more recently inflation.

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PART I. FINANCIAL INFORMATION (CONTINUED)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Our advisor advanced funds to us, which are non-interest bearing, for distribution record dates through the period ended May 31, 2016. We are only obligated to repay our advisor for its advance if and to the extent that:

(i)Our modified funds from operations (“MFFO”), as such term is defined by the Institute for Portfolio Alternatives and interpreted by us, for the immediately preceding quarter exceeds the amount of distributions declared for record dates of such prior quarter (an “MFFO Surplus”), and we will pay our advisor the amount of the MFFO Surplus to reduce the principal amount outstanding under the advance, provided that such payments shall only be made if management in its sole discretion expects an MFFO Surplus to be recurring for at least the next two calendar quarters, determined on a quarterly basis;

(iii)Net sales proceeds from the sale of our real estate portfolio, after the pay down of any related debt and selling costs and expenses, are available.

In determining whether Excess Proceeds are available to repay the advance, our conflicts committee will consider whether cash on hand could have been used to reduce the amount of third-party financing provided to us. If such cash could have been used instead of third-party financing, the third-party financing proceeds will be available to repay the advance.

Our advisor may defer repayment of the advance notwithstanding that we would otherwise be obligated to repay the advance.

We expect that our debt financing and other liabilities will be between 45% and 65% of the cost of our tangible assets (before deducting depreciation and other non-cash reserves). Though this is our target leverage, our charter does not limit us from incurring debt until our aggregate borrowings would exceed 300% of our net assets (before deducting depreciation and other non-cash reserves), which is effectively 75% of the cost of our tangible assets (before deducting depreciation and other non-cash reserves), though we may exceed this limit under certain circumstances. To the extent financing in excess of this limit is available at attractive terms, the conflicts committee may approve debt in excess of this limit. As of June 30, 2022, we had mortgage debt obligations in the aggregate principal amount of $101.6 million and our aggregate borrowings were approximately 62% of our net assets before deducting depreciation and other non-cash reserves. As of June 30, 2022, we had two loans totaling $97.9 million maturing during the 12 months ending June 30, 2023. On August 1, 2022, we refinanced the Term Loan with an outstanding principal balance of $52.3 million, extending its maturity date to November 9, 2023. Due to the decrease in occupancy and a decrease in market value of the property securing the Commonwealth Building Mortgage Loan, we may be unable to extend or refinance the upcoming loan maturity of that loan at current terms and may be required to pay down a portion of the maturing debt in order to extend or refinance the loan. In addition, asset sales pursuant to a Plan of Liquidation, if approved by our board of directors and our stockholders, will further reduce proceeds available from debt financing.

In addition to using our capital resources to meet our debt service obligations, for capital expenditures and for operating costs, we use our capital resources to make certain payments to our advisor and our affiliated property manager.

We paid our advisor fees in connection with the acquisition of our assets and pay our advisor fees in connection with the management of our assets and costs incurred by our advisor in providing certain services to us. The asset management fee is a monthly fee payable to our advisor in an amount equal to one-twelfth of 1.0% of the cost of our investments including the portion of the investment that is debt financed. The cost of our real property investments is calculated as the amount paid or allocated to acquire the real property, plus budgeted capital improvement costs for the development, construction or improvements to the property once such funds are disbursed pursuant to a final approved budget and fees and expenses related to the acquisition, but excluding acquisition fees paid or payable to our advisor. In the case of investments made through joint ventures, the asset management fee is determined based on our proportionate share of the underlying investment. Our advisor waived asset management fees for the second and third quarters of 2017 and deferred payment of asset management fees related to the periods from October 2017 through June 30, 2022. Our advisor’s waiver and deferral of its asset management fees resulted in additional cash being available to fund our operations. If our advisor chooses to no longer defer such fees, our ability to fund our operations may be adversely affected. We also continue to reimburse our advisor and our dealer manager for certain stockholder services.

We also pay fees to KBS Management Group, LLC (the “Co-Manager”), an affiliate of our advisor, pursuant to property management agreements with the Co-Manager, for certain property management services at our properties.

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PART I. FINANCIAL INFORMATION (CONTINUED)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

We elected to be taxed as a REIT and to operate as a REIT beginning with our taxable year ended December 31, 2015. To maintain our qualification as a REIT, we will be required to make aggregate annual distributions to our stockholders of at least 90% of our REIT taxable income (computed without regard to the dividends-paid deduction and excluding net capital gain). Our board of directors may authorize distributions in excess of those required for us to maintain REIT status depending on our financial condition and such other factors as our board of directors deems relevant. We do not expect to pay regular quarterly distributions during the liquidation process. Further, we have not established a minimum distribution level.

Under our charter, we are required to limit our total operating expenses to the greater of 2% of our average invested assets or 25% of our net income for the four most recently completed fiscal quarters, as these terms are defined in our charter, unless the conflicts committee has determined that such excess expenses were justified based on unusual and non-recurring factors. Operating expenses for the four fiscal quarters ended June 30, 2022 did not exceed the charter-imposed limitation.

Cash Flows from Operating Activities

As of June 30, 2022, we owned four office properties. During the six months ended June 30, 2022, net cash used in operating activities was $0.9 million. During six months ended June 30, 2021, net cash provided by operating activities was $0.6 million. Net cash used in operating activities increased due to a decrease in rental income and the payment of lease commissions and lease incentives during 2022. We expect cash flows provided by operating activities to decrease in future periods to the extent a Plan of Liquidation is approved by our board of directors and our stockholders and we begin selling our assets. In addition, to the extent the impacts of COVID-19 continue to be felt by our tenants, our tenants may defer rent payments or be unable to pay rent or we may be unable to re-lease space vacated by our current tenants which could reduce our cash flow provided by operating activities. Further, downtown Portland, where one of our properties is located is experiencing record high vacancies due to the impact of the disruptions caused by protests and demonstrations and increased crime in the downtown area, and it is uncertain when the market will fully recover which we expect to adversely impact our cash flows from operating activities.

Cash Flows from Investing Activities

During the six months ended June 30, 2022, net cash used in investing activities was $0.6 million due to improvements to real estate.

Cash Flows from Financing Activities

During the six months ended June 30, 2022, net cash used in financing activities was $51,000 due to principal payments on notes payable and redemption of common stock.

Debt Obligations

The following is a summary of our contractual obligations as of June 30, 2022 (in thousands).


			Payments Due During the Years Ending December 31,
Debt Obligations	Total		Remainder of 2022		2023-2024		2025-2026
Outstanding debt obligations (1) (2)	$	101,629	$	52,297	$	49,332	$	—
Interest payments on outstanding debt obligations (2) (3)	2,088		1,720		368		—

_____________________

(1) Amounts include principal payments only.

(2) On August 1, 2022, we entered into a modification agreement with the lender of the Term Loan to (i) extend the maturity date to November 9, 2023, (ii) convert the revolving commitment to term commitment and (iii) reset the interest rate of the loan. See “– Subsequent Events – Modified Term Loan.”

(3) Projected interest payments are based on the outstanding principal amount, maturity date and contractual interest rate in effect as of June 30, 2022 (consisting of the contractual interest rate and the effect of interest rate swaps). We incurred interest expense of $1.6 million, excluding amortization of deferred financing costs totaling $0.1 million and unrealized gains on derivative instruments of $0.6 million during the six months ended June 30, 2022.

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PART I. FINANCIAL INFORMATION (CONTINUED)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Results of Operations

Overview

As of June 30, 2022 and 2021, we owned four office properties. If a Plan of Liquidation is approved by our board of directors and our stockholders, we will undertake an orderly liquidation by selling all of our assets, paying our debts, providing for known and unknown liabilities and distributing the net proceeds from liquidation to our stockholders. There can be no assurances regarding the amounts of any liquidating distributions or the timing thereof. In general, subject to other factors as described below, we expect income and expenses to decrease in future periods due to disposition activity.

The following table provides summary information about our results of operations for the three and six months ended June 30, 2022 and 2021 (dollar amounts in thousands):

Comparison of the three months ended June 30, 2022 versus the three months ended June 30, 2021


	For the Three Months Ended June 30,				Increase (Decrease)		Percentage Change
	2022		2021
Rental income	$	3,631	$	4,081	$	(450)	(11)	%
Other operating income	35		48		(13)		(27)	%
Operating, maintenance and management costs	942		935		7		1	%
Property management fees and expenses to affiliate	22		28		(6)		(21)	%
Real estate taxes and insurance	772		728		44		6	%
Asset management fees to affiliate	436		434		2		—	%
General and administrative expenses	412		445		(33)		(7)	%
Depreciation and amortization	1,504		1,896		(392)		(21)	%
Interest expense	689		608		81		13	%
Impairment charges on real estate	8,409		—		8,409		100	%

Rental income decreased from $4.1 million for the three months ended June 30, 2021 to $3.6 million for the three months ended June 30, 2022, primarily due to a decrease in occupancy rate from 82.1% as of June 30, 2021 to 74.5% as of June 30, 2022 as a result of lease expirations. Overall, we expect rental income to decrease in future periods due to anticipated future dispositions of real estate properties and uncertainty and business disruptions as a result of the outbreak of COVID-19 and social unrest in the Portland area where one of our properties is located. See “Market Outlook - Real Estate and Real Estate Finance Markets - COVID-19 Pandemic and Portfolio Outlook” for a discussion on the impact of the COVID-19 pandemic on our business.

Operating, maintenance, and management costs remained consistent at $0.9 million for the three months ended June 30, 2022 and 2021. We expect operating, maintenance, and management costs to decrease in future periods due to anticipated future dispositions of real estate properties, offset by general increase due to inflation and as physical occupancy increases as employees return to the office.

Real estate taxes and insurance increased slightly from $0.7 million for the three months ended June 30, 2021 to $0.8 million for the three months ended June 30, 2022, primarily due to an increase in property taxes due to increased property values and rates. We expect real estate taxes and insurance to decrease in future periods due to anticipated future dispositions of real estate properties, partially offset by general increase due to inflation.

Asset management fees to affiliate remained consistent at $0.4 million for the three months ended June 30, 2022 and 2021. We expect asset management fees to decrease in future periods due to anticipated future dispositions of real estate properties, partially offset by increases in capital improvements. As of June 30, 2022, we had accrued and deferred payment of $8.5 million of asset management fees related to the periods from October 2017 through June 30, 2022.

General and administrative expenses remained consistent at $0.4 million for the three months ended June 30, 2022 and 2021. General and administrative costs consisted primarily of legal fees, internal audit compensation expense, errors and omissions insurance, board of directors fees and audit cost.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Depreciation and amortization decreased from $1.9 million for the three months ended June 30, 2021 to $1.5 million for the three months ended June 30, 2022, primarily due to lease expirations, early lease terminations and reduced depreciable asset basis for the Commonwealth Building as a result of non-cash impairment charges recorded subsequent to June 30, 2021. We expect depreciation and amortization to decrease in future periods due to anticipated future dispositions of real estate properties and fully amortized tenant origination and absorption costs related to lease expirations, partially offset by increases in capital improvements.

Interest expense increased from $0.6 million for the three months ended June 30, 2021 to $0.7 million for the three months ended June 30, 2022. Included in interest expense is the amortization of deferred financing costs of $0.1 million for the three months ended June 30, 2022 and 2021. Interest expense (including gains and losses) incurred as a result of our derivative instruments, decreased interest expense by $0.1 million for the three months ended June 30, 2022 and increased interest expense by $28,000 for the three months ended June 30, 2021. The increase in interest expense is primarily due to an increase in one-month LIBOR and its impact on interest expense related to our variable rate debt, offset by a decrease in interest expense due to the expiration of an interest rate swap in November 2021 that was not accounted for as a cash flow hedge. In general, we expect interest expense to decrease in future periods due to debt repayments related to anticipated future asset sales, which may be offset by certain fees and costs that may be incurred due to the prepayment of certain loans. Our interest expense in future periods will also vary based on fluctuations in one-month LIBOR (for our unhedged variable rate debt) and our level of future borrowings, which will depend on the availability and cost of debt financing, draws on our debts and any debt repayments we make.

During the three months ended June 30, 2022, we recorded non-cash impairment charges of $8.4 million related to the Commonwealth Building as a result of a continued decrease in occupancy and changes in cash flow estimates including a change in leasing projections, which triggered the future estimated undiscounted cash flows to be lower than the net carrying value of the property. As of June 30, 2022, the Commonwealth Building was 51.8% occupied. We are projecting longer lease-up periods for the vacant space as demand for office space in Portland has significantly declined as a result of both the COVID-19 pandemic, with employees continuing to work from home, and the impact of the disruptions caused by protests and demonstrations and increased crime in the downtown area. Downtown Portland is experiencing record high office vacancies and it is uncertain when the market will fully recover.

Comparison of the six months ended June 30, 2022 versus the six months ended June 30, 2021


	For the Six Months Ended June 30,				Increase (Decrease)		Percentage Change
	2022		2021
Rental income	$	7,317	$	8,375	$	(1,058)	(13)	%
Other operating income	76		69		7		10	%
Operating, maintenance and management costs	1,825		1,765		60		3	%
Property management fees and expenses to affiliate	46		59		(13)		(22)	%
Real estate taxes and insurance	1,556		1,494		62		4	%
Asset management fees to affiliate	866		862		4		—	%
General and administrative expenses	1,033		922		111		12	%
Depreciation and amortization	3,052		3,878		(826)		(21)	%
Interest expense	1,141		1,181		(40)		(3)	%
Impairment charges on real estate	11,733		—		11,733		100	%

Rental income decreased from $8.4 million for the six months ended June 30, 2021 to $7.3 million for the six months ended June 30, 2022, primarily due to a decrease in occupancy rate from 82.1% as of June 30, 2021 to 74.5% as of June 30, 2022 as a result of lease expirations. Overall, we expect rental income to decrease in future periods due to anticipated future dispositions of real estate properties and uncertainty and business disruptions as a result of the outbreak of COVID-19 and social unrest in the Portland area where one of our properties is located. See “Market Outlook - Real Estate and Real Estate Finance Markets - COVID-19 Pandemic and Portfolio Outlook” for a discussion on the impact of the COVID-19 pandemic on our business.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Operating, maintenance, and management costs remained consistent at $1.8 million for the six months ended June 30, 2022 and 2021. We expect operating, maintenance, and management costs to decrease in future periods due to anticipated future dispositions of real estate properties, offset by general increase due to inflation and as physical occupancy increases as employees return to the office.

Real estate taxes and insurance increased slightly from $1.5 million for the six months ended June 30, 2021 to $1.6 million for the six months ended June 30, 2022, primarily due to a net increase in property taxes due to increased property values and rates. We expect real estate taxes and insurance to decrease in future periods due to anticipated future dispositions of real estate properties, partially offset by general increase due to inflation.

Asset management fees to affiliate remained consistent at $0.9 million for the six months ended June 30, 2022 and 2021. We expect asset management fees to decrease in future periods due to anticipated future dispositions of real estate properties, partially offset by increases in capital improvements. As of June 30, 2022, we had accrued and deferred payment of $8.5 million of asset management fees related to the periods from October 2017 through June 30, 2022.

General and administrative expenses increased from $0.9 million for the six months ended June 30, 2021 to $1.0 million for the six months ended June 30, 2022, primarily due to legal fees related to our plan of liquidation incurred during the six months ended June 30, 2022. General and administrative costs consisted primarily of legal fees, internal audit compensation expense, errors and omissions insurance, board of directors fees and audit cost.

Depreciation and amortization decreased from $3.9 million for the six months ended June 30, 2021 to $3.1 million for the six months ended June 30, 2022, primarily due to lease expirations, early lease terminations and reduced depreciable asset basis for the Commonwealth Building as a result of non-cash impairment charges recorded subsequent to June 30, 2021. We expect depreciation and amortization to decrease in future periods due to anticipated future dispositions of real estate properties and fully amortized tenant origination and absorption costs related to lease expirations, partially offset by increases in capital improvements.

Interest expense decreased slightly from $1.2 million for the six months ended June 30, 2021 to $1.1 million for the six months ended June 30, 2022. Included in interest expense is the amortization of deferred financing costs of $0.1 million for the six months ended June 30, 2022 and 2021. Interest expense (including gains and losses) incurred as a result of our derivative instruments, decreased interest expense by $0.2 million for the six months ended June 30, 2022 and increased interest expense by $31,000 for the six months ended June 30, 2021. The decrease in interest expense is primarily due to the expiration of an interest rate swap in November 2021 that was not accounted for as a cash flow hedge, offset by an increase in one-month LIBOR and its impact on interest expense related to our variable rate debt. In general, we expect interest expense to decrease in future periods due to debt repayments related to anticipated future asset sales, which may be offset by certain fees and costs that may be incurred due to the prepayment of certain loans. Our interest expense in future periods will also vary based on fluctuations in one-month LIBOR (for our unhedged variable rate debt) and our level of future borrowings, which will depend on the availability and cost of debt financing, draws on our debts and any debt repayments we make.

During the six months ended June 30, 2022, we recorded non-cash impairment charges of $11.7 million to write down the carrying value of the Commonwealth Building, an office property located in Portland, Oregon and the Institute Property, an office property located in Chicago, Illinois, to their estimated fair values as a result of changes in cash flow estimates including a change in leasing projections, which triggered the future estimated undiscounted cash flows to be lower than the net carrying value of the properties. In addition, the Commonwealth Building has experienced a continued decrease in occupancy. As of June 30, 2022, the Commonwealth Building was 51.8% occupied. The decrease in cash flow projections during the six months ended June 30, 2022 was primarily due to reduced demand for the office space at both properties resulting in longer lease-up periods and a decrease in projected rental rates due to the COVID-19 pandemic which resulted in additional challenges to re-lease the vacant space. Moreover, the decrease in cash flow projections during the six months ended June 30, 2022 for the Commonwealth building was also affected by the disruptions caused by protests and demonstrations and increased crime in the downtown area of Portland, where the property is located. Further, tenants at the Institute Property have been adversely impacted by the measures put in place to control the spread of COVID-19 and certain tenants at the Institute Property were granted rent concessions as their businesses have been severely impacted. We did not record any impairment charges on our real estate properties during the six months ended June 30, 2021.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Funds from Operations and Modified Funds from Operations

We believe that funds from operations (“FFO”) is a beneficial indicator of the performance of an equity REIT. We compute FFO in accordance with the current National Association of Real Estate Investment Trusts (“NAREIT”) definition. FFO represents net income, excluding gains and losses from sales of operating real estate assets (which can vary among owners of identical assets in similar conditions based on historical cost accounting and useful-life estimates), gains and losses from change in control, impairment losses on real estate assets, depreciation and amortization of real estate assets, and adjustments for unconsolidated partnerships and joint ventures. We believe FFO facilitates comparisons of operating performance between periods and among other REITs. However, our computation of FFO may not be comparable to other REITs that do not define FFO in accordance with the NAREIT definition or that interpret the current NAREIT definition differently than we do. Our management believes that historical cost accounting for real estate assets in accordance with U.S. generally accepted accounting principles (“GAAP”) implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered the presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. As a result, we believe that the use of FFO, together with the required GAAP presentations, provides a more complete understanding of our performance relative to our competitors and provides a more informed and appropriate basis on which to make decisions involving operating, financing, and investing activities.

Changes in accounting rules have resulted in a substantial increase in the number of non-operating and non-cash items included in the calculation of FFO. As a result, our management also uses MFFO as an indicator of our ongoing performance as well as our dividend sustainability. MFFO excludes from FFO: acquisition fees and expenses (to the extent that such fees and expenses have been recorded as operating expenses); adjustments related to contingent purchase price obligations; amounts relating to straight-line rents and amortization of above and below market intangible lease assets and liabilities; accretion of discounts and amortization of premiums on debt investments; amortization of closing costs relating to debt investments; impairments of real estate-related investments; mark-to-market adjustments included in net income; and gains or losses included in net income for the extinguishment or sale of debt or hedges. We compute MFFO in accordance with the definition of MFFO included in the practice guideline issued by the IPA in November 2010 as interpreted by management. Our computation of MFFO may not be comparable to other REITs that do not compute MFFO in accordance with the current IPA definition or that interpret the current IPA definition differently than we do.

We believe that MFFO is helpful as a measure of ongoing operating performance because it excludes costs that management considers more reflective of investing activities and other non-operating items included in FFO. Management believes that, by excluding acquisition costs (to the extent such costs have been recorded as operating expenses) as well as non-cash items such as straight line rental revenue, MFFO provides investors with supplemental performance information that is consistent with the performance indicators and analysis used by management, in addition to net income and cash flows from operating activities as defined by GAAP, to evaluate the sustainability of our operating performance. MFFO provides comparability in evaluating the operating performance of our portfolio with other non-traded REITs which typically have limited lives with short and defined acquisition periods and targeted exit strategies. MFFO, or an equivalent measure, is routinely reported by non-traded REITs, and we believe often used by analysts and investors for comparison purposes.

FFO and MFFO are non-GAAP financial measures and do not represent net income as defined by GAAP. Net income as defined by GAAP is the most relevant measure in determining our operating performance because FFO and MFFO include adjustments that investors may deem subjective, such as adding back expenses such as depreciation and amortization and the other items described above. Accordingly, FFO and MFFO should not be considered as alternatives to net income as an indicator of our current and historical operating performance. In addition, FFO and MFFO do not represent cash flows from operating activities determined in accordance with GAAP and should not be considered an indication of our liquidity. We believe FFO and MFFO, in addition to net income and cash flows from operating activities as defined by GAAP, are meaningful supplemental performance measures.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Although MFFO includes other adjustments, the exclusion of adjustments for straight-line rent, the amortization of above- and below-market leases and unrealized (gains) losses on derivative instruments are the most significant adjustments for the periods presented. We have excluded these items based on the following economic considerations:

•Adjustments for straight-line rent. These are adjustments to rental revenue as required by GAAP to recognize contractual lease payments on a straight-line basis over the life of the respective lease. We have excluded these adjustments in our calculation of MFFO to more appropriately reflect the current economic impact of our in-place leases, while also providing investors with a useful supplemental metric that addresses core operating performance by removing rent we expect to receive in a future period or rent that was received in a prior period;

•Amortization of above- and below-market leases. Similar to depreciation and amortization of real estate assets and lease related costs that are excluded from FFO, GAAP implicitly assumes that the value of intangible lease assets and liabilities diminishes predictably over time and requires that these charges be recognized currently in revenue. Since market lease rates in the aggregate have historically risen or fallen with local market conditions, management believes that by excluding these charges, MFFO provides useful supplemental information on the realized economics of the real estate; and

•Unrealized (gains) losses on derivative instruments. These adjustments include unrealized (gains) losses from mark-to-market adjustments on interest rate swaps. The change in fair value of interest rate swaps not designated as a hedge are non-cash adjustments recognized directly in earnings and are included in interest expense. We have excluded these adjustments in our calculation of MFFO to more appropriately reflect the economic impact of our interest rate swap agreements.

Our calculation of FFO, which we believe is consistent with the calculation of FFO as defined by NAREIT, is presented in the following table, along with our calculation of MFFO, for the three and six months ended June 30, 2022 and 2021, respectively (in thousands). No conclusions or comparisons should be made from the presentation of these periods.


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2022		2021		2022		2021
Net loss	$	(9,515)	$	(945)	$	(13,854)	$	(1,717)
Depreciation of real estate assets	922		1,141		1,859		2,309
Amortization of lease-related costs	582		755		1,193		1,569
Impairment charges on real estate	8,409		—		11,733		—



FFO	398		951		931		2,161
Straight-line rent and amortization of above- and below-market leases, net	(320)		(133)		(657)		(216)
Unrealized gain on derivative instruments	(223)		(417)		(564)		(850)


MFFO	$	(145)	$	401	$	(290)	$	1,095

FFO and MFFO may also be used to fund all or a portion of certain capitalizable items that are excluded from FFO and MFFO, such as tenant improvements, building improvements and deferred leasing costs.

Distributions

Cash distributions will be determined by our board of directors based on our financial condition and such other factors as our board of directors deems relevant. Our board of directors has not pre-established a percentage rate of return for cash distributions to stockholders. We have not established a minimum distribution level, and our charter does not require that we make distributions to our stockholders. In connection with its consideration of a Plan of Liquidation, our board of directors determined to cease paying regular quarterly distributions with the expectation that any future distributions to our stockholders would be liquidating distributions from the sale of our remaining assets.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Critical Accounting Policies

Our consolidated interim financial statements and condensed notes thereto have been prepared in accordance with GAAP and in conjunction with the rules and regulations of the SEC. The preparation of our financial statements requires significant management judgments, assumptions and estimates about matters that are inherently uncertain. These judgments affect the reported amounts of assets and liabilities and our disclosure of contingent assets and liabilities as of the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. With different estimates or assumptions, materially different amounts could be reported in our financial statements. Additionally, other companies may utilize different estimates that may impact the comparability of our results of operations to those of companies in similar businesses. A discussion of the accounting policies that management considers critical in that they involve significant management judgments, assumptions and estimates is included in our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC. There have been no significant changes to our accounting policies during 2022.

Subsequent Events

We evaluate subsequent events up until the date the consolidated financial statements are issued.

Modified Term Loan

On August 1, 2022, we, through our wholly owned subsidiaries (collectively, the “Borrower”), entered into a modification agreement to the Term Loan (the “Modified Term Loan”) with JP Morgan Chase Bank, N.A. (the “Lender”) to (i) extend the maturity date from November 9, 2022 to November 9, 2023, (ii) convert the revolving commitment to term commitment and (iii) reset the interest rate of the Term Loan. The Modified Term Loan has an outstanding balance of $52.3 million, which is the maximum term commitment available under the Modified Term Loan. The Modified Term Loan continues to be secured by the Offices at Greenhouse and the Institute Property.

The Modified Term Loan bears interest at the forward-looking term rate based on SOFR (“Secured Overnight Financing Rate”) with a tenor comparable to one-month plus 10 basis points (“Adjusted Term SOFR”) plus 200 basis points per annum prior to May 9, 2023. After May 9, 2023, the Modified Term Loan will bear interest at Adjusted Term SOFR plus 250 basis points per annum. Monthly payments are interest-only with the remaining principal balance, all accrued and unpaid interest and all other sums due under the loan documents payable at maturity. We have the right to prepay all or a portion of the Modified Term Loan at any time, subject to certain fees and conditions contained in the loan documents.

Subject to certain terms and conditions contained in the loan documents, cash currently held by us may only be used for our operating costs including but not limited to our general and administrative costs, liquidation costs (which may include proxy solicitation costs, DST transfer agent costs, legal costs, tail insurance policy costs and other reasonable and customary costs to maintain the company in good standing), capital costs (including building improvements, tenant improvements and leasing commissions at its owned properties) and any other reasonable costs and expenses required to maintain the company as a going concern (collectively “REIT Operating Costs”), but for no other purpose. Further, we are required to deposit any cash amount exceeding $7.0 million into an account controlled by the Lender or apply it to pay down the Modified Term Loan. We are prohibited from making any cash distributions (other than REIT Operating Costs) except for amounts needed to maintain REIT status and redemptions sought upon a stockholder’s death, “qualifying disability” or “determination of incompetence” (each as defined in the share redemption program) not exceeding $250,000 annually, in the aggregate, for any calendar year. In addition, on a monthly basis, any excess cash flow (as defined in the modification agreement) from the Offices at Greenhouse and the Institute Property is required to be deposited into an account which will serve as additional security for the loan.

KBSGI REIT Properties, LLC (“KBS GI REIT Properties”), our wholly owned subsidiary, in connection with the Modified Term Loan, is providing a guaranty of the payment of (i) principal balance and any interest or other sums outstanding under the Modified Term Loan as of the date such amounts become due, and (ii) the principal balance and any interest or other sums outstanding under the Modified Term Loan in the event of: certain bankruptcy, insolvency or related proceedings involving the Borrower and KBS GI REIT Properties, as described in the loan documents. KBS GI REIT Properties is also providing a guaranty of the payment of certain liabilities, losses, damages, costs and expenses (including legal fees) incurred by the Lender as a result of certain intentional actions or omissions committed by the Borrower, KBS GI REIT Properties and/or any of their affiliates in violation of the loan documents, or certain other occurrences in relation to The Offices at Greenhouse, the Institute Property and/or the Borrower, as further described in the amended and restated guaranty.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are exposed to the effects of interest rate changes as a result of borrowings used to maintain liquidity and to fund the financing and refinancing of our real estate investment portfolio and operations. Our profitability and the value of our real estate investment portfolio may be adversely affected during any period as a result of interest rate changes. Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings, prepayment penalties and cash flows and to lower overall borrowing costs. We may manage interest rate risk by maintaining a ratio of fixed rate, long-term debt such that variable rate exposure is kept at an acceptable level or we may utilize a variety of financial instruments, including interest rate caps, floors, and swap agreements, in order to limit the effects of changes in interest rates on our operations. When we use these types of derivatives to hedge the risk of interest-earning assets or interest-bearing liabilities, we may be subject to certain risks, including the risk that losses on a hedge position will reduce the funds available for the payment of distributions to our stockholders and that the losses may exceed the amount we invested in the instruments.

We borrow funds at a combination of fixed and variable rates. Interest rate fluctuations will generally not affect future earnings or cash flows on fixed rate debt unless such debt mature or is otherwise terminated. However, interest rate changes will affect the fair value of fixed rate instruments. At June 30, 2022, we did not have any fixed rate debt outstanding.

Conversely, movements in interest rates on variable rate debt would change future earnings and cash flows, but not significantly affect the fair value of the debt. However, changes in required risk premiums would result in changes in the fair value of variable rate instruments. At June 30, 2022, we were exposed to market risks related to fluctuations in interest rates on $71.6 million of variable rate debt outstanding, after giving consideration to the impact of interest rate swap agreements on approximately $30.0 million of our variable debt. Based on interest rates as of June 30, 2022, if interest rates were 100 basis points higher or lower during the 12 months ending June 30, 2023, interest expense on our variable rate debt would increase or decrease by $0.7 million.

The weighted average interest rate of our variable rate debt at June 30, 2022 was 4.0%. The interest rate represents the actual interest rate in effect at June 30, 2022 (consisting of the contractual interest rate and the effect of interest rate swaps, if applicable), using interest rate indices as of June 30, 2022 where applicable.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

As of the end of the period covered by this report, management, including our principal executive officer and principal financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based upon, and as of the date of, the evaluation, our principal executive officer and principal financial officer concluded that the disclosure controls and procedures were effective as of the end of the period covered by this report to ensure that information required to be disclosed in the reports we file and submit under the Exchange Act is recorded, processed, summarized and reported as and when required. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file and submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Table of Contents

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

Please see the risks discussed below and in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021 as filed with the SEC.

If our advisor determines to no longer waive or defer certain fees due to them, our ability to fund our operations may be adversely affected.

From time to time, our advisor may agree to waive or defer all or a portion of the asset management or other fees, compensation or incentives due to it, pay general administrative expenses or otherwise supplement stockholder returns in order to increase the amount of cash available to fund our operations or make distributions to stockholders. Specifically, in the second and third quarters of 2017, our advisor waived its asset management fee and beginning October 2017 through June 30, 2022, the advisor deferred its asset management fee. If our advisor chooses to no longer waive or defer such fees, our ability to fund our operations may be adversely affected.

Item 2. Unregistered Sales of Equity and Use of Proceeds

a).During the period covered by this Form 10-Q, no equity securities that were not registered under the Securities Act of 1933 (the “Act”) were sold.

b).Not applicable.

c).We have adopted a share redemption program that may enable stockholders to sell their shares to us in limited circumstances.

Currently, our share redemption program is only available for redemptions sought upon a stockholder’s death, “qualifying disability” or “determination of incompetence” (each as defined in the share redemption program, and collectively “special redemptions”).

Pursuant to the share redemption program, as amended to date, there are several limitations on our ability to redeem shares:

•During each calendar year, special redemptions are limited to an annual dollar amount determined by our board of directors, which may be reviewed during the year and increased or decreased upon ten business days’ notice to our stockholders. The dollar amount limitation for the calendar year 2022 is $250,000 in the aggregate, as may be reviewed and adjusted from time to time by our board of directors.

•During any calendar year, we may redeem no more than 5% of the weighted-average number of shares outstanding during the prior calendar year.

•We have no obligation to redeem shares if the redemption would violate the restrictions on distributions under Maryland law, which prohibits distributions that would cause a corporation to fail to meet statutory tests of solvency.

Special redemptions are redeemed at a price equal to the most recent estimated NAV per share as of the applicable redemption date. On December 6, 2021, our board of directors approved an estimated NAV per share of our common stock of $3.38 based on the estimated value of our assets less the estimated value of our liabilities, or NAV, divided by the number of shares outstanding, all as of September 30, 2021. For a full description of the methodologies used to value our assets and liabilities in connection with the calculation of our estimated NAV per share as of September 30, 2021, see the Current Report on Form 8-K filed with the SEC on December 10, 2021. We expect to update the estimated NAV annually in December.

We may amend, suspend or terminate our share redemption program upon 10 business days’ notice. We redeem shares on the last business day of each month. For a stockholder’s shares to be eligible for redemption in a given month or to withdraw a redemption request, we 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 us at least five business days before the redemption date.

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PART II. OTHER INFORMATION (CONTINUED)

Item 2. Unregistered Sales of Equity and Use of Proceeds (continued)

During the six months ended June 30, 2022, redemptions under our share redemption program were funded with existing cash on hand and shares were redeemed pursuant to our share redemption program as follows:


Month	Total Number of Shares Redeemed	Average Price Paid Per Share (1)		Approximate Dollar Value of Shares Available That May Yet Be Redeemed Under the Program
January 2022	166	$	3.38	(2)
February 2022	4,112	$	3.38	(2)
March 2022	—	$	—	(2)
April 2022	—	$	—	(2)
May 2022	—	$	—	(2)
June 2022	—	$	—	(2)



Total	4,278

_____________________

(1) The prices at which we redeem shares under the program are as set forth above.

(2) We limit the dollar value of shares that may be redeemed under the program as described above. Based on the redemption limitation described above and redemptions through June 30, 2022, we may redeem up to $236,000 of shares for the remainder of 2022.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

None.

Table of Contents

PART II. OTHER INFORMATION (CONTINUED)

Item 6. Exhibits


Ex.						Description

3.1						Second Articles of Amendment and Restatement, incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-11 filed October 16, 2015

3.2						Second Amended and Restated Bylaws, incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-11 filed October 16, 2015

3.3						Articles Supplementary for Class T Shares, incorporated by reference to Exhibit 3.3 to the Company’s Registration Statement on Form S-11 filed April 20, 2016

4.1						Statement regarding restrictions in transferability of shares of common stock issued in a private offering (to be sent upon request and without charge to stockholders), incorporated by reference to Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, filed November 9, 2017

4.2						Statement regarding restrictions on transferability of shares of common stock issued in a public offering (to be sent upon request and without charge to stockholders), incorporated by reference to Exhibit 4.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, filed November 9, 2017

4.3						Multiple Class Plan, effective as of April 11, 2016, incorporated by reference to Exhibit 4.4 to the Company’s Registration Statement on Form S-11 filed April 20, 2016

10.1						Second Modification Agreement by and among KBSGI Office at Greeanhouse, LLC and KBSGI 213 West Institute Place, LLC and JPMORGAN CHASE BANK, N.A. dated August 1, 2022

10.2						Second Amended and Restated Guaranty by KBSGI REIT Properties, LLC for the benefit of JPMorgan Chase Bank, N.A. dated August 1, 2022

31.1						Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2						Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1						Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2						Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

99.1						Second Amended and Restated Share Redemption Program, incorporated by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K, filed December 10, 2018

101.INS						Inline XBRL Instance Document

101.SCH						Inline XBRL Taxonomy Extension Schema

101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase

101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase

101.LAB						Inline XBRL Taxonomy Extension Label Linkbase

101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase

104						Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

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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 thereunto duly authorized.


		KBS GROWTH & INCOME REIT, INC.

Date:	August 12, 2022	By:	/S/ CHARLES J. SCHREIBER, JR.
			Charles J. Schreiber, Jr.
			Chairman of the Board, Chief Executive Officer, President and Director
			(principal executive officer)

Date:	August 12, 2022	By:	/S/ JEFFREY K. WALDVOGEL
			Jeffrey K. Waldvogel
			Chief Financial Officer, Treasurer and Secretary
			(principal financial officer)

Exhibit 10.1

SECOND MODIFICATION AGREEMENT

This Second Modification Agreement (this “Agreement”) is made as of August 1, 2022, by and among KBSGI OFFICES AT GREENHOUSE, LLC, a Delaware limited liability company (“Greenhouse Borrower”) and KBSGI 213 WEST INSTITUTE PLACE, LLC, a Delaware limited liability company (“Institute Borrower,” and, together with Greenhouse Borrower, individually, collectively, jointly and severally, “Borrower”), the lenders from time to time party to the Loan Agreement (as hereinafter defined) (each a “Lender” and collectively the “Lenders”), and JPMORGAN CHASE BANK, N.A., a national banking association, as administrative agent for the Lenders (in such capacity, “Administrative Agent”).

Factual Background

A.Pursuant to that certain Amended and Restated Term Loan and Security Agreement dated as of November 9, 2017, among Borrower, KBSGI Von Karman Tech, LLC, a Delaware limited liability company (“Von Karman Borrower”), Lenders, and Administrative Agent, as amended by that certain Modification Agreement dated as of January 17, 2020 (the “Modification Agreement”) and that certain letter agreement dated as of October 18, 2021 (as amended, restated or otherwise modified from time to time, the “Loan Agreement”), Lenders agreed to provide a loan (the “Loan”) to Borrower. Capitalized terms used herein without definition have the meanings ascribed to them in the Loan Agreement. Pursuant to that certain Reciprocal Release Agreement among Von Karman Borrower, Borrower, Administrative Agent and Lenders, Von Karman Borrower was released from its obligations under the Loan Documents on the terms and conditions set forth therein.

B.The Loan is evidenced by that certain Amended and Restated Promissory Note dated November 9, 2017, made payable to JPMorgan Chase Bank, N.A., as sole Lender, in the stated principal amount of Seventy-Two Million Eight Hundred Thousand and No/100 Dollars ($72,800,000.00) (as amended, restated, renewed or otherwise modified from time to time, each, a “Note” and, collectively, the “Notes”).

C.The Note is secured by, among other things, (i) the Greenhouse Deed of Trust, which encumbers the Greenhouse Property and the Greenhouse Improvements and (ii) the Institute Mortgage, which encumbers the Institute Property and the Institute Improvements.

D.KBSGI REIT Properties, LLC, a Delaware limited liability company (“Guarantor”), guaranteed certain of Borrower’s obligations to Administrative Agent and Lenders in connection with the Loan pursuant to that certain Amended and Restated Guaranty, dated as of November 9, 2017, executed by Guarantor in favor of Administrative Agent, for the benefit of the Lenders (as amended, restated or otherwise modified, the “Guaranty”).

E.In connection with the Loan, Borrower executed an Amended and Restated Environmental Indemnity Agreement (as amended, restated, renewed or otherwise modified from time to time, the “Environmental Indemnity”) dated as of November 9, 2017, in favor of Administrative Agent, for the benefit of the Lenders. The Environmental Indemnity is a Loan Document, as defined below.

F.As used herein, the term “Loan Documents” means the Loan Agreement, the Note, the Greenhouse Deed of Trust, the Institute Mortgage, the Guaranty, the Environmental Indemnity and any other documents executed in connection with the Loan, including those which evidence, guarantee, secure or modify the Loan, as any or all of them may have been amended to date. This Agreement is a Loan Document.

G.As of the date hereof, the outstanding principal balance of the Loan is $52,260,000 (which is comprised of $34,840,000 of Term Loans, and $17,420,000 of Revolving Loans).

H.Borrower has requested, and Administrative Agent and Lenders have agreed, (i) to extend the Maturity Date on the terms and conditions set forth herein, and (ii) otherwise modify the Loan as provided herein.

I.Borrower, Administrative Agent and the Lenders now wish to modify the Loan as set forth below.

Agreement

Therefore, Borrower, Administrative Agent and the Lenders agree as follows:

1.Recitals. The recitals set forth above in the Factual Background are true, accurate and correct.

2.Reaffirmation of Loan. Borrower reaffirms all of its obligations under the Loan Documents, and Borrower acknowledges that it has no claims, offsets or defenses with respect to the payment of sums due under the Notes or any other Loan Document.

3.Modification of Loan Documents. The Loan Documents are hereby amended as follows:

(a)Maturity Date. The current maturity of the Loan is hereby extended from November 9, 2022 (the “Existing Maturity Date”) to November 9, 2023 (the “Stated Maturity Date”). All references to the “Maturity Date” in the Loan Documents shall be deemed to refer to the Stated Maturity Date.

(b)Definitions. The following definitions set forth in Section 1.01 of the Loan Agreement are hereby amended and restated in their entirety, or, if such definitions are not set forth in Section 1.01 of the Loan Agreement, the following definitions are hereby inserted alphabetically into Section 1.01 of the Loan Agreement, as the case may be:

“‘Adjusted Daily Simple SOFR’ means, an interest rate per annum equal to (a) the Daily Simple SOFR, plus (b) 0.10%.”

“‘Adjusted Term SOFR’ means, an interest rate per annum equal to (a) the Term SOFR, plus (b) 0.10%.”

“Advance” means a borrowing hereunder, by the Lenders of any principal of the

Loan.

“Affected Financial Institution” means (a) any EEA Financial Institution or (b) any UK Financial Institution.

“‘Alternate Base Rate’ means, for any day (or if such day is not a Business Day, the immediately preceding Business Day), a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the NYFRB Rate in effect on such day plus ½ of 1% and (c) the Adjusted Term SOFR as published two U.S. Government Securities Business Days prior to such day plus 1%; provided that, for the purpose of this definition, Adjusted Term SOFR for any day shall be based on the Term SOFR Reference Rate at approximately 5:00 a.m. Chicago time on such day (or any amended publication time for the Term SOFR Reference Rate, as specified by the Term SOFR Administrator in the Term SOFR Reference Rate methodology). Any change in the Alternate Base Rate due to a change in the Prime Rate, the NYFRB Rate or Adjusted Term SOFR shall be effective from and including the effective date of such change in the Prime Rate, the NYFRB Rate or Adjusted Term SOFR, respectively. If the Alternate Base Rate is being used as an alternate rate of interest pursuant to Section 3.09 (for the avoidance of doubt, only until the Benchmark Replacement has been determined pursuant to Section 3.09(b)), then the Alternate Base Rate shall be the greater of clauses (a) and (b) above and shall be determined without reference to clause (c) above. If the Alternate Base Rate as determined above would be less than zero percent (0.00%), such rate shall be deemed to be zero percent (0.00%) for purposes of this Agreement.”

“‘Alternate Rate’ means the Alternate Base Rate plus the Applicable Margin.

“‘Applicable Margin’ means (i) prior to May 9, 2023, 2.00% with respect to Adjusted Term SOFR, Adjusted Daily Simple SOFR, or the Benchmark, as applicable, and 1.00% with respect to the Alternate Base Rate and (ii) on and after May 9, 2023, 2.50% with respect to Adjusted Term SOFR, Adjusted Daily Simple SOFR, or the Benchmark, as applicable, and 1.50% with respect to the Alternate Base Rate.”

“‘Available Tenor” means, as of any date of determination and with respect to the then-current Benchmark, as applicable, any tenor for such Benchmark (or component thereof) or payment period for interest calculated with reference to such Benchmark (or component thereof), as applicable, that is or may be used for determining the length of a payment period for interest for any term rate or otherwise, for determining any frequency of making payments of interest calculated pursuant to this Agreement as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Interest Adjustment Date” pursuant to clause (e) of Section 3.09.

“Bail-In Action’ means the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.

“‘Bail-In Legislation” means, (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).

“‘Benchmark’ means, initially, Term SOFR; provided that if a Benchmark Transition Event and the related Benchmark Replacement Date have occurred with respect to Term SOFR or the then-current Benchmark, then ‘Benchmark’ means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to clause (b) of Section 3.09.”

“‘Benchmark Replacement’ means, for any Available Tenor, the first alternative set forth in the order below that can be determined by Administrative Agent for the applicable Benchmark Replacement Date:

(1) the Adjusted Daily Simple SOFR; or

(2) the sum of: (a) the alternate benchmark rate that has been selected by Administrative Agent and Borrower as the replacement for the then-current Benchmark for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement for the then-current Benchmark for dollar-denominated syndicated credit facilities at such time and (b) the related Benchmark Replacement Adjustment.

If the Benchmark Replacement as determined pursuant to clause (1) or (2) above would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.”

“‘Benchmark Replacement Adjustment’ means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement for any applicable Interest Adjustment Date and Available Tenor for any setting of such Unadjusted Benchmark Replacement, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by Administrative Agent and Borrower for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the

Relevant Governmental Body on the applicable Benchmark Replacement Date or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for dollar-denominated syndicated credit facilities at such time.”

“‘Benchmark Replacement Conforming Changes’ means, with respect to either the use or administration of Term SOFR or the use, administration, adoption or implementation of any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of ‘Alternate Base Rate,’ the definition of ‘Business Day,’ the definition of ‘U.S. Government Securities Business Day,’ the definition of ‘Interest Adjustment Date,’ timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, length of lookback periods, the applicability of breakage provisions, and other technical, administrative or operational matters) that Administrative Agent decides may be appropriate to reflect the adoption and implementation of such rate and to permit the administration thereof by Administrative Agent in a manner substantially consistent with market practice (or, if Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if Administrative Agent determines that no market practice for the administration of such rate exists, in such other manner of administration as Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).”

“‘Benchmark Replacement Date’ means the earliest to occur of the following events with respect to the then-current Benchmark:

(1) in the case of clause (1) or (2) of the definition of ‘Benchmark Transition Event,’ the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof); or

(2) in the case of clause (3) of the definition of ‘Benchmark Transition Event,’ the first date on which such Benchmark (or the published component used in the calculation thereof) has been determined and announced by the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be no longer representative; provided, that such non-representativeness will be determined by reference to the most recent statement or publication referenced in such clause (3) and even if any Available Tenor of such Benchmark (or such component thereof) continues to be provided on such date.

For the avoidance of doubt, (i) if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will be deemed

to have occurred prior to the Reference Time for such determination and (ii) the ‘Benchmark Replacement Date’ will be deemed to have occurred in the case of clause (1) or (2) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).”

“‘Benchmark Transition Event’ means the occurrence of one or more of the following events with respect to the then-current Benchmark:

(1) a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof);

(2) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Federal Reserve Board, the NYFRB, the Term SOFR Administrator, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or

(3) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are no longer, or as of a specified future date will no longer be, representative.

For the avoidance of doubt, a ‘Benchmark Transition Event’ will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).”

“‘Benchmark Unavailability Period’ means the period (if any) (a) beginning at the time that a Benchmark Replacement Date pursuant to clauses (1) or (2) of that definition has occurred if, at such time, no Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan

Document in accordance with Section 3.09 and (b) ending at the time that a Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 3.09.

“‘Business Day’ means, any day (other than a Saturday or a Sunday) on which banks are open for business in New York City or Chicago; provided that, in relation to any loans that bear interest at Daily Simple SOFR and any interest rate settings, fundings, disbursements, settlements or payments of any such Daily Simple SOFR loan, or any other dealings of such Daily Simple SOFR loan, any such day that is only a U.S. Government Securities Business Day.”

“‘Change in Law’ means the occurrence, after the date of this Agreement of: (a) the adoption or taking effect of any law, rule, regulation, treaty or risk-based capital guidelines, (b) any change in any law, rule, regulation, treaty or risk-based capital guidelines or in the administration, interpretation, implementation or application thereof by any Governmental Authority, or (c) compliance by any Lender (or, for purposes of Section 8.20, by any lending office of such Lender or by such Lender’s holding company, if any) with any request, guideline or directive of any Governmental Authority made or issued after the date of this Agreement; provided that, notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith or in the implementation thereof and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall, in each case, be deemed to be a ‘Change in Law,’ regardless of the date enacted, adopted, issued or implemented.”

“‘Corresponding Tenor’ with respect to any Available Tenor means, as applicable, either a tenor (including overnight) or an interest payment period having approximately the same length (disregarding business day adjustment) as such Available Tenor.

“‘Daily Simple SOFR’ means, for any day (a ‘SOFR Rate Day’), a rate per annum equal to SOFR for the day that is five (5) U.S. Government Securities Business Days prior to (i) if such SOFR Rate Day is a U.S. Government Securities Business Day, such SOFR Rate Day or (ii) if such SOFR Rate Day is not a U.S. Government Securities Business Day, the U.S. Government Securities Business Day immediately preceding such SOFR Rate Day, in each case, as such SOFR is published by the SOFR Administrator on the SOFR Administrator’s Website; provided that if Daily Simple SOFR as so determined would be less than the zero, such rate shall be deemed to be the zero for purposes of this Agreement. Any change in Daily Simple SOFR due to a change in SOFR shall be effective from and including the effective date of such change in SOFR without notice to Borrower.”

“‘Federal Funds Effective Rate’” means, for any day, the rate calculated by the NYFRB based on such day’s federal funds transactions by depository institutions (as determined in such manner as set forth on the NYFRB’s Website from time to time) and as published on the next succeeding Business Day by NYFRB as the effective federal funds rate; provided that if the Federal Funds Effective Rate as so determined shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement.

“‘Federal Reserve Board’ means the Board of Governors of the Federal Reserve System of the United States of America.

“‘Floor’ means the benchmark rate floor, if any, provided in this Agreement initially (as of the execution of this Agreement, the modification, amendment or renewal of this Agreement or otherwise) with respect to Term SOFR or Daily Simple SOFR.”

“‘Guarantor Operating Costs’ means all of its operating costs including but not limited to REIT general and administrative costs, REIT liquidation costs (which may include proxy solicitation costs, DST transfer agent costs, legal costs, tail insurance policy costs, and other reasonable and customary costs to maintain the REIT in good standing), capital costs (including building improvements, tenant improvements and leasing commissions at its owned properties), and any other reasonable costs and expenses required to maintain the REIT as a going concern, but for no other purpose.

“‘Guarantor Permitted Indebtedness’ means (a) guaranteed obligations of Guarantor in connection with the Loan, (b) unsecured letters of credit or guarantees required by Governmental Authorities in connection with the construction of the Improvements or any other properties owned directly or indirectly by Guarantor, (c) non-delinquent accrued but unpaid real taxes and insurances premiums, (d) other trade debt incurred in the ordinary course of operation of the Mortgaged Property or any other properties owned directly or indirectly by Guarantor (which, for clarity, shall specifically include trade payables related to capital expenditures, tenant improvement costs and leasing commissions) in such amounts as are normal and reasonable under the circumstances, provided that such debt described in this clause (d) is not evidenced by a note and is paid prior to delinquency and provided in any event that the outstanding principal balance of such debt with respect to a particular property shall not exceed at any one time five percent (5%) of the total outstanding indebtedness owed by Guarantor with respect to such property, (e) equipment leases entered into in the ordinary course of the operation of the Mortgaged Property or any other properties owned directly or indirectly by Guarantor, (f) Approved Leases or leases for any other properties owned directly or indirectly by Guarantor, (g) obligations in connection with posting a bond required by Governmental Authorities in connection with the operation of the Mortgaged Property or any other properties owned directly or indirectly by Guarantor, (h) tenant security deposits, (i) any Swap Agreement(s) with respect to

any loan, (j) any indemnity or similar agreement provided by Guarantor in favor of a title company with respect to title policies for properties owned directly or indirectly by Guarantor, and (k) obligations for tenant improvements, leasing commissions and capital expenditures for properties owned directly or indirectly by Guarantor.”

“‘Interest Adjustment Date’ means the day in each calendar month commencing after an Advance which numerically corresponds to the date of such Advance, provided, however, that (a) if any Interest Adjustment Date would be on a day other than a Business Day, such Interest Adjustment Date shall be the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Adjustment Date shall be the next preceding Business Day and (b) if, for any calendar month, there is no day numerically corresponding to the date of such Advance, the Interest Adjustment Date for such calendar month shall be the last Business Day of such month.

“‘Interest Rate’ means (a) prior to the occurrence of a Benchmark Replacement Date, Adjusted Term SOFR plus the Applicable Margin, or (b), subject to Section 3.09(b), upon the occurrence of a Benchmark Replacement Date, the Benchmark Replacement plus the Applicable Margin.

“‘Maturity Date’ means November 9, 2023.

“‘NYFRB Rate’ means, for any day, the greater of (a) the Federal Funds Effective Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on such day (or for any day that is not a Business Day, for the immediately preceding Business Day); provided that if both such rates are not so published for any day that is a Business Day, the term “NYFRB Rate” means the rate quoted for such day, for a federal funds transaction at 11:00 a.m. on such day received by Administrative Agent from a federal funds broker of recognized standing selected by it; provided, further, that if any of the above rates as so determined would be less than zero, such rate will be deemed to be zero for purposes of this Agreement.

“‘NYFRB’s Website’ means the website of the NYFRB at http://www.newyorkfed.org, or any successor source.

“‘Overnight Bank Funding Rate’ means for any day, the rate comprised of both overnight federal funds and overnight eurodollar transactions denominated in Dollars by U.S.–managed banking offices of depository institutions (as such composite rate shall be determined by the NYFRB as set forth on the NYFRB’s Website from time to time) and published on the next succeeding Business Day by the NYFRB as an overnight bank funding rate.”

“‘Permitted Indebtedness’ means (a) the Obligations, (b) unsecured letters of credit or guarantees required by Governmental Authorities in connection with the construction of the Improvements, (c) non-delinquent accrued but unpaid real taxes and insurances premiums, (d) other trade debt incurred in the ordinary

course of operation of the Mortgaged Property (which, for clarity, shall specifically include trade payables related to capital expenditures, tenant improvement costs and leasing commissions) in such amounts as are normal and reasonable under the circumstances, provided that such debt described in this clause (d) is not evidenced by a note and is paid prior to delinquency and provided in any event that the outstanding principal balance of such debt shall not exceed at any one time five percent (5%) of the outstanding Obligations, (e) equipment leases entered into in the ordinary course of the operation of the Mortgaged Property, (f) Approved Leases, (g) obligations in connection with posting a bond required by Governmental Authorities in connection with the operation of the Mortgaged Property, (h) tenant security deposits, (i) Swap Agreement(s) relating to the Loan (to the extent not already included in the definition of “Obligations”), (j) any indemnity or similar agreement provided by Borrower in favor of Title Company with respect to the Title Policies, and (k) obligations for tenant improvements, leasing commissions and capital expenditures related to an Approved Lease.”

“‘Prime Rate’ means the rate of interest last quoted by The Wall Street Journal as the “Prime Rate” in the U.S. or, if The Wall Street Journal ceases to quote such rate, the highest per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no longer quoted therein, any similar rate quoted therein (as determined by Administrative Agent) or any similar release by the Federal Reserve Board (as reasonably determined by Administrative Agent). Each change in the Prime Rate shall be effective from and including the date such change is publicly announced or quoted as being effective.

“‘Reference Time’ with respect to any setting of the then-current Benchmark means (a) if such Benchmark is Term SOFR, 5:00 a.m. (Chicago time) on the day that is two Business Days preceding the date of such setting, (b) if such Benchmark is Daily Simple SOFR, then four Business Days prior to such setting, and (c) if such Benchmark is not Term SOFR or Daily Simple SOFR, the time determined by Administrative Agent in its reasonable discretion.”

“‘Repayment Guaranty’ means the Second Amended and Restated Repayment Guaranty dated August 1, 2022, executed by Guarantor in favor of Administrative Agent, for the benefit of the Lenders, as amended from time to time.

“‘REIT’ means KBS Growth & Income REIT, Inc., a Maryland corporation.

“‘REIT Excess Cash Account’ has the meaning set forth in that certain Second Modification Agreement dated August 1, 2022, by and among Borrower, Administrative Agent and Lender.

“‘REIT Operating Costs’ means all of its operating costs including but not limited to REIT general and administrative costs, REIT liquidation costs (which may include proxy solicitation costs, DST transfer agent costs, legal costs, tail insurance policy costs, and other reasonable and customary costs to maintain the

REIT in good standing), capital costs (including building improvements, tenant improvements and leasing commissions at its owned properties), and any other reasonable costs and expenses required to maintain the REIT as a going concern, but for no other purpose.

“‘Relevant Governmental Body’ means the Federal Reserve Board, the NYFRB, and/or the Term SOFR Administrator, or a committee officially endorsed or convened by the Federal Reserve Board or the NYFRB, or any successor thereto.”

“‘Resolution Authority’ means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.

“‘Reuters’ means, as applicable, Thomson Reuters Corp., Refinitiv, or any successor thereto.

“‘Sanctioned Country’ means, at any time, a country, region or territory which is itself the subject or target of any Sanctions (at the time of this Agreement, the so-called Donetsk People’s Republic, the so-called Luhansk People’s Republic, the Crimea Region of Ukraine, Cuba, Iran, North Korea and Syria).

“‘Sanctioned Person’ means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by OFAC, or the U.S. Department of State, or by the United Nations Security Council, the European Union, any European Union member state, Her Majesty’s Treasury of the United Kingdom, or other relevant sanctions authority, (b) any Person operating, organized or resident in a Sanctioned Country, (c) an Affiliate of any such Person described in the foregoing clauses (a) or (b), or (d) any Person otherwise the subject of any Sanctions.

“‘SOFR’ means a rate equal to the secured overnight financing rate as administered by the SOFR Administrator.”

“‘SOFR Administrator’ means the NYFRB (or a successor administrator of the secured overnight financing rate).

“‘SOFR Administrator’s Website’ means the NYFRB’s Website, currently at http://www.newyorkfed.org, or any successor source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time.

“‘Term Commitment’ shall mean Fifty-Two Million Two Hundred Sixty-Thousand and No/100 Dollars ($52,260,000.00). The Term Commitment (and, correspondingly, the Aggregate Commitment) shall reduce dollar for dollar with each principal repayment of the Term Loan.

“‘Term SOFR’ means, for any day, the Term SOFR Reference Rate at approximately 5:00 a.m. Chicago time, two U.S. Government Securities Business Days prior to such date, as such rate is published by the Term SOFR Administrator.”

“‘Term SOFR Administrator’ means CME Group Benchmark Administration Limited as administrator of the forward-looking term Secured Overnight Financing Rate (SOFR) (or a successor administrator).”

“‘Term SOFR Determination Day’ has the meaning assigned to it under the definition of Term SOFR Reference Rate.”

“‘Term SOFR Reference Rate’ means, for any day and time (such day, the “Term SOFR Determination Day”), the rate per annum determined by the Administrative Agent as the forward-looking term rate based on SOFR with a tenor comparable to one month; provided that if the Term SOFR Reference Rate as so determined would be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement. If by 5:00 pm (New York City time) on such Term SOFR Determination Day, the “Term SOFR Reference Rate” for such tenor has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to Term SOFR has not occurred, then the Term SOFR Reference Rate for such Term SOFR Determination Day will be the Term SOFR Reference Rate as published in respect of the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate was published by the Term SOFR Administrator, so long as such first preceding U.S. Government Securities Business Day is not more than five (5) Business Days prior to such Term SOFR Determination Day.”

“‘UK Financial Institution’ means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended from time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.

“‘UK Resolution Authority’ means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.

“‘Unadjusted Benchmark Replacement’ means the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.

“‘U.S. Government Securities Business Day’ means any day except for (i) a Saturday, (ii) a Sunday or (iii) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.

“‘Write-Down and Conversion Powers’ means (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are

described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.

(c)Deletion of Defined Terms; References. Section 1.01 of the Loan Agreement is hereby amended to delete the following defined terms: “Adjusted LIBO Rate”; “Eurodollar Advance”, “Eurodollar Loan”, “Eurodollar Rate”, “Floating Rate Advance,” “Floating Rate Loan,” “Floating Rate,” “Impacted Interest Period,” “Interest Election Request,” “Interest Period,” “Interpolated Rate”; “LIBO Rate”; “LIBO Screen Rate”; “Statutory Reserve Rate”; and “Type”.

(d)The Loan and Advances. Sections 3.01(b), (c) and (d) of the Loan Agreement are hereby amended and restated in its entirety as follows:

“(b) Intentionally Omitted.

(d) Intentionally Omitted.”

(e)Requests for Advances; Funding of Advances; Interest Elections. Sections 3.02, 3.03, and 3.04 of the Loan Agreement are hereby deleted in their entirety and replaced, in each case, with “Intentionally Omitted” to maintain the integrity of the numbering of any subsequent Sections.

(f)Payments Generally. A new Section 3.05(f) is hereby added to the Loan agreement in numerical order thereto:

“(f) Payments Generally. Borrower will make each payment required to be made by it under this Agreement prior to 2:00 p.m., Dallas, Texas time, on the date when due, in immediately available funds, without setoff or counterclaim. Any amounts received after such time on any date may, in the discretion of Administrative Agent, be deemed to have been received on the next succeeding Business Day. All such payments will be made to Administrative Agent at 8181 Communictions Pkwy Bldg B, Floor 3, Plano, TX 75024-0239. If any payment under this Agreement comes due on a day that is not a Business Day, such payment will be made on the next succeeding Business Day, and, in the case of any payment accruing interest, interest will continue to accrue during the extension period. All payments hereunder will be made in U.S. dollars.”

(g)Prepayment of Loans. Section 3.06 of the Loan Agreement is hereby amended and restated in its entirety as follows:

“Section 3.06. Prepayment. Borrower may at any time and from time to time prepay the Loan in whole or in part, subject to prior notice in accordance with this Section 3.06, without any prepayment penalty or premium. Borrower will notify Administrative Agent by electronic communication as provided in Section 10.01 of any prepayment not later than 2:00 p.m., Dallas, Texas time, three (3) Business Days before the date of prepayment. Each such notice must specify the prepayment date and the principal amount of the Loan to be prepaid; in the event any such prepayment notice is revoked by Borrower, Borrower shall reimburse Administrative Agent and Lenders for their respective reasonable out-of-pocket costs and expenses in connection with such revoked prepayment notice. Promptly following receipt of any such notice, Administrative Agent will inform the Lenders of the contents thereof.

(h)Interest. Section 3.08 of the Loan Agreement is hereby amended and restated in its entirety as follows:

“(a) Interest Rate. The outstanding principal amount of the Loan shall bear interest at a per annum interest rate equal to the Interest Rate. The Interest Rate will be determined for the date of the Advance and will be reset monthly on each Interest Adjustment Date thereafter.

(b) Default Rate. Notwithstanding the foregoing, to the extent permitted under applicable law, upon the occurrence of a Default, and during the continuance of a Default, and after maturity, the Loans shall bear interest, after as well as before judgment, at a rate per annum equal to 2% plus the rate otherwise applicable to such Loans as provided in the preceding paragraphs of this Section.

(c) Payment of Accrued Interest. Accrued and unpaid interest on the outstanding principal balance of the Loan shall be calculated from and including the first day of each month (or in the case of the first interest accrual period, the borrowing date of the Advance) through and including the last day of such month and is payable in arrears on each Interest Payment Date of the succeeding calendar month; provided (i) interest accrued pursuant to Section 3.08(b) above will be payable within five (5) Business Days following Administrative Agent’s written demand; (ii) in the event of any repayment or prepayment of any principal of the Loan, accrued interest on the principal amount repaid or prepaid will be payable on the date of such repayment or prepayment; and (iii) in the event of any conversion of the rate of interest on the Loan to the rate based on the Alternate Base Rate, accrued interest on the Loan will be due and payable within five (5) Business Days following Administrative Agent’s written demand.

(d) Computation of Interest. All interest hereunder will be computed on the basis of a year of 360 days and will be payable for the actual number of days elapsed (including the first day but excluding the last day). The applicable interest rate for any day will be determined by Administrative Agent.

“3.09 Alternate Rate of Interest.

(a)Subject to clauses (b), (c), (d), (e), and (f) of this Section 3.09, if (i) Administrative Agent determines that adequate and reasonable means do not exist for ascertaining Adjusted Term SOFR or Term SOFR, as applicable (including because the Term SOFR Reference Rate is not available or published on a current basis); or (ii) the Required Lenders advise Administrative Agent that Adjusted Term SOFR or Term SOFR, as applicable, will not adequately and fairly reflect the cost to such Lenders of making or maintaining the Loan, then Administrative Agent will give notice to Borrower by electronic communication as provided in Section 10.01 as promptly as practicable and, until Administrative Agent notifies Borrower that the circumstances giving rise to such notice no longer exist, the Loan will bear interest at (x) the Adjusted Daily Simple SOFR plus the Applicable Margin so long as Adjusted Daily Simple SOFR is not also subject to clauses (i) or (ii) above, or (y) the Alternate Rate if Adjusted Daily Simple SOFR is subject to clauses (i) or (ii) above.

(b)Notwithstanding anything to the contrary herein or in any other Loan Document, if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred prior to the Reference Time in respect of any setting of the then-current Benchmark, then (x) if a Benchmark Replacement is determined in accordance with clause (1) of the definition of ‘Benchmark Replacement’ for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of such Benchmark setting and subsequent Benchmark settings without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document and (y) if a Benchmark Replacement is determined in accordance with clause (2) of the definition of ‘Benchmark Replacement’ for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of any Benchmark setting at or after 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Benchmark Replacement is provided to the Lenders without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document so long as Administrative Agent has not received, by such time, written notice of objection to such Benchmark Replacement from the Lenders comprising the Required Lenders.

(c)Notwithstanding anything to the contrary herein or in any other Loan Document, Administrative Agent will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Loan Document.

(d)Administrative Agent will promptly notify Borrower and the Lenders of (i) any occurrence of a Benchmark Transition Event, (ii) the implementation of any Benchmark Replacement, (iii) the effectiveness of any

Benchmark Replacement Conforming Changes, (iv) the removal or reinstatement of any tenor of a Benchmark pursuant to clause (e) below, and (v) the commencement or conclusion of any Benchmark Unavailability Period. Any determination, decision or election that may be made by Administrative Agent or, if applicable, any Lender (or group of Lenders) pursuant to this Section 3.09, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party to this Agreement or any other Loan Document, except, in each case, as expressly required pursuant to this Section 3.09.

(e)Notwithstanding anything to the contrary herein or in any other Loan Document, at any time (including in connection with the implementation of a Benchmark Replacement):

(i) if the then-current Benchmark is a term rate (including Term SOFR) and either (A) any tenor for such Benchmark is not displayed on a screen or other information service that publishes such rate from time to time as selected by Administrative Agent in its reasonable discretion or (B) the regulatory supervisor for the administrator of such Benchmark has provided a public statement or publication of information announcing that any tenor for such Benchmark is or will be no longer representative, then Administrative Agent may modify the definition of ‘Interest Adjustment Date’ for any Benchmark settings at or after such time to remove such unavailable or non-representative tenor; and

(ii) if a tenor that was removed pursuant to item (i) above either (A) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement) or (B) is not, or is no longer, subject to an announcement that it is or will no longer be representative for a Benchmark (including a Benchmark Replacement), then Administrative Agent may modify the definition of ‘Interest Adjustment Date’ for all Benchmark settings at or after such time to reinstate such previously removed tenor.

(f)During any Benchmark Unavailability Period, the Loan will bear interest at the Alternate Rate. During any Benchmark Unavailability Period, or at any time that a tenor for the then-current Benchmark is not an Available Tenor, the component of the Alternate Base Rate based upon the then-current Benchmark or such tenor for such Benchmark, as applicable, will not be used in any determination of the Alternate Base Rate.”

(i)Increased Costs. Section 3.10(a) of the Loan Agreement is hereby amended to read as follows:

“(a) Increased Costs of Making or Maintaining Loan. If any Change in Law shall (i) impose, modify or deem applicable any reserve, special deposit or similar requirement (including any compulsory loan requirement, insurance charge or other assessment) against assets of, deposits with or for the account of, or credit extended by any Lender, (ii) impose on any Lender any other condition, cost or expense (other than Taxes) affecting this Agreement or the Loan made by such Lender or (iii) subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto, and the result of any of the foregoing is to increase the cost to such Lender or such other Recipient of making, continuing, converting into or maintaining any Loan (or of maintaining its obligation to make any such Loan) or to reduce the amount of any sum received or receivable by such Lender or such other Recipient hereunder (whether of principal, interest or otherwise), then Borrower will pay to such Lender or such other Recipient such additional amount or amounts as will compensate such Lender or such other Recipient for such additional costs incurred or reduction suffered.”

(j)Break Funding Payments. Section 3.11 of the Loan Agreement is hereby amended to read as follows:

“3.11 Intentionally Omitted.”

(k)Conversion of Revolving Loans to Term Loans; Termination of Revolving Commitment.

(i)All outstanding Revolving Loans (i.e., Revolving Loans in the outstanding principal amount of $17,420,000) are hereby converted to Term Loans under the Loan Agreement. The Revolving Commitment is hereby terminated and no further advances shall be permitted from the Loan (including any advances as Revolving Loans).

(ii)Sections 3.16 and 3.17 are hereby amended restated in their entirety as follows:

“3.16 [Reserved.]”

“3.17 [Reserved.]”

(l)Prohibited Distributions. Section 4.06 of the Loan Agreement is hereby amended and restated in its entirety as follows:

“4.06 Prohibited Distributions. Borrower shall not make any distributions at any time, whether or not a Default or Unmatured Default exists. Borrower shall cause Guarantor and REIT to not make any distributions; provided, however, so long as no Default or Unmatured Default exists, (A) Guarantor and/or REIT will be permitted to make distributions (or receive disbursements from the REIT Excess Cash Account or the Guarantor Excess Cash Account (as defined in the Repayment Guaranty)) (i) to the extent

necessary to maintain the REIT status of itself and/or any of its direct or indirect owners that are REITs, and (ii) for Death and Disability Redemptions; provided, however, amounts distributed for Death and Disability Redemptions shall not exceed $250,000, in the aggregate, for any calendar year, and (B) Borrower, Guarantor and/or REIT may make any other distributions subject to Lender’s prior approval in its sole and absolute discretion. For the purposes of this Section 4.06, “Death and Disability Redemptions” means redemptions allowed in connection with a stockholder's death, qualifying disability, or determination of incompetence as discussed and defined in the Second Amended and Restated Share Redemption Program of the REIT adopted December 7, 2018.

(m)Acknowledgement and Consent to Bail-In of Affected Financial Institutions. Section 10.22 of the Loan Agreement is hereby amended to read as follows:

“ 10.22 Acknowledgement and Consent to Bail-In of Affected Financial Institutions. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party acknowledges that any liability of any Affected Financial Institution arising under any Loan Document may be subject to the Write-Down and Conversion Powers of the applicable Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

(a) the application of any Write-Down and Conversion Powers by the applicable Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an Affected Financial Institution; and

(b) the effects of any Bail-In Action on any such liability, including, if applicable:

(i) a reduction in full or in part or cancellation of any such liability;

(ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such Affected Financial Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

(iii) the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of the applicable Resolution Authority.”

(n)Releases of Properties. Section 10.23 of the Loan Agreement is hereby amended and restated in its entirety as follows:

“10.23 Releases of Properties. Except as expressly set forth below in this Section 10.23, Administrative Agent shall have no obligation to release any of the Properties (or portions thereof) until the Loan and all other Obligations have been paid in full and all obligations of Administrative Agent and Lenders under this Agreement and the other Loan Documents have terminated. Borrower shall be entitled to obtain the release of a Property (or portions thereof) (each, a “Release Property”) from the lien of the Loan Documents, provided that all of the following conditions are satisfied:

(a)In connection with the sale of a Release Property to a bone fide third party purchaser (the “Proposed Sale”), Borrower shall have submitted to Administrative Agent a written request for such release at least twenty (20) days prior to the proposed release date, together with a copy of the purchase and sale agreement and copies of any documents which Borrower requests Administrative Agent to execute in connection with such proposed release.

(b)Administrative Agent shall have approved the Proposed Sale (including the proposed purchase price) and corresponding release of the Release Property, which approval shall not be unreasonably withheld, conditioned or delayed.

(c)No Default or Unmatured Default shall have occurred and be continuing.

(d)The Release Property and the portion of the Property that shall remain subject to a Deed of Trust upon the reconveyance of the Release Property shall each constitute one or more legally separable and transferable lots or parcels under all applicable laws, ordinances, rules and regulations relating to the subdivision or parceling of real property and the transfer thereof.

(e)The release of the Release Property will not result in the loss by any other portion of the Property which remains subject to the applicable Deed of Trust of reasonable access to a public street, the use of reasonably necessary easements or utilities, or any parking availability which is reasonably necessary for the use and operation of such remaining Property for its intended purpose (provided, however, that the foregoing requirements in this clause (e) shall be deemed satisfied if the requirements in clause (f) below are satisfied by the applicable Borrower).

(f)The Release Property shall be subject to such reciprocal easement agreements and other agreements as Administrative Agent may reasonably require to ensure that the Property which remains subject to the applicable Deed of Trust enjoys adequate ingress and egress, access to a public street, utility access, parking, and such other rights and benefits as Administrative Agent may reasonably require.

(g)Borrowers’ rights under any reciprocal easement agreement or other agreement that may be required pursuant to Section 10.23(f) above shall be subject to the lien of the applicable Deed of Trust.

(h)Borrower shall have paid to Administrative Agent, for application to the outstanding balance of the Loans, all net proceeds from the Proposed Sale of such Release Property; provided, however, in no event shall the net proceeds be less than (i) with respect to the Institute Property, $24,148,145 and (ii) with respect to the Greenhouse Property, $33,337,855. For purposes hereof, such net proceeds shall be the amount of cash received by the applicable Borrower from such sale after deduction of any escrow, recording, title insurance costs, and any other closing costs (including, without limitation, transfer taxes and legal fees), paid by the applicable Borrower in connection therewith as reasonably approved by Administrative Agent; provided, however, for avoidance of doubt, such costs shall not include any deductions for any distributions or the replenishment of any reserves for any of Borrower, Guarantor, REIT, and/or any Affiliates of such parties except to the extent approved by Administrative Agent in its sole and absolute discretion.

(i)Borrower shall have delivered to Administrative Agent such certifications from Guarantor that, after giving effect to the proposed release, Guarantor shall be in compliance with its financial covenants under the Guaranty.

(j)Borrower shall provide to Administrative Agent at Borrower’s sole cost and expense such title insurance endorsements to the Title Policies for the remaining Deeds of Trust as Administrative Agent shall reasonably request (including, without limitation, CLTA Form 111 Endorsements (or its equivalent), to the extent available and in form and substance reasonably satisfactory to Administrative Agent, which shall insure that after such release, each remaining Deed of Trust shall continue as a valid first position lien against the Property encumbered thereby, subject only to such new title exceptions as Administrative Agent shall approve in writing.

(k)Borrower shall pay, or caused to be paid, to Administrative Agent all reasonable costs and expenses incurred in connection with such release, including without limitation all breakage fees, recording fees, transfer and other taxes, trustee’s fees, reasonable attorneys’ fees, appraisal fees, escrow fees, and fees for title insurance and similar charges.

Following the release of any Property (or portion thereof), such Release Property (or portion thereof) shall no longer be included in the definition of “Property” except with respect to any indemnities and other provisions of the Loan Documents that expressly survive repayment of the Loan.

Upon the release of the Deed of Trust encumbering the Property owned by a Borrower in accordance with the Loan Documents, and the payment to Administrative Agent in full of the amount, if any, required pursuant to Section 10.23(h) above with respect to the release of such Property, so long as no Default or Unmatured Default shall have occurred and be continuing, such Borrower shall be deemed to no longer be a Borrower under the Loan Documents and shall be released therefrom upon the execution (which shall be delivered concurrently with

the release of the applicable Deed of Trust) by such Borrower, each other Borrower and Guarantor, and Administrative Agent of a reciprocal release agreement in the form attached hereto as Exhibit F or any other form reasonably satisfactory to Administrative Agent, the applicable Borrower, each other Borrower and Guarantor.”

(o)Acknowledgments of Lenders. A new Section 11.14 is hereby added to the Loan Agreement in numerical order thereto as follows:

“11.14 Acknowledgements of Lenders.

(a) Each Lender represents and warrants that (i) the Loan Documents set forth the terms of a commercial lending facility, (ii) it is engaged in making, acquiring or holding commercial loans and in providing other facilities set forth herein as may be applicable to such Lender, in each case in the ordinary course of its business, and not for the purpose of purchasing, acquiring or holding any other type of financial instrument (and each Lender agrees not to assert a claim in contravention of the foregoing), (iii) it has, independently and without reliance upon Administrative Agent or any other Lender, or any of the Related Parties of any of them, and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement as a Lender, and to make, acquire or hold the Loan hereunder, and (iv) it is sophisticated with respect to decisions to make, acquire and/or hold commercial loans and to provide other facilities set forth herein, as may be applicable to such Lender, and either it, or the Person exercising discretion in making its decision to make, acquire and/or hold such commercial loans or to provide such other facilities, is experienced in making, acquiring or holding such commercial loans or providing such other facilities. Each Lender also acknowledges that it will, independently and without reliance upon Administrative Agent or any other Lender, or any of the Related Parties of any of them, and based on such documents and information (which may contain material, non-public information within the meaning of the United States securities laws concerning Borrower and its Affiliates) as it from time to time deems appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

(b) Each Lender, by delivering its signature page to this Agreement on the Closing Date, or delivering its signature page to an Assignment and Assumption or any other Loan Document pursuant to which it becomes a Lender hereunder, will be deemed to have acknowledged receipt of, and consented to and approved, each Loan Document and each other document required to be delivered to, or be approved by or satisfactory to, Administrative Agent or Lenders on the Closing Date.

(c) (i) Each Lender hereby agrees that (x) if Administrative Agent notifies such Lender that Administrative Agent has determined in its sole

discretion that any funds received by such Lender from Administrative Agent or any of its Affiliates (whether as a payment, prepayment or repayment of principal, interest, fees or otherwise; individually and collectively, a “Payment”) were erroneously transmitted to such Lender (whether or not known to such Lender), and demands the return of such Payment (or a portion thereof), such Lender shall promptly, but in no event later than one Business Day thereafter, return to the Administrative Agent the amount of any such Payment (or portion thereof) as to which such a demand was made in same day funds, together with interest thereon in respect of each day from and including the date such Payment (or portion thereof) was received by such Lender to the date such amount is repaid to the Administrative Agent at the greater of the NYFRB Rate and a rate determined by Administrative Agent in accordance with banking industry rules on interbank compensation from time to time in effect, and (y) to the extent permitted by applicable law, such Lender shall not assert, and hereby waives, as to Administrative Agent, any claim, counterclaim, defense or right of set-off or recoupment with respect to any demand, claim or counterclaim by Administrative Agent for the return of any Payments received, including any defense based on “discharge for value” or any similar doctrine. A notice of Administrative Agent to any Lender under this Section 11.14(c) shall be conclusive, absent manifest error.

(ii) Each Lender hereby further agrees that if it receives a Payment from Administrative Agent or any of its Affiliates (x) that is in a different amount than, or on a different date from, that specified in a notice of payment sent by Administrative Agent (or any of its Affiliates) with respect to such Payment (a “Payment Notice”) or (y) that was not preceded or accompanied by a Payment Notice, it shall be on notice, in each such case, that an error has been made with respect to such Payment. Each Lender agrees that, in each such case, or if it otherwise becomes aware a Payment (or portion thereof) may have been sent in error, such Lender shall promptly notify Administrative Agent of such occurrence and, upon demand from Administrative Agent, it shall promptly, but in no event later than one Business Day thereafter, return to Administrative Agent the amount of any such Payment (or portion thereof) as to which such a demand was made in same day funds, together with interest thereon in respect of each day from and including the date such Payment (or portion thereof) was received by such Lender to the date such amount is repaid to Administrative Agent at the greater of the NYFRB Rate and a rate determined by Administrative Agent in accordance with banking industry rules on interbank compensation from time to time in effect.

(iii) Borrower hereby agrees that (x) in the event an erroneous Payment (or portion thereof) are not recovered from any Lender that has received such Payment (or portion thereof) for any reason, Administrative Agent shall be subrogated to all the rights of such Lender with respect to such amount and (y) an erroneous Payment shall not pay, prepay, repay, discharge or otherwise satisfy any Obligations owed by Borrower.

(iv) Each party’s obligations under this Section 11.14(c) shall survive the resignation or replacement of Administrative Agent or any transfer of rights or obligations by, or the replacement of, a Lender, the termination of the Commitments or the repayment, satisfaction or discharge of all Obligations under any Loan Document.”

(p)Financial Information and Other Deliveries.

(i)Borrower. Sections 4.09(a)(i) and 4.09(a)(ii) of the Loan Agreement are hereby amended and restated in its entirety as follows:

“(i) (A) Within twenty (20) days after the end of each of calendar month, each Borrower shall deliver to Administrative Agent an operating statement (showing actual to budgeted results) and a lease status report (including a rent roll) for each Property and Improvements, each dated as of the last day of such calendar month. Within forty-five (45) days after the end of each Borrower’s fiscal quarters (except for the fourth fiscal quarter), each Borrower shall deliver to Administrative Agent a balance sheet, statement of operations for each Borrower, each dated as of the last day of such fiscal quarter, in form and substance reasonably satisfactory to Administrative Agent and certified by an authorized representative of each Borrower;

(ii) Within ninety (90) days after the end of each of each Borrower’s fiscal year, each Borrower shall deliver to Administrative Agent (i) an operating budget for the upcoming year and an operating statement (showing actual to budgeted results) and a lease status report (including a rent roll) for each Property and Improvements, each dated as of the last day of the fiscal year, and (ii) a balance sheet, statement of operations for Borrower, each dated as of the last day of such fiscal year, in form and substance reasonably satisfactory to Administrative Agent and certified by an authorized representative of each Borrower;”

(ii)KBS Growth & Income REIT, Inc. In addition to the financial information required pursuant to Section 4.09 of the Loan Agreement, Borrower shall cause each of the following to be delivered to Administrative Agent:

(A)Within forty-five (45) days after the end of the fiscal quarter (except for the fourth fiscal quarter) of REIT, Borrower shall deliver to Administrative Agent a balance sheet, statement of operations for the REIT, each dated as of the last day of such fiscal quarter, in form and substance reasonably satisfactory to Administrative Agent and certified by an authorized representative of the REIT;

(B)Within ninety (90) days after the end of each of the REIT’s fiscal years, Borrower shall deliver to Administrative Agent a balance sheet, a statement of operations for the REIT, each dated as of the last day of such fiscal

year, in form and substance reasonably satisfactory to Administrative Agent and certified by an authorized representative of Guarantor.

(C)Borrower shall deliver to Administrative Agent such other information and materials with respect to the REIT as Administrative Agent shall reasonably request in writing.

(q)Additional Covenants.

(i)Covenant to Use Revenues.

(A)All revenues received by Borrower from the Property shall only be used for purposes consistent with the operating budget approved by Administrative Agent (which approval shall not be withheld, conditioned or delayed unreasonably) and historical practices with respect to such Property, except as otherwise approved by Administrative Agent, in its sole and absolute discretion.

(B)Borrower shall cause all revenues received by Guarantor and/or cash currently held by Guarantor to only be used for payment of Guarantor Operating Costs.

(C)Borrower shall cause all revenues received by REIT and/or cash currently held by REIT to only be used for payment of REIT Operating Costs.

(ii)Guarantor Permitted Indebtedness. Borrower shall cause Guarantor not to incur any Indebtedness other than Guarantor Permitted Indebtedness.

(r)Cash Flow Sweep.

(i)Within ten (10) Business Days of each Interest Payment Date, Borrower shall pay to Administrative Agent an amount equal to the Excess Cash Flow (defined below) for the preceding month and shall deliver to Administrative Agent a reasonably detailed accounting of the amount of such Excess Cash Flow payment certified by the chief financial officer or another authorized representative of Borrower as true, correct, and complete in all material respects. All amounts paid by Borrower pursuant to this subsection (r) shall be deposited by Administrative Agent in an account at, and controlled by, Administrative Agent established for the purpose of holding the Excess Cash Flow deposits (the “Excess Cash Flow Account”). So long as no Event of Default exists, any interest on the funds in the Excess Cash Flow Account shall accrue for the benefit of Borrower.

(ii)Borrower shall, in each case, (i) complete and duly execute and deliver (as applicable) all documentation reasonably required by Administrative Agent to establish and pledge to Administrative Agent, for the benefit of the Lenders, the Excess Cash Flow Account (including Administrative Agent’s standard form of deposit account control agreement, blocked account agreement, or similar agreement, which shall be in all material respects consistent with the provisions of this Agreement, and which shall be subject to any modification as may be agreed upon by Borrower and Administrative

Agent), and (ii) otherwise cooperate with Administrative Agent in all reasonable respects to establish the Excess Cash Flow Account, pledge it to Administrative Agent, for the benefit of Lenders, and perfect such pledge, within ten (10) Business Days after Administrative Agent provides Borrower with such documentation. Borrower hereby grants to Administrative Agent a security interest in the Excess Cash Flow Account and all funds on deposit therein as additional security for the Obligations and agrees that it shall not, without obtaining the prior express written consent of Administrative Agent, further pledge, assign or grant any security interest in the Excess Cash Flow Account. Borrower agrees to hold in trust for the benefit of Administrative Agent on behalf of the Lenders, all Excess Cash Flow in its possession prior to the deposit of such Excess Cash Flow into the Excess Cash Flow Account. This Agreement is, among other things, intended by the parties to be a security agreement for purposes of the UCC.

(iii)During the existence of a Default, Administrative Agent shall have the right to apply all amounts in the Excess Cash Flow Account in repayment of the Obligations in such order as Administrative Agent shall determine. Borrower shall have no right to any funds in the Excess Cash Flow Account until payment of the Obligations in full; provided, however, that so long as no Default or Unmatured Default has occurred and is continuing, at Borrower’s written request, Administrative Agent may disburse funds held in the Excess Cash Flow Account to Borrower for (1) tenant improvement costs and leasing commissions for Approved Leases and (2) at Administrative Agent’s sole and absolute discretion, Guarantor Operating Costs, REIT Operating Costs, and/or capital improvements in such amounts and subject to such evidence and/or conditions Administrative Agent may require in its sole and absolute discretion.

(iv)For the purposes hereof, “Excess Cash Flow” means (A) actual gross revenues of Borrower for such calendar month attributable to the Property (including, without limitation, all rentals, service and other fees or charges, license fees, parking fees and other revenues and cash payments of any kind received by the Borrower) received by Borrower for the most recently completed one (1) month period (the “Actual Revenues”) less (B) the sum of the following costs and expenses paid by Borrower during such month: (x) all actual Property Operating Expenses (including, without limitation, debt service charges paid during such month and swap settlement payments owed by Borrower to Administrative Agent, if any) in connection with the ownership, maintenance and operation of the Property, (y) tenant improvement costs and leasing commissions for Approved Leases, and (z) capital expenditures consistent with the operating budget or any other capital expenditures approved by Administrative Agent, in its sole and absolute discretion; provided, however, in no event shall Actual Revenues be used for payment of any asset management fees to any Borrower, Guarantor, REIT and/or any Affiliates of any Borrower, Guarantor or REIT.

(v)Upon payment in full and satisfaction of all indebtedness under the Loan and obligations under the Loan Documents, any amounts remaining in the Excess Cash Flow Account shall be released to Borrower.

(s)REIT Excess Cash Account.

(i)If at any time REIT holds in excess of $7,000,000 in cash (the “REIT Excess Cash”), REIT shall (and Borrower shall cause REIT to) either, at REIT’s discretion (i) pay to Administrative Agent all REIT Excess Cash and such amounts shall be deposited by Administrative Agent in an account at, and controlled by, Administrative Agent established for the purpose of holding the REIT Excess Cash (the “REIT Excess Cash Account”) (and any interest that may accrue on the funds in such REIT Excess Cash Account shall accrue for the benefit of REIT so long as no Default exists) or (ii) pay to Administrative Agent all REIT Excess Cash to be applied in repayment of the Obligations (as defined in the Loan Agreement) in such order as Administrative Agent shall determine, or a combination of (i) and (ii) in REIT’s sole and absolute discretion.

(ii)REIT shall (and Borrower shall cause REIT to) (i) complete and duly execute and deliver (as applicable) all documentation reasonably required by Administrative Agent to establish and pledge to Administrative Agent, for the benefit of the Lenders, the REIT Excess Cash Account (including Administrative Agent’s standard form of deposit account control agreement, blocked account agreement, or similar agreement, which shall be in all material respects consistent with the provisions of this Agreement and which shall be subject to any modification as may be agreed upon by REIT and Administrative Agent), and (ii) otherwise reasonably cooperate with Administrative Agent in all reasonable respects to establish the REIT Excess Cash Account, pledge it to Administrative Agent, for the benefit of Lenders, and perfect such pledge, within ten (10) Business Days after Administrative Agent provides REIT with such documentation. Borrower shall cause REIT to grant to Administrative Agent a security interest in the REIT Excess Cash Account and all funds on deposit therein as additional security for the Obligations and Borrower shall cause REIT to, without obtaining the prior express written consent of Administrative Agent, not further pledge, assign or grant any security interest in the REIT Excess Cash Account. Borrower shall cause REIT to hold in trust for the benefit of Administrative Agent on behalf of the Lenders, all REIT Excess Cash in its possession prior to the deposit of such REIT Excess Cash into the REIT Excess Cash Account. This Agreement is, among other things, intended by the parties to be a security agreement for purposes of the UCC.

(iii)During the existence of a Default, Administrative Agent shall have the right to apply all amounts in the REIT Excess Cash Account in repayment of the Obligations in such order as Administrative Agent shall determine. REIT nor Borrower shall have any right to any funds in the REIT Excess Cash Account until payment of the Obligations in full.

(iv)Upon payment in full and satisfaction of all indebtedness under the Loan and obligations under the Loan Documents, any amounts remaining in the REIT Excess Cash Account shall be released to REIT.

(t)Interest Rates; Benchmark Notification. The interest rate on the Loan may, at any time, be derived from an interest rate benchmark that may be discontinued or is, or may in the future become, the subject of regulatory reform. Upon the occurrence of a Benchmark Transition Event, Section 3.09(b) of the Loan Agreement provides the mechanism for determining an alternative rate of interest. Administrative Agent does not warrant or accept

any responsibility for, and shall not have any liability with respect to, the administration, submission, performance or any other matter related to any interest rate used in this Agreement, or with respect to any alternative or successor rate thereto, or replacement rate thereof, including, without limitation, whether the composition or characteristics of any such alternative, successor or replacement reference rate will be similar to, or produce the same value or economic equivalence of, the existing interest rate being replaced or have the same volume or liquidity as did any existing interest rate prior to its discontinuance or unavailability. Administrative Agent and its affiliates and/or other related entities may engage in transactions that affect the calculation of any interest rate used in this Agreement or any alternative, successor or alternative rate (including any Benchmark Replacement) and/or any relevant adjustments thereto, in each case, in a manner adverse to Borrower. Administrative Agent may select information sources or services in its reasonable discretion to ascertain any interest rate used in this Agreement, any component thereof, or rates referenced in the definition thereof, in each case pursuant to the terms of this Agreement, and shall have no liability to Borrower, any Lender or any other person or entity for damages of any kind, including direct or indirect, special, punitive, incidental or consequential damages, costs, losses or expenses (whether in tort, contract or otherwise and whether at law or in equity), for any error or calculation of any such rate (or component thereof) provided by any such information source or service.

(u)Notices. The notice addresses for the Borrower and Administrative Agent set forth in Section 10.01 shall be updates as follows:

(i)if to Borrower, to it at c/o KBS Capital Advisors LLC, 800 Newport Center Drive, #700, Newport Beach, CA 92660, Attention of Luke Hamagiwa (Phone No. (202) 552-7568) (Email Address: lhamagiwa@kbs.com), and Brett Merz, Senior Vice President, Asset Management (Phone No. (949) 417-6545) (Email Address: bmerz@kbs.com);

With a copy to: Greenberg Traurig, 18565 Jamboree Road, Suite 500, Irvine, CA 92612, Attention of Bruce Fischer, Esq. (Phone No. (949) 732-6670) (Email Address: fischerb@gtlaw.com);

With a copy to: Todd Smith, 800 Newport Center Drive, #700, Newport Beach, CA 92660 (Phone No. (949) 797-0338) (Email Address: kbs-debt@kbs.com);

(ii)if to Administrative Agent, to it at 277 Park Avenue, 36th Floor, New York, NY 10017, Attention of Donald Wattson (Phone No. (212) 648-1807) (Email Address: donald.a.wattson@jpmorgan.com).

(v)Secured Obligations. Each Deed of Trust is modified to secure payment and performance of the Loan, as amended to date, in addition to all other “Secured Obligations” as therein defined.

4.Conditions Precedent. Before this Agreement becomes effective and any party becomes obligated under it, all of the following conditions shall have been satisfied at Borrower’s sole cost and expense in a manner acceptable to Administrative Agent and the Lenders, in the exercise of their reasonable judgment:

(a)Administrative Agent and the Lenders shall have received fully executed and, where appropriate, acknowledged originals of this Agreement, a Second Amended and Restated Guaranty, and any other documents and agreements which Administrative Agent and the Lenders may reasonably require or request in accordance with this Agreement or the other Loan Documents, in form and substance reasonably satisfactory to Administrative Agent;

(b)A short form of this Agreement shall have been recorded in the Official Records;

(c)Administrative Agent shall have received such assurance as Administrative Agent may reasonably require that the validity and priority of the Deed of Trust has not been and will not be impaired by this Agreement or the transactions contemplated by it, including an ALTA 11-06 Endorsement and any other endorsements reasonably required by Administrative Agent to be attached to the Title Policy;

(d)Administrative Agent shall have received a modification fee in an amount equal to 0.15% of the Aggregate Commitment;

(e)Administrative Agent shall have received reimbursement, in immediately available funds, of all costs and expenses incurred by Administrative Agent in connection with this Agreement, (if required) including charges for title insurance (including endorsements), recording, filing and escrow charges, fees for appraisal, architectural and engineering review, construction services and environmental services, mortgage taxes, and reasonable legal fees and expenses of Administrative Agent’s counsel.

5.Borrower’s Representations and Warranties. Borrower represents and warrants to Administrative Agent and the Lenders as follows:

(a)Loan Documents. All representations and warranties made and given by Borrower in the Loan Documents are true, accurate and correct in all material respects, subject to (i) any changes in circumstances arising from actions or events occurring after the date of this Agreement that do not otherwise constitute a Default hereunder or under any of the Loan Documents (including, without limitation, execution of new Leases and contracts that are not prohibited by the terms of this Agreement or any other Loan Documents), and (ii) such matters, if any, as have been previously disclosed to Administrative Agent in writing.

(b)No Default. No Default or Unmatured Default has occurred and is continuing.

(c)Borrowing Entity. There have been no changes in the formation documents of any Borrower since the inception of the Loan that would violate any restrictions set forth in the Loan Documents.

6.Incorporation. This Agreement shall form a part of each Loan Document, and all references to a given Loan Document shall mean that document as hereby modified.

7.No Prejudice; Reservation of Rights. This Agreement shall not prejudice any rights or remedies of Administrative Agent nor any Lender under the Loan Documents.

Administrative Agent and the Lenders reserve, without limitation, all rights which it has against any indemnitor, guarantor, or endorser of the Notes.

8.No Impairment. Except as specifically hereby amended, the Loan Documents shall each remain unaffected by this Agreement and all such documents shall remain in full force and effect. Nothing in this Agreement shall impair the lien of any Deed of Trust.

9.Purpose and Effect of Administrative Agent’s and/or Lenders Approval. Administrative Agent and/or any Lender’s approval of any matter in connection with the Loan shall be for the sole purpose of protecting Administrative Agent’s and such Lender’s security and rights. No such approval shall result in a waiver of any default of Borrower. In no event shall Administrative Agent and/or any Lender’s approval be a representation of any kind with regard to the matter being approved.

10.Disclosure to Title Company. Administrative Agent and/or any Lender may, upon no less than three (3) Business Days’ notice to Borrower, disclose to any title insurance company which insures any interest of Administrative Agent under any Deed of Trust (whether as primary insurer, coinsurer or reinsurer) any information, data or material in Administrative Agent’s and/or any Lender’s possession relating to Borrower, the Loan, or the Property.

11.Reversal of Payments. If Administrative Agent receives any payments which are subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be paid to a trustee, debtor-in-possession, receiver or any other party under any bankruptcy law, common law, equitable cause or otherwise, then, to such extent, the obligations or part thereof intended to be satisfied by such payments or proceeds shall be reversed and continue as if such payments or proceeds had not been received by Administrative Agent.

12.Integration. The Loan Documents, including this Agreement: (a) integrate all the terms and conditions mentioned in or incidental to the Loan Documents; (b) supersede all oral negotiations and prior and other writings with respect to their subject matter; and (c) are intended by the parties as the final expression of the agreement with respect to the terms and conditions set forth in those documents and as the complete and exclusive statement of the terms agreed to by the parties. If there is any conflict between the terms, conditions and provisions of this Agreement and those of any other agreement or instrument, including any of the other Loan Documents, the terms, conditions and provisions of this Agreement shall prevail.

13.Miscellaneous. This Agreement and any attached consents or exhibits requiring signatures may be executed in counterparts, and all counterparts shall constitute but one and the same document. If any court of competent jurisdiction determines any provision of this Agreement or any of the other Loan Documents to be invalid, illegal or unenforceable, that portion shall be deemed severed from the rest, which shall remain in full force and effect as though the invalid, illegal or unenforceable portion had never been a part of the Loan Documents. This Agreement shall be governed by the laws of the State of California, without regard to the choice of law rules of that State. As used here, the word “include(s)” means “includes(s), without limitation,” and the word “including” means “including, but not limited to.”

14.Limitation on Liability. Notwithstanding the foregoing or anything to the contrary herein, under no circumstances shall Administrative Agent and Lenders have any recourse against, nor shall there be any personal liability to, the members of any Borrower, or to any shareholders, members or partners (direct or indirect, except for the Guarantor under the Guaranty) for any obligations of Borrower hereunder. For purposes of clarification, in no event shall the above language limit, reduce or otherwise affect any Borrower’s liability or obligations under this Agreement, the Loan Documents, Guarantor’s liability or obligations under the Guaranty or Administrative Agent’s and Lenders’ right to exercise any rights or remedies against any collateral securing the Loan.

15.Electronic Execution. Delivery of an executed counterpart of a signature page of (x) this Agreement, (y) any other Loan Document and/or (z) any document, amendment, approval, consent, information, notice (including, for the avoidance of doubt, any notice delivered pursuant to Section 10.01 of the Loan Agreement), certificate, request, statement, disclosure or authorization related to this Agreement, any other Loan Document and/or the transactions contemplated hereby and/or thereby (each an “Ancillary Document”) that is an Electronic Signature transmitted by telecopy, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page shall be effective as delivery of a manually executed counterpart of this Agreement, such other Loan Document or such Ancillary Document, as applicable. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to this Agreement, any other Loan Document and/or any Ancillary Document shall be deemed to include Electronic Signatures, deliveries or the keeping of records in any electronic form (including deliveries by telecopy, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page), each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be; provided that nothing herein shall require Administrative Agent to accept Electronic Signatures in any form or format without its prior written consent and pursuant to procedures approved by it; provided, further, without limiting the foregoing, (i) to the extent Administrative Agent has agreed to accept any Electronic Signature, Administrative Agent and each of the Lenders shall be entitled to rely on such Electronic Signature purportedly given by or on behalf of Borrower without further verification thereof and without any obligation to review the appearance or form of any such Electronic signature and (ii) upon the request of Administrative Agent or any Lender, any Electronic Signature shall be promptly followed by a manually executed counterpart. Without limiting the generality of the foregoing, Borrower hereby (i) agrees that, for all purposes, including in connection with any workout, restructuring, enforcement of remedies, bankruptcy proceedings or litigation among Administrative Agent, the Lenders and Borrower, Electronic Signatures transmitted by telecopy, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page and/or any electronic images of this Agreement, any other Loan Document and/or any Ancillary Document shall have the same legal effect, validity and enforceability as any paper original, (ii) Administrative Agent and each of the Lenders may, at its option, create one or more copies of this Agreement, any other Loan Document and/or any Ancillary Document in the form of an imaged electronic record in any format, which shall be deemed created in the ordinary course of such Person’s business, and destroy the original paper document (and all such electronic records shall be considered an original for all purposes and shall have the same legal effect, validity and enforceability as a paper record), (iii) waives any argument, defense or right to contest the legal effect, validity or

enforceability of this Agreement, any other Loan Document and/or any Ancillary Document based solely on the lack of paper original copies of this Agreement, such other Loan Document and/or such Ancillary Document, respectively, including with respect to any signature pages thereto, and (iv) waives any claim against any Lender-Related Person for any liabilities arising solely from Administrative Agent’s and/or any Lender’s reliance on or use of Electronic Signatures and/or transmissions by telecopy, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page, including any liabilities arising as a result of the failure of Borrower to use any available security measures in connection with the execution, delivery or transmission of any Electronic Signature.

THE LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

[Signatures appear on following page.]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

BORROWER:

KBSGI OFFICES AT GREENHOUSE, LLC,

a Delaware limited liability company

By: KBSGI REIT Acquisition IV, LLC,

a Delaware limited liability company,

its sole member

By: KBSGI REIT Properties, LLC,

a Delaware limited liability company,

its sole member

By: KBS Growth & Income Limited Partnership,

a Delaware limited partnership,

its sole member

By: KBS Growth & Income REIT, Inc.,

a Maryland corporation,

its general partner

By: /s/ Charles J. Schreiber, Jr.

Charles J. Schreiber, Jr.,

Chief Executive Officer

[SIGNATURES CONTINUE ON NEXT PAGE]

BORROWER CONTINUED:

KBSGI 213 WEST INSTITUTE PLACE, LLC,

a Delaware limited liability company

By: KBSGI REIT Acquisition V, LLC,

a Delaware limited liability company,

its sole member

By: KBSGI REIT Properties, LLC,

a Delaware limited liability company,

its sole member

By: KBS Growth & Income Limited Partnership,

a Delaware limited partnership,

its sole member

By: KBS Growth & Income REIT, Inc.,

a Maryland corporation,

its general partner

By: /s/ Charles J. Schreiber, Jr.

Charles J. Schreiber, Jr.,

Chief Executive Officer

[SIGNATURES CONTINUE ON NEXT PAGE]

ADMINISTRATIVE AGENT AND LENDER:

JPMORGAN CHASE BANK, N.A.,

a national banking association,

as Administrative Agent and a Lender

By: /s/Donald Wattson

Name: Donald Wattson

Title: Authorized Officer

Exhibit 10.2

SECOND AMENDED AND RESTATED GUARANTY

THIS SECOND AMENDED AND RESTATED GUARANTY (“Guaranty”) is executed as of August 1, 2022, by KBSGI REIT PROPERTIES, LLC, a Delaware limited liability company (“Guarantor”), for the benefit of JPMORGAN CHASE BANK, N.A., in its capacity as administrative agent for the “Lenders” pursuant to the Loan Agreement described below (in such capacity, “Administrative Agent”) and in favor of each party that now or hereafter is bound under the Loan Agreement as a “Lender” (referred to herein individually as a “Lender” and collectively as the “Lenders”).

RECITALS

A.Pursuant to that certain Amended and Restated Term Loan and Security Agreement dated as of November 9, 2017, among KBSGI OFFICES AT GREENHOUSE, LLC, a Delaware limited liability company (“Greenhouse Borrower”) and KBSGI 213 WEST INSTITUTE PLACE, LLC, a Delaware limited liability company (“Institute Borrower,” and, together with Greenhouse Borrower, individually, collectively, jointly and severally, “Borrower”), KBSGI VON KARMAN TECH, LLC, a Delaware limited liability company (“Von Karman Borrower”), Lenders, and Administrative Agent, as amended by that certain Modification Agreement dated as of January 17, 2020 (the “Modification Agreement”), and that certain letter agreement dated as of October 18, 2021 (as amended, restated or otherwise modified from time to time, the “Loan Agreement”), Lenders agreed to make a loan to Borrower in the maximum principal amount of Seventy-Two Million Eight Hundred Thousand and No/100 Dollars ($72,800,000.00) (the “Loan”).

C.Guarantor guaranteed Borrower’s obligations to Administrative Agent and Lenders in accordance with that certain Amended and Restated Guaranty dated November 9, 2017 (as amended, restated or otherwise modified, the “Original Guaranty”).

D.Pursuant to that certain Reciprocal Release Agreement dated as of January 17, 2020, by and among Greenhouse Borrower, Institute Borrower, Von Karman Borrower, Administrative Agent and Lenders, Von Karman Borrower was released from its obligations under the Notes and the Loan Agreement as more particularly provided therein.

E.Concurrently herewith, the Loan Agreement is being modified pursuant to that certain Second Modification dated as of even date herewith (the “Second Modification”) to extend the term of the Loan, change the benchmark interest rate applicable to the Loan and make certain other changes to the Loan on the terms and conditions set forth in the Second Modification.

F.As a condition to Administrative Agent’s and Lenders’ willingness to enter into the Second Modification, Administrative Agent and Lenders have required that Guarantor

execute and deliver this Guaranty for the benefit of Administrative Agent and Lenders, which Guaranty amends and restates in its entirety the Original Guaranty.

G.Guarantor is the owner of a direct or indirect interest in each Borrower, and Guarantor will directly benefit from Administrative Agent and Lenders modifying the Loan.

H.Any capitalized term used and not defined in this Guaranty shall have the meaning given to such term in the Loan Agreement. This Guaranty is one of the Loan Documents described in the Loan Agreement.

AGREEMENT

NOW, THEREFORE, as an inducement to Administrative Agent and Lenders to modify the Loan to Borrowers and enter into the Loan Agreement, and for other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, Guarantor agrees with Administrative Agent and the Lenders, as follows:

Section 1. Guaranty of Obligations.

(a)Guarantor hereby absolutely, irrevocably and unconditionally guarantees to Administrative Agent and Lenders, the payment of the Obligations (but expressly excluding any amounts owing under the Environmental Indemnity Agreement, except as expressly provided in Sections 1(d)(A) and 1(d)(B) herein below), whether now or hereafter arising, as and when the same shall be due and payable, whether by lapse of time, by acceleration of maturity or otherwise. This Guaranty is a guaranty of payment and not of collection only. Administrative Agent and Lenders shall not be required to exhaust any right or remedy or take any action against Borrowers or any other person or entity or any collateral. Guarantor agrees that, as between Guarantor and Administrative Agent and Lenders, the Obligations may be declared to be due and payable for the purposes of this Guaranty notwithstanding any stay, injunction or other prohibition which may prevent, delay or vitiate any declaration as regards Borrowers (or any of them) and that in the event of a declaration or attempted declaration, the Obligations shall immediately become due and payable by Guarantor (but expressly excluding any amounts owing under the Environmental Indemnity Agreement, except as expressly provided in Sections 1(d)(A) and 1(d)(B) herein below) for the purposes of this Guaranty.

(b)[Intentionally Omitted].

(c)[Intentionally Omitted].

(d)In addition, notwithstanding anything herein to the contrary, at all times until the Obligations have been paid in full and the Loan Documents and any applicable Swap Agreement are no longer in effect, Guarantor guarantees to Administrative Agent and the Lenders, the full and prompt payment of, and agrees to pay protect, guarantee, indemnify, defend and hold harmless Administrative Agent and Lenders from and against, any actual liability, loss, damage, costs and expenses (including legal fees) suffered by Administrative Agent or the Lenders, and caused by or related to or as a result of the following:


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A. all amounts owing under the Environmental Indemnity Agreement if, for any reason, (i) an environmental insurance policy which is the same in all material respects as the environmental insurance policy that was approved by Administrative Agent and delivered in connection with the closing of the Loan as required under Section 2.02(b)(xx) of the Loan Agreement (“Approved Environmental Insurance Policy”) is not maintained in full force and effect (including, without limitation, by reason of Borrowers’ failure to pay the premiums with respect thereto), or (ii) Borrowers (x) fail, after written request by Administrative Agent, to direct payment of all amounts owing under such Approved Environmental Insurance Policy relating to the Mortgaged Properties to Administrative Agent or (y) disputes in writing the payment of such sums under the Approved Environmental Insurance Policy to Administrative Agent. For avoidance of doubt, Guarantor shall have no liability under clause A(i) above so long as an environmental insurance policy, which is the same in all material respects as the Approved Environmental Insurance Policy, is in full force and effect providing effective coverage for claims relating to environmental matters that occurred prior to or during a Borrower’s period of ownership of a Mortgaged Property, to the same extent as under the Approved Environmental Insurance Policy, when and if demand is made by Administrative Agent under the Environmental Indemnity Agreement, whether or not the claim relating to any such environmental matter is a covered claim under such environmental insurance policy (unless such claim was a covered claim under the Approved Environmental Insurance Policy); and

B. all losses (which shall include, without limitation, attorneys’ fees and costs of defense) sustained or incurred by Administrative Agent and/or Lenders by reason of any failure to maintain in full force and effect (which Guarantor hereby covenants to so do) an environmental insurance policy which is the same in all material respects as the Approved Environmental Insurance Policy for a period of two years following the repayment of the Obligations in full. As used in this subsection B, “full force and effect” shall include reference to an environmental insurance policy for events occurring prior to or during a Borrower’s period of ownership of a Mortgaged Property and that has coverage under an extended reporting period of no less than two (2) years following the repayment of the Obligations in full. For avoidance of doubt, Guarantor shall have no liability under this subsection B so long as an environmental insurance policy, which is the same in all material respects as the Approved Environmental Insurance Policy, is in full force and effect providing coverage under an extended reporting period for claims relating to environmental matters that occurred prior to or during a Borrower’s period of ownership of the Mortgaged Property, to the same extent as under the Approved Environmental Insurance Policy, when and if demand is made by Administrative Agent under the Guaranty, whether or not the claim relating to any such environmental matter is a covered claim under such environmental insurance policy (unless such claim was a


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covered claim under the Approved Environmental Insurance Policy). For purposes of clarification (but subject to Section 27 below), Guarantor’s liability under this subsection B shall not be terminated or otherwise affected even if a Borrower’s obligations under the Environmental Indemnity Agreement are terminated in accordance with Section 10 of the Environmental Indemnity.

Section 2. Guaranty Absolute. Guarantor guarantees that the Obligations shall be paid strictly in accordance with the terms of the Loan Documents and any applicable Swap Agreement. The liability of Guarantor under this Guaranty is absolute and unconditional irrespective of: (a) any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to departure from any of the terms of any Loan Document or any applicable Swap Agreement, including any increase or decrease in the rate of interest thereon; (b) any release or amendment or waiver of, or consent to departure from, or failure to act by Administrative Agent or the Lenders with respect to, any other guaranty or support document, or any exchange, release or non-perfection of, or failure to act by Administrative Agent or the Lenders, with respect to, any collateral, for all or any of the Obligations; (c) any present or future law, regulation or order of any jurisdiction (whether of right or in fact) or of any agency thereof purporting to reduce, amend, restructure or otherwise affect any term of the Obligations or any Loan Document or any applicable Swap Agreement; (d) any change in the existence, structure, or ownership of any Borrower; (e) without being limited by the foregoing, any lack of validity or enforceability of any Loan Document or any applicable Swap Agreement; and (f) any other setoff, recoupment, defense or counterclaim whatsoever (in any case, whether based on contract, tort or any other theory) with respect to the Loan Documents and any applicable Swap Agreement or the transactions contemplated thereby which might constitute a legal or equitable defense available to, or discharge of, a Borrower or a guarantor.

Section 3. Guaranty Irrevocable. This Guaranty is a continuing guaranty of the payment of all Obligations now or hereafter existing and shall remain in full force and effect until payment in full of all Obligations and other amounts payable under this Guaranty and until the Loan Documents and any applicable Swap Agreement are no longer in effect.

Section 4. Waiver of Certain Rights and Notices. To the fullest extent not prohibited by applicable law, except as specifically provided herein, Guarantor hereby waives and agrees not to assert or take advantage of (a) any right to require Administrative Agent, for the benefit of the Lenders, to proceed against or exhaust its recourse against Borrowers, any other guarantor or endorser, or any security or collateral held by Administrative Agent or Lenders at any time or to pursue any other remedy in its power before proceeding against Guarantor hereunder; (b) the defense of the statute of limitations in any action hereunder; (c) any defense that may arise by reason of (i) the incapacity, lack of authority, death or disability of a Borrower, Guarantor or any other or others, (ii) the revocation or repudiation hereof by Guarantor or the revocation or repudiation of any of the Loan Documents by a Borrower or any other or others, (iii) the failure of Administrative Agent, on behalf of the Lenders, to file or enforce a claim against the estate (either in administration, bankruptcy or any other proceeding) of a Borrower or any other or others, (iv) the unenforceability in whole or in part of any Loan Document or any applicable Swap Agreement, (v) Administrative Agent’s or a Lender’s election in any proceeding instituted under the federal Bankruptcy Code, of the application of Section 1111(b)(2) of the federal Bankruptcy Code, or (vi)


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any borrowing or grant of a security interest under Section 364 of the federal Bankruptcy Code; (d) presentment, demand for payment, protest, notice of discharge, notice of acceptance of this Guaranty, and indulgences and notices of any other kind whatsoever; (e) any defense based upon an election of remedies by Administrative Agent, on behalf of the Lenders, which destroys or otherwise impairs the subrogation rights of Guarantor or the right of Guarantor to proceed against Borrowers for reimbursement, or both; (f) any defense based upon any taking, modification or release of any collateral, or any failure to perfect any security interest in, or the taking of or failure to take any other action with respect to any collateral securing payment or performance of the Obligations; (g) any right to require marshaling of assets and liabilities, sale in inverse order of alienation, notice of acceptance of this Guaranty and of any obligations to which it applies or may apply; and (h) any rights or defenses based upon an offset by Guarantor against any obligation now or hereafter owed to Guarantor by Borrowers; it being the intention hereof that Guarantor shall remain liable hereunder to the extent set forth herein, notwithstanding any act, omission or thing which might otherwise operate as a legal or equitable discharge of Guarantor, until the termination of this Guaranty under Section 3. Guarantor waives presentment, demand, notice of dishonor, protest, notice of acceptance of this Guaranty or incurrence of any of the Obligations and any other formality with respect to any of the Obligations or this Guaranty.

Guarantor hereby waives: (a) any defense based upon the application by Borrowers of any proceeds relating to the Loan Agreement for purposes other than the purposes represented by Borrowers to Administrative Agent and Lenders, or intended or understood by Administrative Agent and Lenders or Guarantor; (b) any defense based upon Administrative Agent’s or any Lender’s failure to disclose to Guarantor any information concerning a Borrower’s financial condition or any other circumstances bearing on a Borrower’s ability to pay all sums payable under the Loan Agreement; (c) any defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in any other respects more burdensome than that of a principal; (d) any rights of subrogation, reimbursement, indemnification and contribution, and any other rights and defenses that are or may become available to Guarantor by reason of Sections 2787 to 2855, inclusive, of the California Civil Code, any right to enforce any remedy which Administrative Agent and Lenders may have against a Borrower and any right to participate in, or benefit from, any security for the Loan Agreement now or hereafter held by Administrative Agent or Lenders; (e) presentment, demand, protest and notice of any kind (other than when expressly required under the Loan Documents); (f) the benefit of any statute of limitations affecting the liability of Guarantor hereunder or the enforcement hereof; (g) any right to require Administrative Agent, on behalf of the Lenders, to institute suit or exhaust remedies against a Borrower or others liable for any Obligations, to enforce Administrative Agent’s and Lenders’ rights against any collateral which shall have been given to secure the Obligations to enforce Administrative Agent’s and Lenders’ rights against any other guarantors of such indebtedness, to join Borrowers or any others liable on such Obligations in any action seeking to enforce this Guaranty, to resort to any other means of obtaining payment of such Obligations; (h) notices of disbursement of proceeds, acceptance hereof, proof of non-payment, default under any document, notices and demands of any kind; and (i) the invalidity illegality or unenforceability of all or any portion of the indebtedness guaranteed hereby or any of the Loan Documents for any reason whatsoever, including that interest on such indebtedness violates applicable usury laws, that the Borrowers or others liable for all or a portion thereof have valid defenses, claims or offsets to all or a portion of such indebtedness, or that the Loan Documents have been forged or otherwise are irregular or not genuine or authentic (it being agreed that Guarantor shall remain liable under


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this Guaranty regardless of whether Borrowers or any other person shall be found not liable for repayment of all or a portion of such indebtedness). Guarantor further waives any and all rights and defenses that Guarantor may have because Borrowers’ debt is secured by real property; this means, among other things, that (1) Administrative Agent and Lenders may collect or receive performance from Guarantor without first foreclosing on any real or personal property collateral pledged by any Borrower; (2) if Administrative Agent forecloses on any real property collateral pledged by a Borrower, then (A) the amount of the debt may be reduced only by the price for which that collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale price, and (B) Administrative Agent and Lenders may collect or receive performance from Guarantor even if Administrative Agent, by foreclosing on the real property collateral, has destroyed any right Guarantor may have to collect from a Borrower. The foregoing is an unconditional and irrevocable waiver of any rights and defenses Guarantor may have because Borrowers’ debt is secured by real property. These rights and defenses include, but are not limited to, any rights or defenses based upon Sections 580a, 580b, 580d, or 726 of the California Code of Civil Procedure. Without limiting the generality of the foregoing or any other provision hereof, Guarantor further expressly waives (i) all rights and defenses arising out of an election of remedies by the Administrative Agent or Lenders, even though that election of remedies, such as non-judicial foreclosure with respect to security for Borrowers’ obligations, has destroyed Guarantor’s rights of subrogation and reimbursement against the principal by the operation of Section 580(d) of the California Code of Civil Procedure or otherwise and (ii) any and all other rights and defenses to the extent permitted by law. Guarantor hereby waives any right it might otherwise have under Section 2822 of the California Civil Code or similar law or otherwise to have Borrowers designate the portion of any such obligation to be satisfied in the event that a Borrower provides partial satisfaction of such obligation. Guarantor acknowledges and agrees that Borrowers may already have agreed with Administrative Agent and Lenders, or may hereafter agree, that in any such event the designation of the portion of the obligation to be satisfied shall, to the extent not expressly made by the terms of the Loan Documents, be made by Administrative Agent and Lenders rather than by Borrowers. Finally, Guarantor agrees that the performance of any act or any payment which tolls any statute of limitations applicable to the Loan Documents shall similarly operate to toll the statute of limitations applicable to Guarantor’s liability hereunder.

Section 5. Reinstatement. This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Obligations is rescinded or must otherwise be returned by Administrative Agent or Lenders on the insolvency, bankruptcy or reorganization of a Borrower or otherwise, all as though the payment had not been made, whether or not Administrative Agent is in possession of this Guaranty.

Section 6. Subrogation. Guarantor shall not exercise any rights which it may acquire by way of subrogation, reimbursement or contribution, as a result of any payment made under this Guaranty or otherwise, until all the Obligations have been paid in full and the Loan Documents and any Swap Agreement are no longer in effect. If any amount is paid to Guarantor by a Borrower on account of such rights prior to such time, the amount shall be held in trust for the benefit of the Administrative Agent and Lenders and shall be promptly paid to Administrative Agent, for the benefit of the Lenders, to be credited and applied to the Obligations, whether matured or unmatured or absolute or contingent, in accordance with the terms of the Loan Documents and any applicable Swap Agreement. If Guarantor makes payment to Administrative Agent, for the benefit of the Lenders, of all or any part of the Obligations and all the Obligations are paid in full and the Loan


			-6-

Documents and any applicable Swap Agreement are no longer in effect, Administrative Agent shall, at Guarantor’s request, execute and deliver to Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to Guarantor of the interest in the Obligations resulting from the payment.

Section 7. Subordination. Without limiting Administrative Agent’s or Lenders’ rights under any other agreement, any liabilities owed by Borrowers to Guarantor in connection with any extension of credit or financial accommodation by Guarantor to or for the account of a Borrower, including but not limited to interest accruing at the agreed contract rate after the commencement of a bankruptcy or similar proceeding, are hereby subordinated to the Obligations, and such liabilities of Borrowers to Guarantor, if Administrative Agent so requests, shall be collected, enforced and received by Guarantor as trustee for the Lenders and shall be paid over to Administrative Agent, for the benefit of the Lenders, on account of the Obligations but without reducing or affecting in any manner the liability of Guarantor under the other provisions of this Guaranty.

Section 8. Certain Taxes. Guarantor further agrees that all payments to be made hereunder shall be made without setoff or counterclaim and free and clear of, and without deduction for, any taxes, levies, imposts, duties, charges, fees, deductions, withholdings or restrictions or conditions of any nature whatsoever now or hereafter imposed, levied, collected, withheld or assessed by any country or by any political subdivision or taxing authority thereof or therein (“Taxes”). If any Taxes are required to be withheld from any amounts payable to Administrative Agent on behalf of Lenders, hereunder, the amounts so payable to Administrative Agent on behalf of Lenders, shall be increased to the extent necessary to yield to Administrative Agent on behalf of Lenders, (after payment of all Taxes) the amounts payable hereunder in the full amounts so to be paid. Whenever any Tax is paid by Guarantor, as promptly as possible thereafter, Guarantor shall send Administrative Agent an official receipt showing payment thereof, together with such additional documentary evidence as may be required from time to time by Administrative Agent.

Section 9. Representations and Warranties. Guarantor represents and warrants that: (a) this Guaranty (i) has been authorized by all necessary action; (ii) to Guarantor’s knowledge, does not violate any agreement, instrument, law, regulation or order applicable to Guarantor; (iii) to Guarantor’s knowledge, does not require the consent or approval of any person or entity, including but not limited to any governmental authority, or any filing or registration of any kind; and (iv) is the legal, valid and binding obligation of Guarantor enforceable against Guarantor in accordance with its terms, except to the extent that enforcement may be limited by applicable bankruptcy, insolvency and other similar laws affecting creditors’ rights generally; and (b) in executing and delivering this Guaranty, Guarantor has (i) without reliance on Administrative Agent or any Lender or any information received from Administrative Agent or any Lender and based upon such documents and information it deems appropriate, made an independent investigation of the transactions contemplated hereby and each Borrower, each Borrower’s business, assets, operations, prospects and condition, financial or otherwise, and any circumstances which may bear upon such transactions, Borrowers or the obligations and risks undertaken herein with respect to the Obligations; (ii) adequate means to obtain from Borrowers on a continuing basis information concerning Borrowers; (iii) full and complete access to the Loan Documents, any applicable Swap Agreement and any other documents executed in connection with the Loan Documents; and (iv) not relied and will not rely upon any representations or warranties of


			-7-

Administrative Agent or any Lender not embodied herein or any acts heretofore or hereafter taken by Administrative Agent or any Lender (including but not limited to any review by Administrative Agent or any Lender of the affairs of Borrowers).

Section 10. Financial Reports and Covenants.

(a)Guarantor shall keep adequate books and records of account in accordance with methods acceptable to Administrative Agent, consistently applied and shall furnish to Administrative Agent the financial statements, certificates and other information described in Section 4.09(b) of the Loan Agreement as and when required by said Section 4.09(b).

(b)Administrative Agent and its accountants shall have the right to examine, upon at least 24 hours’ prior written notice to Guarantor (provided no advance notice is required during the existence of a Default), the records, books, management and other papers of Guarantor which reflect upon its financial condition, at any Mortgaged Property or at any office regularly maintained by Guarantor where the books and records are located. Such examination shall be at Administrative Agent’s and Lenders’ costs unless (i) a Default exists, (ii) Administrative Agent or any Lender has reason to believe any information provided to Administrative Agent or Lenders, by Guarantor may be incorrect or misleading in any material respect, or (iii) Administrative Agent, on behalf of the Lenders, is conducting such examination pursuant to its obligations under any applicable laws or regulations (provided, with respect to subsection (iii), in no event shall Guarantor be obligated to reimburse Administrative Agent or Lenders for such costs and expenses for more than one examination per year). Administrative Agent and its accountants shall have the right to make copies and extracts from the foregoing records and other papers. In addition, Administrative Agent and its accountants shall have the right to examine and audit the books and records of Guarantor pertaining to the income, expenses and operation of the Mortgaged Properties during reasonable business hours at any office of Guarantor where the books and records are located.

(c)Guarantor Prohibited Distributions. Guarantor shall not make any distributions; provided, however, so long as no Default or Unmatured Default exists, Guarantor will be permitted to make distributions (i) to the extent necessary to maintain the REIT status of any of its direct or indirect owners that are REITs, and (ii) for Death and Disability Redemptions (as defined in the Second Modification); provided, however, amounts distributed for Death and Disability Redemptions shall not exceed $250,000, in the aggregate, for any calendar year.

(d)Guarantor Covenant to Use Revenues. All revenues received by Guarantor and/or cash currently held by Guarantor shall only be used for payment of Guarantor Operating Costs (as defined in the Second Modification).

(e)Guarantor Permitted Indebtedness. Guarantor not to incur any Indebtedness other than Guarantor Permitted Indebtedness (as defined in the Second Modification).

Section 11. Guarantor Excess Cash Account.

(a)If at any time Guarantor holds in excess of $7,000,000 in cash (the “Guarantor Excess Cash”), Guarantor shall either, at Guarantor’s discretion (i) pay to Administrative Agent all Guarantor Excess Cash and such amounts shall be deposited by Administrative Agent in an


			-8-

account at, and controlled by, Administrative Agent established for the purpose of holding the Guarantor Excess Cash (the “Guarantor Excess Cash Account”) (and any interest that may accrue on the funds in such Guarantor Excess Cash Account shall accrue for the benefit of Guarantor so long as no Default exists) or (ii) pay to Administrative Agent all Guarantor Excess Cash to be applied in repayment of the Obligations (as defined in the Loan Agreement) in such order as Administrative Agent shall determine, or a combination of (i) and (ii) in Guarantor’s sole and absolute discretion.

(b)Guarantor shall (i) complete and duly execute and deliver (as applicable) all documentation reasonably required by Administrative Agent to establish and pledge to Administrative Agent, for the benefit of the Lenders, the Guarantor Excess Cash Account (including Administrative Agent’s standard form of deposit account control agreement, blocked account agreement, or similar agreement, which shall be in all material respects consistent with the provisions of this Agreement and which shall be subject to any modification as may be agreed upon by Borrower and Administrative Agent), and (ii) otherwise reasonably cooperate with Administrative Agent in all reasonable respects to establish the Guarantor Excess Cash Account, pledge it to Administrative Agent, for the benefit of Lenders, and perfect such pledge, within ten (10) Business Days after Administrative Agent provides Guarantor with such documentation. Guarantor hereby grants to Administrative Agent a security interest in the Guarantor Excess Cash Account and all funds on deposit therein as additional security for the Obligations and agrees that it shall not, without obtaining the prior express written consent of Administrative Agent, further pledge, assign or grant any security interest in the Guarantor Excess Cash Account. Guarantor agrees to hold in trust for the benefit of Administrative Agent on behalf of the Lenders, all Guarantor Excess Cash in its possession prior to the deposit of such Guarantor Excess Cash into the Guarantor Excess Cash Account. This Agreement is, among other things, intended by the parties to be a security agreement for purposes of the UCC.

(c)During the existence of a Default, Administrative Agent shall have the right to apply all amounts in the Guarantor Excess Cash Account in repayment of the Obligations in such order as Administrative Agent shall determine. Guarantor shall have no right to any funds in the Guarantor Excess Cash Account until payment of the Obligations in full.

(d)Upon payment in full and satisfaction of all indebtedness under the Loan and obligations under the Loan Documents, any amounts remaining in the Guarantor Excess Cash Account shall be released to Guarantor.

Section 12. Remedies Generally. The remedies provided in this Guaranty are cumulative and not exclusive of any remedies provided by law.

Section 13. Setoff. If a Default shall have occurred and be continuing, Administrative Agent and each Lender and each of their respective Affiliates are hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing by such party to or for the credit or the account of Guarantor against any of and all the obligations of Guarantor under this Guaranty, irrespective of whether or not Administrative Agent or such Lender shall have made any demand under this Guaranty and although such obligations may be unmatured. The rights of Administrative Agent and each Lender


			-9-

under this Section are in addition to other rights and remedies (including other rights of setoff) which such parties may have.

Section 14. Formalities. Guarantor waives presentment, demand, notice of dishonor, protest, notice of acceptance of this Guaranty or incurrence of any of the Obligations and any other formality with respect to any of the Obligations or this Guaranty.

Section 15. Amendments and Waivers. No amendment or waiver of any provision of this Guaranty, nor consent to any departure by Guarantor therefrom, shall be effective unless it is in writing and signed by Administrative Agent, and then the waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No failure on the part of Administrative Agent to exercise, and no delay in exercising, any right under this Guaranty shall operate as a waiver or preclude any other or further exercise thereof or the exercise of any other right.

Section 16. Expenses. Guarantor shall reimburse Administrative Agent and the Lenders on demand for all costs, expenses and charges (including without limitation reasonable fees and charges of external legal counsel for Administrative Agent and the Lenders) incurred by Administrative Agent and the Lenders in connection with the performance or enforcement of this Guaranty. The obligations of Guarantor under this Section shall survive the termination of this Guaranty.

Section 17. Assignment. This Guaranty shall be binding on, and shall inure to the benefit of Guarantor, Administrative Agent, the Lenders and their respective successors, assigns, estates and personal representatives; provided that Guarantor may not assign or transfer its rights or obligations under this Guaranty. Without limiting the generality of the foregoing: (a) the obligations of Guarantor under this Guaranty shall continue in full force and effect and shall be binding on any successor partnership and on previous partners and their respective estates if Guarantor is a partnership, regardless of any change in the partnership as a result of death, retirement or otherwise; and (b) Administrative Agent and each Lender may assign, sell participations in or otherwise transfer their respective rights under the Loan Documents and any applicable Swap Agreement to any other person or entity in accordance with the terms of the Loan Agreement and any applicable Swap Agreement, and the other person or entity shall then become vested with all the rights granted to Administrative Agent or such Lender in this Guaranty or otherwise.

Section 18. Captions. The headings and captions in this Guaranty are for convenience only and shall not affect the interpretation or construction of this Guaranty.

Section 19. Notices. All notices or other written communications hereunder shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy or email, as follows:

(a)if to Guarantor, to it at c/o KBS Capital Advisors LLC, 800 Newport Center Drive, #700, Newport Beach, CA 92660, Attention of Bryce Lin, Director of Finance and Reporting (Phone No. (949) 97-0312 (Email Address: blin@kbsrealty.com);


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(b)With a copy to: Greenberg Traurig, LLP, 18565 Jamboree Road, Suite 500, Irvine, CA 92612, Attention of Bruce Fischer, Esq. (Phone No. (949) 732-6670 (Email Address fischerb@gtlaw.com); and

(c)if to Administrative Agent, to it at JPMorgan Chase Bank, N.A., CCBSI – RE, 277 Park Avenue, 36th Floor, New York, NY 10017, Attention of Donald Wattson (Email Address: donald.a.wattson@jpmorgan.com).

Guarantor and Administrative Agent may change their address or telecopy number or email address for notices and other communications hereunder by notice to the other party. All notices and other communications given to Guarantor or Administrative Agent in accordance with the provisions of this Guaranty shall be deemed to have been given on the date of receipt, in the case of email notices, as evidenced by sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt function”).

Section 20. Governing Law; Jurisdiction; Consent to Service of Process.

(a)This Guaranty shall be construed in accordance with and governed by the law of the State of California.

(b)Guarantor hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any United States Federal or State court sitting in Orange County, California, and any appellate court therein, in any action or proceeding arising out of or relating to this Guaranty, or for recognition or enforcement of any judgment, and Guarantor hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such State court(s) or, to the extent permitted by law, in such Federal court(s). Guarantor hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Guaranty shall affect any right that Administrative Agent and Lenders may otherwise have to bring any action or proceeding relating to this Guaranty against Guarantor or its properties in the courts of any jurisdiction.

(c)Guarantor hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Guaranty in any court referred to in subsection (b) above. Guarantor hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(d)Guarantor irrevocably consents to service of process in the manner provided for notices herein. Nothing in this Guaranty will affect the right of Administrative Agent and Lenders to serve process in any other manner permitted by law.

Section 21. ECP RULES. No Guarantor hereunder shall be deemed to be a guarantor of any Swap Obligations if such Guarantor is not an “Eligible Contract Participant” as defined in §1(a)(18) of the Commodity Exchange Act and the applicable rules issued by the Commodity Futures Trading Commission and/or the Securities and Exchange Commission (collectively, and as now or hereafter in effect, the “ECP Rules”) to the extent that the providing of such guaranty


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by such Guarantor would violate the ECP Rules or any other applicable law or regulation. This paragraph shall not affect any obligations of Guarantor other than Swap Obligations, nor shall it affect the obligations of any Guarantor who qualifies as an “Eligible Contract Participant”.

Section 22. Invalid Provisions. If any provision of this Guaranty is held to be illegal, invalid, or unenforceable under present or future laws effective during the term of this Guaranty, such provision shall be fully severable and this Guaranty shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part of this Guaranty, and the remaining provisions of this Guaranty shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Guaranty, unless such continued effectiveness of this Guaranty, as modified, would be contrary to the basic understandings and intentions of the parties as expressed herein.

Section 23. ENTIRETY. THIS GUARANTY AND THE OTHER LOAN DOCUMENTS EXECUTED BY GUARANTOR EMBODY THE FINAL, ENTIRE AGREEMENT OF GUARANTOR, ADMINISTRATIVE AGENT AND THE LENDERS WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF. THIS GUARANTY AND THE OTHER LOAN DOCUMENTS EXECUTED BY GUARANTOR ARE INTENDED BY GUARANTOR, ADMINISTRATIVE AGENT AND THE LENDERS AS A FINAL AND COMPLETE EXPRESSION OF THE TERMS HEREOF AND THEREOF, AND NO COURSE OF DEALING AMONG GUARANTOR, ADMINISTRATIVE AGENT AND THE LENDERS, NO COURSE OF PERFORMANCE, NO TRADE PRACTICES, AND NO EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OR OTHER EXTRINSIC EVIDENCE OF ANY NATURE SHALL BE USED TO CONTRADICT, VARY, SUPPLEMENT OR MODIFY ANY TERM OF THIS GUARANTY OR ANY OTHER LOAN DOCUMENT EXECUTED BY GUARANTOR. THERE ARE NO ORAL AGREEMENTS BETWEEN GUARANTOR, ADMINISTRATIVE AGENT AND THE LENDERS.

Section 24. WAIVER OF JURY TRIAL AND JUDICIAL REFERENCE PROVISION.

EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS GUARANTY AND REFERENCE AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.


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IN THE EVENT ANY LEGAL PROCEEDING IS FILED IN A COURT OF THE STATE OF CALIFORNIA (THE “COURT”) BY OR AGAINST ANY PARTY HERETO IN CONNECTION WITH ANY CONTROVERSY, DISPUTE OR CLAIM DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY) (EACH, A “CLAIM”) AND THE WAIVER SET FORTH IN THE PRECEDING PARAGRAPH IS NOT ENFORCEABLE IN SUCH ACTION OR PROCEEDING, THE PARTIES HERETO AGREE AS FOLLOWS:

1. WITH THE EXCEPTION OF THE MATTERS SPECIFIED IN PARAGRAPH 2 BELOW, ANY CLAIM WILL BE DETERMINED BY A GENERAL REFERENCE PROCEEDING IN ACCORDANCE WITH THE PROVISIONS OF CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS 638 THROUGH 645.1. THE PARTIES INTEND THIS GENERAL REFERENCE AGREEMENT TO BE SPECIFICALLY ENFORCEABLE IN ACCORDANCE WITH CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 638. EXCEPT AS OTHERWISE PROVIDED IN THE LOAN DOCUMENTS, VENUE FOR THE REFERENCE PROCEEDING WILL BE IN THE STATE OR FEDERAL COURT IN THE COUNTY OR DISTRICT WHERE VENUE IS OTHERWISE APPROPRIATE UNDER APPLICABLE LAW.

2. THE FOLLOWING MATTERS SHALL NOT BE SUBJECT TO A GENERAL REFERENCE PROCEEDING: (A) NON-JUDICIAL FORECLOSURE OF ANY SECURITY INTERESTS IN REAL OR PERSONAL PROPERTY, (B) EXERCISE OF SELF-HELP REMEDIES (INCLUDING, WITHOUT LIMITATION, SET-OFF), (C) APPOINTMENT OF A RECEIVER AND (D) TEMPORARY, PROVISIONAL OR ANCILLARY REMEDIES (INCLUDING, WITHOUT LIMITATION, WRITS OF ATTACHMENT, WRITS OF POSSESSION, TEMPORARY RESTRAINING ORDERS OR PRELIMINARY INJUNCTIONS). THIS AGREEMENT DOES NOT LIMIT THE RIGHT OF ANY PARTY TO EXERCISE OR OPPOSE ANY OF THE RIGHTS AND REMEDIES DESCRIBED IN CLAUSES (A) - (D) AND ANY SUCH EXERCISE OR OPPOSITION DOES NOT WAIVE THE RIGHT OF ANY PARTY TO A REFERENCE PROCEEDING PURSUANT TO THIS AGREEMENT.

3. UPON THE WRITTEN REQUEST OF ANY PARTY, THE PARTIES SHALL SELECT A SINGLE REFEREE, WHO SHALL BE A RETIRED JUDGE OR JUSTICE. IF THE PARTIES DO NOT AGREE UPON A REFEREE WITHIN TEN (10) DAYS OF SUCH WRITTEN REQUEST, THEN, ANY PARTY MAY REQUEST THE COURT TO APPOINT A REFEREE PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 640(B).

4. ALL PROCEEDINGS AND HEARINGS CONDUCTED BEFORE THE REFEREE, EXCEPT FOR TRIAL, SHALL BE CONDUCTED WITHOUT A COURT REPORTER, EXCEPT WHEN ANY PARTY SO REQUESTS, A COURT REPORTER WILL BE USED AND THE REFEREE WILL BE PROVIDED A COURTESY COPY OF THE TRANSCRIPT. THE PARTY MAKING SUCH REQUEST SHALL HAVE THE OBLIGATION TO ARRANGE FOR AND PAY COSTS OF THE


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COURT REPORTER, PROVIDED THAT SUCH COSTS, ALONG WITH THE REFEREE’S FEES, SHALL ULTIMATELY BE BORNE BY THE PARTY WHO DOES NOT PREVAIL, AS DETERMINED BY THE REFEREE.

5. THE REFEREE MAY REQUIRE ONE OR MORE PREHEARING CONFERENCES. THE PARTIES HERETO SHALL BE ENTITLED TO DISCOVERY, AND THE REFEREE SHALL OVERSEE DISCOVERY IN ACCORDANCE WITH THE RULES OF DISCOVERY, AND MAY ENFORCE ALL DISCOVERY ORDERS IN THE SAME MANNER AS ANY TRIAL COURT JUDGE IN PROCEEDINGS AT LAW IN THE STATE OF CALIFORNIA. THE REFEREE SHALL APPLY THE RULES OF EVIDENCE APPLICABLE TO PROCEEDINGS AT LAW IN THE STATE OF CALIFORNIA AND SHALL DETERMINE ALL ISSUES IN ACCORDANCE WITH APPLICABLE STATE AND FEDERAL LAW. THE REFEREE SHALL BE EMPOWERED TO ENTER EQUITABLE AS WELL AS LEGAL RELIEF AND RULE ON ANY MOTION WHICH WOULD BE AUTHORIZED IN A TRIAL, INCLUDING, WITHOUT LIMITATION, MOTIONS FOR DEFAULT JUDGMENT OR SUMMARY JUDGMENT. THE REFEREE SHALL REPORT HIS DECISION, WHICH REPORT SHALL ALSO INCLUDE FINDINGS OF FACT AND CONCLUSIONS OF LAW.

6. THE PARTIES RECOGNIZE AND AGREE THAT ALL CLAIMS RESOLVED IN A GENERAL REFERENCE PROCEEDING PURSUANT HERETO WILL BE DECIDED BY A REFEREE AND NOT BY A JURY.

ADMINISTRATIVE AGENT AND LENDERS WILL BE DEEMED TO HAVE AGREED TO THE PROVISIONS OF THIS SECTION BY ACCEPTING THIS GUARANTY.

Section 25. WAIVER OF SPECIAL DAMAGES. Guarantor agrees that neither Administrative Agent nor any Lender shall have any liability to Guarantor (whether sounding in tort, contract or otherwise) for losses suffered by Guarantor in connection with, arising out of, or in any way related to, the transactions contemplated and the relationship established by the Loan Documents and any applicable Swap Agreement, or any act, omission or event occurring in connection therewith, unless such losses result from the gross negligence or willful misconduct of the party from which recovery is sought or from a breach of any Loan Document or any applicable Swap Agreement by such party. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW, GUARANTOR SHALL NOT ASSERT, AND HEREBY WAIVES, ANY CLAIM AGAINST ADMINISTRATIVE AGENT AND EACH OF THE LENDERS ON ANY THEORY OF LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES (AS OPPOSED TO DIRECT OR ACTUAL DAMAGES) ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF, THIS GUARANTY, ANY OTHER LOAN DOCUMENT OR ANY SWAP AGREEMENT, THE OBLIGATIONS OR THE USE OF THE PROCEEDS THEREOF.

Section 26. Limitation on Liability. Notwithstanding the foregoing or anything to the contrary in this Guaranty, under no circumstances shall Administrative Agent or the Lenders have any recourse against, nor shall there be any personal liability to, the members of Guarantor, or to any shareholders, members or partners (direct or indirect) for any obligations of Guarantor


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hereunder. For purposes of clarification, in no event shall the above language limit, reduce or otherwise affect any Guarantor’s liability or obligations under the Guaranty or Administrative Agent’s and Lenders’ right to exercise any rights or remedies against any collateral securing the Loan.

Section 27. Termination of Environmental Liability. Notwithstanding anything to the contrary stated in this Guaranty, if the conditions set forth in Sections 10.1 through 10.5 of the Environmental Indemnity Agreement are satisfied (i.e., all conditions for Borrowers’ release of their liability under the Environmental Indemnity Agreement other than the expiration of the two year period have been satisfied), Guarantor’s liability under Sections 1(d)A and 1(d)B of this Guaranty with respect to environmental liability shall automatically terminate.

[SIGNATURE PAGE FOLLOWS]


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IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly executed and delivered by its duly authorized officer as of the date first above written.

KBSGI REIT PROPERTIES, LLC,

a Delaware limited liability company

By: KBS GROWTH & INCOME LIMITED PARTNERSHIP,

a Delaware limited partnership,

its sole member

By: KBS GROWTH & INCOME REIT, INC.,

a Maryland corporation,

its general partner

By: /s/ Charles J. Schreiber, Jr.

Charles J. Schreiber, Jr.,

Chief Executive Officer


			S-1

Exhibit 31.1

Certification of Chief Executive Officer pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, Charles J. Schreiber, Jr., certify that:

1.I have reviewed this quarterly report on Form 10-Q of KBS Growth & Income REIT, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date:	August 12, 2022	By:	/S/ CHARLES J. SCHREIBER, JR.
			Charles J. Schreiber, Jr.
			Chairman of the Board, Chief Executive Officer, President and Director
			(principal executive officer)

Exhibit 31.2

Certification of Chief Financial Officer pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, Jeffrey K. Waldvogel, certify that:

1.I have reviewed this quarterly report on Form 10-Q of KBS Growth & Income REIT, Inc.;

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date:	August 12, 2022	By:	/S/ JEFFREY K. WALDVOGEL
			Jeffrey K. Waldvogel
			Chief Financial Officer, Treasurer and Secretary
			(principal financial officer)

Exhibit 32.1

Certification pursuant to 18 U.S.C. Section 1350,

as Adopted pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of KBS Growth & Income REIT, Inc. (the “Registrant”) for the quarter ended June 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Charles J. Schreiber Jr., Chief Executive Officer, President and Director of the Registrant, hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge and belief:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.


Date:	August 12, 2022	By:	/S/ CHARLES J. SCHREIBER, JR.
			Charles J. Schreiber, Jr.
			Chairman of the Board, Chief Executive Officer, President and Director
			(principal executive officer)

Exhibit 32.2

Certification pursuant to 18 U.S.C. Section 1350,

as Adopted pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of KBS Growth & Income REIT, Inc. (the “Registrant”) for the quarter ended June 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Jeffrey K. Waldvogel, the Chief Financial Officer, Treasurer and Secretary of the Registrant, hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge and belief:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.


Date:	August 12, 2022	By:	/S/ JEFFREY K. WALDVOGEL
			Jeffrey K. Waldvogel
			Chief Financial Officer, Treasurer and Secretary
			(principal financial officer)