With respect to investments in real estate, we pay the Advisor a monthly asset
management fee equal to one-twelfth of 0.75% of the amount paid or allocated to acquire the investment, plus the cost of any subsequent development, construction or improvements to the property. This amount
includes any portion of the investment that was debt financed and is inclusive of acquisition fees and expenses related thereto. In the case of investments made through joint ventures, the asset management fee is determined based on our
proportionate share of the underlying investment. With respect to investments in loans and any investments other than real estate, we paid the Advisor a monthly asset management fee calculated, each month, as
one-twelfth of 0.75% of the lesser of (i) the amount paid or allocated to acquire or fund the loan or other investment (which amount included any portion of the investment that was debt financed and was
inclusive of acquisition or origination fees and expenses related thereto) and (ii) the outstanding principal amount of such loan or other investment, plus the acquisition or origination fees and expenses related to the acquisition or funding
of such investment, as of the time of calculation. Asset management fees from January 1, 2019 through June 30, 2020 totaled approximately $13.7 million, all of which had been paid as of June 30, 2020.
Under the advisory agreement, the Advisor and its affiliates have the right to seek reimbursement from us for all costs and expenses they
incur in connection with their provision of services to us, including our allocable share of the Advisors overhead, such as rent, employee costs, utilities, accounting software and cybersecurity costs. We reimburse the Advisor for our
allocable portion of the salaries, benefits and overhead of internal audit department personnel providing services to us. In the future, the Advisor may seek reimbursement for additional employee costs. However, we will not reimburse the Advisor or
its affiliates for employee costs in connection with services for which the Advisor earns acquisition, origination or disposition fees (other than reimbursement of travel and communication expenses) or for the salaries and benefits the Advisor or
its affiliates may pay to our executive officers. From January 1, 2019 through June 30, 2020, we incurred $547,000 of operating expenses reimbursable to the Advisor, including $397,000 of our allocable portion of the salaries, benefits and
overhead of internal audit department personnel providing services to us, of which $41,000 was payable as of June 30, 2020. We also reimburse the Advisor for certain of our direct costs incurred from third parties that were initially paid by
the Advisor on our behalf.
For substantial assistance in connection with the sale of properties or other investments, we pay
the Advisor or its affiliates 1.0% of the contract sales price of each property or other investment sold; provided, however, in no event may aggregate disposition fees paid to the Advisor, its affiliates and unaffiliated third parties exceed 6.0% of
the contract sales price. From January 1, 2019 through June 30, 2020, we incurred $5.1 million of disposition fees, all of which had been paid as of June 30, 2020.
From January 1, 2019 through June 30, 2020, the Advisor did not reimburse us for any property insurance rebates.
Our Relationship with KBS Capital Markets Group. We have entered into a fee reimbursement agreement (the AIP Reimbursement
Agreement) with KBS Capital Markets Group LLC, the entity that acted as our dealer manager (the Dealer Manager), pursuant to which we agreed to reimburse the Dealer Manager for certain fees and expenses it incurs for administering
our participation in the DTCC Alternative Investment Product Platform with respect to certain accounts of our stockholders serviced through the platform. From January 1, 2019 through June 30, 2020, we incurred $110,000 of costs and
expenses related to the AIP Reimbursement Agreement, of which $7,000 was payable as of June 30, 2020.
Insurance
Program. As of January 1, 2019, we, together with KBS Real Estate Investment Trust III, Inc. (KBS REIT III), KBS Growth & Income REIT, Inc. (KBS Growth & Income REIT), 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 2020, we renewed our participation in the program. The program is
effective through June 30, 2021.
From January 1, 2019 through June 30, 2020, no other transactions occurred
between us and KBS REIT III, Pacific Oak Strategic Opportunity REIT, Inc., formerly KBS Strategic Opportunity REIT, Inc., (Pacific Oak Strategic Opportunity REIT)(advisory agreement with KBS Capital Advisors terminated as of
October 31, 2019 and dealer manager agreement with KBS Capital Markets Group terminated as of December 31, 2019), Pacific Oak Strategic Opportunity REIT II, Inc., formerly KBS Strategic Opportunity REIT II, Inc., (Pacific Oak
Strategic Opportunity REIT II)(advisory agreement with KBS Capital Advisors terminated as of October 31, 2019 and dealer manager agreement with KBS Capital Markets Group terminated as of December 31, 2019), KBS Growth &
Income REIT, the Advisor, the Dealer Manager or other KBS-affiliated entities.
On
November 1, 2019, Pacific Oak Strategic Opportunity REIT and Pacific Oak Strategic Opportunity REIT II transferred the management of the companies to a new external advisor, Pacific Oak Capital Advisors LLC. The transfer of management allows
the Advisor to focus on its core asset portfolios, while the Pacific Oak group of companies focuses primarily on opportunistic portfolios. Pacific Oak Capital Advisors, LLC is owned and managed by Keith D. Hall and Peter McMillan III. Together,
through GKP Holding LLC, Messrs. Hall and McMillan, continue to indirectly own a 33 1/3% interest in the Advisor and the Dealer Manager.
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