KBS REIT III Directors Retain Seats

Auditor reappointment was approved, but director nominees fell short due to widespread broker non-votes.

July 24, 2025

Board Elections Fall Short, but Directors Stay On

At KBS Real Estate Investment Trust III’s annual meeting on July 23, shareholders had two decisions to make: elect five directors and ratify the company’s auditor. The result? The board stays the same, even though none of the nominees received majority support.

Here’s what happened. A significant portion of shareholders didn’t weigh in on the director elections. Instead, brokers—who hold shares on behalf of clients—submitted proxies without voting on that part of the ballot. This led to over 56 million broker non-votes for each nominee.

Under Maryland law, though, sitting directors continue in their roles until new ones are formally elected. So while the votes didn’t add up, the board remains in place.

Auditor Ratification Clears Without Objection

The vote on the auditor was a different story. Shareholders ratified the appointment of Ernst & Young LLP to serve as independent auditor for 2025, with over 72 million votes in favor. Unlike director elections, this is considered a routine matter. Brokers were able to vote even without specific instructions from their clients, and the proposal passed comfortably.

What It Means

This meeting underscores how procedural rules shape outcomes. Broker voting rules meant shareholders had more impact on the auditor ratification than on board composition. For KBS REIT III, the results maintain stability—for now. But they also highlight how critical shareholder participation is when governance is on the agenda.