# KBS CAPITAL MARKETS GROUP LLC X-17A-5 (2025-03-27) — Broker-dealer annual report

- Company: KBS CAPITAL MARKETS GROUP LLC
- Form: X-17A-5
- Filed: 2025-03-27
- Period: 2024-12-31
- Accession: 0001296382-25-000001
- CIK: 1296382
- File #: 8-66581
- Type: Broker-dealer
- Material weakness: No
- Auditor: Baker Tilly, LLP
- Auditor location: Irvine, CA
- Contact: Kenny Tam
- Phone: 9497970308
- Email: ktam@kbs.com
- Website: kbs.com
- Signed by: Michael Zapata (Chief Operating Officer)

Original filing: https://www.sec.gov/Archives/edgar/data/1296382/000129638225000001/KBSCMGPUBLIC2024SECfiled.pdf

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Public Copy

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

OMB APPROVAL OMB Number: 3235-0123 Expires: Nov. 30, 2026 Estimated average burden hours per response: 12 sec file number

8-66581

# ANNUAL REPORTS FORM X-17A-5 PART III

FACING PAGE

l Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934

|                                                                                                                                                                                                                                                   | Information Required Pursuant to Rules 178-3, 178-12, and 20d T | AND ENDING                                        | 12/31/24                                   |  |  |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------|---------------------------------------------------|--------------------------------------------|--|--|
| filing for the period beginning 01/01/24                                                                                                                                                                                                          | MM/DD/YY                                                        |                                                   | MM/DD/YY                                   |  |  |
|                                                                                                                                                                                                                                                   | A. REGISTRANT IDENTIFICATION                                    |                                                   |                                            |  |  |
| NAME OF FIRM® KBS Capital Markets Group, LLC                                                                                                                                                                                                      |                                                                 |                                                   |                                            |  |  |
| TYPE OF REGISTRANT (check all applicable boxes):<br>Broker-dealer<br>□ Check here if respondent is also an OTC derivatives dealer                                                                                                                 | ‍   Security-based swap dealer                                  | LJ Major security-based swap participant          |                                            |  |  |
| ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.)                                                                                                                                                                               |                                                                 |                                                   |                                            |  |  |
| 800 Newport Center Drive, Suite 700                                                                                                                                                                                                               | (No. and Street)                                                |                                                   |                                            |  |  |
| Newport Beach                                                                                                                                                                                                                                     |                                                                 | CA                                                | 92660                                      |  |  |
| (City)                                                                                                                                                                                                                                            |                                                                 | (State)                                           | (Zip Code)                                 |  |  |
| PERSON TO CONTACT WITH REGARD TO THIS FILING                                                                                                                                                                                                      |                                                                 |                                                   |                                            |  |  |
| Kenny Tam                                                                                                                                                                                                                                         |                                                                 | ktam@kbs.com<br>949-797-0308                      |                                            |  |  |
| (Name)                                                                                                                                                                                                                                            |                                                                 | (Email Address)<br>(Area Code - Telephone Number) |                                            |  |  |
|                                                                                                                                                                                                                                                   | B. ACCOUNTANT IDENTIFICATION                                    |                                                   |                                            |  |  |
| INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*<br>Baker Tilly, LLP                                                                                                                                                     |                                                                 |                                                   |                                            |  |  |
|                                                                                                                                                                                                                                                   | (Name - if individual, state last, first, and middle name)      | CA                                                | 92612                                      |  |  |
| 18500 Von Karman Avenue, 10th Floor   Irvine                                                                                                                                                                                                      |                                                                 |                                                   | (Zip Code)                                 |  |  |
| (Address)                                                                                                                                                                                                                                         | (City)                                                          | (State)<br>23                                     |                                            |  |  |
| 10/22/2003                                                                                                                                                                                                                                        |                                                                 |                                                   | (PCAOB Registration Number, if applicable) |  |  |
| (Date of Registration with PCAOB)(if applicable)                                                                                                                                                                                                  | FOR OFFICIAL USE ONLY                                           |                                                   |                                            |  |  |
| * Claims for exemption from the requirement that the annual reports be covered by the reports of an independent public<br>accountant must be supported by a statement of facts and circumstances relied on as the basis of the exemption.  See 17 |                                                                 |                                                   |                                            |  |  |

CFR 240.17a-5(e)(1)(ii), if applicable. CFR 240.17a-5(e){1)(i), if applicable.
Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.

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# Public Copy

#### OATH OR AFFIRMATION

swear (or affirm) that, to the best of my knowledge and belief, the | Michael Zapata financial report pertaining to the firm of KBS Capital Markets Group, LLC as of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ertaining to the firm of of the and correct. I further swear (or affirm) that neither the company nor any 12/31

 in zio i as that of a customer.

Soo AHached

Notary Public

#### This filing\*\* contains (check all applicable boxes):

- (a) Statement of financial condition.
- (b) Notes to consolidated statement of financial condition.
- {p/ Notes to conformatical statement of ther comprehensive income in the period(s) presented, a statement of comprehensive income (as defined in § 210.1-02 of Regulation S-X).
- □ (d) Statement of cash flows.
- □ (e) Statement of changes in stockholders' or partners' or sole proprietor's equity.
- □ (f) Statement of changes in liabilities subordinated to claims of creditors.
- □ (g) Notes to consolidated financial statements.
- (8) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable.
- □ (i) Computation of tangible net worth under 17 CFR 240.18a-2.
- ロ (i) Computation of cansion of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15CS 3
- ロ (J) Computation for determination of security-based swap reserve requirements pursuant to Exhibit B to 17 CFR 240.15c3-3 or Exhibit A to 17 CFR 240.18a-4, as applicable.
- [
- ロ (m) Compution relation for Desession or control requirements for customers under 17 CFR 240.15c3-3.
[ m] Information relating to possession or control requirements for cus
- ロ (n) Thrormation relating to possession of control requirements for security-based swap customers under 17 CFR 240.15c3-3(p)(2) or 17 CFR 240.18a-4, as applicable.
- 240.150.25.3-3(p)(2) 01-7 CH 240.204 -, is spirosation of the FOCUS Report with computation of the magine reguirements under (0) Reconclinations, Including approphateling 17 CFR 240.18a-2, as applicable, and the reserve requirements under I7
worth under 17 CFR 240.15c3-1, 17 CFR 240.18a-1, or 17 worth under 17 CFR 240.186-4, as applicable, if material differences exist, or a statement that no material differences exist.
- |
- ロー (p) >unlinery of mancial rer basicians no no views and research 17 CFR 240.17a-12, or 17 CFR 240.18a-7, as applicable.
- | (q) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.
- □ </ / Semption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.
- | (3) Lxchiption report in assortants report based on an examination of the statement of financial condition.
- □ { } } lidependent public accountant 5 report based on an examination of the financial statements under 17 CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable.
- CFR 240.278-3, 17 CN 240.2007, or 27 on t a sed on an examination of certain statements in the compliance report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.
- CFR 240.17a-5 of 17 CFR 240.186 7) as appliassed on a review of the exemption report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.
- CFR 240.186-7, as applicable.
□ (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.17-12, 1 as applicable.
- as applicable.
□ (y) Report describing any material inadequacies found to existed since the date of the previous audit, or a statement that no material inadequacies exist, under 17 CFR 240.17a-12(k).
- □ (z) Other: \_\_
- \*\*To request confidential treatment of certain portions of this filing, see 17 CFR 240.17a-5(e)(3) or 17 CFR 240.18a-7(d)(2), as applicable.

Signatures. Title: Chief Operating Officer

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# Public Copy

CALIFORNIA JURAT WITH AFFIANT STATEMENT

GOVERNMENT CODE § 8202

SCORESCONDICIES COLOCACCACCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC See Attached Document (Notary to cross out lines 1-6 below) TSee Statement Below (Lines 1-6 to be completed only by document signer[s], not Notary) Signature of Document Signer No. 2 (if any) Signature of Document Signer No. 1 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the A follow of other officer completing this certificate relificals, accuracy, or validity of that document. Subscribed and sworn to (or affirmed) before me State of California County of DRANGE arch 20 2 7 on this Old Vear Month Date by (and (2) Name(s) of Signer(s) proved to me on the basis of satisfactory evidence to be the person(s) who appeared before me. HELLEY GEORGETTE GARDEWICK Notary Public - California Orange County Commission # 2496777 Signature My Comm. Expires Sep 1, 2028 Signature of Notary Public Seal Place Notary Seal Above OPTIONAL Though this section is optional, completing this information can deler alteration of the document or fraudulent reattachment of this form to an unintended document. Description of Attached Document Title or Type of Document: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Document Date: Number of Pages: \_\_\_\_\_\_\_\_\_Signer(s) Other Than Named Above: \_ Names of a service concerners consistence consisteres as accessories consistences and as a

©2014 National Notary Association • www.NationalNotary.org • 1-800-US NOTARY (1-800-876-6827) • Item #5910

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PUBLIC

#### S TATEMENT OF F INANCIAL C ONDITION

KBS Capital Markets Group, LLC *(a California limited liability company)*  As of December 31, 2024 With Report of Independent Registered Public Accounting Firm

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Statement of Financial Condition As of December 31, 2024

# **Contents**

| Report of Independent Registered Public Accounting Firm 1 |  |
|-----------------------------------------------------------|--|
| Statement of Financial Condition 2                        |  |
| Notes to Statement of Financial Condition 3               |  |

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![](_page_5_Picture_0.jpeg)

#### **Report of Independent Registered Public Accounting Firm**

To the Member and Management of KBS Capital Markets Group, LLC

#### **Opinion on the Financial Statement**

We have audited the accompanying statement of financial condition of KBS Capital Markets Group, LLC (the "Company") as of December 31, 2024, and the related notes (collectively referred to as the "financial statement"). In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Company as of December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

#### **Basis for Opinion**

This financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statement based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statement, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statement. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement. We believe that our audit provides a reasonable basis for our opinion.

We have served as the Company's auditor since 2016.

Minneapolis, Minnesota March 21, 2025

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# Statement of Financial Condition

December 31, 2024

| ASSETS                                   |               |
|------------------------------------------|---------------|
| Cash                                     | \$<br>233,898 |
| Prepaid expenses and other assets        | 52,109        |
| Total assets                             | \$<br>286,007 |
| LIABILITIES AND MEMBER'S CAPITAL         |               |
| Accounts payable and accrued liabilities | \$<br>60,889  |
| Accrued compensation                     | 773           |
| Total liabilities                        | 61,662        |
| Commitments and contingencies (Note 7)   |               |
| Member's capital                         | 224,345       |
| Total liabilities and member's capital   | \$<br>286,007 |
| See notes to financial statements.       |               |

2

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## Notes to Statement of Financial Condition As of December 31, 2024

#### **1. Organization of the Company**

KBS Capital Markets Group, LLC (the "Company") is a registered broker-dealer in securities under the Securities Exchange Act of 1934 and a member of the Financial Industry Regulatory Authority ("FINRA"). The Company is a limited purpose introducing broker-dealer approved to distribute mutual funds, variable annuities and direct participation programs to other FINRA approved broker-dealers. The Company is organized as a Limited Liability Company ("LLC") in the State of California. The Company has a single member, KBS Holdings, LLC (the "Member"). During 2019, the Company wound down its principal operations; however, it will remain an operating entity in order to provide shareholder services to the KBS REITs, as defined below.

During the year ended December 31, 2024, the Company served as the dealer manager for the public offerings of KBS Real Estate Investment Trust III, Inc., and KBS Growth & Income REIT, Inc. (collectively referred to herein as the "KBS REITs"), all of which are affiliates of the Member. The offering periods of all KBS REITs had all closed prior to January 1, 2024.

#### **2. Summary of Significant Accounting Policies**

#### **Basis of Presentation**

The accompanying Statement of Financial Condition has been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") as contained within the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC").

Pursuant to Accounting Standards Update No. 2014-15, Presentation of Financial Statement Going Concern (Subtopic 205-40), management evaluates the Company's ability to continue as a going concern for one year after the date the financial statements are available for issuance. The Company focuses on providing shareholder services to existing offerings and does not generate revenue. Company operations are supported through capital contributions from the Member, and such capital contributions shall not be temporary.

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## Notes to Statement of Financial Condition As of December 31, 2024

#### **2. Summary of Significant Accounting Policies (continued)**

#### **Basis of Presentation (continued)**

For the year ended December 31, 2024, the Company had an operational cash shortfall of \$677,673. Management of KBS Capital Markets Group, LLC believes the Member, KBS Holdings, LLC has the intent and ability to continue making capital contributions to the Company for the foreseeable future, sufficient to support the Company's limited operations.

#### **Use of Estimates**

The preparation of the Statement of Financial Condition in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect assets and liabilities as of December 31, 2024. Actual results could differ from these estimates.

#### **Cash**

The Company currently maintains substantially all of its operating cash with one major financial institution. At times, cash balances may be in excess of the amounts insured by the Federal Deposit Insurance Corporation. The Company has not experienced any losses and is not exposed to any significant credit risk on cash.

#### **Prepaid Expenses and Other Assets**

Prepaid expenses and other assets mainly consist of prepaid insurance and prepaid rent.

#### **Accrued Compensation**

Accrued compensation is primarily related to paid time off and employee benefits.

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## Notes to Statement of Financial Condition As of December 31, 2024

## **2. Summary of Significant Accounting Policies (continued)**

## **Taxes**

As a Limited Liability Company, the Company is subject to certain state and local taxes; however, income taxes on income or losses realized by the Company are generally the obligation of the Member.

The Company has concluded that there are no significant uncertain tax positions requiring recognition in its Statement of Financial Condition, nor has the Company been assessed interest or penalties by any major tax jurisdictions. The Company's evaluation was performed in accordance with Accounting Standards Codification 740-10, *Income Taxes* for the tax year ended December 31, 2024.

## **3. Segment Information**

The Company operates as a single operating segment, which previously focused on engagement as a limited purpose introducing broker-dealer. In 2019, the Company wound down its principal operations and now primarily provides shareholder services to the KBS REITs. These shareholder services do not generate revenue. The Company's chief operating decision maker ("CODM") consists of the Member's Chief Executive Officer and Chief Financial Officer. The accounting policies of the segment are the same as those described in Note 2 – Summary of Significant Accounting Policies. The measure of segment assets is reported on the statement of financial condition as total assets. The measure of segment profit or loss is reported on the statement of operations as net loss. Significant segment expenses are reported in the accompanying statement of operations as "Employee salaries, commissions and benefits" and "Insurance" for the year ended December 31, 2024. The CODM uses this alongside working capital changes to evaluate cash burn and determine financial sustainability, in relation to strategic goals of the Company.

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## Notes to Statement of Financial Condition As of December 31, 2024

#### **4. Regulatory Requirements**

The Company is subject to the Securities and Exchange Commission ("SEC") Uniform Net Capital Rule ("Rule 15c3-1"), which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. The Company computes its net capital requirements under the aggregate indebtedness method provided for in Rule 15c3-1. Advances to affiliates, repayment of subordinated borrowings, dividend payments, and other equity withdrawals are subject to certain notification requirements and other provisions of the SEC Uniform Net Capital Rule or other regulatory bodies.

At December 31, 2024, the Company had net capital of \$172,236 which was \$167,236 in excess of the required minimum net capital of \$5,000 as computed in accordance with Rule 15c3-1. The Company's aggregate indebtedness to net capital ratio was 0.36 to 1.

The Company's management is responsible for compliance with the exemption provisions and its statements. The Company does not claim an exemption from SEC Rule 15c3-3 in reliance on footnote 74 to SEC Release 34-70073 and as discussed in Q&A 8 of the related FAQ issued by SEC staff. The Company, during the reporting period, (i) did not directly or indirectly receive, hold, or otherwise owe funds or securities for or to customers, other than money or other consideration received and promptly transmitted in compliance with paragraph (a) or (b)(2) of Rule 15c2-4; (ii) did not carry accounts of or for customers; and (iii) did not carry PAB accounts (as defined in Rule 15c3-3).

#### **5. Defined Contribution Plan**

KBSRA sponsors a 401(k) defined contribution plan (the "Plan") that is made available to employees of the Company. Eligible participants may contribute up to the maximum amounts established by the United States Internal Revenue Service.

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## Notes to Statement of Financial Condition As of December 31, 2024

#### **6. Commitments and Contingencies**

#### **Legal**

The Company may be subject to various claims, lawsuits and complaints arising during the ordinary course of business, none of which, in the opinion of management, is expected to have a material adverse effect on the Company's financial position or results from operations.

#### **7. Subsequent Events**

The Company evaluates subsequent events up until the date the Statement of Financial Condition is available for issuance. As of March 21, 2025, no material subsequent events have occurred.


Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.