Kilroy Realty Acquires Fully Entitled San Francisco Development Site
LOS ANGELES--(BUSINESS WIRE)--Jul. 7, 2015-- Kilroy Realty Corporation (NYSE: KRC) announced today that it has acquired a development site in the highly sought-after south of market area of San Francisco for approximately $78.0 million. The 3.3-acre site, located at 100 Hooper Street, is fully designed and entitled for the development of a LEED Gold, low-rise, mixed-use creative campus that will consist of approximately 450,000 square feet. KRC will develop and own two large floor plate, concrete buildings totaling approximately 400,000 square feet with a total projected investment of approximately $250 million. The project will be approximately 80% office space and 20% PDR (production, distribution, and repair) space. As part of the transaction, the land will be sub-divided and an additional approximately 50,000 square feet of stand-alone PDR space is expected to be owned and managed by PlaceMade, a non-profit subsidiary of SFMade that focuses on providing affordable space for manufacturers and other related industrial users in San Francisco.
With the addition of 100 Hooper, KRC now owns the last two remaining fully entitled office development sites in San Francisco that are not yet leased and designed to appeal to the modern workforce. In late June, KRC commenced construction on The Exchange at 16th in the Mission Bay submarket of San Francisco. Both projects are well-positioned to take advantage of the strong tenant demand for new Class A creative space. KRC intends to commence construction at 100 Hooper later this year, subject to market conditions.
The Hooper site, adjacent to Showplace Square, is in close proximity to some of the nation’s premier companies and institutions, including California College of the Arts, the University of California, San Francisco, salesforce.com, Inc., Dolby Laboratories Inc., Airbnb Inc., Pinterest and Cisco Systems, Inc. Bounded by popular residential neighborhoods of the Dogpatch and Potrero Hill, the project will further benefit from the addition of San Francisco’s Central Subway system, currently under construction.
“We are very pleased to be able to add another value-creating, this-cycle project to our development pipeline,” said John Kilroy, chairman, president and CEO of Kilroy Realty. “The combination of manufacturing applications from the PDR space and innovation-oriented uses from the creative office space will not only create terrific synergies for the project but will also generate diverse jobs for the community.”
About Kilroy Realty Corporation. With more than 65 years’ experience owning, developing, acquiring and managing real estate assets in West Coast real estate markets, Kilroy Realty Corporation (KRC), a publicly traded real estate investment trust and member of the S&P MidCap 400 Index, is one of the region’s premier landlords. The company provides physical work environments that foster creativity and productivity and serves a broad roster of dynamic, innovation-driven tenants, including technology, entertainment, digital media and health care companies.
At March 31, 2015, the company’s stabilized portfolio totaled 13.0 million square feet of office properties, all located in the coastal regions of greater Seattle, the San Francisco Bay Area, Los Angeles, Orange County and San Diego. The company is recognized by the Global Real Estate Sustainability Benchmark (GRESB) as the North American leader in sustainability and was ranked first among 151 North American participants across all asset types. At the end of the first quarter, the company’s properties were 42% LEED certified and 60% of eligible properties were ENERGY STAR certified. In addition, KRC had approximately 1.7 million square feet of new office and mixed-use development under construction with a total estimated investment of approximately $1.1 billion. More information is available at http://www.kilroyrealty.com.
Forward-Looking Statements. This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are based on our current expectations, beliefs and assumptions, and are not guarantees of future performance. Forward-looking statements are inherently subject to uncertainties, risks, changes in circumstances, trends and factors that are difficult to predict, many of which are outside of our control. Accordingly, actual performance, results and events may vary materially from those indicated in forward-looking statements, and you should not rely on forward-looking statements as predictions of future performance, results or events. Numerous factors could cause actual future performance, results and events to differ materially from those indicated in forward-looking statements, including, among others, risks associated with: investment in real estate assets, which are illiquid; trends in the real estate industry; significant competition, which may decrease the occupancy and rental rates of properties; the ability to successfully complete acquisitions and dispositions on announced terms; the ability to successfully operate acquired properties; the availability of cash for distribution and debt service and exposure of risk of default under debt obligations; adverse changes to, or implementations of, applicable laws, regulations or legislation; and the ability to successfully complete development and redevelopment projects on schedule and within budgeted amounts. These factors are not exhaustive. For a discussion of additional factors that could materially adversely affect our business and financial performance, see the factors included under the caption “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2014 and our other filings with the Securities and Exchange Commission. All forward-looking statements are based on information that was available, and speak only as of the date on which they are made. We assume no obligation to update any forward-looking statement made in this press release that becomes untrue because of subsequent events, new information or otherwise, except to the extent required in connection with ongoing requirements under U.S. securities laws.
View source version on businesswire.com: http://www.businesswire.com/news/home/20150707006541/en/
Source: Kilroy Realty Corporation
Kilroy Realty Corporation
Tyler H. Rose
Executive Vice President and Chief Financial Officer
Senior Vice President and Treasurer