LOS ANGELES, Jun 04, 2012 (BUSINESS WIRE) –
Kilroy Realty Corporation


/quotes/zigman/171049/quotes/nls/krc KRC
-0.09%



today announced that it has
completed the purchase of two office properties in the Lake Union
submarket of Seattle and expects to complete the acquisition of a
Bellevue property in the third quarter, subject to customary closing
conditions. These acquisitions will nearly double the West Coast real
estate investment trust’s office portfolio in high growth submarkets of
the Puget Sound Region.

In three separate transactions, KRC has acquired or expects to acquire
properties in Lake Union and Bellevue aggregating approximately 837,000
square feet of space for a total purchase price of approximately $330
million.

Since its reentry into the Seattle market in 2010, including these
transactions, KRC will acquire approximately 1.7 million square feet of
premier office space in the Puget Sound Region and has established a
locally-based operating platform with seasoned management to expand and
manage its portfolio there. The company’s Seattle portfolio, located in
the Eastside markets of Bellevue, Kirkland and Redmond as well as the
Lake Union submarket, now represent approximately 10% of KRC’s portfolio
on a square-foot basis and account for approximately 13% of its annual
net operating income on a pro forma basis.

“Seattle’s Bellevue, Eastside and Lake Union submarkets present a
compelling set of characteristics that KRC looks for in its real estate
portfolio,” said John Kilroy, Jr., the company’s president and chief
executive officer. “These include an economically vibrant core, a unique
coastal location, a quality of life valued by fast-growing,
knowledge-based businesses and their employees, and a regional approach
to development that effectively limits supply.”

“With a knowledgeable and experienced management team now in place,”
said Kilroy, “Seattle will continue to play an important role in the
expansion of our West Coast real estate franchise and the growth of our
brand as the region’s most innovative landlord.”

Lake Union Acquisitions

In two separate transactions, KRC acquired a three-building, 420,000
square-foot office campus located at 701, 801, 837 N. 34th Street in
Seattle’s Fremont neighborhood of Lake Union for approximately $145
million. Lake Union, home to Amazon.com’s two million square-foot
headquarters, is a magnet for Seattle’s high-growth, high-tech industry
and KRC’s newly acquired campus is well positioned in the submarket on
the Lake Union waterfront and immediately adjacent to the Burke Gilman
Trail, Seattle’s most popular running and biking trail.

Known as Fremont Lake Union Center and Fremont Lake View, the
three-building campus is currently 100% leased to a tenant list that
includes Adobe, Inc., Tableau Software and Ubermind, a Deloitte software
company. KRC purchased the properties at a significant discount to
replacement cost and expects to capture significant value as this
submarket continues to lead the region in growth and tenant demand with
in-place rents well below market. The campus is subject to a long term
ground lease and the company will be assuming approximately $34 million
of debt as part of the acquisition.

Bellevue Acquisition

KRC is also in escrow to acquire Skyline Tower, a 417,000 square-foot,
24-story, Class A office building in Downtown Bellevue for approximately
$186 million. The LEED Silver certified property is located at 10900
Northeast Fourth Street, two blocks from the company’s Key Center office
building and one block north of the Bellevue Transit Center. The
building, which has spectacular views of the Cascade Mountains and Mount
Rainier, is in close proximity to The Bravern and Bellevue Square, two
of the area’s most prestigious residential and retail centers.

Skyline Tower is currently 92% leased to a diverse tenant base that
includes technology companies Expedia and Valve Corporation. The company
will assume an in-place loan of approximately $84 million as part of the
acquisition.

“With the purchase of Skyline Tower, KRC will own two of the top Class A
multi-tenant office buildings in Downtown Bellevue,” said Mike Shields,
senior vice president of KRC’s Pacific Northwest region. “We expect
Downtown Bellevue to continue to be a location of choice for both
technology and service companies that value high quality amenities,
proximity to mass transit, and commuter convenience.”

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,
results or events. 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,
and with trends in the real estate industry; competitive market
conditions; the ability to complete potential acquisitions and
dispositions on announced terms; the ability to successfully operate
acquired properties; the availability of cash for debt service and
exposure of risk of default under debt obligations; 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 risk factors that could 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, 2011, quarterly report on Form 10-Q for the quarter
ended March 31, 2012, and our other filings with the Securities and
Exchange Commission. All forward-looking statements are based on
currently available information and speak only as of the date on which
they are made. We assumes 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 it
is required to do so in connection with ongoing requirements under
Federal securities laws.

Kilroy Realty Corporation, a member of the SP Small Cap 600 Index, is a
real estate investment trust active in premier office and industrial
submarkets along the West Coast. For over 60 years, the company has
owned, developed, acquired and managed real estate assets, consisting
primarily of Class A real estate properties in the coastal regions of
Los Angeles, Orange County, San Diego, greater Seattle and the San
Francisco Bay Area. At March 31, 2012, the company owned 11.8 million
rentable square feet of commercial office space and 3.4 million rentable
square feet of industrial space. More information is available at
http://www.kilroyrealty.com .

SOURCE: Kilroy Realty Corporation

        Kilroy Realty Corporation
        Tyler H. Rose
        Executive Vice President
        and Chief Financial Officer
        (310) 481-8484
        or
        Michelle Ngo
        Vice President
        and Treasurer
        (310) 481-8581

Copyright Business Wire 2012

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Article source: http://www.marketwatch.com/story/kilroy-realty-corporation-continues-seattle-area-expansion-with-acquisitions-in-lake-union-and-bellevue-2012-06-04