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Kilroy Realty Announces Tax Treatment of 2007 Dividend Distributions

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LOS ANGELES--(BUSINESS WIRE)--Jan. 10, 2008--Kilroy Realty Corporation (NYSE: KRC) announced today the tax treatment of its 2007 dividend distributions. The company's total dividend distributions per share of common stock (CUSIP #49427F108) are to be classified for income tax purposes as follows:

     Record          Payable       Total        2007        2007
      Date            Date       Distribution  Taxable  Total Capital
                                  per Share    Ordinary     Gain
                                               Dividend  Distribution
----------------------------------------------------------------------
    12/29/06         1/18/07         $.530000  $.252067      $.023426
----------------------------------------------------------------------
     3/30/07         4/18/07          .555000   .263957       .024531
----------------------------------------------------------------------
     6/29/07         7/18/07          .555000   .263957       .024531
----------------------------------------------------------------------
     9/28/07        10/18/07          .555000   .263957       .024531
----------------------------------------------------------------------


       Record              Payable            2007       2007 Return
        Date                Date          Unrecaptured     of Capital
                                          Section 1250
                                             Gain (1)
----------------------------------------------------------------------
      12/29/06             1/18/07                     -      $.254507
----------------------------------------------------------------------
      3/30/07              4/18/07                     -       .266512
----------------------------------------------------------------------
      6/29/07              7/18/07                     -       .266512
----------------------------------------------------------------------
      9/28/07             10/18/07                     -       .266512
----------------------------------------------------------------------

(1) Unrecaptured Section 1250 Gain is a subset of, and is included in, the Total Capital Gain Distribution amount.

The dividend distributions being made to holders of record as of December 31, 2007 and being paid on January 18, 2008 are considered 2008 dividend distributions for federal income tax purposes.

The company's total dividend distributions per share of Series E cumulative redeemable perpetual preferred stock (CUSIP #49427F405) are to be classified for income tax purposes as follows:

    Record          Payable        Total        2007        2007
     Date            Date        Distribution  Taxable  Total Capital
                                  per Share    Ordinary     Gain
                                               Dividend  Distribution
----------------------------------------------------------------------
   1/31/2007       2/15/2007         $.487500  $.446410      $.041090
----------------------------------------------------------------------
   4/30/2007       5/15/2007          .487500   .446410       .041090
----------------------------------------------------------------------
   7/31/2007       8/15/2007          .487500   .446410       .041090
----------------------------------------------------------------------
  10/31/2007      11/15/2007          .487500   .446410       .041090
----------------------------------------------------------------------


       Record              Payable            2007       2007 Return
        Date                Date          Unrecaptured     of Capital
                                          Section 1250
                                             Gain (1)
----------------------------------------------------------------------
     1/31/2007            2/15/2007                    -             -
----------------------------------------------------------------------
     4/30/2007            5/15/2007                    -             -
----------------------------------------------------------------------
     7/31/2007            8/15/2007                    -             -
----------------------------------------------------------------------
     10/31/2007          11/15/2007                    -             -
----------------------------------------------------------------------

(1) Unrecaptured Section 1250 Gain is a subset of, and is included in, the Total Capital Gain Distribution amount.

The company's total dividend distributions per share of Series F cumulative redeemable perpetual preferred stock (CUSIP #49427F504) are to be classified for income tax purposes as follows:

    Record         Payable         Total        2007        2007
     Date            Date        Distribution  Taxable  Total Capital
                                  per Share    Ordinary     Gain
                                               Dividend  Distribution
----------------------------------------------------------------------
  1/31/2007       2/15/2007          $.468750  $.429241      $.039509
----------------------------------------------------------------------
  4/30/2007       5/15/2007           .468750   .429241       .039509
----------------------------------------------------------------------
  7/31/2007       8/15/2007           .468750   .429241       .039509
----------------------------------------------------------------------
  10/31/2007      11/15/2007          .468750   .429241       .039509
----------------------------------------------------------------------


       Record              Payable            2007       2007 Return
        Date                Date          Unrecaptured     of Capital
                                          Section 1250
                                             Gain (1)
----------------------------------------------------------------------
     1/31/2007            2/15/2007                    -             -
----------------------------------------------------------------------
     4/30/2007            5/15/2007                    -             -
----------------------------------------------------------------------
     7/31/2007            8/15/2007                    -             -
----------------------------------------------------------------------
     10/31/2007          11/15/2007                    -             -
----------------------------------------------------------------------

(1) Unrecaptured Section 1250 Gain is a subset of, and is included in, the Total Capital Gain Distribution amount.

Stockholders are encouraged to consult with their tax advisors as to their specific tax treatment for Kilroy Realty Corporation common and preferred distributions.

Kilroy Realty Corporation, a member of the S&P Small Cap 600 Index, is a Southern California-based real estate investment trust active in the office and industrial property sectors. For more than 60 years the company has owned, developed, acquired and managed real estate assets, primarily in the coastal regions of California and Washington. Kilroy Realty currently has an in-process development and redevelopment pipeline of approximately 600,000 square feet of office space in Los Angeles and San Diego counties. At September 30, 2007, the company owned 8.6 million rentable square feet of commercial office space and 3.9 million rentable square feet of industrial space. More information is available at www.kilroyrealty.com.

CONTACT: Kilroy Realty Corporation
Richard E. Moran Jr.
Executive Vice President
and Chief Financial Officer
(310) 481-8483
or
Tyler H. Rose
Senior Vice President
and Treasurer
(310) 481-8484

SOURCE: Kilroy Realty Corporation