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Kilroy Realty to Create State-of-the-Art Office Tower; Will Transform First High Rise in El Segundo at LAX

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- 999 Occupies One of Highest Visibility Locations in Region -

LOS ANGELES, Feb. 6, 2001 -- Kilroy Realty Corporation (NYSE:KRC) has developed a creative plan expected to cost $35 million to transform its nine-story office building at 999 Sepulveda Boulevard in El Segundo into a state-of-the-art, Class-A office tower. The building was the first high-rise developed in El Segundo, built in 1962. A 15,000-square-foot addition will create a 138,500-square-foot office building, scheduled for completion in October 2001.

"El Segundo's commercial market is continuing to experience a full resurgence with a wide diversity of companies rediscovering its amenities, sense of community and proximity to LAX," said John B. Kilroy, Jr., president and chief executive officer of Kilroy Realty. "This building offers unparalleled identity, sitting at the third busiest intersection in the state -- the corner of Imperial Highway and Sepulveda Boulevard -- plus it has clear visibility from LAX and the 105 freeway.

"Jim Kilroy was a visionary 40 years ago when he saw the value of developing at LAX, and this location continues to be one of the best in the region," added Kilroy. He noted that LAX has 64 million passengers annually and 90,000 cars per day travel the I-105 at Sepulveda.

Further, Kilroy added, the building offers exceptional views from downtown Los Angeles to the Getty Center to LAX and the Pacific Ocean.

The planned renovation is so extensive that the building will be brand new on both the exterior and interior, offering completely new mechanical, electrical, and HVAC systems. Kilroy Realty Corporation's vision for 999 includes a sleek look incorporating machined aluminum, glass and stainless steel in a modernist architectural style that evokes its close relationship with LAX.

Bold architectural elements in aerodynamic forms have been added to the north-facing façade. A dramatic "wing" carrying the numbers "999" stretches out from the main structure toward Sepulveda Boulevard. A "rudder" slices the facade, sitting atop the new office space that has been added to the first three floors facing LAX. A shiny stainless steel "fin" has been added along the top of the building, linking the wing and the rudder, while a deck over the new office space offers a viewing platform to fourth floor tenants.

Lighting will reinforce the aviation theme: A grid of airplane-style lights will be applied to the northern facade. These will read as frosted white during daylight, but will become blue LED lights at night. In addition, the ground surrounding the building will be lit similar to airport runways.

The lobby will carry forward the same industrial vocabulary as the exterior, with concrete floors and metal walls softened by wood accents. "Careful attention has been given to enhancing the pedestrian areas," according to Hugh Greenup, executive vice president-development. A large pedestrian plaza with seating and landscaping is planned between the 999 and 909 buildings and the parking structure.

Tenant floors at 999 are being reconfigured to resemble those in contemporary loft buildings with exposed ductwork and industrial materials. Conventional spaces also will be available. Further, the building will be equipped with the telecommunications technology to accommodate current tenant demands.

999 is part of a three-building complex on a full city that includes 909 Sepulveda, fully occupied by Boeing Space and Communications, and a five-story parking garage. The buildings were acquired by Kilroy Realty Corporation last year.

"Recognizing the opportunity to renovate and reposition 999 to meet the growing office demand in El Segundo, we immediately began planning its transformation into a 2001 property," stated Kathy Delgado, senior vice president. Delgado is responsible for marketing of the property, and has hired a team from CB Richard Ellis to spearhead leasing that includes Grafton Tanguary, John Ayoob and Jeff Pion.

The 909 building will be tied into the renovation through new lighting and landscaping and renovation of pedestrian spaces, while the parking structure will be given the same exterior skin as 999 and completely upgraded.

HKS Architects' senior designer, Michael Rogers, is responsible for the creative efforts on this project, and has designed many of Kilroy Realty's Southern California developments. Hathaway Dinwiddie is the general contractor and Carter Romanek is the landscape architect.

Kilroy Realty Corporation is a real estate investment trust (NYSE:KRC) that focuses on the commercial office and industrial property sectors in the coastal corridor of Southern California. The company has a current development pipeline of approximately $500 million. At December 31, 2000, Kilroy Realty owned 6.6 million square feet of commercial office space and 5.8 million square feet of industrial space. More information can be found at www.kilroyrealty.com.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding Kilroy Realty Corp.'s business that are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.

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CONTACT: Kilroy Realty Corporation 
         Tyler H. Rose, Senior Vice President and Treasurer
         (310) 563-5531