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Kilroy Realty Corporation Reports 9.1% Increase in First Quarter FFO Per Share

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LOS ANGELES, April 30, 2001 -- Kilroy Realty Corporation (NYSE:KRC) today reported financial results for its first quarter ended March 31, 2001, with funds from operations (FFO) of $21.9 million, or $0.72 per share, up 9.1% on a per-share basis from $20.7 million, or $0.66 per share, in the first quarter of 2000. Net income in the first quarter was $6.4 million, or $0.24 per share, compared to $9.6 million, or $0.35 per share, in the year-earlier quarter. Revenues totaled $50.4 million, up from $43.8 million a year ago. All per-share amounts are presented on a diluted basis.

KRC's occupancy rate on its 12.8 million square feet of stabilized properties at the end of the first quarter was 97%. The company is currently developing or is committed to develop approximately one million additional square feet of office space in Southern California, with completion dates scheduled through mid-2002. This committed development pipeline, representing a total investment of approximately $250 million, is currently 52% preleased.

Some of the information presented in this release is forward-looking in nature within the meaning of the federal securities law. Although the information is based on the company's current best judgment, actual results, including the timing and total investment of the company's development projects, could vary from expectations stated here. Numerous factors will affect KRC's actual results, some of which are beyond the company's control. These include the timing and strength of regional economic growth, the strength of commercial and industrial real estate markets, competitive market conditions, future interest rate levels, capital market conditions and risks detailed from time to time in the company's SEC reports, including quarterly reports on Form 10-Q, reports on Form 8-K and annual reports on Form 10-K.

Kilroy Realty Corporation is a southern California-based real estate investment trust active in the office and industrial property sectors. For more than 50 years, the company has owned, developed, acquired and managed real estate assets in the coastal regions of California and Washington. Principal submarkets for KRC's current development projects include Calabasas, West Los Angeles, and coastal San Diego, where the company's total development pipeline is approximately $500 million. At March 31, 2001, the company owned 7.1 million square feet of commercial office space and 5.8 million square feet of industrial space. More information on Kilroy Realty can be found at www.kilroyrealty.com.

                      KILROY REALTY CORPORATION
                      SUMMARY QUARTERLY RESULTS
                      -------------------------
           (unaudited, in thousands, except per share data)

                                                      Three Months
                                                          Ended
                                                        March 31, 
                                                    2001        2000
                                                  -------     -------
 Revenues                                         $50,367     $43,771
 Net income available
  to common stockholders (1)                      $ 6,426     $ 9,578

 Weighted average common shares
  outstanding - basic                              26,713      27,228
 Weighted average common shares
  outstanding - diluted                            26,971      27,229

 Net income per share of
  common stock - basic                            $  0.24     $  0.35
 Net income per share of
  common stock - diluted                          $  0.24     $  0.35

 Funds From Operations                            $21,876     $20,680

 Weighted average common
  shares/units outstanding - basic (2)             30,225      31,130
 Weighted average common
  shares/units outstanding - diluted (2)           30,484      31,130

 Funds From Operations per
  common share/unit - basic (2)                   $  0.72     $  0.66
 Funds From Operations per
  common share/unit - diluted (2)                 $  0.72     $  0.66

 Common shares outstanding
  at end of period                                 26,975      26,223
 Common partnership units
  outstanding at end of period                      3,282       3,805
                                                  -------     -------
   Total common shares
    and units outstanding
    at end of period                               30,257      30,028


                                                  March 31,  March 31,
                                                     2001       2000
                                                  -------     -------
 Occupancy rates:
     California                                      96.4%       96.6%
     Washington                                     100.0%      100.0%
     Arizona                                        100.0%      100.0%
     Nevada                                         100.0%      100.0%
                                                  -------     -------
      Weighted average total                         96.6%       96.8%

 Total square feet of stabilized
  properties owned at end of period:
     Office                                         7,064       6,225
     Industrial                                     5,768       6,432
                                                  -------     -------
      Total                                        12,832      12,657

 (1)  Net income after minority interests.

 (2) Calculated based on weighted average shares outstanding assuming
     conversion of all common limited partnership units outstanding.




        KILROY REALTY CORPORATION CONSOLIDATED BALANCE SHEETS
        -----------------------------------------------------
                      (unaudited, in thousands)

                                            March 31,    December 31,
                                              2001          2000
                                          -----------    -----------
 ASSETS 
 INVESTMENT IN REAL ESTATE:
  Land and improvements                   $   272,013    $   266,444
  Buildings and improvements                1,106,079      1,054,995
  Undeveloped land and
   construction in progress,
   net                                        181,674        162,633
  Investment in unconsolidated
   real estate                                  --            12,405
                                          -----------    -----------
    Total investment in real estate         1,559,766      1,496,477
   Accumulated depreciation
    and amortization                         (215,176)      (205,332)
                                          -----------    -----------
    Investment in real estate,
     net                                    1,344,590      1,291,145

 Cash and cash equivalents                     19,669         17,600
 Restricted cash                                6,662         35,014
 Tenant receivables, net                       28,695         32,521
 Note receivable from
  related party                                  --           33,274
 Deferred financing and
  leasing costs, net                           35,633         39,674
 Prepaid expenses and
  other assets                                  9,226          7,941
                                          -----------    -----------
    TOTAL ASSETS                          $ 1,444,475    $ 1,457,169
                                          ===========    ===========

 LIABILITIES & STOCKHOLDERS'
  EQUITY

 LIABILITIES:
  Secured debt                            $   440,541    $   432,688
  Unsecured line of credit                    162,000        191,000
  Unsecured term facility                     100,000        100,000
  Accounts payable and accrued
   expenses                                    39,752         33,911
  Accrued distributions                        14,523         13,601
  Rents received in advance,
   tenant security deposits
   and deferred revenue                        30,909         17,810
                                          -----------    -----------
    Total liabilities                         787,725        789,010
                                          -----------    -----------
 MINORITY INTERESTS:
  8.075% Series A Cumulative
   Redeemable Preferred
   unitholders                                 73,716         73,716
  9.375% Series C Cumulative
   Redeemable Preferred
   unitholders                                 34,464         34,464
  9.250% Series D Cumulative
   Redeemable Preferred
   unitholders                                 44,321         44,321
  Common unitholders of the
   Operating Partnership                       53,440         62,485
  Minority interest in
   Development LLCs                            11,707         11,748
                                          -----------    -----------
    Total minority interests                  217,648        226,734
                                          -----------    -----------

 STOCKHOLDERS' EQUITY:
  Common stock                                    270            265
  Additional paid-in capital                  470,077        460,390
  Distributions in excess of
   earnings                                   (25,751)       (19,230)
  Accumulated other comprehensive
   loss                                        (5,494)          --
                                          -----------    -----------
    Total stockholders' equity                439,102        441,425
                                          -----------    -----------
    TOTAL LIABILITIES &
     STOCKHOLDERS' EQUITY                 $ 1,444,475    $ 1,457,169
                                          ===========    ===========




   KILROY REALTY CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS
   ---------------------------------------------------------------
           (unaudited, in thousands, except per share data)

                                                  Three Months
                                                      Ended
                                                     March 31, 
                                                2001          2000
                                              --------      --------
 REVENUES:
  Rental income                               $ 44,379      $ 37,702
  Tenant reimbursements                          5,520         4,694
  Interest income                                  436           294
  Other income                                      32         1,081
                                              --------      --------
   Total revenues                               50,367        43,771
                                              --------      --------
 EXPENSES:
  Property expenses                              6,895         5,458
  Real estate taxes                              3,635         3,387
  General and administrative
   expenses                                      3,354         2,632
  Ground leases                                    392           389
  Interest expense                              10,791         7,828
  Depreciation and amortization                 13,433         9,323
                                              --------      --------
   Total expenses                               38,500        29,017
                                              --------      --------
 Income from operations                         11,867        14,754
 Net gains (losses) on
  dispositions of operating
  properties                                       305          (305)
                                              --------      --------
 Income before minority
  interests and cumulative effect
  of change in accounting principle             12,172        14,449
                                              --------      --------
 Minority interests:
  Distributions on Cumulative
   Redeemable Preferred units                   (3,375)       (3,375)
  Minority interest in earnings
   of Operating Partnership                       (845)       (1,372)
  Minority interest in earnings
   of Development LLCs                            (134)         (124)
                                              --------      --------
    Total minority interests                    (4,354)       (4,871)
                                              --------      --------
 Net income before cumulative
  effect of change in accounting
  principle                                      7,818         9,578
 Cumulative effect of change
  in accounting principle                       (1,392)         --
                                              --------      --------
 Net Income                                   $  6,426      $  9,578
                                              ========      ========
 Weighted average shares
  outstanding - basic                           26,713        27,228
 Weighted average shares
  outstanding - diluted                         26,971        27,229

 Income per common share
  - basic                                     $   0.24      $   0.35
                                              ========      ========
 Income per common share
  - diluted                                   $   0.24      $   0.35
                                              ========      ========



                      KILROY REALTY CORPORATION
                        FUNDS FROM OPERATIONS
                        ---------------------
           (unaudited, in thousands, except per share data)

                                                   Three Months
                                                       Ended
                                                      March 31, 
                                                 2001          2000
                                               --------      --------
 Net income                                    $  6,426      $  9,578

 Adjustments:
  Minority interest in earnings
   of Operating Partnership                         845         1,372
  Depreciation and amortization                  12,970         9,323
  Net (gains) losses on dispositions
   of operating properties                         (305)          305
  Cumulative effect of change in
   accounting principle                           1,392
  Non-cash amortization of
   restricted stock grants                          548           102
                                               --------      --------
 Funds From Operations                         $ 21,876      $ 20,680
                                               ========      ========
 Weighted average common
  shares/units outstanding - basic               30,225        31,130
 Weighted average common
  shares/units outstanding - diluted             30,484        31,130

 Funds From Operations
  per common share/unit - basic                $   0.72      $   0.66
                                               ========      ========
 Funds From Operations
  per common share/unit - diluted              $   0.72      $   0.66
                                               ========      ========

                      KILROY REALTY CORPORATION
                   FUNDS AVAILABLE FOR DISTRIBUTION
                   --------------------------------
           (unaudited, in thousands, except per share data)

                                                   Three Months
                                                       Ended
                                                      March 31, 
                                                 2001          2000
                                               --------      --------
 Funds From Operations                        $ 21,876      $ 20,680

  Adjustments:
   Amortization of deferred
    financing costs                                381           206
   Tenant improvements, leasing
    commissions and recurring
    capital expenditures                        (1,011)         (904)
   Net effect of straight-line
    rents                                       (1,714)       (1,508)
                                              --------      --------
 Funds Available for Distribution             $ 19,532      $ 18,474
                                              ========      ========
 Funds Available for Distribution
  per common share/unit - basic               $   0.65      $   0.59
                                              ========      ========
 Funds Available for Distribution
  per common share/unit - diluted             $   0.64      $   0.59
                                              ========      ========
-0-
CONTACT: Kilroy Realty Corporation, Los Angeles
         Richard E. Moran Jr., Executive Vice President
           and Chief Financial Officer
         (310) 563-5533

         Tyler H. Rose, Senior Vice President and Treasurer
         (310) 563-5531