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Kilroy Realty Corporation Acquires Remaining Interest in San Diego Properties From The Allen Group

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LOS ANGELES, Mar 25, 2002 (BUSINESS WIRE) -- Kilroy Realty Corporation (NYSE:KRC) today said it has purchased the remaining interest owned by The Allen Group in nine San Diego office properties and three San Diego development sites. The net consideration was approximately $40.9 million.

Kilroy Realty had been the managing member and joint owner of two limited liability companies that held these properties with The Allen Group since 1999.

The acquisition was funded with $2.2 million in net cash and 1,398,068 Kilroy Realty, L.P. operating partnership units. In its role as managing member of the limited liability companies, Kilroy Realty developed the eight completed properties covered under the current transaction between 1998 and 2002 and held an option to purchase The Allen Group's interest in each building following its stabilization.

Once current development is completed at the one under construction property and the three development sites, the 12 acquired properties will encompass more than one million square feet of office space, increasing KRC's total holdings in coastal San Diego to approximately three million square feet.

The acquired properties include:

  • Four stabilized and 100% leased office buildings located in Del Mar totaling 423,874 square feet;
  • A 100% leased, 114,780 square-foot office building located in Del Mar, currently under construction and estimated to be completed in the third quarter of 2002;
  • Two stabilized and 100% leased office buildings located in Sorrento Mesa totaling 172,778 square feet;
  • Two stabilized and 100% leased office/biotech buildings located in Sorrento Mesa totaling 136,908 square feet; and
  • Three development sites in Sorrento Mesa totaling approximately 11.9 acres, with an estimated potential buildout of approximately 184,000 square feet.

Some of the information presented in this release is forward-looking in nature within the meaning of the Private Securities Litigation Reform Act of 1995. Although Kilroy Realty Corporation believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, there can be no assurance that the expectations will be achieved. Certain factors that could cause actual results to differ materially from Kilroy Realty's expectations are set forth as risk factors in the company's Securities and Exchange Commission reports and filings. Included among these factors are changes in general economic conditions, including changes in the economic conditions affecting industries in which its principal tenants compete; any failure of the general economy to recover timely from the current economic downturn; Kilroy Realty's ability to timely lease or re-lease space at current or anticipated rents; changes in interest rates; changes in operating costs, including utility and insurance costs; future demand for its debt and equity securities; its ability to refinance its debt on reasonable terms at maturity; its ability to complete current and future development projects on schedule and on budget; the demand for office space in markets in which Kilroy Realty has a presence; 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. Many of these factors are beyond Kilroy Realty's ability to control or predict. Forward-looking statements are not guarantees of performance. For forward-looking statements herein, Kilroy Realty claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

Kilroy Realty Corporation is a Southern California-based real estate investment trust active in the office and industrial property sectors. The company is a member of the S&P Small Cap 600 Index. For more than 50 years, the company has owned, developed, acquired and managed real estate assets primarily in the coastal regions of California and Washington. Principal submarkets for KRC's current development program include West Los Angeles, El Segundo and coastal San Diego, where the company's total development pipeline is more than $500 million. At December 31, 2001, the company owned 7.2 million square feet of commercial office space and 5.1 million square feet of industrial space.

CONTACT:
Kilroy Realty Corporation
Richard E. Moran Jr., 310/563-5533
Tyler H. Rose, 310/563-5531

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