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Kilroy Realty Finalizes Lease Agreement With Epson America

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Company To Relocate Headquarters to Kilroy Airport Center, Long Beach

EL SEGUNDO, CALIF. — Kilroy Realty Corporation (NYSE: KRC) today announced that Epson America, Inc. will move its headquarters from Torrance to Kilroy Airport Center in Long Beach, where it will lease approximately 162,000 square-feet of space. The lease will comprise the entire five-story building, approximately 141,000 square-feet, in Phase III of Kilroy Airport Center, and 26,000 square-feet of space in another building within the office complex. Epson America, which signed a ten-year lease, is expected to move to its new facilities in October 1999.

"We are excited about relocating our new headquarters to Kilroy Airport Center, as it will enable Epson to accommodate the future and evolving needs of the company," commented Norio Niwa, president and chief executive officer, Epson. "Kilroy Airport Center was the prime choice for us because of the professional campus-style environment, easy access to the freeway as well as a host of other amenities."

Founded in 1975, Epson America, Inc., is the U.S. affiliate of Japan-based Seiko Epson Corporation, a global manufacturer and supplier of high-quality technology products that meet customer demands for increased functionality, compactness, systems integration and energy efficiency. Epson offers an extensive array of image capture and image output products for the consumer, business and graphic arts markets. The company is also the leading supplier of value-added point-of-sale (POS) solutions for the retail market.

"This project has consistently demonstrated its attractiveness to companies in both Los Angeles and Orange County," said Kathy Delgado, vice president of marketing, KRC. "At the signing of the Epson America lease, Kilroy Airport Center, with a total of 950,000 square-feet of rentable space, will be 95 percent leased, including 130,000 square-feet of pre-leased space in building two of Phase III. These numbers truly speak to the unprecedented demand for Class-A office space within the Long Beach Airport area as well as the growing popularity of the Long Beach area as a prime location for business."

User-Friendly Campus

Phase III of Kilroy Airport Center integrates a mix of distinct architecture, technology and amenities to accommodate the varied needs of its professional and high-tech tenants. The campus offers a range of on-site amenities such as a fitness center, cafe, sundry shop, dry cleaners and print shop, in addition to high quality landscape themes featuring sculptured gardens, water fountains and seating. For high-speed Internet, voice and data transfer, tenants can take advantage of the "Smart Building Systems" designed to accommodate future changes in technology, as well as the GTE SmartPark, which provides multiple fiber-optic feeds.

"When construction of the five-story building began 13 months ago, Kilroy forecasted that demand for Class A office space would be strong," commented Hugh Greenup, executive vice president, KRC. "This has proven to be the case as companies look to Kilroy Airport Center for the best in office space and location within the Long Beach submarket. Because it is situated adjacent to the San Diego Freeway (I-405) and the Long Beach Airport, with four on/off ramps located within a one-mile radius of the property, the office complex provides prime freeway signage and visibility for tenants as well as easy access and abundant parking for employees located on-site."

Kilroy Airport Center is a multi-phased, master-planned office community, offering 950,000 square-feet of rentable space on 54 acres of land. Phases I and II were completed in 1987 and 1990 respectively. Phase III consists of a five-story building, recently completed in February, and a seven-story, 191,000 square-foot building for which construction is underway for a June 2000 completion

"Kilroy Realty is a major player in the South Bay commercial real estate arena," commented Jim Biondi, Grubb & Ellis, Inc. "Because of Kilroy Realty’s development history and professional staff, the company was able to expedite the negotiation process and meet the needs of Epson."

Mike Rogers, vice president, Harwood K. Smith & Associates (HKS) was the senior designer on the project. The firm, headquarted in Dallas, TX, also designed Phase II of Kilroy Airport Center. Dinwiddie Construction served as the general contractor. Jim Biondi of Grubb & Ellis Company was the broker for Epson America; Robert Healey and Gregg Kirkpatrick of CB Richard Ellis, Inc., and Kathy Delgado served as Kilroy Realty’s brokers; attorneys for the landlord were Jordan Fishman and Tony Natsis of Allen Matkins.

Kilroy Realty Corporation is a Southern California-based real estate investment trust active in the commercial office and industrial property sectors. Principal submarkets for the company’s development projects include San Diego, Los Angeles, Long Beach and Orange County where the company has a development pipeline exceeding $500 million. At March 31, 1999, the company owned 5.7 million square feet of commercial office space and 6.2 million square feet of industrial space. For more information, visit Kilroy Realty at www.kilroyrealty.com.