Kilroy Realty Reports Peregrine Systems' Bankruptcy
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LOS ANGELES, Sep 23, 2002 (BUSINESS WIRE) -- Kilroy Realty Corporation (NYSE:KRC) reported today that Peregrine Systems, Inc., one of the company's current tenants, has filed for bankruptcy in U.S. bankruptcy court in Delaware. Peregrine leases four office buildings in the Del Mar submarket of San Diego totaling approximately 423,900 rentable square feet under four separate leases. It previously had an obligation to lease a fifth building but had surrendered the lease to Kilroy Realty in June 2002.
As part of the bankruptcy filing, Peregrine filed a motion to reject three leases it has with Kilroy Realty, including the lease that had previously been surrendered. Peregrine did not file to reject the leases for two buildings and also continues to sublease approximately 58% of one of those buildings to other tenants. Specifically, the leases that Peregrine filed to reject and those that were not rejected are as follows:
Address Square Feet Motion Filed to Reject Building 1 3579 Valley Centre Drive 52,375 Building 3 3661 Valley Centre Drive 129,752 Building 4 (1) 3721 Valley Centre Drive 114,780 ------- Sub-total 296,907 ------- Leases Not Rejected Building 2 3611 Valley Centre Drive 129,680 Building 5 (2) 3811 Valley Centre Drive 112,067 ------- Sub-total 241,747 ------- Total 538,654 ======= (1) Building 4 was previously surrendered by Peregrine to KRC. Currently under LOI with third-party tenant for 100% of building. (2) Building 5 is approximately 58% subleased by Peregrine; 50.5% to third party tenants and 7.5% to KRC.As disclosed in KRC's filings with the Securities and Exchange Commission, the company has been monitoring the financial difficulties at Peregrine, and already has recorded certain charges to earnings in response to the eroding situation at Peregrine. The company is in the process of evaluating the motions filed by Peregrine in the bankruptcy court following the initial bankruptcy filing by Peregrine, and cannot currently predict the impact of the bankruptcy filing on Kilroy Realty.
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 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. At June 30, 2002, the company owned 7.6 million square feet of commercial office space and 5.1 million square feet of industrial space. More information is available at www.kilroyrealty.com.
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