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Kilroy Realty Announces Tax Treatment of 2005 Dividend Distributions

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LOS ANGELES--(BUSINESS WIRE)--Jan. 13, 2006--Kilroy Realty Corporation (NYSE:KRC) announced today the tax treatment of its 2005 dividend distributions. The Company's total dividend distributions per share of common stock (CUSIP #49427F108) are to be classified for income tax purposes as follows:

Record   Payable     Total        2005     2005        2005      2005
 Date     Date     Distribution Taxable    Total        Un-     Return
                   per Share    Ordinary  Capital   recaptured    of
                                Dividend   Gain      Section   Capital
                                          Distri-      1250
                                          bution      Gain(1)
----------------------------------------------------------------------
12/31/04  1/18/05  $.495000    $.053929  $.012629    $.008282 $.428442
----------------------------------------------------------------------
 3/31/05  4/15/05   .510000     .055563   .013012     .008533  .441425
----------------------------------------------------------------------
 6/30/05  7/15/05   .510000     .055563   .013012     .008533  .441425
----------------------------------------------------------------------
 9/30/05 10/18/05   .510000     .055563   .013012     .008533  .441425
----------------------------------------------------------------------
(1) Unrecaptured Section 1250 Gain is a subset of, and is included in,
    the Total Capital Gain Distribution amount.

The dividend distributions being made to holders of record as of December 30, 2005 and being paid on January 18, 2006 are considered 2006 dividend distributions for federal income tax purposes.

The Company's total dividend distributions per share of Series E cumulative redeemable perpetual preferred stock (CUSIP #49427F405) are to be classified for income tax purposes as follows:

Record    Payable     Total       2005      2005       2005      2005
 Date      Date    Distribution  Taxable    Total       Un-     Return
                    per Share    Ordinary  Capital   recaptured   of
                                 Dividend   Gain      Section  Capital
                                           Distri-     1250
                                           bution     Gain(1)
----------------------------------------------------------------------
  2/1/05  2/15/05  $.487500    $.393632   $.093868    $.061556     -
----------------------------------------------------------------------
  5/2/05  5/16/05   .487500     .393632    .093868     .061556     -
----------------------------------------------------------------------
  8/1/05  8/15/05   .487500     .393632    .093868     .061556     -
----------------------------------------------------------------------
10/31/05 11/15/05   .487500     .393632    .093868     .061556     -
----------------------------------------------------------------------
(1) Unrecaptured Section 1250 Gain is a subset of, and is included in,
    the Total Capital Gain Distribution amount.

The Company's total dividend distributions per share of Series F cumulative redeemable perpetual preferred stock (CUSIP #49427F504) are to be classified for income tax purposes as follows:

Record    Payable     Total        2005     2005       2005      2005
 Date      Date     Distribution Taxable    Total       Un-     Return
                     per Share   Ordinary  Capital   recaptured   of
                                 Dividend   Gain      Section  Capital
                                           Distri-     1250
                                           bution     Gain(1)
----------------------------------------------------------------------
  2/1/05  2/15/05  $.354167     $.285973  $.068194    $.044720     -
----------------------------------------------------------------------
  5/2/05  5/16/05   .468750      .378493   .090257     .059188     -
----------------------------------------------------------------------
  8/1/05  8/15/05   .468750      .378493   .090257     .059188     -
----------------------------------------------------------------------
10/31/05 11/15/05   .468750      .378493   .090257     .059188     -
----------------------------------------------------------------------
(1) Unrecaptured Section 1250 Gain is a subset of, and is included in,
    the Total Capital Gain Distribution amount.

Stockholders are encouraged to consult with their tax advisors as to their specific tax treatment for Kilroy Realty Corporation common and preferred distributions.

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. Kilroy Realty currently has an in-process development pipeline of approximately 644,000 square feet of office space in San Diego County. At September 30, 2005, the company owned 7.8 million rentable square feet of commercial office space and 4.7 million rentable square feet of industrial space. More information is available at www.kilroyrealty.com.

CONTACT:
Kilroy Realty Corporation
Richard E. Moran Jr., 310-481-8483
or
Tyler H. Rose, 310-481-8484

SOURCE:
Kilroy Realty Corporation