By Jon Peterson
Los Angeles-based Kilroy Realty Corporation is planning a new office development at 333 Dexter in South Lake Union. According to the company’s second quarter 2015 Supplemental Financial Report, the public REIT’s total estimated investment in the project is $375 million. This would mean that the company will fund this project itself and have no construction loans associated with the development.
The office building development will be for approximately 700,000 square feet. Through the end of June of this year, Kilroy had allocated a total cost of $54.6 million for this project, which was mainly spent in two areas. During the first quarter of this year, the company paid $49.5 million to buy four adjacent parcels of land for the development. There also was $2.4 million in transaction costs and accrued liabilities.
The firm anticipates that the project would be started sometime in 2016. There was no indication that this was going to be a spec project or if it needed to have some level of pre-leasing before the project would be started. The Los Angeles-based developer and owner has a history of making strong investments in the markets that it likes, and Seattle is one of them. In the Bay Area market, for instance, Kilroy has commenced projects without a signed tenant, although the firm has been successful in leasing the building before it was finished.
Kilroy current owns a total of 12 office buildings in the Seattle market. These assets are in three major sub-markets of South Lake Union, Kirkland and Bellevue. The properties total 13.1 million square feet and the portfolio had an overall occupancy of 96.7 percent, through the end of the second quarter.
Kilroy does have a regional office in Bellevue located at 601 108th Avenue Northeast. This office is led by Mike Shields, a regional vice president for the company.