West Coast Market Fundamentals Remain Healthy Evidenced by Strong Leasing Spreads
LOS ANGELES, April 26,2017–Kilroy Realty Corporation (NYSE:KRC) today said that it has signed new or renewing leases on more than 890,000 square feet of space across the company’s portfolio during the first four months of the year. Rents on these leases were up 19% on a cash basis and 36% on a GAAP basis.
This robust leasing activity, in addition to the leases signed in 2016 that have not yet commenced, has reduced the company’s 2017 expirations of 757,000 square feet to approximately 355,000 square feet or less than 3% of total expirations.
The strong leasing performance spanned all four major markets of the company’s West Coast portfolio that include Seattle, San Francisco, Los Angeles and San Diego.
For the quarter ended March 31, 2017, the company executed 747,000 square feet of leases at rents that were up 15% on a cash basis and up 29% on a GAAP basis. The leases signed during this period included a renewal by Expedia of its 112,000 square-foot lease at the company’s Skyline Tower in the Bellevue CBD submarket of greater Seattle. The renewal terms extended half the square footage to 2020 and the other half to 2023. In San Francisco, at the company’s 303 Second Street property, App/Dynamics, recently acquired by Cisco, renewed and expanded its lease by 67,000 square feet or 76% to take a total of just under 150,000 square feet for a term of five and a half years. And in San Diego, the company signed multiple leases totaling 157,000 square feet of space in several different projects.
In April, Riot Games, whose majority owner is Tencent, China’s largest internet company, more than doubled its position at KRC’s Westside Media Center in Los Angeles.
As of April 26, 2017, KRC’s stabilized portfolio was 95.7% leased.
“Our real estate markets are among the most dynamic in the United States today,” said John Kilroy, the company’s chairman, president and chief executive officer. “They are the breeding grounds for some of the most innovative companies in the world, and magnets for new creative talent. Large, established companies continue to expand their presence here, while enterprising start-ups seek to establish a foothold. Our portfolio of well-located and well-designed contemporary, sustainable work environments is in constant demand.”
About Kilroy Realty Corporation
Kilroy Realty Corporation (KRC), a publicly traded real estate investment trust and member of the S&P MidCap 400 Index, is one of the West Coast’s premier landlords. The company has over 70 years of experience developing, acquiring and managing office and mixed-use real estate assets. The company provides physical work environments that foster creativity and productivity and serves a broad roster of dynamic, innovation-driven tenants, including technology, entertainment, digital media and health care companies.
At March 31, 2017, the company’s stabilized portfolio totaled approximately 14.4 million square feet of office space and 200 residential units located in the coastal regions of Los Angeles, Orange County, San Diego, the San Francisco Bay Area and Greater Seattle. In addition, KRC had two office projects totaling approximately 1.2 million square feet, 237 residential units and 96,000 square feet of retail space under construction.
The company is recognized by GRESB as the North American leader in sustainability and was ranked first among 178 North American participants across all asset types. At the end of the first quarter, the company’s stabilized portfolio was 52% LEED certified and 71% of eligible properties were ENERGY STAR certified. More information is available at http://www.kilroyrealty.com.
